Illustration: Sarah Grillo/Axios
A House Republican proposal to cut the District of Columbia's federal Medicaid reimbursement to generate savings for reconciliation is sending shudders through the city's hospitals.
Why it matters: The proposal has largely flown under the radar in the Medicaid debate, but the D.C. Hospital Association is warning it would have "devastating" effects, including longer wait times and even the possible closure of a hospital.
Driving the news: The proposal under consideration would cut D.C.'s federal Medicaid reimbursement, or FMAP, from 70% to 50%.
- DCHA — which represents 13 facilities — warns that would result in a roughly $400 million annual cut to hospital revenues at a time when some are operating on thin margins.
- "It would send our short-term acute care hospitals from a positive margin to a negative margin almost immediately," said Justin Palmer, a vice president at DCHA. "The results are devastating from a care delivery perspective."
- "Given the severity of the cuts it is likely one if not more hospitals would close," he added, warning of layoffs and longer wait times for emergency care and specialty appointments.
Yes, but: D.C.'s FMAP is currently set at a higher level by statute, and this proposal would instead use the standard formula that states use to calculate the federal share of payments, which would result in a drop to a 50% FMAP.
- D.C. hospitals argue there's good reason they get a higher share.
- Much of the land in the district is owned by the federal government and not subject to property taxes, which would otherwise generate revenue to offset the loss of federal funds.
Between the lines: It's not guaranteed that this proposal will make it into the reconciliation bill. It was included in a menu of options circulated in January, which found it would save $8 billion over 10 years.
- "We are still in the process of drafting legislation, so we are not yet ready to speak to any policy-specific questions or items regarding reconciliation," said Matt VanHyfte, a spokesperson for House Energy and Commerce Republicans, when asked about the proposal.
- But D.C. hospitals are trying to fight a perception among Hill Republicans that the proposal is low-hanging fruit. Even moderate House Republicans who generally worry about cutting Medicaid do not have much at stake politically if D.C. has its federal share reduced.
- One argument by the hospitals is that the move would hurt President Trump's stated goal of making D.C. "better, safer, and more beautiful than ever before" by, for example, cutting funds for ambulances to respond to emergencies.
- The White House did not respond to requests for comment on the proposal.
