A tax bill currently before Congress could lead to Medicaid cuts that would inhibit access to home- and community-based services (HCBS).

The bill, which promises sweeping tax and spending cuts, currently is undergoing a reconciliation process. The amount of tax cuts could reach $4.5 trillion, with spending cuts in the area of $4.5 billion, with a significant portion coming from Medicaid. However, the bill remains a work in progress for now with some resistance to the proposed cuts from both Democrats and a contingent of Republicans.

The National Alliance for Care at Home released a statement Monday opposing the Medicaid reductions.

“The ongoing conversations around potential reductions to Medicaid spending are increasingly concerning to the Alliance and our provider members that deliver home and community-based services (HCBS), hospice and palliative care to children with serious health conditions, older adults and people with disabilities,” the Alliance indicated in a statement. “Although we recognize that leadership in the House and Senate have expressed support for preserving services to these populations, we do not believe that it is possible to reduce Federal Medicaid expenditures by hundreds of billions of dollars over a ten-year period without negatively impacting eligibility and access to care.”

The Alliance cited several reasons why this may be the case:

• At the state level, Medicaid funding is fungible and reductions are often distributed across a wide swath of the program.
• Reductions in federal funding would either require additional state money to backfill the loss — thus pulling resources from other parts of the program — or, more likely, would lead to similar reductions to the state matching dollars, resulting in compounded cuts at the service delivery level.
• Services to older adults and people with disabilities represent more than 52% of total Medicaid expenditures, making it nearly impossible to effectuate large reductions in spending without impacting services to these individuals.
• The optional nature of HCBS and the ability to cap enrollment and establish waiting lists creates additional vulnerabilities when Medicaid spending reductions and state budget shortfalls occur.
• Attempts to limit reductions to the “childless adult group” would negatively impact many paid and unpaid caregivers who provide HCBS.

A component of the long term care benefit, home- and community-based services is a comprehensive set of in-home services and supports for older adults and people with disabilities, according to Damon Terzaghi, director of Medicaid advocacy for the Alliance. This includes personal care, home health/home health aide, supported employment, group homes, adult foster care, home-delivered meals and a wide range of other supports.

Medicaid is the nation’s largest payer for these services, Terzaghi told Hospice News in an email. Definitions of HCBS vary in Medicaid programs among the different states, he said.

Katie Smith Sloan, president and CEO of the senior care industry organization LeadingAge also released a statement opposing the cuts.

“Medicaid isn’t just a safety net—it’s a lifeline for millions of older adults and their families.  Medicaid is the only public payer for long term services and supports. As the number of Americans age 65 and older surges and the care workforce shrinks, slashing or restricting Medicaid funding isn’t just irresponsible; it’s dangerous,” Smith Sloan said in the statement. “The number of people estimated to lose coverage under these proposals is at least 8.7 million, and it will likely be more. Medicaid is an interconnected ecosystem—if you target one piece, the whole system will be impacted.”

Investors expected Medicaid to bear a greater share of the weight of the $880 billion cuts requested by Congress, according to a report from Tao Qiu, an analyst with Macquarie Equity Research.

The impact of the potential cuts on hospice and palliative care providers could vary from state to state, Terzaghi indicated.

“Hospice has a minimum reimbursement rate set federally – which is fairly unique in Medicaid — so it is not as vulnerable to reimbursement cuts as other services,” Terzaghi told Hospice News. “Palliative care that is not part of the hospice benefit does not have the same protections and therefore state budget crunches could have ancillary impacts on reimbursement rates — either via states forgoing any inflationary updates or, in more challenging environments, reimbursement cuts to make the budget math work.”