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Medicaid cuts may affect rehab services

Rehab Private Practice Alert, August 31, 2005

Although an administration commission did not specifically target rehabilitation services in recommendations to Congress last week, steps to cut Medicaid spending by $11 billion over five years could affect federal matching funding for many services provided by physical therapists and physical therapist assistants, according to PT Bulletin Online.

The commission's chairman and vice chairman also cautioned that the initial short-term recommendations do not necessarily signal the panel's approach to long-term reform of the Medicaid program. The commission will meet again in mid- to late October to begin working on longer term Medicaid reforms after submitting short-term savings ideas to Congress by September 1.

The commission recommended that Medicaid not provide coverage for services that are "allowable services or an administrative function under a federal, state, or local program," including those that govern provision of education, foster care, or child welfare.

Rehabilitation groups are concerned that such a restriction could hamper access to therapy care. Much of the projected federal savings targeted by the commission, created by Health and Human Services Secretary Michael O Leavitt, would come by changing Medicaid's reimbursement formula for prescription drugs. By rebasing Medicaid drug reimbursement rates, the government could save $4.3 billion over five years, reported the Bulletin.

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