In a February 24th blog post, we described Medicaid block grants and per capita caps in terms of A x B = C to demonstrate how those payment policies work. ‘A’ is the amount a state is paid per beneficiary, ‘B’ is the number of beneficiaries in a given state, and ‘C’ is the total state payment from the federal government. We have since been asked by numerous providers to describe the nuts and bolts of how a per capita cap, the current Medicaid financing structure in the proposed American Health Care Act, would work. For the Medicaid provider, the nuts and bolts of how they are paid would change very little while the amount they are paid might change a lot. Continue Reading Provider Payments Under a Medicaid Per Capita Cap
One of the challenges of policy making is that bills must go before the Congressional Budget Office (CBO). CBO has one of the toughest jobs in Washington. Their job is to dispassionately look at policy and evaluate the cost of the bill to the federal treasury. Sometimes that means splashing cold water on the high-minded aspirations of policy makers. And CBO’s brand of actuarial water can be icy cold.
In health care, one of the most perplexing areas for policymakers is convincing CBO that providing additional services to individuals can lead to lower cost outcomes. Obesity reduction was a particularly problematic policy area. Advocates argued that through the deployment of intensive supports, individuals could lose weight and keep weight off thus improving their overall health outcomes. CBO did extensive research and found that weight loss only had an effect on health outcomes for the most morbidly obese. If you are only moderately overweight (BMI 25 to 30), weight loss or gain has no effect on health outcomes. So go enjoy that donut. Continue Reading Research Opens a Door for Disability Policy
As was widely expected over the month of December, the Obama Administration and Congress scrambled in the late hours of 2012 and on New Year’s Day devising a legislative package to prevent the United States from going over the “Fiscal Cliff,” a series of across-the-board tax increases and spending cuts that would have automatically implemented without intervening legislative action. Although the compromise they reached was far from the “Grand Bargain” that President Obama and many members of Congress were seeking, Vice President Biden and Senate leadership came to an agreement to avoid the cliff for the early part of 2013. The Senate approved the package, the American Taxpayer Relief Act (H.R. 8), by an overwhelmingly bipartisan vote of 89-8 in the early morning hours of New Year’s Day. Later that day, shortly before midnight, the House voted to approve the Senate package by a vote of 257-167, with 85 Republicans joining 172 Democrats in support.
The legislation contains some significant health policy changes, described in more detail in a Mintz Levin/ML Strategies Client Alert, although its primary purpose is to prevent steep tax increases for 99% of Americans and to delay the automatic “sequestration” spending cuts that were scheduled to go into effect due to an earlier agreement to raise the debt ceiling. In H.R. 8, which the Congressional Budget Office (CBO) estimates will cost around $4 trillion, the sequester is turned off for two months, allowing Congress more time to focus on a comprehensive deficit reduction solution. In addition, current tax rates are permanently extended for all Americans earning up to $400,000 for individuals and $450,000 for married couples. Several other major tax modifications, including some related to the estate tax and capital gains, were also included. Discussion about other aspects of the legislation, including changes to renewable energy programs, may be found here.
Although the American Taxpayer Relief Act has prevented the country from going over the “fiscal cliff,” the 113th Congress will almost certainly continue to focus on health care cost containment and entitlement reform in the coming weeks and months. Mintz Levin and ML Strategies will continue to closely monitor the effect of fiscal policy on health care.