HHS: Stop Disguising Medicaid Caps

"Recent actions by HHS can only be seen as an attempt to do through administrative action what the Administration failed to win Congress' approval for last year."

March 2, 2004

The Honorable Tommy Thompson
Secretary
Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, DC 20201

Dear Mr. Secretary:

We are writing as organizations representing people with disabilities. Nearly three years ago, President Bush pledged to bring about New Freedom in the lives of people with disabilities and that he would devote the full resources of the federal government to ensure that states carry out the Olmstead decision. As you know, we have lent our support and participated in key aspects of this initiative. Specifically we strongly support the Money Follows the Person demonstration as well as several of the New Freedom proposals in the President's budget for FY 2005. 

We must go on record, however, as strongly objecting to the way in which this Administration misuses the principles of self determination, independent living and consumer direction to further policies that will undercut those very values. We also are deeply outraged by the actions the Administration is taking to fundamentally weaken the Medicaid program through changes to the current open-ended financing system for Medicaid.

The major flaw in Medicaid for Americans with disabilities of every age and in every state is the pernicious institutional bias. It is a bias that forces too many to be needlessly institutionalized and others in the community to have their need for assistance with eating, dressing and going to the bathroom go unmet. Demonstration projects like those the President has proposed can help some states to begin to remedy these discriminatory practices and fundamental inequities. Demonstrations alone, however, are not in anyway an acceptable or adequate way to address these major flaws in our how our nation finances community based long-term services and supports.

This is particularly true when the Administration is aggressively pursuing an agenda to undermine the basic protections and structure of Medicaid. All of which is being done in a way that would steadily deplete the resources that are available at the federal or state levels to finance the necessary range of health and community based long-term services. 

CAPPING FEDERAL SPENDING THROUGH BACK DOOR WAIVERS 

The disability community along with many other consumer and provider organizations strongly opposed the Administration's 2003 Medicaid proposal that called for capped funding for Medicaid and enable states to eliminate the comparability requirements of Medicaid. We are increasingly troubled by a range of Administration waiver initiatives which all lead to individual or global funding caps in Medicaid. Recent actions by HHS can only be seen as an attempt to do through administrative action what the Administration failed to win Congress' approval for last year. We seriously question whether you as the Secretary have sufficient statutory authority to do so. These types of waivers make for bad public policy that will do very real harm to millions of children, adults and older Americans with disabilities throughout our Nation. 

According to recent media reports, Governor Craig Benson of New Hampshire and other Governors are seeking your approval to waive the fundamental consumer protections of Medicaid in order to be free of federal financing requirements. We are especially concerned that there appears to be a quid pro quo of short-term federal relief through the approval of state financing practices that are being questioned in other contexts in exchange for states submitting waiver proposals that would cap the federal financial obligation to state Medicaid programs. Such waivers do not further the goals of the Medicaid Act; indeed, they would render it obsolete. 

These waivers, if approved, would have serious negative consequences for people with disabilities of all ages. The budget crises states have faced in the last year or two demonstrate the havoc in the lives of people with disabilities and others caused by cuts in Medicaid services. The types of consequences faced by children, adults and older persons with disabilities are unimaginable to most Americans. These cuts in Medicaid have already led, to situations where far too many children, adults and older Americans with disabilities:

• Are unable to get out bed, eat or get dressed

• Are forced to lie in their excrement

• Have seizures because they can't pay for their epilepsy medication

• Are locked away in jail or an institution rather than receiving community based mental health services

• Wake up each day in a nursing home instead of their own home 

By capping federal Medicaid spending through Section 1115 waivers, the Administration is ensuring that: 1) states will continue to be forced to eliminate rather than expand community living services; and, 2) More people with disabilities will remain unjustly institutionalized or live in the community but experience the real harm and indignities of having their most basic human needs go unmet. 

We find this intolerable. 

We, therefore, strongly call on you to immediately stop all efforts in HHS related to the consideration and approval of any new waiver of this kind. If you are unwilling to do this we believe that before you approve any Section 1115 waivers that would require global caps that you should meet with a diverse range of representatives of the disability community and explain steps that you are prepared to take to ensure that individuals with disabilities will continue to receive all necessary services to which they are currently entitled.

At the same time that the Administration is pushing its waiver initiatives, it is making changes to longstanding financing practices under the guise of cracking down on fraud and abuse. Unfortunately, the Administration's recent rushed attempts to make revisions to the financial reporting form CMS-37 and other recent policies, however, suggest that these efforts are not being taken in a careful and considered way. This is imperative because we believe that your first responsibility must be to protect the stability and security of the health coverage that Medicaid provides for more than 50 million low-income people. 

We ask that before the Administration makes changes to current rules for financing the state share of Medicaid costs that the Department consults not only with states, but beneficiaries, providers, and other essential Medicaid stakeholders.

ADOPT MICASSA AS THE BASIC FRAMEWORK FOR MAKING GENUINE PROGRESS

We strongly urge the Administration, Congress and the Governors join the disability community in adopting the Medicaid Community Attendant Services and Supports Act (MiCASSA) as the basic framework for making genuine progress in this area. Now is the time to strengthen the Medicaid program, not to weaken and destroy it. Strengthening Medicaid means that the Administration and Congress must take steps to:

• Ensure the federal government assumes the primary responsibility for financing and assuring the quality of services that enable people with disabilities of all ages to live in their communities rather than be unjustifiably institutionalized.

• Assure that in return for an increased federal commitment to Medicaid that states must continue their current funding and reinvest a major portion of the savings in expanding community living services. 

• Ensure that persons who are eligible for Medicaid retain their individual entitlement to receive all necessary and appropriate medical, health care and supportive services. 

Passage of the Medicaid Community Attendant Services and Supports Act (MiCASSA) and pursuing similar reforms is critical to achieving these vital national policy aims. 

The collective result of the Administration's Medicaid policies is that people with disabilities are promised new freedoms, but we are given new insecurity. Our criticism may seem harsh, but we believe it is both honest and necessary for you and others to hear. We are ready to work with the Administration to eliminate the institutional bias and enable people with disabilities across our nation to finally come to know real and lasting freedom. Toward this end, we request a meeting with you in the third week of March -- when several of us will be in Washington, DC -- to discuss the concerns we have raised in this letter and hopefully agree on a more constructive path for moving forward. Thank you. 

Sincerely,

ADAPT
Advancing Independence
American Association of Persons with Disabilities 
National Coalition for Disability Rights 
National Council on Independent Living 
National Spinal Cord Injury Association 
Paralyzed Veterans of America 

CC: Senator Charles Grassley 
Senator Max Baucus
Representative Billy Tauzin 
Representative John Dingell