Tag: medicaid

‘There Isn’t a Single Honest Health Economist Who Agrees with the LA Times’ on IPAB

I blogged previously about Mitt Romney’s claim that ObamaCare creates “an unelected board that’s going to tell people ultimately what kind of treatments they can have.” President Obama conceded the point when he responded that the Independent Payment Advisory Board “basically identifies best practices and says, let’s use the purchasing power of Medicare and Medicaid to help to institutionalize all these good things that we do.” The president admitted the whole point of IPAB is to let a bunch of experts decide what practices are “best,” and to stop paying for what isn’t.

I am not aware of a single fact-checker who has grasped that basic point. Not PolitiFact, not the Associated Press, not FactCheck.org, not The Washington Post’s Fact-Checker, not this Washington Post health reporter. The Los Angeles Times called Romney’s claim “erroneous” and writes:

This is a myth advanced repeatedly by critics of the Affordable Care Act and debunked consistently by independent fact-checkers…the panel is explicitly prohibited from cutting benefits for people on Medicare. And there is no provision in the law that empowers the advisory board to make any decisions about what treatments doctors may provide for their patients.

Jay Bhattacharya, a professor of medicine and economics at Stanford University, responds:

The media “fact check” business is incredibly tiresome given how pedantic and downright inaccurate it is, but I wanted to weigh in on this one before it hardens.  The LA Times somehow thinks that the ACA (aka Obamacare) will have no effect on determining what care patients can get, and consequently dings Romney for saying it will.  There isn’t a single honest health economist out there who agrees with the LA Times on this one.

Bhattacharya explains that IPAB will be able to influence care by cutting payments to providers. But that’s not the half of it. IPAB has the power to do exactly what the fact-checkers think it can’t: deny specific treatments to Medicare enrollees. It can even raise taxes and do other things the fact-checkers think it cannot.

I explain why the fact-checkers are wrong at this Cato Institute policy forum at noon on Thursday (October 11). Join us. Pre-register now at that link.

The Fraud Lobby

Evidently, there’s fraud in Medicaid.

The following are excerpts from an article in today’s Wall Street Journal. See if you can spot the fraud lobby:

In 2011, New York charged [Medicaid] a per-diem rate of $5,118 for residents of the [state-run] institutions, a network of 11 centers that now house about 1,300 people with severe developmental disabilities. Over the course of a year, Medicaid spends $1.9 million for every resident, or $2.5 billion in total—with half coming from the federal government. But the cost of running the institutions is only a quarter of that amount.

[A congressional] report said New York took advantage of a complex formula and kept federal officials in the dark for years…

The committee’s report said Gov. Andrew Cuomo’s administration refused to cooperate with the investigation. Joshua Vlasto, a spokesman for Mr. Cuomo, said the report’s conclusions were “wrong and totally misleading” and that a threatened “precipitous reduction” in funding would jeopardize administration efforts to modernize and restructure its Medicaid program…

But at a Thursday hearing, Penny Thompson, a CMS deputy director, suggested…, “You can expect to see a rate that’s about one-fifth of its current level” … without specifying a time frame. Such a reduction would reduce the annual federal reimbursement by about $1 billion, punching a hole in New York’s $54 billion Medicaid program…

The skewed methodology traces back more than 20 years, when New York got permission from the federal government to use a different formula for state-run developmental centers, assuring officials that the rates would hew close to costs.

But almost immediately, reimbursements began to skyrocket. The new methodology allowed New York to bill Medicaid for ghost patients: When a patient was discharged from a state-run facility, New York retained nearly two-thirds of the reimbursement amount. The formula also double-billed taxpayers: Many of those patients who left the centers moved into Medicaid-financed group homes.

Between 1990 and 2011, the daily reimbursement rate grew to $5,118 from $348. Ms. Thompson said it wasn’t clear if CMS “completely understood” the cost projections when it approved the rates. CMS officials acknowledge they first became aware of the problem in 2007 but waited three years before launching a probe.

In June 2010, the Poughkeepsie Journal ran a lengthy investigative piece about the rates. CMS started its investigation in response to the newspaper’s report, the committee said.

Lest you think I’m blaming Medicaid fraud on one political party, have a gander at my recent article, “Entitlement Bandits”:

Even conservatives fight anti-fraud measures, albeit in the name of preventing frivolous litigation, when they oppose expanding whistle-blower lawsuits, where private citizens who help the government win a case get to keep some of the penalty.

Protecting Medicare and Medicaid fraud is a bipartisan pastime.

Sebelius v. Gessing on ObamaCare’s Medicaid Expansion

From the Rio Grande Foundation’s Errors of Enchantment blog, foundation president Paul Gessing argues against New Mexico implementing ObamaCare’s Medicaid expansion:

One should note that HHS Secretary Kathleen Sebelius left out the cost to New Mexico of the “old eligibles” who would enroll in Medicaid as a result of the expansion.

To Help the Poor, Don’t Expand Medicaid — Just Get out of the Way

The gods tell me I’m not allowed to post the article, “Medical volunteers not free to cross state lines; Charity wants changes so it can help more,” from The Tennesseean in its entirety. So here’s an, ahem, excerpt:

The founder of the Knoxville-based charity Remote Area Medical Volunteer Corps says his nonprofit is hamstrung by laws preventing medical volunteers from crossing state lines.

Stan Brock told the Bristol Herald Courier that RAM has provided free medical and dental care to more than half-a-million patients since 1992, but it could serve even more if state laws were changed…

Brock said the group recently went to Joplin, Mo., with a mobile eyeglass lab. But they were not allowed to make free glasses because their volunteer optometrists and opticians were not licensed in the state.

Events in California have had dozens of empty dental chairs as patients were turned away — not for lack of willing volunteers but because state law creates impossible hurdles for out-of-state providers.

“Before Georgia told us to stop, we used to go down to southern Georgia and work with the Lions Club there treating patients,” he said.

Brock said the laws are designed as “turf protection,” but his charity efforts pose no threat to traditional medical providers…

RAM began providing its free services, which it calls “expeditions” in South America. Its first expedition in the U.S. was in Tennessee, which also passed the first law allowing the providers to cross state lines for charity care. Illinois later adopted a similar law, modeled after Tennessee’s.

Brock said those laws have three key components: They allow health providers from out of state to provide charity care, protect them against frivolous lawsuits and are simple enough to allow busy volunteers to come without jumping through hoops.

See also this moving photoblog about a Remote Area Medical “expedition” to Appalachia.

For more about Remote Area Medical, click here.

For $460 Billion a Year, Medicaid Darn Well Better Save Lives

A study in this week’s New England Journal of Medicine finds that when three states expanded their Medicaid programs, mortality rates fell 6 percent relative to four neighboring states. The study found evidence that the mortality gains were concentrated in poorer counties – i.e., where people were most likely to become eligible for Medicaid.

As always, the study comes with caveats. The results “may not be generalizable to other states,” may have been driven by unobservable confounding factors, et cetera. Speaking only for myself, I hope these results are accurate. I hope Medicaid does save lives. That program spends nearly half a trillion dollars per year. It damn well better save lives.

Even so, that does not mean politicians should expand Medicaid. If saving lives is the goal, then politicians should instead find the lowest-cost way of doing so, because that enables the greatest number of lives to be saved with the available resources. It is generally accepted among health economists that other strategies (e.g., discrete health programs targeted at hypertension or diabetes) could save more lives per dollar spent than expanding health insurance. This study says nothing about how much it costs to save lives through Medicaid, much less whether alternative uses of those resources could save even more lives. It could be that other uses of the money would save – I don’t know – twice as many lives.

Absent evidence that Medicaid saves the most lives per dollar spent, expanding Medicaid does not show how much politicians care about saving lives. It shows how little they care about saving lives, because they are willing to forgo additional reductions in mortality for the sake of…whatever else expanding Medicaid gives them.

‘Leavitt’ Is Republican for ‘Solyndra’

Mike Leavitt is a Republican, a former Utah governor, a former Secretary of Health and Human Services under President George W. Bush, and now owns a firm called Leavitt Partners, which makes money by helping states implement ObamaCare’s health insurance “exchanges” and take advantage of ObamaCare’s Medicaid expansion. Let’s stipulate from the outset that Leavitt and his staff are doing what they think is best for the nation. Still, as this article in yesterday’s New York Times explores, it’s odd that Mitt Romney chose as one of his top advisers a guy who’s profiting from ObamaCare:

If Republicans in Congress agree on anything, it is their desire to eradicate President Obama’s health care law. But one of the top advisers to Mitt Romney, the party’s likely presidential nominee, has spent the last two years advising states and private insurers on how to comply with the law…

Mr. Romney has named Mr. Leavitt — a longtime friend, former governor of Utah and former federal health secretary — to plan the transition for what both hope will be a Romney administration.

Mr. Leavitt’s full-time job is running his consulting company, Leavitt Partners, which is based in Salt Lake City and has advised officials in Mississippi, New Mexico and Pennsylvania, among other states…

Michael F. Cannon, director of health policy studies at the Cato Institute, said: “It is strange to see Mr. Leavitt, a former Republican governor and former secretary of health and human services, helping and encouraging states to carry out this law for which Republicans have so much antipathy. It deepens suspicion as to whether Romney is sufficiently committed to repealing the Obama health care law.”

Twila Brase, president of the Citizens’ Council for Health Freedom, a free market group that is mobilizing opposition to an exchange in Minnesota, said: “Mike Leavitt is an enabler of Obamacare. He has taken advantage of Obamacare to expand his own business, instead of helping governors resist a federal takeover of health care.”

Secretary of Health and Human Services Kathleen Sebelius has thrown nearly a billion dollars at states in a desperate attempt to bribe them into establishing Exchanges. We do not yet know how much of that cash has found its way to Leavitt Partners:

Natalie Gochnour, a spokeswoman for Leavitt Partners, said its work with states was only part of its business, but she refused to say how much the company had been paid for such work.

Perhaps some day we will, and “Leavitt” will become synonymous with “Solyndra.”

Also, by my count the Times article devoted eight column-inches to such pro-Exchange nonsense as the idea that an ObamaCare Exchange could “run on free market principles” or Leavitt’s claim that “continued inaction by states risks an Obama-style federal exchange being foisted upon a state.” Yet the Times cited no one who challenges those claims. I have no problem with the Times posing difficult questions to Romney. Why should ObamaCare get a pass?

ObamaCare Lost on the Medicaid Mandate & Commerce Power. It May Yet Lose on the Tax Power.

Supporters of the Obama health law are incorrectly reading the Supreme Court’s ruling as a victory.

First, the ruling severely limited the Obama health law’s Medicaid expansion, effectively giving states the green light to refuse to expand their Medicaid programs. Coupled with the fact that the statute already enables states to block the other half-trillion dollars of new entitlement spending, the law is in a very precarious position.

Second, the Court ruled 5-4 that the individual mandate is not a legitimate use of the Commerce Power. That too is a defeat for the government, even if it is of no immediate consequence.

Third, while the Court upheld the individual mandate as a tax, that ruling may be vulnerable to legal challenge.

Chief Justice Roberts wrote, “The Federal Government ‘is acknowledged by all to be one of enumerated powers,’” and, “The Constitution’s express conferral of some powersmakes clear that it does not grant others.” So it is interesting that Roberts did not specify exactly what type of constitutionally authorized tax the mandate is.

As Cato chairman Bob Levy wrote in 2011, that’s not an easy thing to do:

Assume, however, the Supreme Court ultimately disagrees and finds that the penalty for not purchasing health insurance is indeed a tax. Nevertheless, say opponents of PPACA, the tax would be unconstitutional. They underscore that taxes are of three types—income, excise, or direct. Each type must meet specified constitutional constraints. Because the mandate penalty under PPACA does not satisfy any of the constraints, it is not a valid tax.

Income taxes, authorized by the Sixteenth Amendment, must (by definition) be triggered by income. Yet the mandate penalty is triggered by the nonpurchase of insurance. Except for an exemption available to low-income families, the amount of the penalty depends on age, family size, geographic location, and smoking status. So the penalty is not an income tax.

Excise taxes are assessed on selected transactions. Because the penalty arises from a nontransaction, perhaps it qualifies as a reverse excise tax. If so, it has to be uniform across the country (U.S. Const., Art. I, sec. 8). But the penalty varies by location, so it cannot be a constitutional excise tax.

Direct taxes are assessed on persons or their property. Because the penalty is imposed on nonownership of property, perhaps it could be classified as a reverse direct tax. But direct taxes must be apportioned among the states by population (U.S. Const., Art. I, sec. 2). The mandate penalty is assessed on individuals without regard to any state’s population. Hence, it is not a lawful direct tax.

On the last point, Roberts agreed: ”A tax on going without health insurance does not fall within any recognized category of direct tax.” But then what kind of constitutionally authorized tax is it?

The dissent suggests the Court has given this issue scant attention:

Finally, we must observe that rewriting [the mandate] as a tax in order to sustain its constitutionality would force us to confront a difficult constitutional question: whether this is a direct tax that must be apportioned among the States according to their population. Art. I, §9, cl. 4. Perhaps it is not (we have no need to address the point); but the meaning of the Direct Tax Clause is famously unclear, and its application here is a question of first impression that deserves more thoughtful consideration than the lick-and-a-promise accorded by the Government and its supporters. The Government’s opening brief did not even address the question—perhaps because, until today, no federal court has accepted the implausible argument that [the mandate] is an exercise of the tax power. And once respondents raised the issue, the Government devoted a mere 21 lines of its reply brief to the issue…At oral argument, the most prolonged statement about the issue was just over 50 words…One would expect this Court to demand more than fly-by-night briefing and argument before deciding a difficult constitutional question of first impression.

There is even less discussion about what type of constitutionally authorized tax the mandate is.

I’m not a lawyer. But it seems to me there may be room here for the same individual citizens who brought this case to again file suit against the federal government for trying to impose an unconstitutional tax. It may seem unlikely that Roberts would reverse himself on the Tax Power issue. Then again, since he never specified what type of constitutionally permissible tax the mandate is, perhaps voting to strike the mandate would not be reversing himself.