WASHINGTON -- Congress unexpectedly gave final approval this week to legislation that would codify an agreement between the National Governors' Association and the Bush administration to ease Medicaid financing rules and delay their effective date for nine months, to Oct. 1, 1992.
States had urged Congress to delay the rules, but by its action Congress also approved various changes to the rules that other state and local groups and hospital associations had been wary of endorsing because they had not had enough time to study them carefully.
Those groups had endorsed a bill passed by the House last month that would simply have delayed the rules for nine months to give the Bush administration time to work out various changes. But the Senate on Tuesday unexpectedly approved the governors' agreement, bypassing a proposal for a simple three-month delay in the rules recommended by the Senate Finance Committee.
On Wednesday, the House, over the objections of a key health legislator, passed the Senate measure, sending it to President Bush for his signature. Bush administration officials have indicated the bill is acceptable to them.
The regulations were first proposed by the Health Care Financing Administration on Sept. 12. They require the federal government, beginning Jan. 1, 1992, to stop matching the portion of states' Medicaid funds that are garnered through donations from hospitals. The rules also place tight new restrictions on the types of state tax revenues that are eligible for federal matching dollars. Specifically, they would severely restrict the use of taxes on health facilities, commonly known as "provider-specific" taxes.
Besides easing the rules, the bill that finally cleared Congress this week imposes a temporary "freeze" on the entire Medicaid situation. While it blocks the federal government from imposing the rules until Oct. 1, 1992, it also prevents donation or tax programs from being started by states that did not have them in place as of Sept. 30, 1991.
The legislation also makes several other changes to the original rules. For example, it allows taxes to count provider-specific taxes toward the Medicaid match as long as the tax uniformly applies to all providers in a class and to all business of those providers.
Though it also delayed the rules to Oct. 1, 1992, the House bill did not contain a freeze on new state donation and tax programs, and it does not approve the changes agreed to by the governors and the health agency in their pact.
Rep. Henry Waxman, D-Calif., who sponsored the House bill, warned House members they would regret scrapping their measure and acceding to the Senate's bill.
"We are here today to enact legislation that I think we're going to all regret in a very short period of time," said Rep. Waxman, who chairs the House Energy and Commerce Committee's subcommittee on health and the environment. He did not detail which parts of the agreement troubled him.
