Medicare Compliance & Reimbursement

But the federal government is searching for ways to cut budgets.

President Bush's choice of former Utah Gov. Mike Leavitt (R) to head the Department of Health and Human Services likely means that the administration will try once again to persuade the nation's governors to accept a temporary boost in federal Medicaid payments along with increased autonomy to design their programs in return for a significantly trimmed federal payment in future years.

But a recent letter to Congress and a new lobbying campaign launched in December by the National Governors Association suggests that the administration still will find the persuasion uphill work.
 
Leavitt was Utah's governor in 2002 when the state obtained an unprecedented Medicaid waiver to cut benefits for some traditional populations to pay for providing primary-care coverage for other, higher-income uninsured people. The Bush administration has suggested that the program is a model for a nationwide transformation of Medicaid that would give states more control of what benefits their programs provide, potentially expand basic primary-care coverage to more people, and ultimately get the federal government off the hook for some Medicaid costs in coming decades.
 
So far, however, the NGA has failed to endorse overhaul proposals put forward by the administration, arguing that, while governors would like more freedom to shape Medicaid in individual states, they won't accept curtailment of federal funds. With concerns rising in Washington about the size of federal deficits, the White House is sure to advance some Medicaid-based deficit-trimming measures in 2005, but governors again are saying that they won't play ball.
 
In a Dec. 22 letter, NGA warned congressional leaders that, while governors "look forward to working closely with the administration and Congress to reform Medicaid," program changes "should not be part of a 2006 fiscal year budget reduction and reconciliation process, especially if it does nothing more than shift additional costs to states."
 
Medicaid now averages 22 percent of state budgets, and 42 percent of all Medicaid expenditures are spent on Medicare beneficiaries, the NGA says.

The governors will continue to press the federal government to take on full responsibility for care of these so-called dual eligibles, says the letter. However, doing so would increase federal spending, not limit it, as the administration and many Washington lawmakers are looking to do in 2005.