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Bill to Block Cost-Cutting Medicaid Changes Advances Despite Veto Threat

By Drew Armstrong

April 17, 2008 -- A House panel's approval of a bill to block several cost-cutting administration Medicaid regulations has taken Congress one step closer to a veto showdown that Democrats might win.

The House Energy and Commerce Committee approved the bill (HR 5613) by a vote of 46–0. A manager's amendment by Chairman John D. Dingell, D-Mich., was approved by voice vote.

During a break in the markup, ranking Republican Joe L. Barton of Texas said he did not think Republicans would vote to sustain the veto threatened by the administration. "I don't think the veto threat was appropriate, and I don't think it will be successful if vetoed, because the votes simply aren't there," Barton said.

The wild card could be the Senate. There are likely enough votes in the upper chamber to pass the bill, but if Republicans stand firm they could sustain a Bush veto.

The threat was delivered via a letter on Tuesday from Health and Human Services Secretary Michael O. Leavitt.

The bill, sponsored by Dingell, would block seven rules proposed by the administration. All are designed to cut back on federal Medicaid payments to the states, which the administration argues are using current rules to maximize payments.

On April 9, the panel's Health Subcommittee approved the bill by voice vote after Democrats agreed to add language clarifying that it would not prevent the administration from issuing other Medicaid regulations, and providing $25 million per year to fight fraud and abuse in the program.

But Leavitt wrote that the changes do not alter the administration's opposition.

House Republicans, meanwhile, have backed the measure, which would keep Medicaid dollars flowing to the states.

Grassley's Criticism
In the Senate, Charles E. Grassley, R-Iowa, took to the floor Wednesday to criticize Dingell's bill. "We ought to let them move forward instead of just delaying all of these Medicaid regulations all at once," Grassley said.

If Grassley can mobilize enough Republicans, he might be successful in at least backing up a veto of the bill. Dingell made no prediction about the outcome.

"I can't tell you what's going to happen in the Senate. The place is full of unexpected surprises," Dingell said. "I hope the president will take a look at the vote we're going to get on this matter and decide maybe a veto is unwise."

Barton had asked the administration not to send the veto threat letter. He was among 20 Republicans who voted to report the bill out of committee.

The administration proposed the rules last year in an attempt to prevent the states from engaging in certain practices, such as billing the program for transporting Medicaid-eligible children to school or helping patients find jobs or housing, as part of "case management."

With several of the regulations set to go into effect on May 25, Dingell said he wants to get the bill to the floor as quickly as possible. Because of the fast timetable, some members see the bill as an opportunity to attach amendments on slightly related concerns and issues. Dingell did his best to fend them off at the markup, offering to meet with members to discuss what changes might make it into the measure.

Dingell said later that he wants to keep the bill free of provisions that might imperil a veto-proof margin.

One amendment by Rep. Nathan Deal, R-Ga., would have raised the minimum Medicaid payments to pharmacists for dispensing drugs. It was defeated, 15–26.

Another, offered by Reps. Eliot L. Engel, D-N.Y., Hilda L. Solis, D-Calif., and Vito J. Fossella, R-N.Y., would preserve a Medicaid program that helps families look after particularly frail seniors during the day, rather than sending them to nursing homes. It was withdrawn, as was an amendment by Rep. Michael C. Burgess, R-Texas, that would stop an upcoming cut to Medicare physician payment rates.

Dingell's Tweaks
Dingell's manager's amendment made several changes. One would alter how a program to electronically verify the assets of Medicaid enrollees would be implemented, phasing in the program. The asset verification program would pay for the bill's $1.65 billion cost.

Governors say the administration's new Medicaid rules would unfairly shift costs for the services to the states, forcing them to either spend more money on Medicaid or eliminate services. The bill would postpone the regulations until April 2009, when a new president will be in office.

Medicaid is a joint state–federal program for the poor in which the federal government pays 57 percent of the costs—an estimated $204 billion in fiscal 2008. There has long been tension between states and the federal government over who should bear more of the burden for the program.

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