HHS can provide Medicaid reform relief to states, report says

NEWS IN BRIEF — Posted April 4, 2011

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Republican lawmakers want the Dept. of Health and Human Services to start granting states waivers to Medicaid eligibility requirements after the release of an independent report that confirms the administration has that power.

The department has the authority to waive requirements for state Medicaid programs established under the health reform law and the most recent economic stimulus package, the Congressional Research Service said in a memo to the Senate Finance Committee in March.

Some states with tight budgets are struggling to meet the maintenance-of-effort provisions that requires states to keep Medicaid eligibility from dropping below levels that were in place at the time the legislation was enacted, said Sen. Orrin Hatch (R, Utah), the Finance panel's chair. He urged HHS Secretary Kathleen Sebelius to waive these requirements for states under financial distress.

"The Medicaid mandates included in Obamacare are crippling state budgets, encroaching on their flexibility to lower Medicaid spending and tying states' hands in targeting scarce resources to the most vulnerable beneficiaries," Hatch said. Sebelius has said cash-strapped states still have options to reduce Medicaid spending without running afoul of the federal requirements.

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