Providers this week said that that the government’s goal to cut the provider tax is “inconsistent” with its broader goals to reform the Medicaid program.

Bruce Yarwood, president of the American Health Care Association, praised the government for reaching out to stakeholders at Medicaid Commission hearings to reform the program. But he expressed frustration that the administration still plans to cut the tax in half, amid mounting opposition from lawmakers.

This week, Dennis Smith, Centers for Medicare and Medicaid Reform (CMS) Director of the Center for Medicaid and State Operations, warned a State Medicaid directors meeting in Washington that the Medicaid cuts remain a top priority. President Bush said he wants to cut the provider tax limit to 3% from 6%. The move is projected to reduce federal outlays by $12.2 billion over five years.