2016 Postmortem

DonViejo

(60,536 posts) Sun Oct 14, 2012, 05:26 PM Oct 2012

A scathing op-ed in the Boston Globe explains then-Governor Romney's "Medicaid shell game"

Mitt Romney and running mate Rep. Paul Ryan R.-Wis. have been tough critics of federal spending during their run for the White House. But just as Ryan wasn’t shy about asking for stimulus money for Wisconsin, an October 12 Boston Globe op-ed explains how Romney exploited a regulatory loophole when he was governor of Massachusetts to attract excessive federal Medicaid funds without necessarily using them for their supposed purpose: health care for the poor.

Daniel Hatcher, associate professor at the University of Baltimore School of Law, called the approach:

Akin to tax schemes using offshore bank accounts — but instead of avoiding federal taxes, seeking to pilfer the federal treasury. The Wall Street Journal labeled such financing mechanisms “Medicaid Money Laundering” and a “swindle.”

…Buried in his 2004 budget, Romney proposed maximizing federal aid by taxing hospitals, shifting the resulting tax payments in and out of an uncompensated care fund, back to hospitals as adjustment payments, and diverting resulting federal Medicaid funds to state general revenue. He also proposed using taxes on nursing homes and pharmacies in his efforts to maximize and divert federal aid.

The approach attracted attention from the U.S. General Accounting Office, which,

Responded that “hospitals should benefit from increased federal reimbursements and Massachusetts’s arrangement appeared to result in lower payments to hospitals, despite increased claims for federal reimbursement.”

Continue reading:
http://www.salon.com/2012/10/14/law_professor_romney_exploited_federal_spending_loophole_in_mass/