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B-309734 1 (2007-07-24)

handle is hein.gao/gaobaczyh0001 and id is 1 raw text is: I Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 B-309734 July 24, 2007 The Honorable Michael 0. Leavitt Secretary of Health and Human Services Subject: Medicaid Demonstration Projects in Florida and Vermont Approved Under Section 1115 of the Social Security Act Dear Mr. Secretary: In response to a congressional request, we are evaluating Medicaid demonstration projects in Florida and Vermont approved by the Department of Health and Human Services (HHS) under section 1115 of the Social Security Act (the act).' During the course of our work, we identified several issues that raise concerns about the consistency of these demonstration projects with federal law.' With respect to Florida, our concerns center on HHS's decision to waive requirements to provide covered benefits and limit cost sharing without addressing statutory limitations on its authority to do so. In the case of Vermont, HHS authorized the state to operate its own Medicaid managed care organization and, through this arrangement, to apply federal Medicaid matching funds to programs previously funded by the state. Given our concerns with these demonstration projects, discussed in detail below, we are bringing them to your attention. We recommend that you reexamine these projects in light of our concerns and, where appropriate, either modify the terms of these projects or seek statutory authorization for them to continue in their current form. BACKGROUND Through the Medicaid program established by title XIX of the act, the federal government shares with states the expense of furnishing medical services to certain low-income individuals. States operate their Medicaid programs under HHS 42 U.S.C. § 1315 (2000). 2We did not examine the extent to which arrangements in other states raise similar legal concerns. By letter of March 15, 2007, we solicited the views of the General Counsel of HHS on several questions about the Florida and Vermont demonstration projects. By letter of April 26, 2007, the Director of the Center for Medicaid and State Operations, Centers for Medicare & Medicaid Services (CMS), responded to our inquiries. Throughout this letter, we refer to this response as the CMS Letter.

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