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GOVERNORS PROTEST NEW MEDICAID REGULATIONS

Governors of both parties strongly objected on Saturday to a half-dozen new federal Medicaid regulations that they said would shift billions of dollars in costs to the states, forcing them to consider cutbacks in services.

The rules, scheduled to take effect in the next few months, would reduce federal payments for public hospitals, teaching hospitals and services for the disabled, among others.

State officials voiced their concerns as they arrived in Washington for the winter meeting of the National Governors' Association.

Federal health officials said the new rules were needed to end creative financing techniques that states had used to obtain excessive amounts of federal Medicaid money.

But governors said the Bush administration was unilaterally reshaping Medicaid in ways that would harm some of their most vulnerable citizens. Moreover, they said, the rules are taking effect at a time when the national economic slowdown is cutting into state tax revenues.

"Governors strongly oppose the changes," said Gov. Jim Douglas of Vermont, a Republican. "The timing could not be worse."

One of the rules would ban the use of federal Medicaid money to help pay for the training of doctors, a use that has been allowed since the inception of Medicaid more than 40 years ago. Another would set new limits on Medicaid payments to hospitals and nursing homes operated by states, cities, counties and other units of government.

A third rule would limit Medicaid coverage of rehabilitation services for people with disabilities, including serious mental illnesses.

Federal officials estimate that the rules will save the federal government $15-billion over five years. But that figure may be low. California alone says it could lose $12-billion over five years.

Congress delayed some of the rules last year, but they will soon take effect unless Congress intervenes again.

The National Conference of State Legislatures joined governors in criticizing what it described as "the regulatory activism" displayed in the new rules.

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