Bruce Vladeck, head of the Health Care Financing Administration, which oversees Medicaid, said this cycle of tighter money and lowered quality was exactly what he feared.

"We're going to change Medicaid," said Representative Dennis Hastert, the Illinois Republican who is the vice chairman of the Commerce subcommittee on health, which oversees Medicaid.

The managers at risk include a deputy commissioner making $63,000 a year and dozens of program directors and office managers who oversee Medicaid, food-stamp, welfare and employment programs.

In 1967, President Richard Nixon appointed Haughton to Department of Health, Education and Welfare task force overseeing Medicaid.

The Republicans also discussed taking jurisdiction over Medicare, the health program for the elderly, and giving it to Commerce, which already oversees Medicaid, the health program for the poor.

Cindy Mann, an administrator at the federal Health Care Financing Administration, which oversees Medicaid, said it was not yet clear whether New York owed a refund.

"We are beginning to watch this," said Sally Richardson, director of Medicaid and State Operations at the Health Care Financing Administration, which oversees Medicaid and Medicare.

Ms. Flicker will oversees 870 employees, including 150 lawyers and 340 investigators, who deal with white-collar crime, mob activities, bias and environmental crimes, and Medicaid and insurance fraud.

As such, he promises to bring creativity to the federal agency that oversees welfare, Medicare, Medicaid and Social Security.

Kathryn Kuhmerker, the deputy state health commissioner who oversees Medicaid, said such confusion was unavoidable.