By Crystal D. Swann
April 21, 2008

The House Energy and Commerce Committee on April 17 approved H.R. 5613, a bill that would impose a one-year moratorium on the seven Medicaid regulations recently issued by the Centers for Medicare and Medicaid Services (CMS). The legislation, introduced by Chairman John Dingell and Congressman Tim Murphy (PA), has bipartisan support and would prohibit CMS from taking action to implement these regulations until April 2009. The Bush Administration officials have stated that they would advise President Bush to veto the bill if it reaches his desk.

Late last year, the administration proposed the rules in an “attempt to prevent the states from engaging in certain practices, such as billing the program for transporting Medicaid-eligible children to school or helping patients find jobs or housing as part of the program's case management services.” In effect, these rules would shift responsibility for millions of dollars in Medicaid costs from the federal government to state and subsequently local governments.

The September 7 published regulation, which proposed to eliminate Medicaid reimbursements to school districts for administrative activities and transportation of school-aged children between home and school, left many cities wondering what it would mean for their local school budgets. Several mayors have written letters to Congress indicating the devastating impact the proposed rules would have on the services they provide to children with disabilities as well as students in regular education programs. For example, Boston would lose up to $15 million in funding if these rule changes are implemented.

Clarifying language was added in the nature of a manager’s amendment. The manager’s amendment by Dingell, which replaced the original language of the bill with language from the Medicare and SCHIP Extension Act of 2007 (S. 2499), included new language that would require the HHS to submit a report to Congress that identifies the prevalence of fraud and abuse within the jurisdiction of the rules in question. Additionally, the bill would require that HHS have an independent contractor evaluate the prevalence of the problems; authorize an additional $25 million each year to HHS for combating fraud and abuse in the Medicaid program; and not impede HHS from issuing other Medicaid regulations. Medicaid is a joint state-funded program for the poor in which the federal government pays 57 percent of the costs.