Will Feds Get Tobacco Funds?

The head of the Health Care Financing Administration told a congressional panel Monday that "her agency had no intention of shaking down state officials" to force them to hand over part of their settlements of lawsuits against tobacco companies, the Washington Post reported.

"If you're asking if we're here looking for a fight with the states, the answer is no," HCFA Administrator Nancy-Ann Min DeParle told the House Commerce health and environment subcommittee. "'The only thing HCFA has done is write a letter to the states' explaining the law," DeParle said.

During the hearing, the Post reported, "a conciliatory letter from President Clinton" to the National Governors' Association was released stating that the administration "would prefer to see the allocation of tobacco funds between federal and state government resolved through legislation."

Clinton said in the letter that he would prefer "to find a mutually agreeable purpose for the funds generated by the" $368.5 billion global tobacco settlement. The dispute between the states and HCFA arose last month after the federal agency informed states that they would be required to share any funds recouped from tobacco companies on behalf of Medicaid patients.

Under "sharp questioning" from Rep. Thomas Bliley, R-Va., and Rep. Charlie Norwood, R-Ga., DeParle defended the November 3 letter sent to states seeking a portion of Medicaid-related lawsuits funds. She contended that "the letter was not meant to be threatening, but merely an attempt to put the issue on the table," CongressDaily reported.

The Washington Times reported that the letter from Clinton to the NGA "lets some of the steam out" of a contentious issue in Congress. But CongressDaily reported that members of the House subcommittee "appeared equally divided over whether the federal government should receive any payment all."

While Commerce Committee Chair Bliley and subcommittee chair Michael Bilirakis, R-Fla., favor allowing the states to keep "the entire kitty," others, including subcommittee ranking member Sherrod Brown, D-Ohio, and Rep. Bart Stupak, D-Mich., contended such a move would be "bad precedent."

The Associated Press noted that in his letter, "Clinton added that current law requires [HCFA] to recover a federal portion of money reimbursed to Medicaid that may be part of a state tobacco settlement."