HHS Secretary Mike Leavitt notified Iowa that if it enacts legislation to expand coverage to the uninsured it will still be entitled to $65 million in federal Medicaid funding, according to a statement released by Iowa Gov. Tom Vilsack. Iowa had expected to lose the money after it was notified by the CMS that effective July 1 the state would no longer be able to use a financing mechanism called intergovernmental transfers, which essentially work as a federal matching funds program. The Bush administration has indicated that it wants to limit the program because some states have taken part in questionable practices to obtain and use the matched funds and otherwise take advantage of the program. The CMS had notified states with intergovernmental transfers that it will be auditing their use of the funds and will work with the states to help ensure they use the money in permissible ways, according to a CMS spokeswoman. Vilsack said he and two state legislators presented Leavitt with a plan that called for the state keeping the money and expanding coverage to the uninsured. "The secretary reacted favorably and on March 22 gave us the green light to enact legislation that would tackle the issue of the uninsured enabling the state to preserve funding for the regular Medicaid program," Vilsack said in the statement. -- by Joseph Mantone
Iowa would retain federal Medicaid funding
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