Leavitt faces Democrat questioning on plan to cut Medicaid

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Democrats on the Senate Finance Committee this week pressured Health and Human Services Secretary Michael O. Leavitt for specifics of President Bush's fiscal year 2006 budget proposal to trim $60 billion from Medicaid. The federal-state program is the single largest payer of nursing home bills.

Sen. Max Baucus (D-MO), ranking member on the committee, requested that the secretary provide the committee by the end of February with a state-by-state breakdown of how the proposed cuts would affect state budgets.

Leavitt has said most of the $60 billion in savings would result from efforts to curb states' use of intergovernmental transfer accounting mechanisms. IGT techniques have been used by states to inflate their Medicaid costs and attract more federal money through matching funds. Over the next decade, HHS estimates, states could use these transfers to shift as much as $40 billion in costs to the federal government.

However, Baucus said it is important to have a "better understanding of what states are doing, whether those activities are truly abusive, and what impact these cuts have on the people who depend on Medicaid." Other senators on the committee said the cuts would strip necessary resources from the states.