Medicaid policy changes included in the fiscal year 2007 budget proposed by the Bush administration would shift costs to states and limit reform efforts, according to a letter from the National Governors Association, CQ HealthBeat reports. The letter, sent on Tuesday to HHS Secretary Mike Leavitt, said that the policy changes "would reduce funding for Medicaid just as states are working to redesign their programs to utilize the reform tools" included in the FY 2006 budget reconciliation law enacted in February. According to the letter, the policy changes -- which include a large reduction in allowable provider taxes, limits on reimbursements to providers and changes to reimbursements for rehabilitation services -- would shift costs to states and "diminish long-standing, legitimate state-funding mechanisms" previously approved by CMS. HHS officials declined to comment on the letter (CQ HealthBeat, 6/27).