Roth Blasts White House Inaction on Growing Medicaid Scandal
WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today hammered the White House for its refusal to shut down a growing Medicaid loophole that is threatening to drain billions of dollars from the program.
The Health Care Financing Administration told the Committee that they hoped to release the notice of proposed rulemaking by the end of September so that this Administration would have sufficient time to finalize the regulation before leaving office in January. No notice or regulation has been issued to date.
"Let me be clear. What is currently occuring is an obscene abuse of the program, and this abuse is being facilitated by this Administration's negligence. The Administration has been aware of this growing problem for months. They have promised numerous times that they would take action to shut down this spending scandal. Tens of billions of dollars are at stake -- dollars that should be spent on health care for poor and disabled children and senior citizens," Roth stated. "This threatens the integrity of the Medicaid program and therefore the program itself."
"By looking the other way, the White House has abdicated its responsibility for the Medicaid program and the 40 million low income Americans who depend on it," Roth stated. "This should all be somewhat familiar to us -- just ten years ago, Medicaid's disproportionate share hospital program dollars were being used to build roads, bridges and highways. Are we going to allow history to repeat itself?"
At the Finance Committee oversight hearing on September 6, the Committee heard from experts from the General Accounting Office, the Office of Inspector General of the Department of Health and Human Services, and the Health Care Financing Administration. These witnesses addressed the use of upper payment limits and intergovernmental transfers to maximize the draw down of federal Medicaid funds in a way that bypasses traditional Medicaid matching rates - causing the federal government to pay more and state and local governments to pay less. By taking advantage of this loophole, some states are using Medicaid funds to cut taxes or to fill in holes in their budgets.
Through this complicated accounting mechanism, the federal government is paying rates that can be even higher than what Medicare traditionally pays for services in hospitals and nursing homes, but the states are only allowing the facilities to keep the often much lower Medicaid payment rates for the same services. The state can then pocket the difference between what they receive from the federal government and what they allow the facilities to keep.
Roth began working with the Administration to address this problem in May, and was told that HCFA would take the steps needed to shut down the loophole through a notice of proposed rulemaking that was to have been released in June. In June, Roth was told it would be out in July. In July, he was told it would be out in August. In early September, he was told it would be out by the end of the month. Without that regulation, billions more dollars continue to be siphoned from the program.
"The longer the exploitation of the program continues, the more difficult it will be to shut it down. It is the responsibility of this Administration to protect the financial integrity of the Medicaid program. It is failing to live up to that responsibility.
"If the Administration will not act to stop the hemorrhaging of Medicaid funds, it will be up to Congress to act on the taxpayers' behalf. I am fully exploring all of my options to protect the 40 million vulnerable low-income pregnant women, children, senior citizens, and individuals with disabilities who rely upon a healthy and sound Medicaid program."
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