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SUNNY Temp: 50 °F Wind: CLM at 0 mph Tuesday, September 30, 2003 SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics AP News Weather Classified Archives Site Map EXTRA HomeLife Magazine Joy Magazine Tempo A & E RogueValleyAutoFinder RogueValleyHomeFinder Real Estate Showcase Wellness Connection Newspaper in Education Prime Times Outdoor Journal Personals Movie Times TV Times E The People CLASSIFIEDS Find a Car Find a Home Find a Job Find Everything E SOUTHERN OREGON Automotive Communities Entertainment Publications Recreation Calendar ABOUT US FAQ What's New Advertise Home Delivery Classified Ad Employment Contact Us Media Kit Email Story to a Friend June 23, 2003 Bates, Westlund say Medicaid diversion proper By DON JEPSEN for the Mail Tribune SALEM — Two legislators have expressed optimism that a federal challenge over how the state used Medicaid funding will not result in severe penalties. At issue is a loophole in the Medicaid Upper Payment Limit law passed by Congress during the Clinton administration. States used the loophole to divert Medicaid funds for general government programs. "I’m not a lawyer," said Rep. Alan Bates, D-Ashland, "but we had certifiably smart people advising us every step of the way when we were spending the money." Added Rep. Ben Westlund, R-Tumalo, "No laws were broken." Bates, a physician, and Westlund are probably the leading experts on Medicaid in the Legislature, in large part because of their work to salvage the Oregon Health Plan. Advertisement Thirty-seven states, including Oregon, took advantage of a Medicaid provision that allowed them to list the cost of medical services at the maximum rate allowed at publicly owned hospitals and nursing homes. In most cases, the actual costs were less. That produced revenue surpluses which the cash-strapped states diverted to programs for which the money wasn’t intended. Alarmed at the growing cost of payments to the states, Congress ordered an investigation. The 2001 Legislature used $249 million in the Medicaid upper-payment limit funds for state school support, and $93 million went to the Oregon Health and Science University. "The money was used by school districts for school health programs and nurses," said George Naughton, a budget analyst with the Department of Administrative Services. "That in turn freed up general funds for other purposes." State auditors raised the initial warning flag in February, saying the state might have to repay the federal government more than $200 million. But after review of extensive documentation submitted to the Center for Medicare/Medicaid Services, Westlund said he believes the amount in dispute is much smaller now — maybe about $75 million. That includes $45.5 million Oregon allegedly overbilled the federal government. As a result, the center withheld its final quarterly payment and the state is preparing a lawsuit to shake loose the money. "I am very confident that we are owed that money," said Westlund. "No laws were broken, and if we were culpable it’s because we didn’t file some of the documentation in a timely manner." He said a number of other states are challenging the federal government over threats to penalize them for improper use of Medicaid funding. Maryland was the first to win a related suit. Meanwhile, the Legislature was forced to pass an emergency appropriation balancing the current budget with scarce general fund dollars, something the lawmakers had thought they accomplished through five grueling special sessions from the 2001 Legislature. The money will fill the shortfall in the Department of Human Services budget caused by the withholding of the Medicaid funding money. The Bush administration is phasing out the upper-payment limit program, claiming it will save an estimated $9 billion over the next five years. Oregon is expected to receive $73 million in 2003-05 and less than $4 million the following biennium. Don Jepsen is a free-lance writer living in Salem. Printer Friendly Version Email Story to a Friend Subscribe Archive: Click to Search Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright © 1997-2003 Mail Tribune. All rights reserved. Privacy Policy | Terms & Conditions Website Feedback A D V E R T I S E R S SPECIAL SECTIONS Rogue Valley Auto Finder Rogue Valley Job Finder --> Rogue Valley Home Finder Joy Magazine Homelife Magazine Tempo Real Estate Showcase Food for Thought Hike of the Week Wellness Connection Outdoor Journal Moving to Southern Oregon? Volunteer Openings Prime Times