NAPH challenges CMS on Medicaid finance policy

The National Association of Public Hospitals and Health Systems questioned the CMS' authority to limit states' use of intergovernmental transfers to fund their Medicaid programs. The NAPH's comments were a response to an April CMS letter to Sen. Charles Grassley (R-Iowa), who had questioned amendments to his state's Medicaid plan. In the letter, the CMS implied it would deny federal matching funds for intergovernmental transfers. Such transfers -- for example, the transfer of part of a county hospital's disproportionate-share payments to the state Medicaid program -- have been criticized by Republicans as a "recycling" of federal funds to generate more federal funds. In a letter to CMS Administrator Mark McClellan, the NAPH said, "There is nothing intrinsically wrong, abusive, inappropriate or illegal about intergovernmental transfers." Such transfers, the association said, "are congressionally approved mechanisms for allowing states to claim federal matching payments related to public funds spent on healthcare services to low-income and vulnerable patients." Read the letter. -- by Tony Fong