Thursday, June 6th 2002

The Honorable Susan Collins
United States Senate
172 Russell Senate Office Building
Washington, DC 20510

Dear Senator Collins:

The undersigned hospital organizations are writing to express our strong support for your bill, S. 2570, which would increase the Medicaid federal medical assistance percentage (FMAP). In addition to enactment of legislation to stop further federal cuts in Medicaid disproportionate share (DSH) funding to states, we also believe this bipartisan bill is essential to ensuring that Americans continue to receive safety net health services.

As you know, most states faced budget deficits for fiscal year (FY) 2002 and are trying to figure out ways to cope with expected shortfalls for FY 2003. The Medicaid program accounts for a large portion of total state spending, making it a likely target for budget cuts. Many states have avoided cuts this year by using one-time-only tobacco settlements or “rainy day” funds; however few alternatives to Medicaid cuts exist for future budgets. States need immediate help to make sure their Medicaid residents receive appropriate health services.

S. 2570 offers that help. For states that maintain their Medicaid eligibility criteria, your bill provides a temporary one-percentage point increase in FMAP for 18 months. It also includes a “hold harmless” provision for states in which FMAPs would otherwise decline in 2002 and 2003 and adds $4.4 billion to the Title XX Social Service Block Grant.

Along with passage of legislation to stop the resumption of cuts in federal funding for Medicaid DSH, we support swift enactment of this legislation and applaud your leadership, and that of cosponsor Sen. Ben Nelson (D-NE) on this important matter.


American Hospital Association
Association of American Medical Colleges
Catholic Health Association of the United States
Federation of American Hospitals
Healthcare Financial Management Association
National Association of Children’s Hospitals
National Association of Public Hospitals and Health Systems
National Association of Urban Hospitals
Premier Inc.
VHA Inc.

This letter was also sent to the Honorable Ben Nelson, US Senate

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