Bush administration may ignite a Medicaid showdown

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Concerned that states are shifting costs to the federal government with "creative bookkeeping," the Bush administration is broaching Medicaid financing with governors at the National Governor's Association winter meeting, according to the New York Times. The seasonal meeting starts Saturday.

The General Accounting Office recently added Medicaid to its list of high-risk programs. It said in a report: "States have used various financing schemes to generate excessive federal Medicaid matching funds while their own share of expenditures has remained unchanged or decreased."

The federal government splits Medicaid costs with the states, but sometimes pays more than 70% of the burden. When President Bush unveiled his proposed 2005 fiscal budget, he said he could save $1.5 billion next year and $23.6 billion in the next decade by restoring Medicaid's "fiscal integrity."

The National Conference of State Legislatures says it advises its members on "Medicaid maximization" strategies. The NCSL also contends the methods are legitimate.