WASHINGTON -- What a difference a day makes in the search for federal funds.
Bush administration officials yesterday denied telling Gov. William Donald Schaefer and his aides at a closed-door meeting Wednesday that Maryland would be receiving millions of dollars in controversial Medicaid reimbursements.
But the governor and his aides are sticking to their interpretation of events and hope that $30 million from its doctors' "tax" will be on the way in January.
At issue is Maryland's plan to boost its federal share for Medicaid, the federal-state program that provides health care for the poor. The state, starting July 1, doubled doctors' fees, with doctors getting none of the additional money. Since the federal government covers half the fees, increasing them would raise the federal reimbursement and allow the state to expand the Medicaid program.
"The Maryland plan is not going to be approved," said Thomas A. Scully, associate director of the Office of Management and Budget, who Mr. Schaefer credited with giving the state a green light during the Washington meeting.
Mr. Scully said he found it "incredible" the way Mr. Schaefer and his aides interpreted his remarks, made during a session on health care with governors and administration officials. The OMB associate director said he told them that while Maryland's Medicaid plan "may be legal now" it would not be in January when new regulations come out. "I said it won't be legal after January 1," he said.
Later, Mr. Scully said he learned that "Maryland does not comply by current law," and that the January regulations will not matter.
The state, however, said it got a different message yesterday.
"Everyone agreed -- the administration agreed, that our position was legal and that the money would be coming, forthcoming in January," Mr. Schaefer said at a news conference yesterday.
And Michael J. Werner, a senior aide in the governor's Washington office, also said he wrote down Mr. Scully's remarks of approval. "We'll get a transcript of that hearing. We'll keep battling," he said.
Although the state attorney general's office said the plan was legal, the federal Health Care Financing Administration (HCFA), which oversees Medicaid, denied Maryland the money -- some $30 million since July 1.
"What they've done is so egregious. This is just not right," said HCFA Administrator Gail R. Wilensky, who has been fighting the state over the doctors' "tax." "They are not conforming to Medicaid rules. They're not doing something that's entitling them to match money," she said.
Maryland is not alone. Nearly 30 other states had requested some $3.8 billion in federal funds this year to match donations and taxes -- up from eight in 1990 -- which has spurred the proposed federal regulations. The regulations would bar states from raising Medicaid reimbursements with taxes on hospitals, nursing homes and similar facilities.
Even if the Bush administration refuses to sign the $30 million check, Maryland and other states have another option, said Mr. Werner. A bill being pushed by Representative Henry A. Waxman, D-Calif., will postpone the regulations until next September.
The bill is slated for a full committee vote this month and a similar measure has been introduced in the Senate, said Mr. Werner. At the same time, the measure also would bar the federal government from withholding Medicaid money until Congress and the administration resolve the matter.
Should that effort fail, Maryland is in for even a tougher fiscal future, said Mr. Werner. The state Medicaid program, already $150 million in the red, had anticipated the doctors' "tax" in its budget.