Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Hey, Don't Forget Us—Administration Forwards Medicaid Bills to Congress

AUGUST 10, 2005 -- Much of the attention of late in the Medicaid overhaul debate has been on proposals by the nation's governors and on congressional staff efforts to revise the program. But the Bush administration is reasserting itself by submitting a draft bill to Congress to restrain Medicaid spending growth.

The provisions in the bill and a related administration proposal regarding home-based alternatives to nursing home care are much the same as Medicaid overhaul proposals detailed in the Bush administration's fiscal 2006 budget request. But the draft legislative language marks a fresh attempt by the administration to end what it calls "accounting gimmicks" by the states to boost the federal Medicaid payments they receive. And it also contains some new details on how the administration plans to trim spending for administrative expenses, analysts say.

The administration forwarded the measures Aug. 5 to House and Senate leaders and to the two committees preparing Medicaid overhaul legislation for mid-September markups, the House Energy and Commerce and Senate Finance.

"These proposals will help keep Medicaid affordable and sustainable for states and the federal government by restructuring reimbursement for prescription drugs, reforming rules for long-term care eligibility, and strengthening the program's financial integrity," Leavitt said in a letter to congressional leaders.

The "integrity" proposals to end the so-called accounting gimmicks haven't found favor with state governors but could generate billions of dollars in federal savings if the administration can persuade Congress to accept them.

There are some "new twists" in the integrity proposals, said Leighton Ku, an analyst with the left-leaning Center on Budget and Policy Priorities.

For example, the draft language provides for advance submission of state Medicaid spending plans in a way that allows federal officials to prevent use of controversial financing practices designed to boost federal matching funds, Ku said. The Centers for Medicare and Medicaid Services had backed away from reviews of these "CMS Form 37s" detailing the spending plans because of state objections, but the draft language represents an attempt to bring back that approach, he said.

Also new are details in the draft on how the administration would cap federal payments to the states for Medicaid administrative costs, Ku said. The administration would establish a limit for each state on federal matching funds for Medicaid administrative costs using 2003 as a base year and increasing payments each successive year by the percentage increase in the consumer price index plus 4.5 percent.

Ku predicted that states would object to that plan because it wouldn't take into account higher state administrative expenses associated with implementation of the Medicare overhaul law (PL 108-173). The analyst also noted the absence in the administration's draft bill language of programs to increase Medicaid funding that were highlighted in the budget proposal earlier this year. They included extended funding for transitional Medicaid coverage for people coming off welfare and for certain refugees, and money to enroll more children in Medicaid and to cover certain Medicare out-of-pocket costs for low-income Americans qualifying for both Medicare and Medicaid.

Publication Details