Medicare Compliance & Reimbursement

The ten-member governors' task force convened by the National Governors Association hopes to come up with recommendations "in the next couple of months" and is considering a wide range of options, said NGA Executive Director Ray Sheppach at an April 8 Medicaid forum.

The task force was created after the White House introduced a voluntary plan for Medicaid overhaul at NGA's February meeting. Under the administration proposal, which would be budget-neutral for the federal government over ten years, states could choose to get enhanced funding over the next few years - plus a green light to alter many benefit, eligibility and other requirements without seeking waivers - in return for accepting a partial cap on their federal funding thereafter.

But while NGA formed the task force in response to the administration plan, the group is in no way limiting its deliberations to the White House proposal - as the administration seems to have hoped. The governors are "looking at a lot of ideas ... everything that's out there," including all congressional proposals, said Sheppach.

While the White House plan would eventually put the brakes on federal spending, many congressional proposals go in the opposite direction. For instance, some would increase federal matching rates during the current economic slowdown or create a funding mechanism to automatically increase federal Medicaid dollars when state economies slumped and cut them when states prospered.

Nine members of the task force met on April 10, with three of the nine conferring by telephone. The six governors who came to Washington - Kentucky Gov. Paul Patton (D), Idaho Gov. Dirk Kempthorne (R), Connecticut Gov. John Rowland (R), Florida Gov. Jeb Bush (R), Iowa Gov. Tom Vilsack (D), and North Dakota Gov. John Hoeven (R) - also met with administration officials and members of the House and Senate.

The task force has identified its six top Medicaid issues as beneficiaries dually eligible for Medicare and Medicaid (see story, p. 4); state flexibility; prescription drugs; long-term care; private-sector partnerships; and financing structure, according to NGA.

States project a budgetary shortfall of $80 billion for fiscal year 2004, which begins in about three months for most states, Sheppach told the briefing audience. "In spite of this, I think that states continue to try to protect their progress" in insuring children, he said. Fifteen governors plan to enhance children's coverage this year, he noted.

State revenue structures, which rely heavily on taxing goods rather than the growing service sector and miss out on taxing Internet sales, need overhaul to cope with future spending needs, says Shep-pach. But such change is hard and requires support from the business community. "Twelve to 15 states" have assembled citizen and business groups to look into the big issues of tax reform, he said.