Hospital Groups Urge Obama to Resist Medicaid MOE Cuts

The nation's largest hospital associations have banded together to ask the Obama administration to resist efforts by governors to reduce maintenance-of-effort funding for Medicaid in their cash-strapped states.

"We want to reiterate our strong support for the Medicaid MOE requirement that was part of the Affordable Care Act, and urge you to continue to resist efforts to erode the important coverage protections that this provision is intended to ensure," the associations said in a joint letter Tuesday to Health and Human Services Secretary Kathleen Sebelius. "The nation's hospitals and health systems recognize the significant fiscal pressures facing many states and stand ready to work with them, as you do, to find effective solutions without compromising coverage."

The letter was sent as Republican governors urged the Obama Administration to change Medicaid from its reliance on state and federal matching funds, and into a block grant program. The GOP governors said block grants would provide them with the flexibility to manage the budget-busting program and cover gaping state revenue shortfalls. Several media outlets reported Tuesday that the Obama administration has rejected the idea.

Medicaid covers more than 50 million people, and the rolls have increased in recent years owing to the recession and sputtering recover. The hospital associations in the letter to Sebelius acknowledged the pressure that Medicaid is putting on state budgets, but they urged the federal government to resist any requests for MOE waivers, which are otherwise prohibited before Jan. 14, 2014, when the ACA's coverage expansion goes into effect.

"A relaxation of the MOE provisions will push many low-income Americans off Medicaid rolls, thereby increasing the number of uninsured – moving us backwards rather than forward towards the ACA's goal of expanded health coverage," the associations said. "Removing people from Medicaid does not keep them from getting sick and will deter them from seeking the care that they need. Further, it shifts the burden of their care from states and the federal government largely onto the nation's hospitals. Hospitals currently provide some $40 billion in uncompensated care and the loss of the Medicaid MOE will only increase this burden on providers."

The letter was signed by representatives from the American Hospital Association, Catholic Health Association of the United States, Federation of American Hospitals, National Association of Children's Hospitals, National Association of Public Hospitals and Health Systems, the Association of American Medical Colleges, and VHA Inc.