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Debate erupts on Indiana's incomplete Medicaid waiver

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Indiana Gov. Mike Pence defended his administration Thursday over criticism from Democratic lawmakers that they have imperiled Hoosiers' health care by failing to follow proper procedures on Medicaid.

In a letter to state Democratic leaders, Pence insisted his administration did not err by filing an incomplete Medicaid waiver with the Centers for Medicare and Medicaid Services and called the federal approval process "flawed."

Pence asked CMS' approval to complete the federal Medicaid expansion for residents earning up to 138 percent of the federal poverty level using the Healthy Indiana Plan, a hybrid health savings account plan that he argues would give the state more control.

However, Diane Gerrits, CMS' director of state demonstrations and waivers, wrote in a Feb. 25 letter that the state will have to resubmit its application because it had not yet held two public hearings required by law.

House Minority Leader Scott Pelath, D-Michigan City, and Senate Minority Leader Tim Lanane, D-Anderson, wrote to Pence on Thursday saying his move put the state in danger of losing the program and could also freeze lawmakers out of the decision.

"As a result of the failure to comply with the transparency portion of the proposal, it now appears that we must begin a 30-day state public comment and notice period, followed by an additional 30-day federal public comment and notice process, later than expected," the pair wrote.

Pence contends, however, the state faces no delay.

"The Feb. 25, 2013, letter from HHS does not indicate in any way that the waiver application process has been jeopardized," he wrote Thursday. "It does, however, speak to the flawed bureaucratic process that has impeded progress on our successful Healthy Indiana Plan."

Pence spokeswoman Christy Denault said state officials have been talking regularly with CMS officials, and said giving CMS the incomplete application allowed them to begin vetting the application. CMS officials did not respond to questions Thursday afternoon.

If Pence's plan is approved, it could provide coverage for an additional 400,000 low-income residents. If it is rejected, it could end coverage for the roughly 40,000 residents already enrolled in HIP. And a decision has to be made by June, six months before the state's current waiver expires. Additionally, Pence has said he might not sign off on the expansion using HIP even if he wins federal approval.

A pair of public hearings have been scheduled in Indianapolis next week. Denault said the final, completed waiver, should be submitted by April 11.

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