Proposed Medicaid regulation would hurt rural hospitals and nursing homes
Many rural hospitals and nursing homes would get fewer federal dollars under a proposal to save Medicaidalmost $4 billion over the next five years. The change would have “asignificant economic impact on a substantial number” of health careproviders, the Bush administration acknowledges.At issue are financing arrangements betweenstates and local governments. These deals tend to increase Washington’sshare of spending in Medicaid, the joint state-federal program covering 55 million poor and disabled people, even when a state’s share is unchanged or drops. The federal share of the program ranges from50 percent to 76 percent, depending upon the state. Poor states receivea greater federal share. In many states, financing arrangements betweenhealth care providers and the state result in the federal governmentpaying more than the law says it should. Dennis Smith, director of thefederal Center for Medicaid and State Operations, said the proposed rule made public late Friday would put a crimp on that practice.”This is about the match rate, and states havedemonstrated they’re willing to fund their share of the program,” Smithsaid in an interview Saturday. “It’s just that for many years previousto us, they were not paying their share.”The Kaiser Family Foundation, which conductshealth care research, said some of these arrangements have helpedstates maintain important services, such as nursing home care, duringtough economic times.