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HRD-81-105 1 (1981-06-30)

handle is hein.gao/gaobabmtw0001 and id is 1 raw text is: 



                    UNITED STATES GENERAL ACCOUNTING OFFICE
                            WASHINGTON, D.C. 20548


HUMAN RNESOUR
   DIVISION
                                             tside tln  rovaUNlE 301981
     B-203592gs6 '                                         JN3018



     The Honorable William L. Clay
     House of Representatives
     Dear Mr. Clay:,107

          Subject: LAppropriateness of Missouri's Mingling of
                   Medicaid Reimbursement Funds with State
                   General Revenue Fund 7(HRD-81-105)

          In your March 13, 1981, letter, you requested information on
     several questions related to the recent 10-percent State budget
     reduction in Missouri and the resultant dismissal of more than
     1,000 employees of the State Department of Mental Health. Your
     questions involved whether it was legal for Missouri to count
     Medicaid payments for services provided by the Department of
     Mental Health as revenue to the State general fund and whether
     this practice exacerbated cuts in patient care.

         We reviewed the Medicaid law and regulations and discussed
     the questions with officials of the Department of Health and Human
     Services in Washington, D.C., and its regional office in Kansas
     City, Missouri. We also spoke with State officials from the De-
     partment of Mental Health and the Office of the State Auditor in
     Jefferson City, Missouri. In addition, we reviewed applicable
     State documents and practices.

         We concluded that the State's handling of Medicaid payments
     to its Department of Mental Health was permissible under Federal
     law and regulations. Also, while the budget cuts had a dramatic
     impact on the Department, the impact-was expected to be relatively
     short lived, with most of the reduction in employees being restored.

         The Missouri Department of Mental Health receives State-
     appropriated general revenue funds to finance most of its opera-
     tions, Any income for mental health services covered by Medicaid
     (or Medicare) is considered a reimbursement to the State for those
     services and is credited to the general revenue account. Thus,
     Medicaid payments received by the Department, go dollar for dollar
     for patient services. Missouri, or any State, can legally combine
                                                               (106204)


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