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1992.08.03 :  Medicaid -- Oregon Waiver

Contact:  HHS Press Office (202) 690-6343
August 3, 1992

       HHS Secretary Louis W. Sullivan, M.D., today ruled that
final approval for Oregon to make extensive changes in its
Medicaid program cannot be granted until the state's proposal is
altered to protect persons with disabilities.
       "The Administration continues to encourage innovation in
state health care programs, but at the same time we are
determined to protect the rights of Americans with disabilities,"
Secretary Sullivan said.  "The Americans with Disabilities Act,
which was passed with the President's strong support and which
went into effect last month, leaves no question that those with
disabilities must enjoy the same treatment under the law as other
Americans.  Oregon's proposal does not meet that test, and we
must return it for further work."
       The proposed changes to Oregon's Medicaid program require
government approval because they do not conform to current legal
requirements for the federally-funded, state-administered health
care program for the poor.  Under its waiver request, Oregon
would assign rankings to the various medical treatments and would
remove Medicaid coverage for some treatments identified in the
ranking as least beneficial.  
       However, in its reply to the state today, the Department
of Health and Human Services questioned the legality of the
manner in which the rankings were derived.
       "The record regarding the manner in which the list ... was
compiled contains considerable evidence that it was based in
substantial part on the premise that the value of the life of a
person with a disability is less than the value of a life of a
person without a disability.  This is a premise which is
inconsistent with the Americans with Disabilities Act," the reply
states. 
       Secretary Sullivan, in a letter to Oregon Gov. Barbara
Roberts, also said that "given the real possibility that Oregon's
general approach will serve as a model for other states, it is
critically important that it go forward only with strict
adherence to the legal protections that President Bush has worked
so hard to enact."  
       In the letter, Dr. Sullivan also said, "I urge Oregon to
submit a revised application which addresses these concerns, and
I look forward to approving such a demonstration."
       In the reply to the state, HHS said many nonscientific
information sources were used to determine ranking of treatments
and conditions, which would affect the services to be covered by
the Oregon Medicaid program or removed from coverage.  In
particular, the reply cited a telephone survey of Oregon
residents concerning quality of life issues.
       "There are substantial indications ... that the quality of
life data derived from the Oregon telephone survey quantifies
stereotypic assumptions about persons with disabilities," the
reply states.  "Scholars who have examined quality of life
surveys have concluded that, as compared to persons who have the
disabilities in question, persons without disabilities
systematically undervalue the quality of life of those with
disabilities."  The reply said the Congressional Office of
Technology Assessment had also found this bias against persons
with disabilities in the Oregon survey results.
       "A number of aspects of the ranking process reflect
discrimination on the basis of disability," said HHS General
Counsel Michael J. Astrue.  "As a result, the government has no
choice but to ask Oregon to review its waiver request and resolve
these serious issues."

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