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Saturday, October 27th 2012

The Medicaid Block Grant & Mitt Romney

Sometimes, for a policy proposal to be taken seriously depends on the mouths from which the proposal comes. To their credibility and moral standing on the issue. So to hear Mitt Romney on Medicaid reform is irking as insincere. A Boston Globe opinion piece recently put down the Governor’s run in charge of Massachusetts’ Medicaid program,

Buried in his 2004 [Massachusetts' state] budget, Romney proposed maximizing federal aid by taxing hospitals, shifting the resulting tax payments in and out of an uncompensated care fund, back to hospitals as adjustment payments, and diverting resulting federal Medicaid funds to state general revenue. He also proposed using taxes on nursing homes and pharmacies in his efforts to maximize and divert federal aid.

In such strategies, health care facilities serving the poor are used to claim federal funds to help the poor. But the health care facilities and the poor may get nothing, as the state diverts the federal aid to general coffers — and revenue maximization contractors reap millions in contingency fees.

While Massachusetts wasn’t the only state pulling such a plan, and indeed simliar state accounting practices remain, it did draw the rightful ire of the Government Accountability Office and eventually the Bush administration. As the Boston Globe opinion piece ends,

It’s not hard to imagine how a governor — one that employs complex shell games to find loopholes in federal rules in order to maximize and divert federal aid — would use the federal funds if handed to the state without any federal oversight. The answer to state misuse of federal aid is not to give those states even more discretion to do whatever they wish – but to simplify the claiming process, reduce loopholes allowing the revenue schemes, and improve oversight to ensure Medicaid funds are used as intended.

To be completely sincere I don’t agree one hundred percent with Mr. Hatcher, in the sense that I support state specific Medicaid waivers and perhaps reducing, across the board, requirements for the matching funds and giving states more leeway. However, I’m not sure a man who led a state in playing such a shell game with Medicaid before, should be the man leading such deregulation.