White House issues formal veto threat against legislation that would delay Medicaid regulations

The Bush administration on Tuesday issued a formal veto threat against legislation (HR 5613) that would place a one-year moratorium on seven new Medicaid regulations, CongressDaily reports (CongressDaily, 4/22).

The legislation would delay implementation of the regulations until April 1, 2009. Under the regulations, proposed by the Bush administration, states could not use federal Medicaid funds to help pay for physician training. The regulations also would place new limits on Medicaid reimbursements to hospitals and nursing homes operated by state and local governments and limit coverage of rehabilitation services for individuals with disabilities and mental illnesses. In addition, the bill would provide $25 million annually for efforts to fight Medicaid fraud (Kaiser Daily Health Policy Report, 4/17).

The Bush administration cited reports from the HHS Office of Inspector General and the Government Accountability Office that found states have been inappropriately increasing Medicaid spending to draw down more federal matching funds. The administration in a statement said, "Blocking the [CMS] regulations ignores the policy recommendations and investigatory findings of the GAO and the OIG and will put billions of dollars of federal funds at risk" (CongressDaily, 4/22).

The House on Wednesday is expected to pass the measure with a veto-proof margin after Republican lawmakers reached an agreement with Democratic co-sponsors to scale back an earlier version of the bill (Johnson, CongressDaily, 4/23). The House was scheduled to vote on the legislation on Tuesday, but lawmakers delayed action so that representatives campaigning in the Pennsylvania primary could participate. It is unclear whether the Senate will pass the measure with a veto-proof margin, which "means the veto battle will almost certainly be decided in the Senate," CQ Today reports (Armstrong, CQ Today, 4/22). Senate Finance Committee Chair Max Baucus (D-Mont.) said Tuesday that he believes the Senate will have the votes to override a veto. "A lot of Republicans want those regulations repealed," Baucus said (CongressDaily, 4/23).

NPR's "Morning Edition" on Wednesday reported on the bill. The segment includes comments from Dennis Smith, former director of CMS' Center for Medicaid and State Operations; Barbara Edwards, director of the National Association of State Medicaid Directors; Angela Gardner, an emergency department doctor at University of Texas Medical Branch at Galveston; and Alan Weil, executive director of the National Academy for State Health Policy (Rovner, "Morning Edition," NPR, 4/23). Audio of the segment is available online.

A kaisernetwork.org interview with Barbara Edwards about the impact of the economic downturn on Medicaid is available online.