Democratic Lawmakers Say CMS Has No Authority To Limit State Efforts To Expand Medicaid Eligibility

House and Senate Democrats on Tuesday in a letter to HHS Secretary Mike Leavitt wrote that CMS does not have the authority to limit states' ability to expand Medicaid coverage to more children, CQ HealthBeat reports (Carey, CQ HealthBeat, 1/15).

CMS has reportedly imposed restrictions on the ability of states to expand their Medicaid programs that mirror a policy directive announced in August 2007 that limits states' abilities to expand SCHIP. The SCHIP guidelines state that before expanding SCHIP eligibility to children in families with incomes greater than 250% of the federal poverty level, states must demonstrate that they have "enrolled at least 95% of children in the state below 200% of the federal poverty level" who are eligible for Medicaid or SCHIP, according to a letter sent by Dennis Smith, director of the Center for Medicaid and State Operations (Kaiser Daily Health Policy Report, 1/4). CMS has imposed the directive on several states that were considering Medicaid expansions, including Ohio, Louisiana, New York, Wisconsin and Oklahoma.

The lawmakers -- which included Senate Finance Committee Chair Max Baucus (D-Mont.), House Energy and Commerce Committee Chair John Dingell (D-Mich.) and House Oversight and Government Reform Committee Chair Henry Waxman (D-Calif.) -- wrote, "Despite repeated warnings about the legality of the Aug. 17, 2007, directive and the absence of a formal rule making process, your administration has continued to pursue a policy that is contrary to federal law and that limits children's access to health care." They added, "Federal law does not authorize CMS to effectively impose an income eligibility cap in (SCHIP) or Medicaid, nor does it require states wanting to cover children at levels higher than 250% of poverty to have to use 100% state-only funds to do so" (CQ HealthBeat, 1/15).

According to the letter, recent denials of state requests to expand Medicaid eligibility above 250% of the poverty level "are just the latest in a growing list of unilateral changes to longstanding law and policy without statutory authority. ... The president has made repeated statements about his desire to cover more uninsured children. However, the actions of your department contradict those statements. Moreover, the department's actions are inconsistent with federal law" (Johnson, CongressDaily, 1/15).

The lawmakers requested that CMS reverse the decision and that Leavitt respond by Jan. 31 (CQ HealthBeat, 1/15).