Nellie Bristol

WASHINGTON – The House and Senate are negotiating legislation that would establish a voluntary medical error reporting system with the goal of passing a consensus measure by the August recess, lawmakers and staffers say.

Following a June 9 hearing of the House Energy and Commerce subcommittee on Health, Rep. Nathan Deal (R-Ga.), chairman of the subcommittee on Health, told reporters that the measure is likely to have some variations from last year's versions of the bill, but said the scope of the proposed legislation is the same. “Hopefully, if we can get a consensus worked out, it would be a bill that I think would move rather quickly” to gain approval, he said.

The House and Senate each passed similar patient safety bills last year–the House on a 418–6 vote and the Senate by voice vote. But the bills got bogged down in conference and died in the waning days of the 108th Congress.

The lawmakers are trying to establish a voluntary system in which providers could confidentially report errors to official patient safety organizations. The previously proposed bills differed in the degree to which information was legally protected and in approaches to health information technology interoperability.

Now, as lawmakers negotiate a new measure, Agency for Healthcare Research and Quality (AHRQ) Director Carolyn Clancy, M.D., is calling for increased training of data analysts.

She recently testified that her agency continues its patient safety efforts. “While an increasing number of hospitals are developing the capacity to analyze the causes of medical errors, we need to recognize that the ability to conduct these analyses is uneven both in terms of experience and skill level,” Dr. Clancy said. Moving to a system where the errors are routinely analyzed will require “significant skill development and technical assistance.”

Dr. Clancy also warned that as the environment for patient safety improves, the number of reported errors is likely to rise as “previously hidden errors are disclosed.” An initial increase in the number of reported errors, therefore, “is a sign of success, not failure.”

She also called for increased information on care improvement in outpatient settings. “There is a significant amount of information on how to improve the safety of hospital care, but the evidence base is less robust for other settings of care.”

The day before the hearing, AHRQ announced it will award more than $8 million for 15 projects designed to help clinicians, facilities, and patients implement evidence-based safety practices. More than half of the projects focus on reducing medication errors. Another area of interest is improved communications among health care teams.

Despite efforts in the public and private sectors to improve patient safety, Joint Commission on Accreditation of Healthcare Organizations President Dennis O'Leary, M.D., told the House panel that “we may actually be falling further behind as new drugs, procedures, and technologies are introduced every day.”

Each new intervention carries its own risks that have not been identified, Dr. O'Leary said, and “they will be introduced into care delivery systems where patient safety and systems thinking … are not constantly top of mind.”

Dr. O'Leary also said more should be done to ensure adherence to clinical guidelines, which he said can reduce legal risk for providers. He suggested providing incentives to focus on improvements in patient safety and health care quality as one way to increase guideline adherence.

Dr. O'Leary also recommended finding a private sector alternative for the National Provider Data Bank, which he said “has probably never met its full expectations.” He said the data bank tends not to record information about whether a standard of care was violated, making the information “relatively unhelpful” for patient safety analysis. He suggested an approach that may include a network of databases.

WASHINGTON – The House and Senate are negotiating legislation that would establish a voluntary medical error reporting system with the goal of passing a consensus measure by the August recess, lawmakers and staffers say.

Following a June 9 hearing of the House Energy and Commerce subcommittee on Health, Rep. Nathan Deal (R-Ga.), chairman of the subcommittee on Health, told reporters that the measure is likely to have some variations from last year's versions of the bill, but said the scope of the proposed legislation is the same. “Hopefully, if we can get a consensus worked out, it would be a bill that I think would move rather quickly” to gain approval, he said.

The House and Senate each passed similar patient safety bills last year–the House on a 418–6 vote and the Senate by voice vote. But the bills got bogged down in conference and died in the waning days of the 108th Congress.

The lawmakers are trying to establish a voluntary system in which providers could confidentially report errors to official patient safety organizations. The previously proposed bills differed in the degree to which information was legally protected and in approaches to health information technology interoperability.

Now, as lawmakers negotiate a new measure, Agency for Healthcare Research and Quality (AHRQ) Director Carolyn Clancy, M.D., is calling for increased training of data analysts.

She recently testified that her agency continues its patient safety efforts. “While an increasing number of hospitals are developing the capacity to analyze the causes of medical errors, we need to recognize that the ability to conduct these analyses is uneven both in terms of experience and skill level,” Dr. Clancy said. Moving to a system where the errors are routinely analyzed will require “significant skill development and technical assistance.”

Dr. Clancy also warned that as the environment for patient safety improves, the number of reported errors is likely to rise as “previously hidden errors are disclosed.” An initial increase in the number of reported errors, therefore, “is a sign of success, not failure.”

She also called for increased information on care improvement in outpatient settings. “There is a significant amount of information on how to improve the safety of hospital care, but the evidence base is less robust for other settings of care.”

The day before the hearing, AHRQ announced it will award more than $8 million for 15 projects designed to help clinicians, facilities, and patients implement evidence-based safety practices. More than half of the projects focus on reducing medication errors. Another area of interest is improved communications among health care teams.

Despite efforts in the public and private sectors to improve patient safety, Joint Commission on Accreditation of Healthcare Organizations President Dennis O'Leary, M.D., told the House panel that “we may actually be falling further behind as new drugs, procedures, and technologies are introduced every day.”

Each new intervention carries its own risks that have not been identified, Dr. O'Leary said, and “they will be introduced into care delivery systems where patient safety and systems thinking … are not constantly top of mind.”

Dr. O'Leary also said more should be done to ensure adherence to clinical guidelines, which he said can reduce legal risk for providers. He suggested providing incentives to focus on improvements in patient safety and health care quality as one way to increase guideline adherence.

Dr. O'Leary also recommended finding a private sector alternative for the National Provider Data Bank, which he said “has probably never met its full expectations.” He said the data bank tends not to record information about whether a standard of care was violated, making the information “relatively unhelpful” for patient safety analysis. He suggested an approach that may include a network of databases.

WASHINGTON – The House and Senate are negotiating legislation that would establish a voluntary medical error reporting system with the goal of passing a consensus measure by the August recess, lawmakers and staffers say.

Following a June 9 hearing of the House Energy and Commerce subcommittee on Health, Rep. Nathan Deal (R-Ga.), chairman of the subcommittee on Health, told reporters that the measure is likely to have some variations from last year's versions of the bill, but said the scope of the proposed legislation is the same. “Hopefully, if we can get a consensus worked out, it would be a bill that I think would move rather quickly” to gain approval, he said.

The House and Senate each passed similar patient safety bills last year–the House on a 418–6 vote and the Senate by voice vote. But the bills got bogged down in conference and died in the waning days of the 108th Congress.

The lawmakers are trying to establish a voluntary system in which providers could confidentially report errors to official patient safety organizations. The previously proposed bills differed in the degree to which information was legally protected and in approaches to health information technology interoperability.

Now, as lawmakers negotiate a new measure, Agency for Healthcare Research and Quality (AHRQ) Director Carolyn Clancy, M.D., is calling for increased training of data analysts.

She recently testified that her agency continues its patient safety efforts. “While an increasing number of hospitals are developing the capacity to analyze the causes of medical errors, we need to recognize that the ability to conduct these analyses is uneven both in terms of experience and skill level,” Dr. Clancy said. Moving to a system where the errors are routinely analyzed will require “significant skill development and technical assistance.”

Dr. Clancy also warned that as the environment for patient safety improves, the number of reported errors is likely to rise as “previously hidden errors are disclosed.” An initial increase in the number of reported errors, therefore, “is a sign of success, not failure.”

She also called for increased information on care improvement in outpatient settings. “There is a significant amount of information on how to improve the safety of hospital care, but the evidence base is less robust for other settings of care.”

The day before the hearing, AHRQ announced it will award more than $8 million for 15 projects designed to help clinicians, facilities, and patients implement evidence-based safety practices. More than half of the projects focus on reducing medication errors. Another area of interest is improved communications among health care teams.

Despite efforts in the public and private sectors to improve patient safety, Joint Commission on Accreditation of Healthcare Organizations President Dennis O'Leary, M.D., told the House panel that “we may actually be falling further behind as new drugs, procedures, and technologies are introduced every day.”

Each new intervention carries its own risks that have not been identified, Dr. O'Leary said, and “they will be introduced into care delivery systems where patient safety and systems thinking … are not constantly top of mind.”

Dr. O'Leary also said more should be done to ensure adherence to clinical guidelines, which he said can reduce legal risk for providers. He suggested providing incentives to focus on improvements in patient safety and health care quality as one way to increase guideline adherence.

Dr. O'Leary also recommended finding a private sector alternative for the National Provider Data Bank, which he said “has probably never met its full expectations.” He said the data bank tends not to record information about whether a standard of care was violated, making the information “relatively unhelpful” for patient safety analysis. He suggested an approach that may include a network of databases.

WASHINGTON – The Centers for Medicare and Medicaid Services will review national provider identifier protocols that now require separate numbers for each covered entity. The requirement could mean some physicians who are also part of group practices and other arrangements would have multiple NPI numbers.

At a meeting of the Practicing Physicians Advisory Council, members brought the issue to the attention of CMs' director of program integrity, Kimberly Brandt. She said the goal is to have fewer numbers –not more. “So I appreciate your point, and it's a very good one,” she said. “And that's something I will definitely look into.”

PPAC member Barbara McAneny, M.D., an oncologist from Albuquerque, suggested the review as part of a draft recommendation approved by the council. The recommendation suggests CMS clarify which current provider numbers would be replaced by the NPI number and which entities would need their own numbers.

Dr. McAneny also suggested CMS “put pressure” on other groups, including state licensure boards, “to eliminate some of the numbers and not to just add them on and add them on and add them on. …”

NPI enrollment began May 2 and continues through May 2007, when all providers will be required to use the system for standard electronic health care transactions. “With national standards and identifiers in place for electronic claims and other transactions, health care providers will be able to submit transactions to any health plan in the United States,” CMS Administrator Mark McClellan, M.D., said in a May letter to health care providers.

As a requirement of the Health Insurance Portability and Accountability Act, many health plans–including Medicare, Medicaid, private health insurance issuers, and health care clearinghouses–must use NPIs in standard transactions by May 2007. Small health plans have an additional year to comply. The number is intended to replace current numbers, including the unique physician identification number (UPIN).

Ms. Brandt told the advisory council that CMS is conducting a “massive outreach effort” to inform providers of the change and encourages them to apply for an NPI. Applications can be made electronically or through the mail. To demonstrate the process of getting an NPI, PPAC Chairman Ronald Castellanos, M.D., got his number at the council's meeting, in a process that took approximately 8 minutes. “I'm not bleeding,” Dr. Castellanos said when asked how painful the process was.

CMS is encouraging health plans to devise a transition plan for a system that accepts both the UPIN and NPI until the May 2007 compliance deadline. Ms. Bryant said that although a few health plans already have systems developed, most do not–including Medicare, which she said will not have the “capacity to be fully changed over” until 2007.

“We need the next year and a half to finish getting our claims-processing system completely converted over, and then we'll begin the phase-out I would say about 6–8 months ahead” of the May 2007 deadline, she said. CMS is recommending that members of groups not sign up individually now but wait until fall, when “batch enumeration” systems will be in place to accept group applications.

Once assigned a random NPI, providers will have that number for the remainder of their careers and need only contact CMS to make changes. The system will be meshed with Social Security information to track provider deaths, and the agency hopes to be able to coordinate with state licensing groups as well, Ms. Brandt told the council.

PPAC member Dr. Geraldine O'Shea applied for her national provider identifier number during a break at a recent council meeting. Vivian E. Lee

Please, Can We Have a Directory?

Security concerns are currently keeping CMS from developing a directory of all NPI numbers for all health providers and covered entities, but one may be developed in the future, Ms. Brandt told PPAC members.

“We may get to a point where we have a directory, but right at the moment, we don't have a [list] like the unique physician identification number directory in the works,” she said.

Instead, the agency is planning to publish in the Federal Register in October a notice on how NPIs can be obtained from other health care providers and covered entities.

PPAC members encouraged Ms. Brandt to look into a directory for referring physicians, even if such a directory turned out to be a subscriber service. “I would strongly advocate that you [develop a directory] even if there's a subscription fee because one of the more problematic things when you bill for a consult is to try to track down Dr. Jones' [UPIN], and it's a significant hurdle and a big burden on the practice,” said surgeon Anthony Senagore, M.D., of the Cleveland Clinic Foundation.

Ms. Brandt noted that an encrypted or password-accessed system would be necessary, given that “people have been able to get access to [the UPIN director] who shouldn't have been able to get access to it.” Council members' recommendation for a subscription fee or encryption is “a good one,” she said.

WASHINGTON – The Centers for Medicare and Medicaid Services will review national provider identifier protocols that now require separate numbers for each covered entity. The requirement could mean some physicians who are also part of group practices and other arrangements would have multiple NPI numbers.

At a meeting of the Practicing Physicians Advisory Council, members brought the issue to the attention of CMs' director of program integrity, Kimberly Brandt. She said the goal is to have fewer numbers –not more. “So I appreciate your point, and it's a very good one,” she said. “And that's something I will definitely look into.”

PPAC member Barbara McAneny, M.D., an oncologist from Albuquerque, suggested the review as part of a draft recommendation approved by the council. The recommendation suggests CMS clarify which current provider numbers would be replaced by the NPI number and which entities would need their own numbers.

Dr. McAneny also suggested CMS “put pressure” on other groups, including state licensure boards, “to eliminate some of the numbers and not to just add them on and add them on and add them on. …”

NPI enrollment began May 2 and continues through May 2007, when all providers will be required to use the system for standard electronic health care transactions. “With national standards and identifiers in place for electronic claims and other transactions, health care providers will be able to submit transactions to any health plan in the United States,” CMS Administrator Mark McClellan, M.D., said in a May letter to health care providers.

As a requirement of the Health Insurance Portability and Accountability Act, many health plans–including Medicare, Medicaid, private health insurance issuers, and health care clearinghouses–must use NPIs in standard transactions by May 2007. Small health plans have an additional year to comply. The number is intended to replace current numbers, including the unique physician identification number (UPIN).

Ms. Brandt told the advisory council that CMS is conducting a “massive outreach effort” to inform providers of the change and encourages them to apply for an NPI. Applications can be made electronically or through the mail. To demonstrate the process of getting an NPI, PPAC Chairman Ronald Castellanos, M.D., got his number at the council's meeting, in a process that took approximately 8 minutes. “I'm not bleeding,” Dr. Castellanos said when asked how painful the process was.

CMS is encouraging health plans to devise a transition plan for a system that accepts both the UPIN and NPI until the May 2007 compliance deadline. Ms. Bryant said that although a few health plans already have systems developed, most do not–including Medicare, which she said will not have the “capacity to be fully changed over” until 2007.

“We need the next year and a half to finish getting our claims-processing system completely converted over, and then we'll begin the phase-out I would say about 6–8 months ahead” of the May 2007 deadline, she said. CMS is recommending that members of groups not sign up individually now but wait until fall, when “batch enumeration” systems will be in place to accept group applications.

Once assigned a random NPI, providers will have that number for the remainder of their careers and need only contact CMS to make changes. The system will be meshed with Social Security information to track provider deaths, and the agency hopes to be able to coordinate with state licensing groups as well, Ms. Brandt told the council.

PPAC member Dr. Geraldine O'Shea applied for her national provider identifier number during a break at a recent council meeting. Vivian E. Lee

Please, Can We Have a Directory?

Security concerns are currently keeping CMS from developing a directory of all NPI numbers for all health providers and covered entities, but one may be developed in the future, Ms. Brandt told PPAC members.

“We may get to a point where we have a directory, but right at the moment, we don't have a [list] like the unique physician identification number directory in the works,” she said.

Instead, the agency is planning to publish in the Federal Register in October a notice on how NPIs can be obtained from other health care providers and covered entities.

PPAC members encouraged Ms. Brandt to look into a directory for referring physicians, even if such a directory turned out to be a subscriber service. “I would strongly advocate that you [develop a directory] even if there's a subscription fee because one of the more problematic things when you bill for a consult is to try to track down Dr. Jones' [UPIN], and it's a significant hurdle and a big burden on the practice,” said surgeon Anthony Senagore, M.D., of the Cleveland Clinic Foundation.

Ms. Brandt noted that an encrypted or password-accessed system would be necessary, given that “people have been able to get access to [the UPIN director] who shouldn't have been able to get access to it.” Council members' recommendation for a subscription fee or encryption is “a good one,” she said.

WASHINGTON – The Centers for Medicare and Medicaid Services will review national provider identifier protocols that now require separate numbers for each covered entity. The requirement could mean some physicians who are also part of group practices and other arrangements would have multiple NPI numbers.

At a meeting of the Practicing Physicians Advisory Council, members brought the issue to the attention of CMs' director of program integrity, Kimberly Brandt. She said the goal is to have fewer numbers –not more. “So I appreciate your point, and it's a very good one,” she said. “And that's something I will definitely look into.”

PPAC member Barbara McAneny, M.D., an oncologist from Albuquerque, suggested the review as part of a draft recommendation approved by the council. The recommendation suggests CMS clarify which current provider numbers would be replaced by the NPI number and which entities would need their own numbers.

Dr. McAneny also suggested CMS “put pressure” on other groups, including state licensure boards, “to eliminate some of the numbers and not to just add them on and add them on and add them on. …”

NPI enrollment began May 2 and continues through May 2007, when all providers will be required to use the system for standard electronic health care transactions. “With national standards and identifiers in place for electronic claims and other transactions, health care providers will be able to submit transactions to any health plan in the United States,” CMS Administrator Mark McClellan, M.D., said in a May letter to health care providers.

As a requirement of the Health Insurance Portability and Accountability Act, many health plans–including Medicare, Medicaid, private health insurance issuers, and health care clearinghouses–must use NPIs in standard transactions by May 2007. Small health plans have an additional year to comply. The number is intended to replace current numbers, including the unique physician identification number (UPIN).

Ms. Brandt told the advisory council that CMS is conducting a “massive outreach effort” to inform providers of the change and encourages them to apply for an NPI. Applications can be made electronically or through the mail. To demonstrate the process of getting an NPI, PPAC Chairman Ronald Castellanos, M.D., got his number at the council's meeting, in a process that took approximately 8 minutes. “I'm not bleeding,” Dr. Castellanos said when asked how painful the process was.

CMS is encouraging health plans to devise a transition plan for a system that accepts both the UPIN and NPI until the May 2007 compliance deadline. Ms. Bryant said that although a few health plans already have systems developed, most do not–including Medicare, which she said will not have the “capacity to be fully changed over” until 2007.

“We need the next year and a half to finish getting our claims-processing system completely converted over, and then we'll begin the phase-out I would say about 6–8 months ahead” of the May 2007 deadline, she said. CMS is recommending that members of groups not sign up individually now but wait until fall, when “batch enumeration” systems will be in place to accept group applications.

Once assigned a random NPI, providers will have that number for the remainder of their careers and need only contact CMS to make changes. The system will be meshed with Social Security information to track provider deaths, and the agency hopes to be able to coordinate with state licensing groups as well, Ms. Brandt told the council.

PPAC member Dr. Geraldine O'Shea applied for her national provider identifier number during a break at a recent council meeting. Vivian E. Lee

Please, Can We Have a Directory?

Security concerns are currently keeping CMS from developing a directory of all NPI numbers for all health providers and covered entities, but one may be developed in the future, Ms. Brandt told PPAC members.

“We may get to a point where we have a directory, but right at the moment, we don't have a [list] like the unique physician identification number directory in the works,” she said.

Instead, the agency is planning to publish in the Federal Register in October a notice on how NPIs can be obtained from other health care providers and covered entities.

PPAC members encouraged Ms. Brandt to look into a directory for referring physicians, even if such a directory turned out to be a subscriber service. “I would strongly advocate that you [develop a directory] even if there's a subscription fee because one of the more problematic things when you bill for a consult is to try to track down Dr. Jones' [UPIN], and it's a significant hurdle and a big burden on the practice,” said surgeon Anthony Senagore, M.D., of the Cleveland Clinic Foundation.

Ms. Brandt noted that an encrypted or password-accessed system would be necessary, given that “people have been able to get access to [the UPIN director] who shouldn't have been able to get access to it.” Council members' recommendation for a subscription fee or encryption is “a good one,” she said.

WASHINGTON — Private bounty hunters are one way to fight fraud in the Medicaid program, according to Stan Dorn, J.D., senior analyst at the Economic and Social Research Institute.

Successfully used by Medicare, the bounty hunter approach allows whistle-blowers to share in funds recovered through prosecutions under the False Claims Act. According to recommendations developed by Andy Schneider, J.D., Medicaid policy expert for Taxpayers Against Fraud, Congress could bolster Medicaid whistle-blower opportunities by increasing federal payments to states that enact their own False Claims Act and by offering whistle-blowers a minimum of 20% of the federal share of any recovered funds.

At a policy forum sponsored by the American Public Health Association, Mr. Dorn included enhanced fraud reduction efforts among nine budget-cutting options that would trim the cost of the program without capping spending or enrollment. Congress is expected to propose Medicaid program changes this year that will cut $10 billon in federal spending over 5 years.

Mr. Dorn offered other cost savings ideas, such as improving case management for the chronically ill and implementing community-based obesity prevention strategies. The Bush administration in its fiscal year 2006 budget proposed reducing Medicaid funding by reforming the program's drug purchasing system and limiting asset transfers that qualify seniors for long-term care.

Limits on spending and benefits are not part of any current federal budget plans, but lawmakers are looking broadly at Medicaid reform proposals; caps could be considered as part of those, Mr. Dorn noted at the forum, cosponsored by the Joint Center for Political and Economic Studies.

Not only would caps affect Medicaid recipients, but they could prove detrimental to the economy, Mr. Dorn said. Medicaid must provide benefits to all of those eligible, so most of the program is economically “countercyclical,” he said, meaning it expands as the economy contracts. This makes health benefits available to low-income individuals and contributes to the flow of funds to health care providers and, in turn, other sectors of the economy.

To capitalize on Medicaid's stabilizing effects, Mr. Dorn suggested that federal matching rates could automatically rise when the economy slows.

WASHINGTON — Private bounty hunters are one way to fight fraud in the Medicaid program, according to Stan Dorn, J.D., senior analyst at the Economic and Social Research Institute.

Successfully used by Medicare, the bounty hunter approach allows whistle-blowers to share in funds recovered through prosecutions under the False Claims Act. According to recommendations developed by Andy Schneider, J.D., Medicaid policy expert for Taxpayers Against Fraud, Congress could bolster Medicaid whistle-blower opportunities by increasing federal payments to states that enact their own False Claims Act and by offering whistle-blowers a minimum of 20% of the federal share of any recovered funds.

At a policy forum sponsored by the American Public Health Association, Mr. Dorn included enhanced fraud reduction efforts among nine budget-cutting options that would trim the cost of the program without capping spending or enrollment. Congress is expected to propose Medicaid program changes this year that will cut $10 billon in federal spending over 5 years.

Mr. Dorn offered other cost savings ideas, such as improving case management for the chronically ill and implementing community-based obesity prevention strategies. The Bush administration in its fiscal year 2006 budget proposed reducing Medicaid funding by reforming the program's drug purchasing system and limiting asset transfers that qualify seniors for long-term care.

Limits on spending and benefits are not part of any current federal budget plans, but lawmakers are looking broadly at Medicaid reform proposals; caps could be considered as part of those, Mr. Dorn noted at the forum, cosponsored by the Joint Center for Political and Economic Studies.

Not only would caps affect Medicaid recipients, but they could prove detrimental to the economy, Mr. Dorn said. Medicaid must provide benefits to all of those eligible, so most of the program is economically “countercyclical,” he said, meaning it expands as the economy contracts. This makes health benefits available to low-income individuals and contributes to the flow of funds to health care providers and, in turn, other sectors of the economy.

To capitalize on Medicaid's stabilizing effects, Mr. Dorn suggested that federal matching rates could automatically rise when the economy slows.

WASHINGTON — Private bounty hunters are one way to fight fraud in the Medicaid program, according to Stan Dorn, J.D., senior analyst at the Economic and Social Research Institute.

Successfully used by Medicare, the bounty hunter approach allows whistle-blowers to share in funds recovered through prosecutions under the False Claims Act. According to recommendations developed by Andy Schneider, J.D., Medicaid policy expert for Taxpayers Against Fraud, Congress could bolster Medicaid whistle-blower opportunities by increasing federal payments to states that enact their own False Claims Act and by offering whistle-blowers a minimum of 20% of the federal share of any recovered funds.

At a policy forum sponsored by the American Public Health Association, Mr. Dorn included enhanced fraud reduction efforts among nine budget-cutting options that would trim the cost of the program without capping spending or enrollment. Congress is expected to propose Medicaid program changes this year that will cut $10 billon in federal spending over 5 years.

Mr. Dorn offered other cost savings ideas, such as improving case management for the chronically ill and implementing community-based obesity prevention strategies. The Bush administration in its fiscal year 2006 budget proposed reducing Medicaid funding by reforming the program's drug purchasing system and limiting asset transfers that qualify seniors for long-term care.

Limits on spending and benefits are not part of any current federal budget plans, but lawmakers are looking broadly at Medicaid reform proposals; caps could be considered as part of those, Mr. Dorn noted at the forum, cosponsored by the Joint Center for Political and Economic Studies.

Not only would caps affect Medicaid recipients, but they could prove detrimental to the economy, Mr. Dorn said. Medicaid must provide benefits to all of those eligible, so most of the program is economically “countercyclical,” he said, meaning it expands as the economy contracts. This makes health benefits available to low-income individuals and contributes to the flow of funds to health care providers and, in turn, other sectors of the economy.

To capitalize on Medicaid's stabilizing effects, Mr. Dorn suggested that federal matching rates could automatically rise when the economy slows.