Rovner Column Asks, Is Now the Right Time to Close the Medicaid Loophole?
CongressDaily/AM reporter Julie Rovner asks in a "HealthMatters" column today if now "is the best time" for the Bush administration to move forward with its stated goal of fully closing the "Medicaid loophole" (Rovner, CongressDaily/AM, 10/25). 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 state then sometimes pays the facilities a small fee for participating, and uses the extra federal funds for health and/or non-health-related items (Kaiser Daily Health Policy Report, 9/7). Part of the loophole was closed in January through a CMS regulation, but states are still allowed to pay public hospitals 150% of the Medicare amount for Medicaid services. The Bush administration has said that it wants to terminate that practice. But Rovner writes that such a move would take a great deal of money away from public hospitals, which are "at the center" of the two current "key health issues" -- bioterrorism and helping the uninsured. Rovner concludes that while allowing states to "bilk" the government "for a good cause" is "not a very responsible" policy, "Congress and the Bush administration ought to make sure that when they take away with one hand, they give what is legitimately needed with the other" (CongressDaily/AM, 10/25).
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