CMS to give Congress proposal for restricting Medicaid funding

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The Centers for Medicare and Medicaid Services will attempt to give Congress a legislative proposal by Wednesday for limiting intergovernmental transfers. CMS has complained that states have improperly used the transfers to draw extra matching Medicaid funding from federal sources.

Dennis Smith, director of CMS' Center for Medicaid and State Operations, said certain restrictions could save Medicaid about $23 billion over 10 years. Providers and states, however, have decried any attempt to tighten the funding noose, especially on an expedited basis.

Energy and Commerce Chairman Rep. Joe Barton (R-TX) held out a ray of hope, saying it might not be necessary to cut Medicaid funding if the conference budget resolution excludes the House instructions telling his committee to find $2.2 billion in savings in for fiscal 2005 through 2009.

The House was expected to recess last week until April 20 without reaching an agreement with the Senate on a final budget resolution.