WASHINGTON -- President Bush has signed into law a measure that eases new Medicaid financing rules and delays their effective date for nine months, to Oct. 1, 1992.

Enactment of the law puts to rest, at least for now, the controversy that erupted after the Health Care Financing Administration published the rules on Sept. 12.

Those regulations required the federal government, beginning Jan. 1, 1992, to stop matching the portion of state's Medicaid funds that are garnered through donations and placed tight curbs on the types of state tax revenue eligible for federal matching dollars. States had warned that the rules would wreak havoc with their budgets, especially because the regulations were to become effective in the middle of most states' fiscal years.

The new law codifies an agreement worked out between the National Governors Association and the health administration. Besides easing the rules, the law 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 prohibits state donation or tax programs that were not in place as of Sept. 30, 1991.

Earlier this week, a lobbyist pointed out that the law has the potential to generate more controversy because the health administration must draft regulations to implement it. The administration's rules were what set off the flap in the first place, noted Joy Wilson, a lobbyist for the National Conference of State Legislatures.

"The scariest thing about all of this is the law requires HCFA to promulgate regulations," she said.

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