STATE OF CONNECTICUT EXECUTIVE CHAMBERS HARTFORD, CONNECTICUT  06106
M. Jodi Rell Governor

May 18, 2005

The Honorable Susan Bysiewicz

Secretary of the State

30 Trinity Street

Hartford, CT 06115-0470

Dear Madam Secretary:

I am hereby returning without my signature Senate Bill 1100, An Act Concerning the Authority of the Commissioner of Social Services with Respect to the Administration of the Medicaid Program.  Senate Bill 1100 does not provide the Department of Social Services the flexibility to negotiate on behalf of the State of Connecticut certain waivers of the requirements of the Medicaid program administered by the United States Department of Health and Human Services (the “USHHS”).  The loss of flexibility and bargaining position by the State of Connecticut while negotiating with the USHHS will be detrimental to the interests of the citizens of our state.

By enactment of Senate Bill 1100, beginning July 1, 2005, the Commissioner of the Department of Social Services (the “Commissioner”) is prohibited from agreeing to any waiver agreement with USHHS regarding the Medicaid program, in the event such waiver reduces the standard 50% federal financial participation (“FFP”).  Under current law, the prohibition from entering into such agreements ends June 30, 2005.  Senate Bill 1100 extends the prohibition on entering into such waivers for an additional two years, through June 30, 2007. 

Connecticut, like all other states, aggressively pursues federal revenue enhancements through the submission of waivers to the Centers for Medicare and Medicaid Services at the USHHS.  Waiver submissions may seek to initiate a non-traditional service package, or introduce a non-traditional method of service delivery or deliver defined services to a specified segment of the population.  In essence, waivers from Medicaid requirements request that the federal government share in the costs of health care, by reimbursing the state for services that the state feels are appropriate for the health care needs of its citizens.

At times, reimbursement may also be sought for the provision of traditional health care or health care related services.  In recent years, federal Medicaid policy has significantly changed and the USHHS is increasing efforts to control Medicaid spending by closely scrutinizing state waiver requests.  At a time when the State of Connecticut is seeking increased federal funding, the federal government has reduced its contribution to our state initiatives. 

Connecticut must retain the flexibility to pursue waivers and must seek waivers that contain enticements for enhanced federal funding of our state programs.  For this reason, Senate Bill 1100 is not advantageous to the citizens of Connecticut.  The bill undermines the ability of the Department of Social Services to negotiate effectively with the federal government when the department proposes waivers where the FFP would be less than the standard 50%.  In some instances, negotiating a FFP of less than 50% may serve as an enticement for the federal government to partially fund a project that it normally would not consider funding.  Although in some instances the potential revenue to the state may be less than instances where the federal government participates at the 50% level, the reduced FFP would result in new or additional revenue to the state.  The Department of Social Services needs the flexibility to determine and negotiate appropriate program parameters on behalf of the State of Connecticut in waiver submissions and must have the authority to negotiate a reimbursement rate that is in the best interests of the state.

For the reasons stated herein, I am returning without my signature Senate Bill 1100, An Act Concerning the Authority of the Commissioner of Social Services with Respect to the Administration of the Medicaid Program. 

Sincerely,

M. JODI RELL

Governor