Weathering the Medicaid StormBy Elissa
Karg
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"What do that man expect people to do?" Frank Leonard asked when he learned that Medicaid would no longer pay for transportation to the hospital where he receives chemotherapy treatments. "Are people supposed to starve to death or live on the street because of him?" "That man" is Gov. John Engler, and Leonard is one of almost 1 million Medicaid recipients affected by Medicaid cuts implemented April 1, eliminating many "optional" Medicaid services, or those beyond what federal law requires, and reducing Medicaid payments to hospitals, doctors and other health care providers by 18.4 percent. For someone like Leonard, diagnosed with leukemia last year, a little thing like cab fare to the hospital can mean the difference between independence and institutionalization in a nursing home. A visiting nurse sees him three times a week to tend to an indwelling catheter and teach him to check blood sugar and give insulin injections for his diabetes. This costs the state a fraction of what it would for one day's hospitalization. At 59, Leonard is too young for Medicare. The company where he worked as a truck driver doesn't pay benefits. He relies on a friend for a place to live in a dilapidated block of wood frame houses in northwest Detroit. Now that Medicaid won't pay for his trips to the hospital, Leonard must turn elsewhere: Can his sister, his only nearby relative, drive him?, he was asked. "No, something's wrong with her leg." His landlord? He shook his head. "I'm tired of begging for things." Medical transportation isn't the only benefit Medicaid recipients will lose. Hopefully, Leonard won't need a wheelchair, because durable equipment, including the glucometer that helps him to control his blood sugar and the walker that helps him to get around safely, will not be paid for unless they're required to sustain life or keep a person from being immediately admitted to a hospital or nursing home. Other so-called optional services that have been eliminated include physical therapy provided by home health care agencies, podiatry and chiropractic care and substance abuse treatment, except for acute detoxification. Certain "high cost" hospitals, like Detroit Receiving, Henry Ford, Harper and the University of Michigan Medical Center, will no longer receive Medicaid reimbursements, except for emergency care. These items were dropped, and payments to providers reduced, when the state Department of Social Services (DSS), which handles Medicaid, had to trim 9.2 percent from its budget. The percentage was doubled to 18.4 percent because half of the 1990-91 fiscal year had already elapsed. Furthermore, DSS Director Gerald Miller has said that the Medicaid system will run out of money altogether in August, and that the state will have to "disenroll" from the Medicaid program until the end of the fiscal year, Sept. 30. The state pays 46 percent toward Medicaid and the federal government, 54 percent. Coming on the heels of one Armageddon headline after another, the idea that Michigan might go two months without Medicaid has received little attention. Social services advocates say that it's hard to know whether Miller is serious, posturing or playing a big game of chicken to force the Legislature to accept other devastating social service cuts, like eliminating General Assistance. Miller, an Engler appointee, mentioned disenrolling from Medicaid in his Senate confirmation hearings Feb. 12. Questioned by Sen. John Kelly, D-Detroit, about whether he was seriously considering dropping out of Medicaid, Miller responded: "... if we are mandated as we are as of right now, to cut 9.2 percent from the Medicaid line, the only alternative that we have is to get out of the program. So am I serious? Yes. If I'm required by law to do that, that's what we will have to do. Do I hope it will occur? Absolutely not. I think it would be a disastrous impact for the state. But there is no alternative if we are required to cut those funds, because once we run out of money in Medicaid ... any provider will go to court ... we'll get an injunction telling us to provide the service and pay for it." Bob Lathrop, a member of the newly formed Michigan Fair Budget Action Coalition and the legislative director of the Service Employees International Union (SEIU), which represents nursing home workers, says: "That is the threat they put out there on a regular basis; they say it at almost every public function. It reflects John Engler's style of legislative negotiations. He puts people against the wall and sees who will blink first." Meanwhile, the 9.2 percent, across-the-board cuts, originally proposed by the Blanchard administration and agreed to by the Legislature in December, went through when the new governor and Democrat-led House were unable to agree on an alternative budget-balancing package. Each department was supposed to make proposals to implement the cuts; if no agreement could be reached, 9.2 percent would be cut from each line item. Eileen Ellis, acting director of the state Medicaid program, says that the Medicaid budget has nine "line items," including hospitals, nursing homes, county long-term-care facilities, physician services, auxiliary services such as vision, dental and durable medical equipment, pharmaceuticals and laboratories, transportation, HMOs and home health care. However, last year hospitals and nursing homes won a lawsuit prohibiting their benefit levels from being cut. Claiming they were losing money on Medicaid patients, the hospitals and nursing homes cited the Boren Amendment, which requires that Medicaid reimbursements be sufficient to attract providers. Instead, the Department of Social Services has whittled away at the hospital and nursing home lines by identifying "high cost" hospitals, eliminating subacute substance abuse treatment, refusing to reimburse for "therapeutic leave days" from nursing homes, cutting reimbursements to county long-term-care facilities by 18.4 percent on April 1 and 30 percent, to take effect on May 1, cutting the personal needs allowance for nursing home patients from $32 to $30, and other cuts that vary between significant and nickel-and-dime savings. Should the state run out of Medicaid money in August as Miller predicted, Michigan would be the only state ever to disenroll. Lathrop of the SEIU warns that, with cuts of 30 percent, county long-term-care facilities -- the poor houses of yesteryear -- might be forced to close by the end of the fiscal year. "I don't think people are able to grasp the enormity of the consequences," he says. Even Miller said in the confirmation hearings that "people would die, as simple as that. ... They would die." Certainly, some hospitals and nursing homes would go under. On any given day, 65 percent of the revenue coming through a nursing home is Medicaid dollars, and in county facilities, it is 85 percent, according to social service advocates. Dave Weiner, assistant to state Rep. David Hollister, D-Lansing, says he can't imagine the Medicaid program being halted, even temporarily. "It won't happen," he says. "It can't happen. The outrage that hospitals, doctors, nursing homes ... it will be the biggest class action suit we've ever seen." Kathleen Gmeiner, staff attorney for Michigan Legal Services, agrees that it is "inconceivable," but adds: "Other things that previously seemed inconceivable are happening now. In my opinion, if DSS did attempt to end Medicaid, it would violate state law." Meanwhile, health care providers are already seeing the effects of the cuts. Dr. Susan Rice, who has a practice in northwest Detroit that consists of 45 percent Medicaid patients, says: "I talk to people who have no transportation to get to the doctor, who could not bring a feverish child on the bus. People are deferring routine medical care, such as prenatal appointments and immunizations, putting off care for their children's sicknesses until the children are damaged by the illness." Beverly McDonald, director of the Michigan League for Human Services, an advocacy group, finds it hard to discuss the social service cuts without getting angry: "The debate is becoming more and more surreal. It's like a game of blinkmanship -- are we going to hang tough up to July 31 and see if they really do disenroll from Medicaid, or are we going to eliminate General Assistance? Neither of the choices is acceptable. We can find the revenue to do both. That's what we would do in a civilized society. "It's not a matter that we have no money. We have no money because Engler wants to fund a property tax cut next year. The trade-off for that is that we will turn people out of nursing homes. "What about the (state's) 'rainy day' fund? It's raining. I think we would all agree that it's raining."
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