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Insurance > Health Insurance
New health secretary tells states to clean up their act on Medicaid
LAURIE KELLMAN, Associated Press Writer. Associated Press.
Copyright Associated Press
WASHINGTON (AP) _ President Bush's new health secretary accused some states on Tuesday of mismanaging their Medicaid programs and cheating the federal government and taxpayers of as much as $40 billion over a decade.
"We need to have a very uncomfortable but, frankly, necessary conversation with our funding partners, the states," said Health and Human Services Secretary Mike Leavitt. "State officials have resorted to what I would refer to as a variety of loopholes and in some cases accounting gimmicks that shift the cost that they claim to pay to the taxpayers of other states."
He said that if the federal government doesn't persuade states to close those loopholes, they will shift as much as $40 billion in what officials describe as a shell game in which the federal government repays states for supposedly spent money.
The tough talk previewed Bush's budget proposal, due next Monday, in which he has said he will look to control popular benefit programs to save money. Programs like Medicaid are among the biggest and fastest-growing parts of the budget but are also widely popular and difficult for politicians to cut.
Leavitt, like Bush a former governor, tried to strike a balance between frankness and empathy in the run-up to the money fight over the health insurance program for the poor and disabled. When asked, he declined to name or describe the "gimmicks" of even one offending state.
"I sympathize with the state officials who face these pressures. I know why they act this way," Leavitt, a former governor of Utah, told the World Health Congress. "This isn't about blame; it's a simple statement that it has to stop."
In a gesture of fairness, Leavitt personally called dozens of governors in recent days to give them a heads-up about what was coming, according to officials at HHS and the National Governors Association who asked not to be named.
The governors thanked Leavitt for the warning.
Back in Washington, Leavitt tore into the states by bluntly listing some of what he called "the seven harmful habits of highly desperate states."
On double-dipping: "States overpay providers, get the overpayment returned to them and spend the same dollars a second time. It's a shell game that makes no one healthier."
On inflating overhead costs: "States are shifting costs to the federal treasury for 'administration.' This accounting gimmick encourages wasteful spending and bloated bureaucracy."
Medicaid, expected to cost the federal government about $190 billion this year, is paid for jointly by Washington and the states.
For their part, state officials have complained in recent years that their financial burden for the program has mushroomed, thanks to growing caseloads and Medicaid spending for patients in nursing homes.
Late last year, the National Governors Association acknowledged problems with the states' stewardship of Medicaid, including the transfers of money between them.
"We agree that maintaining the status quo in Medicaid is not acceptable," said the letter from the National Governors Association. "However, it is equally unacceptable in any deficit reduction strategy to simply shift federal costs to states."
Leavitt's speech was the first hint of the tack Bush would take on the matter. White House officials are not saying how much Bush's $2.5 trillion 2006 budget will propose saving from such programs.
Many lobbyists and activists expect him to propose giving states more flexibility in using the $180 billion in federal Medicaid funds each year, but to limit the program's growth on a per-patient basis _ in effect forcing the states to find ways to save money.
On the Net: Health and Human Services Department: http://www.hhs.gov
Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
Companies: National Governors Association (NAICS: 813940 )
Dateline: WASHINGTON
Text Word Count 595
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