Virginia County Debates Participation in State’s Medicaid Loophole Plan
Chesterfield County, Va., officials "remain divided and confused," over whether to participate in a state plan to use the Medicaid loophole that would bring more than $259 million in federal funding to the state, the Richmond Times-Dispatch reports. While the Chesterfield Board of Supervisors has voted in favor of the plan, the commission that operates the county's Lucy Corr Village nursing home has opposed it (Fischer/Martz, Richmond Times-Dispatch, 10/24). In a 5-1 vote on Oct. 8, the Chesterfield County Health Center Commission, which oversees publicly owned local nursing homes, decided to forgo incentives and "not exploit a loophole in the federal Medicaid law." Under the loophole, states pay city- or county-owned care facilities more than the actual cost of health services, receive additional matching funds from the Centers for Medicare and Medicaid Services and then require the facilities to return the extra state funds. The states sometimes pay the facilities a small fee for participating, and use the extra federal funds for both health and non-health programs. In January, federal officials issued final rules to close the loophole gradually; following a 60-day delay on implementation ordered by President Bush, the regulations took effect in mid-March (Kaiser Daily Health Policy Report, 10/10). In Chesterfield, however, members of the nursing home board said they will resign if the county accepts the state plan. James Shepherd, chair of the commission, said the plan amounted to "fraud," adding "I think this is so wrong it is ridiculous." The county, however, has offered to give Lucy Corr Village about $1.8 million to participate in the plan, "nearly triple" what was originally proposed. While the nursing home commission is lobbying the Board of Supervisors to "reconsider its decision" to participate, such action is unlikely. Supervisor Jack McHale said, "The board already voted and I do not see the board changing its position. While I am not totally delighted with the way the federal government has permitted state and localities to move funds around there has been ample opportunity for Congress to close this loophole." Since the county must notify the state by Nov. 1 of its intentions, the board of supervisors is considering appointing a new commission. Supervisor Kelly Miller said, "We need to have a commission that is willing to work with the Board of Supervisors."
More Confusion, Rejection
The state's loophole plan is also creating confusion and controversy in other Virginia localities. In Petersburg, Va., local officials are "more confused" about the amount of financing they are being asked to contribute to the plan. Currently, the state is asking Petersburg, one of the "most fiscally stressed localities," for $2.5 million. Last week, the state estimate was $3.8 million. The "numbers are changing," the Times-Dispatch reports, as different localities in the state choose to participate. The Petersburg city council is expected to vote on the issue Nov. 13. Two other Virginia localities, Norfolk and Price William County, have altogether "rejected" participating in the state's plan, saying it is an "unethical" use of Medicaid funds (Richmond Times-Dispatch, 10/24). For further information on state health policy in Virginia, visit State Health Facts Online.
