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CMS Defends Plan To Let States Tailor Medicaid Benefits

Centers for Medicare and Medicaid Services Administrator Thomas Scully has defended the Bush administration's plan to allow states to opt out of mandatory Medicaid-coverage requirements. The CMS (formerly HCFA) chief, deflecting criticism that states might not use their savings to expand health coverage, says they will be required to plow the money into coverage for services that may be more germane to their populations than the once-required services they are dropping.

The plan is similar to a proposal conceived by the National Governors' Association. The Clinton administration had granted states Section 1115 waivers to allow them to drop statutory coverage requirements, but the Bush administration put the regulation on hold while it examined the strings attached to earning a waiver. CMS had been concerned that the rules for getting a waiver were so onerous they threatened to drive managed care plans out of Medicaid.

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