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Congress notices FL ‘shell game’

4/22/2009 © Health News Florida
A Congressional staff report raps Florida and seven other states for misuse of Medicaid stimulus funds that were supposed to create health-care jobs and help newly uninsured people get coverage. The report raises a question of whether Florida could be held accountable for paying back diverted money.

Florida Health Care Association, which represents the nursing-home industry, is circulating the report to the media in hopes of catching the attention of the Legislature and forcing a change in the budget before it's too late. The budget has to be finished by the end of this week if the session is to end on time.

In the Senate budget, nursing homes face a 3 percent cut, or $81 million, and in the House, a 2.5 percent cut, or $69 million. At the same time, FHCA says, legislators are taking $783 million of federal stimulus dollars designated for health care and redirecting them into other areas.

Sen. Nan Rich, D-Weston, has called this a "shell game."  

The staff report, "De-Targeting the Stimulus: States Diverting Medicaid Funds Away from Helping Poor, Protecting Health Care Jobs," was released by the U.S. House Oversight and Government Reform Committee. But it was released by the ranking Republican member, Rep. Darrell Issa of California, so it's not clear how much concern the majority Democrats have about the issue.

"By exploiting a loophole in the stimulus legislation, states are effectively able to use federal funds intended for healthcare spending for whatever projects they choose and without obligation to adhere to (the rules)," the report says.

The American Recovery and Reinvestment Act of 2009 (ARRA) provided $87 billion to states to support their Medicaid programs retroactive to last October and through 2010. Florida's extra funding amounts to $4 billion. 

According to the "De-Targeting" report, Florida's Legislature wants to use almost $800 million of the Medicaid stimulus to offset the deficit in other areas by transferring state money out of the Medicaid budget as federal funds come in.
The report cites quotes from Congressional leaders showing they intended states to use the federal funds for a net increase in Medicaid spending. But the Centers for Medicare and Medicaid Services does not appear to be interested in citing states that violate that intent, the report says.

The other states cited in the report are New York, Michigan, Virginia, West Virginia, Kansas, Nevada and Indiana.