Virginia Officials Plan Meetings with State Localities to ‘Salvage’ Medicaid Loophole Plan

Virginia officials from the state departments of treasury and planning and budget will appear at a meeting of the board that operates the Lucy Corr Village nursing home in Chesterfield County, Va., in an effort to "salvage" Gov. James Gilmore's (R) plan to use the Medicaid "loophole" to bring in more than $259 million in federal funding to the state, the Richmond Times-Dispatch reports. On Oct. 26, Deputy County Administrator for Human Services Bradford Hammer said that Health and Human Resources Secretary Louis Rossiter was scheduled to make a presentation this week to the Chesterfield County Health Center Commission, which has opposed the state's plan to use the Medicaid loophole (Hickey, Richmond Times-Dispatch, 10/27). 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). But "[l]ess than five minutes" after Hammer's announcement, a spokesperson for Rossiter said he would not appear before the board and instead, other state officials would appear at the commission's Nov. 1 meeting. The Times-Dispatch reports that the meetings and "personal appearances" are part of an effort by the state to save the loophole plan. Officials from KPMG are also scheduled to participate in the meetings to discuss the "struggling" nursing home's finances. Chesterfield is one of seven localities the state has asked to participate in the plan (Richmond Times-Dispatch, 10/27). Officials in Richmond, Va., Norfolk, Va., and Prince William and Orange counties have also opposed the plan. The Board of Supervisors in Petersburg, Va., is scheduled to vote on the plan on Nov. 13 (Kaiser Daily Health Policy Report, 10/24). The Bedford County Board of Supervisors has accepted the plan (Richmond Times-Dispatch, 10/27). For further information on state health policy in Virginia, visit State Health Facts Online.