The U.S. Health Care Financing Administration (HCFA) took another step last week in its effort to make regulatory changes that could result in the loss of $400 million in Medicaid funding in New York State. In a letter dated July 26, 2000, HCFA notified State Medicaid directors that it intended to issue a proposal by late August that would change the way HCFA calculates the maximum Medicaid rates that states can pay to providers. HCFA noted in its letter that it believed some states were paying overly generous reimbursement rates to some local government-owned health care providers, causing high levels of matching Federal Medicaid funds to be claimed. HCFA believes that some states use the resulting high Federal matching payments for purposes entirely unrelated to health care, including tax cuts, education, and closing state budget gaps. At the same time, HCFA stated that the Clinton Administration is committed to supporting health care providers that serve the uninsured and chronically ill. It is feared that New York's Medicaid program, which has been fully approved by HCFA year after year, would be adversely affected by the proposed changes. In New York, Medicaid funds are used to increase health care access and coverage to low-income and indigent New Yorkers, including health insurance for low-income children and Family Health Plus, the largest insurance expansion in the State's history, which is scheduled to be implemented in 2001. Because HCFA's contemplated new rules would jeopardize these important programs, GNYHA and 1199/SEIU have called upon the entire New York Congressional Delegation, including Delegation member and Senate candidate Congressman Rick Lazio, and Senate candidate Hillary Clinton, to intervene immediately. The letter did not question HCFA's right to curtail abuses, but urged immediate action to prevent the unintended consequence of hurting New York's health care programs for the poor and uninsured.