On July 8, Peter Orszag, Director of the President’s Office of Management and Budget, sent a letter to key committee chairman in the House of Representatives in which he called for cuts to crucial payments for safety net hospitals. The letter came at an important time, as House Ways and Means Committee Chairman Charles Rangel (D-NY), Energy and Commerce Committee Chairman Henry Waxman (D-CA), and Education and Labor Committee Chairman George Miller (D-CA) were putting the finishing touches on revisions to the health reform discussion draft they released on June 19. The committee chairmen were hoping to formally introduce a bill late last week so their committees could begin to consider the legislation this week. “As you introduce and mark-up your legislation,” Director Orszag said, “we recommend you consider additional savings from Medicare and Medicaid disproportionate share hospital payments and further delivery system reforms, including changes to the process through which Medicare policies are set.” The end of the sentence referring to the Medicare policy-setting process is an apparent reference to proposals to give a non-elected body, such as the Medicare Payment Assessment Commission (MedPAC), the power to make Medicare payment policy, with little input or oversight from the people’s representatives in Congress. 

The House discussion draft contained no Medicare or Medicaid disproportionate share hospital (DSH) payment cuts, but instead called for an analysis of the continued need for DSH payments over time. GNYHA strongly supports the House draft because it does not propose cuts to DSH or teaching hospital payments, such as Medicare indirect medical education (IME) payments. GNYHA is dismayed at the Obama Administration’s call for cutting safety net institutions. Health reform will leave uninsured the nation’s 11 million undocumented immigrants who will still rely upon safety net hospitals for their health care. These institutions will also continue to care for citizens and legal immigrants who may still be uninsured under health reform, especially in states like New York and New Jersey that have already expanded their Medicaid programs and so may benefit little from the Medicaid expansions under consideration. GNYHA also views proposals for Congress to cede its power over Medicare payment policy to an unelected body such as MedPAC as an abdication of responsibility and undemocratic. As the national health reform negotiations progress, GNYHA will continue to vigorously oppose any proposals that will undermine safety net hospitals.