Lawmakers Delay Medicaid Cuts
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WASHINGTON — Congress voted Wednesday to forestall severe state Medicaid cutbacks but will require changes that affect future financing of health care programs for the poor.
The changes are based on an agreement between the Bush Administration and governors to resolve a dispute over the ways states can receive federal Medicaid matching funds.
States feared those rules would severely cut federal matching funds and throw their Medicaid programs into disarray. But the Administration said states were abusing the matching system with fund-raising schemes that were draining federal coffers.
The Administration objected to states raising money through voluntary contributions and special taxes on hospitals, nursing homes and other Medicaid providers. States would use the revenues to get federal matching funds and recycle the money back to the providers.
The congressional compromise would protect existing programs at least until Oct. 1, after which most donation and certain tax programs would not be allowed.
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