The Kaiser Family Foundation cautions in a new report that changes to Medicaid financing should be undertaken cautiously. The report was issued in response to the Bush administration’s stated goal of strengthening integrity and accountability and comes at a time when members of Congress are contemplating cutting Medicaid funding in the fiscal year 2005 budget resolution.

The foundation specifically notes that curtailment of devices such as nursing home bed taxes or upper payment limits to states could be harmful if not executed properly. Both of the above rely heavily on federal matching funding to pump funding back into state Medicaid programs.

Any changes to the program must take into consideration the country’s growing number of low-income, uninsured individuals and the rising cost of prescription drugs, the Kaiser report says.

“Moreover, states continue to face significant budget shortfalls because of declining tax revenues, and will be even more challenged as the temporary fiscal relief provided by the Jobs and Growth Act of 2003 expires at the end of June 2004,” the report adds.