Scully Says Increased Federal Funds for States’ Medicaid Programs Unlikely

At a meeting of the National Governors Association on July 15 in Boise, Idaho, CMS Administrator Tom Scully reiterated the Bush administration's opposition to a Senate bill (S 2570) that would give states additional funding for Medicaid to help them balance their budgets, the AP/Boston Globe reports. "We can't always give you more money. I know that's frustrating. But we are trying to help you ... make the money you have go as far as you can," Scully said (Arrillaga, AP/Boston Globe, 7/16). The bill, sponsored by Sens. Ben Nelson (D-Neb.) and Susan Collins (R-Maine), would give states $8.9 billion over the next 18 months. Half of that money would be targeted at "relieving the escalating" Medicaid costs, which increased 13% last year, and the remainder would be given to states as a block grant (Kaiser Daily Health Policy Report, 7/15). The legislation "faces an uphill battle" in part because the federal government must manage a large budget deficit this year, the AP/Globe reports. Scully "urged" the governors to support a GOP-sponsored House bill (HR 4954) approved last month that would spend $320 billion over 10 years to provide a Medicare prescription drug benefit. Scully noted that such legislation could eventually save states about $38 billion (AP/Boston Globe, 7/16). However, Mississippi Gov. Ronnie Musgrove (D) said that he prefers the Nelson-Collins bill because it provides "immediate relief to the states" instead of a "long-term approach." The Senate is debating a Medicare prescription drug benefit this week (see related story) (AP/Boston Globe, 7/16).

Criticizing PhRMA
The NGA also "criticized" a federal lawsuit filed by the Pharmaceutical Research and Manufacturers of America that seeks to prevent states from adopting preferred drug lists, the Wall Street Journal reports. Such lists -- which have been enacted by Michigan and Florida and are being considered by others including Illinois, Indiana, Minnesota and Ohio -- are states' "most effective tool" to control drug costs, the governors said. The lists are used to demand price cuts from drug makers and to reduce pharmaceutical expenses for Medicaid beneficiaries (Wall Street Journal, 7/5).