Two senators and the General Accounting Office have accused HHS of improperly using State Children's Health Insurance Program funds to cover adults who don't even have kids, prompting a spat between the Senate and the agency.
Last week, Sens. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), representing the Senate Finance Committee, sent a letter to HHS Secretary Tommy Thompson requesting that he "explain projects that divert health dollars from covering uninsured children in violation of federal law." The senators' demand for an explanation is based on a July report from the GAO that argued that Medicaid waivers HHS has granted to four states since August 2001 are illegal and inconsistent with the goals of SCHIP, a 5-year-old program designed to provide health insurance coverage to children in low-income families.
As the dispute plays out, increasingly cash-strapped states could find it more difficult to secure the waivers they argue are necessary to cover low-income segments of the population. Currently HHS is reviewing at least nine waiver requests, according to the GAO, and Baucus and Grassley expect an HHS response to their letter by Aug. 20.
HHS' Medicaid waivers, which give states the flexibility to modify their SCHIP programs to meet unique needs, "raise legal and policy concerns in light of SCHIP's stated purpose of expanding health coverage to low-income children," the GAO report said. The GAO also said the waivers have not been "budget- neutral," referring to a requirement that any state's expansion of Medicaid and SCHIP programs not increase federal expenditures.
HHS disagreed with the GAO's allegations that waivers granted to Arizona, California, Illinois and Utah have violated Medicaid rules or the budget neutrality principle.
"We make no apologies for providing healthcare to low-income individuals and families," said Bill Pierce, an HHS spokesman. "Congress has continued to fail to act on initiatives to expand care and we're not going to wait and allow Americans to suffer as a result of this inaction."