Weekly Column of U.S. Senator Lamar Alexander - “First, Do No Harm”

Posted on March 25, 2007

On Thursday I joined with colleagues on the Senate Appropriations Committee to add language to a supplemental funding bill that would put the brakes on a regulatory proposal to change the rules governing Medicaid program funding to states. This kind of issue – particularly its official designation of CMS-2258-P – probably strikes most people as just another obscure policy issue for bureaucrats in Washington, DC to sort out. But appearances can be deceiving: in this case, it’s a matter of billions of dollars in funding and enormous potential consequences for Tennessee’s hospitals and those they serve. At a minimum, such issues should be decided by Congress and not unelected federal regulators. The proposal in question would dramatically reduce the amount of money that public hospitals in Tennessee receive from the federal Medicaid program. Now, I generally support efforts to control Medicaid spending, which has spiraled in recent years, and we understand that our state must bear its share of the burden. But these cuts are so steep, and so abrupt, as to threaten the very viability of a number of our hospitals. Senator Bob Corker and I also wrote to the Senate Finance Committee last week outlining our concerns: specifically, that this proposal could force drastic cuts in the medical services available to many Tennesseans – not just the low-income patients that Medicaid is designed to cover, but also others who receive health care services in the same facilities. How? The proposed restructuring of the way the nation’s public hospitals are reimbursed for Medicaid-related services would cost Tennessee hospitals of $1.3 billion over the next 5 years. That’s not so much a restructuring as an amputation. Not only would it result in significant cuts in a wide range of services, it could very well require the elimination of entire fields of medicine, such as obstetrics and psychology. Both large urban hospitals as well as smaller rural operations would be affected. Operating margins for 19 Tennessee facilities would turn from positive to negative solely as the result of the loss of Medicaid revenue. In other words, this one change would push them out of the black and into the red. Some of the hardest hit facilities would be “safety net” hospitals, such as the Memphis Medical Center (“the Med”) and Erlanger Hospital in Chattanooga, which provide medical services to large numbers of low-income and uninsured patients. A loss of federal funds would also automatically trigger a decrease in state funds going to these hospitals, a one-two punch. Tennessee hospitals already face increasing costs for workers, drugs, medical malpractice coverage, and disaster readiness. Decreases in payments of this size would almost certainly result in staff reductions, making it even more difficult for them to deal with such issues, not to mention comply with costly federal mandates. Investment in new facilities and technology would be out of the question. That’s why we put the brakes on, so Congress can make sure that our efforts to restrain the growth of Medicaid don’t unfairly hurt Tennessee hospitals. When Tennesseans’ health care is at stake, the only thing worse than high costs is an over-reaction that violates the Hippocratic Oath’s requirement of “First, do no harm.”