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Medicaid News
Governors Oppose New Medicaid Regulations that
Reduce Federal Funding
California officials estimate they could lose $12
billion over 5 years
Feb. 25, 2008 - New federal Medicaid regulations
scheduled to take effect this year would shift billions of dollars in
costs to the states and could lead to a reduction in services, governors
said last weekend during the winter meeting of the
National Governors Association in Washington, D.C., the
New York Times reports.
The rules are scheduled to take effect over the
next several months. Federal officials estimate that the rules will save
$15 billion over five years. Dennis Smith, director of
CMS' Center for Medicaid and State Operations, said the rules are
needed to "protect the fiscal integrity of the Medicaid program."
One of the rules would prohibit states from using
federal Medicaid funds to help pay for physician training, a use that
has been allowed since the program began, according to the Times.
Smith said that the Bush administration believes
"that paying for graduate medical education is outside the scope of
Medicaid's role, which is to provide care to low-income people," adding,
"There is no explicit authorization under the Medicaid statute to
subsidize the training of physicians."
The federal government estimates the rule change
will save $1.8 billion over five years, but officials from New York,
where more than 15% of U.S. physicians are trained, said it would lose
at least that much. Stan Rosenstein, California's Medicaid director,
said using funds for physician training is justified because "interns
and residents provide a tremendous amount of care to Medicaid
beneficiaries."
Another rule would place new limits on Medicaid
payments to hospitals and nursing homes operated by state and local
governments. State governments are concerned that the rule could
"eliminate federal contributions for a whole category of public spending
on health care for the poor -- specifically, spending by autonomous
units of local government," the Times reports.
A third rule would limit coverage of rehabilitation
services for people with disabilities, including those with mental
illnesses.
Reaction
Vermont Gov. Jim Douglas (R), who chairs NGA's
Health and Human Services Committee, said, "Governors strongly
oppose the changes," adding, "The timing could not be worse."
He added, "We can have a legitimate discussion
about expanding [SCHIP]. But the Medicaid rules are different. They
renege on commitments already made."
Douglas said that "we've come to rely on Medicaid
to help pay for special education and other services to children with
disabilities."
California Gov. Arnold Schwarzenegger (R) said the
rule changes "would effectively end the federal government's
participation in many crucial components of the Medicaid program."
California officials estimate that if the rules
take effect, the state could lose $12 billion over five years.
The
National Conference of State Legislatures also criticized what it
called "the regulatory activism" of the new rules.
Additional Comments
New York City Health and Hospitals Corporation -- the nation's
largest municipal health care system, which gets 60% of its budget from
Medicaid -- said the rules would have "a potentially devastating impact"
and could force cutbacks in services.
Deborah Bachrach, a deputy commissioner in the
New York State Health Department, said, "The new Medicaid rules make
it difficult to pay for current programs and nearly impossible to expand
coverage to all."
Rhonda Medows, commissioner of the
Georgia Department of Community Health, said, "We understand the
need for financial safeguards, but these rules, taken together, would
have a tremendous adverse impact," adding, "They would undermine the
health care safety net for the entire state of Georgia, reducing federal
Medicaid payments for hospitals, nursing homes and school clinics"
(Pear, New York Times, 2/24).
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