Proposed legislation would settle State claims for reimbursement of social services costs whether or not the claims are currently in dispute. As of June 1977, the Department of Health, Education, and Welfare's (HEW) records showed that there were 141 claims totaling $3.988 billion for social services costs that were deferred or disallowed by HEW and were outstanding. Most of the disputed claims occurred when HEW disallowed them, either before or after they were paid, and the States requested reconsideration of the disallowances. According to HEW, because of limited staff, not all States' claims are reviewed in detail when they are submitted. The following were noted in connection with the HEW proposed settlement: the disputed claims covered will be settled without regard to their validity; the Office of Management and Budget would probably make about $543 million available to settle the unpaid claims; the formula to be used for the settlement of unpaid claims is a modification by the States of an HEW proposal; the States would be paid or would keep from 50 percent to 100 percent of their total paid and unpaid claims; and both paid and unpaid claims were disallowed by HEW for the same reasons. Seven New York claims account for $1.404 billion of the $2.390 billion involved in the settlement. According to HEW, the purpose of the proposed legislation is to "wipe the slate clean" of all social services claims for expenditures made by States before October 1, 1975.
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