April 4, 2000

Dear Colleague:

The Institute of Medicine (IOM) issued a wake-up call last week with the release of its report entitled, "America’s Health Care Safety Net: Intact but Endangered." In the summary of the report, the IOM finds the following:

"A major cause of concern is…that Medicaid as well as other revenues and subsidies that in the past have helped support care for the uninsured and other vulnerable populations are becoming more restricted at the same time that the demand on the safety net is rising.

The Balanced Budget Act of 1997 reduced some of the major public subsidies that help finance health care for indigent patients, including…the phase-out over 5 years of cost-based reimbursement for [Federally qualified health centers].

…over the years Medicaid revenues have come to provide a critical ‘silent subsidy’ that helps core safety net providers pay for fixed infrastructure costs, freeing limited grant funds and other revenues to pay for care for uninsured patients.

Rising numbers of uninsured Americans, an increasingly price-driven health care market, and rapid growth in enrollment of Medicaid beneficiaries in managed care plans may have critical implications for the future viability of America’s health care safety net that serves a large portion of low income and uninsured Americans…A failure to support and maintain these core providers could cause the entire safety net to collapse."

We have introduced bipartisan legislation (H.R. 2341, the Safety Net Preservation Act) that would protect one of these core providers–community health centers. This legislation would ensure that health centers receive sufficient funding from Medicaid, therefore enabling Federal grant dollars to be used appropriately–to pay for uninsured Americans’ health care.

"…failure to take into consideration the impact on safety net providers of changes in Medicaid policy could have a significant negative effect on the ability of these providers to continue their mission to serve the uninsured population, particularly those who move back and forth between being eligible for Medicaid and being uninsured."

Over 187 members of the House of Representatives have expressed their support for protecting the community and rural health safety net by cosponsoring H.R. 2341. If you have any questions or if you would like to cosponsor this legislation, please contact Jenny Hansen with Mr. Burr (52071) or Brenda Pillors with Mr. Towns (55936).

Sincerely,

Rep. Richard Burr (R-NC)
Rep. Edolphus Towns (D-NY)

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