Washington —- The Bush administration is pressing for rapid changes in Medicaid funding that could cost Georgia more than $2.6 billion during the next five years and potentially shut down dozens of the state's hospitals, health clinics and nursing homes, according to a Democratic congressional report.

Under the proposed changes, state funding to Grady Memorial Hospital would be eliminated, which would virtually guarantee its closure, according to reports sent to federal authorities by Georgia's officials during the past year.

"The changes they have are very drastic and damaging to a state like ours," state Health Commissioner Rhonda Medows said Monday.

A report released Monday by the House Oversight and Government Reform Committee showed that Georgia would be among the hardest-hit states, unless congressional Democrats can prevent the administration's orders from taking effect.

The administration began sending "policy clarifications" to state health officials last March about the changes, a process that allowed it to avoid the scrutiny and approval of Congress.

The nation's governors have vigorously protested the proposed Medicaid changes. They say it would amount to a shift in costs that would have to be made up by the states.

The rules cover a myriad of services. For example, one proposed regulation would limit Medicaid reimbursement to public hospitals to no more than the cost of providing a particular service. Another would prohibit billing Medicaid for the costs of medical interns and residents. Another would eliminate Medicaid payments to schools for transporting certain students directly from home to school and back. The students get health services that are covered through Medicaid, the nation's health care program for the poor.

Federal officials said the changes are designed to ensure that providers don't bill the program for more than the costs of providing care and that states pay their fair share of the program.

The changes would reduce or, in some cases, eliminate funding for a number of Georgia programs.

Georgia would have to reduce payments to nursing homes and hospitals. A program that encourages young doctors to train —- and possibly remain —- at public health facilities would be eliminated. School clinics where medical professionals help students with short- and long-term health problems might be shut down.

The changes are aimed mainly at reducing federal Medicaid costs by restraining how the states use their Medicaid allocation.

The administration said the quick and deep changes would save the federal government $15 billion over five years, but the committee's report shows that the impact on states would be more than three times that amount, $49.7 billion.

"We cannot replace this huge amount of money," Medows said.

In addition to Georgia, states facing losses of more than $1 billion each under the regulation changes include California, Texas, New York and Illinois.

Dennis Smith, director of the Centers for Medicaid and State Operations, said the committee's survey lacked credibility and had too many gaps and assumptions.

"We don't see states changing their budgets based on these kinds of assumptions," Smith said.

Overall, the federal government will spend more than $1.2 trillion on Medicaid during the next five years. The administration projects that if all the changes it seeks were enacted, the federal government would save about $13 billion during those five years.

—- The Associated Press contributed to this article.

ON THE WEB

http://oversight.house.gov/features/medicaid08/