Federal Government To Review New Medicaid Rules
The federal government will revisit "tough new rules" on Medicaid financing that are designed to "curb creative bookkeeping" methods used by states to obtain additional federal matching funds, HHS Secretary Tommy Thompson told participants at the winter meeting of the National Governors Association on Sunday, the New York Times reports (Pear, New York Times, 2/23). Federal officials maintain that state efforts to shift more of the cost of Medicaid to the federal government, which currently covers between 50% and 70% of the cost of the program, have resulted in rising federal Medicaid expenditures. In his proposed 2005 fiscal year budget, President Bush said that the federal government could save $1.5 billion next year and $23.6 billion in the next decade with efforts to restore the "fiscal integrity" of Medicaid. The Bush administration this month published a notice in the Federal Register to inform states that the federal government plans to require them to provide detailed descriptions of "each source of revenue" used to pay their shares of the cost of Medicaid. Under the plan, the federal government would have to approve state Medicaid budgets, and states could not receive federal funds for additional costs unless and until the expenditures are approved by federal officials (California Healthline, 2/17). States have mounted "strenuous protests" to the proposed changes, saying that "soaring Medicaid costs" and "stagnant" revenue collections "have put them in a fiscal vise," according to the Times. On Sunday, an NGA committee approved a resolution opposing the proposed changes.
NGA Chair Idaho Gov. Dirk Kempthorne (R) said the rules would impose "new administrative requirements and new costs on the states." Tennessee Gov. Phil Bredesen (D) said the federal government is "reneging on financial arrangements that it approved just a few years ago," the Times reports. He added that the government should "honor its commitments and ... not characterize [states'] arrangements as cheating" (New York Times, 2/23). NGA Executive Director Raymond Scheppach said, "It's clear that things are going to be tight, and they are going to be tight for the next five years" (Hook, Los Angeles Times, 2/22). In a letter responding to governors' concerns, Thompson said that the federal government will consult with governors and state officials on the proposed changes, according to the Times. Thompson said he will hold a 60-day formal public comment period before implementing the new rules (New York Times, 2/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.