HHS chief says states use Medicaid loopholes

February 02, 2005|By LOS ANGELES TIMES

WASHINGTON - The Bush administration plans to confront state governments over Medicaid costs in an effort to slow the growth in federal spending on health care for 50 million poor, disabled and elderly, Health and Human Services Secretary Michael O. Leavitt said yesterday.

Leavitt said Medicaid, the federal-state partnership to provide medical care for the needy, "is not financially sustainable." He accused states of using accounting gimmicks to inflate their claims for reimbursement from Washington.

Leavitt said his goal was to cut growth in the cost of Medicaid from 10 percent a year now to an annual rate of 7 percent.

Spurred by a weak economy that has increased the number of people eligible for Medicaid, spending on the program has risen in recent years to levels that present severe budget problems for most states.

States have responded by seeking ways to shift more of the bill to the federal government. The total cost of the program nationwide runs about $300 billion a year, with the federal government picking up more than 60 percent of the total.

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