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Oregon Officials Seek To Salvage Plan To 'Ration' Medicaid

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Health Coverage By Meg Sommerfeld

Oregon officials are continuing negotiations with the U.S. Health and Human Services Department in an effort to save some or all of the state's controversial plan to "ration'' Medicaid health coverage.

The Bush Administration last month rejected the proposal, which seeks to expand basic health coverage while eliminating payments for certain medical services deemed less effective or necessary.

Critics of the plan have warned that it could deny needed medical attention to significant numbers of poor children and the disabled.

In an Aug. 3 letter to Gov. Barbara Roberts, Secretary of Health and Human Services Louis W. Sullivan turned down the state's proposal on the grounds that it violated the Americans With Disabilities Act.

The centerpiece of the plan is a list of 709 medical treatments ranked according to their effectiveness by a state commission. Medicaid coverage would be provided for only as many treatments as the legislature voted into the budget, which this year would have funded the top 587 procedures.

By excluding procedures at the bottom of the list, state officials estimated that they would save enough money to expand coverage to include an additional 120,000 uninsured residents, more than half of them women and children.

The state's current Medicaid program covers only families with dependent children with incomes of less than half of the poverty level.

The state needs a waiver to implement the reform plan because it does not include a minimum-benefits package guaranteeing medically necessary treatments to children under age 21, as required by federal law.

Discrimination Concerns

An HHS analysis accompanying Dr. Sullivan's letter concluded that the manner in which the commission calculated the rankings "was based in substantial part on the premise that the value of the life of a person with a disability is less than the value of the life of a person without a disability.''

The analysis cited two examples of discrimination from among the 122 excluded procedures: the elimination of medical therapy for certain low-weight, extremely premature babies and of liver transplants for alcoholic cirrhosis of the liver.

But Jean Thorne, the state's Medicaid director, responded that treatment for low-weight babies would still be included under the state's definition of "comfort care.'' Liver transplants would only be denied to alcoholics who were still drinking, because of their low success rate.

In response to Dr. Sullivan's letter, Governor Roberts wrote to President Bush asking him to overturn the decision. "By denying this waiver,'' she wrote, "your Administration has denied all health care to thousands of disabled Oregonians on the basis of possible future discrimination that remains unsubstantiated.''

The state is currently seeking clarification from the federal department of exactly how the plan violates the ADA, Ms. Thorne explained.

State officials plan to resubmit their waiver application, after first determining whether the department wants them merely to revise the list or to scrap the ranking method altogether.

Focusing on the 'Greatest Good'

Among the organizations opposing the plan are the Children's Defense Fund, the National Right to Life Committee, and advocacy groups for the disabled.

"We opposed the very nature of Oregon's rationing scheme that ranks medical conditions with the medical treatment for those conditions,'' said Joseph Liu, a senior health associate at the CDF

If the state faces major budget cuts without a minimum-benefits guarantee, Mr. Liu warned, it could eliminate such basic services for children as treating broken ribs or providing eyeglasses. Up to 15,000 pregnant women and children under 6 could actually lose coverage due to changes in how the state calculates income, he predicted.

Ms. Thorne argued, however, that no more than 300 women and children might lose coverage.

While other states may not explicitly ration care, she contended, they may limit services in a manner that harms certain populations. By limiting certain categories of coverage, she continued, the state can "concentrate our dollars on those services that do the greatest good.''

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