WASHINGTON -- A House subcommittee yesterday approved legislation that would delay for nine months the Jan. 1, 1992, effective date of proposed Medicaid financing rules that states have warned would ravage their budgets in the middle of their fiscal years.
The bill passed by the House Energy and Commerce Committee's subcommittee on health and the environment would temporarily block Health Care Financing Administration regulations that would disallow certain types of state funds that had been eligible for Medicaid matching funds.
The subcommittee's action came after a stormy hearing last week in which panel members lambasted the administration's head, Gail R. Wilensky, for refusing to delay implementation of the regulations. They charged that the rules subverted congressional intent in this area.
"While I had hoped the administration would have withdrawn the regulation, it's obvious they have no intention of doing so," said Rep. Henry Waxman, D-Calif., chairman of the subcommittee and chief sponsor of the legislation. He said the bill was needed "to prevent fiscal and program chaos that would result" from the regulations.
By acting this week, the committee sent a message to the health administration that it was not waiting for a clarification of the rules promised by Ms. Wilensky during the hearing. That clarification could come later this week or next week.
The rules, which are designed to implement a 1990 Medicaid law, would require the federal government to stop matching the portion of states' Medicaid funds garnered through donations. The regulations also would place tight restrictions on the use of taxes states collect from hospitals for the Medicaid program.
The health administration -- an agency within the Department of Health and Human Services -- has said using donations to count toward the match is inappropriate because it allows a state to receive more federal aid without kicking in its own funds. State taxes also can be unfair, because many states make higher Medicaid payments to hospitals to pay such taxes, in effect reimbursing them for those levies, the administration has said.
State officials have argued that the donations and hospital taxes do not supplant, but supplement, state contributions to the Medicaid program. They also warned that making the regulations effective Jan. 1 would create severe financial problems for them because because nearly all the states operate on a July-June fiscal year.
One of the major issues the clarification will spell out is what kinds of intergovernmental fund transfers will be eligible for federal matching funds, Ms. Wilensky said.
The rules clamp down on transfers because the administration is concerned some were really donations in disguise, Ms. Wilensky said. For example, the regulations disallow hospital donations made to a county that are passed through to the state. But she has stressed that the regulations do not rule out all intergovernmental transfers.
In addition to delaying the effective date for nine months, the bill also would do the following:
* Give states until Dec. 31, 1992, to wean themselves from reliance on hospital donations as a part of their Medicaid contribution.
* Permanently block the health administration from imposing any rules that bar any types of intergovernmental transfers that states want to put toward their Medicaid match.
* Require the secretary of Health and Human Services to submit a report to health lawmakers in the House and Senate by Feb. 1, 1992, describing any future regulations the department intends to propose involving hospital taxes under the Medicaid program.