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U.S. capital can't pay for Medicaid during shutdown

WASHINGTON (Reuters) - Washington, D.C., officials said on Thursday the U.S. capital was not able to pay hospitals, long-term care providers and other organizations that participate in the Medicaid healthcare program for the poor during the federal budget shutdown.

Since the District of Columbia is a local government without a state, the U.S. Congress authorizes its budget when it approves the federal budget. Congress has been locked in a budget stalemate that allowed the federal government to shut down Tuesday at the start of the fiscal year.

That meant the city cannot spend any of the $2.7 billion it budgeted for Medicaid, even though those funds come from its own tax revenues.

The city pays healthcare providers in the Medicaid program and then receives federal reimbursement equal to 70 percent.

"We don't have the authority," said Wayne Turnage, director of Washington's department of healthcare finance. "We have the money."

Healthcare providers were expecting to receive $89 million this week, Turnage said. The district could use its contingency reserve fund to cover the amount, but the $144 million fund is supposed to support all city operations during the shutdown, he added.

Most states control their own spending plans, and the shutdown should not affect the U.S. government's Medicaid reimbursements.

Still, the Medicaid program is not immune to the shutdown, especially as federal workers have been furloughed.

Every year, the Center for Medicare and Medicaid Services, approves and extends hundreds of waivers intended to provide states with funding and operational flexibility, said Andrea Maresca, director of federal policy for the National Association of Medicaid Directors.

The process frequently takes weeks of negotiations between the states and the center.

"It's unclear what will happen if there aren't workers to negotiate with states and get those approved," she said. "There are things that will sit in somebody's inbox."

(Reporting by Lisa Lambert; Editing by Doina Chiacu)

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