Washington State, Federal Officials Agree on $70M Medicaid Bailout

Washington state officials this week decided to accept a $70 million bailout from the federal government that will help prevent reductions in the state's Medicaid program, the AP/Tacoma News Tribune reports (Cook, AP/Tacoma News Tribune, 9/11). State officials had asked HHS for $1 billion in additional Medicaid funds, based on a recalculation of nursing home reimbursements, but reduced their request to $235 million after negotiations with federal officials. HHS offered the state $70 million (Kaiser Daily Health Policy Report, 9/6). Washington state officials said that the $70 million "wasn't enough to solve the problems" in the state's Medicaid program but decided to "take what they could get" after negotiations with HHS. Ed Penhale, a spokesperson for the state Office of Financial Management, said, "We think our initial claim was legitimate, but we understand the circumstances in Washington, D.C." The state will receive $55 million this year and $15 million over the next few years. Gov. Gary Locke (D) had "counted on" an additional $150 million in federal funds to prevent future reductions in the state's Medicaid program, which costs the state about $2.5 billion per year and serves about 900,000 state residents, the AP/News Tribune reports. Penhale said that "even without the bailout," the state can fund the Medicaid program without reductions until January. However, state officials will have to "pull some fancy accounting footwork" to fund the program in the future and may have to make "painful cuts," the AP/News Tribune reports (AP/Tacoma News Tribune, 9/11).