Kay Bailey Hutchison: “The Federal Government had nothing to do with the lawsuits that were brought by the States. In fact, the States asked…”

“The Federal Government had nothing to do with the lawsuits that were brought by the States. In fact, the States asked for Federal help. They asked for Federal guidance, and they got none. It was only after the States had settled with the tobacco companies and all States were covered that the Health Care Financing Administration decided that these suits were based on Medicaid and, therefore, the Federal Government should be able to take the average of the Medicaid expenditures from the States from these tobacco settlements. It came up with a figure of 57 percent. They are relying on the part of the law that says the States are responsible for recovering Medicaid overpayments or mistakes in billing; or if a person is covered with private insurance and they get Medicaid coverage, the States would go after the private insurance companies to pay these Medicaid costs. The Health Care Financing Administration is using that law to say that the tobacco settlement should be covered for Medicaid, and they are coming in and saying to the States that the tobacco settlement that was made should not be allowed to be kept by the States and, in fact, they want to withhold 57 percent.”