White House, Congress at odds over Medicaid funding Bush administration seeks to clamp down tighter on states' Medicaid funding "scam."

October 30, 1991|By New York Times

WASHINGTON -- Bush administration officials are heading for a clash with Congress over their plan to further restrict fund-raising techniques used by states to pay for the health care of poor people under Medicaid.

New rules approved today by Dr. Louis W. Sullivan, the secretary of health and human services, affirm and clarify earlier re

strictions, which have been strongly criticized by governors and members of Congress of both parties.

The administration says the new rules are required to eliminate a "scam" used by states to get $3 billion to $5 billion a year in extra federal money for Medicaid. But states say the rules will force them to restrict Medicaid eligibility and access to health care for poor people.

Maryland could lose millions of dollars under the new regulations.

Gail R. Wilensky, the federal official in charge of Medicaid, said the restrictions, first announced last month, would take effect on Jan. 1, despite the objections.

She said the rules were needed to preserve the "fiscal integrity" of Medicaid, a federal-state program that finances health care for 27 million people, including 13 million children.

But the health subcommittee of the House Energy and Commerce Committee has approved a proposal to block the rules until Oct. 1, 1992, and the full committee is expected to approve the measure this week.

The effect of the rules is to require states to finance their share of Medicaid through broad-based taxes, rather than through donations or special taxes levied on hospitals, nursing homes and institutions for the mentally retarded.

The rules issued last month caused widespread confusion, which the administration sought to clear up yesterday. But state officials said the new rules were worse because they would curb allowances paid by Medicaid to some hospitals serving "a disproportionate number of low-income patients."

Under a rule proposed yesterday, a hospital could not receive such allowances if low-income patients accounted for a lower share of its business than the average for all hospitals in the state.

James L. Martin, an official with the National Governors' Association, said: "The White House has got to wake up and realize that this is more than a budget issue. It's a service issue, and there's nothing in the new rules that gives us any consolation. In fact, they are worse than the rules issued in September."

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