OBRA89

AcronymDefinition
OBRA89Omnibus Budget Reconciliation Act of 1989
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The ebb and flow of Medicaid reimbursement rates continued after the initial round of rate hikes following the enactment of OBRA89. Fee levels began to erode again relative to Medicare, private payers, and inflation, however, and by 1998 the national Medicaid-to-Medicare ratio declined to 62 percent (Norton & Zuckerman, 2000; Zuckerman et al., 2004).
Despite this pullback in federal influence over reimbursement rate setting and limitations imposed on potential plaintiffs, a new round of pediatricoriented lawsuits ensued, based on the failure of the states to provide the EPSDT services mandated by OBRA89. Although there was a distinct initial upward trend in provider rates following OBRA89's enactment, the increase in receipt of EPSDT services was less dramatic.
Plaintiffs' appeal contends that "substantial compliance" is the incorrect legal standard to be applied considering the definitive legislative intent of OBRA89.
By the summer of 2005, the child advocacy community believed a consensus was emerging from the federal bench that confirmed the expanded rights to care for children and pregnant women intended under OBRA89's equal access provision.
Consequently, despite the unique claim to equal access afforded to children and pregnant women by OBRA89 and the supportive subsequent court decisions, the final chapter has not been written on this 16-year battle.
In the case of the OBRA89 procedures, however, the variations in price were driven mainly by changes in the prevailing charges.
The OBRA89 price reductions did not affect the fees of each medical procedure by the same amount and, in turn, not all practices were affected the same way.
One expects that the larger the dollar share of the OBRA89 procedures for a practice, the greater the impact of the fee reduction on the practice, making it more likely to increase volume.
Given that volume and price fluctuate from one year to the next, our estimates of the impact of OBRA89 in calendar year 1990 may not be robust in another time period.