The Obama administration is defending the right of states to cut Medicaid payments to doctors and other health-care providers in an effort to reduce the program’s overall costs.
According to The New York Times, that policy position was laid out Monday in a brief to a California federal appeals court where the state is defending its decision to reduce Medicaid payments by 10 percent to some doctors and other service providers. The cuts are being challenged by an array of medical providers, as well as some patients.
In defense of the cuts, California Democratic Gov. Jerry Brown describes them as a necessary part of addressing the state’s budget crisis.
Medicaid is one of the fastest-growing costs to states. Cutting reimbursement rates not only saves money for states, but also for the federal government that will pay most of the costs to cover those who are newly eligible for Medicaid as a result of Obamacare, the Times noted.
The cuts in California were set to take effect in 2011, but have been on hold because of the ongoing litigation.
Health-care providers claim California is reducing Medicaid payments for budget reasons alone. But the Obama administration argued in its brief to the United States Court of Appeals for the Ninth Circuit in San Francisco that states have the ability under Obamacare to review the Medicaid program to determine if mandatory coverage requirements can be met at lower costs.
Federal law requires Medicaid reimbursement rates to be sufficient enough to give coverage recipients the same access to care as the general population. The Obama administration said California officials would monitor the access to care available to Medicaid beneficiaries and “take prompt action if any problems are indicated.”
The administration's statement of position coincides with its effort to convince wavering GOP governors around the country to expand their Medicaid programs, which is considered a key part of Obamacare for providing coverage to the uninsured.
According to the Times, the administration argues that Medicaid expansion can actually be used as a “tool” to help control health-care costs by giving states “wide discretion” to set rates.
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