As states finish up writing their budgets for the next fiscal year, many are counting on another six months of enhanced Medicaid payments under the American Recovery and Reinvestment Act (ARRA.)

Those funds, which looked like a sure bet until recently, are looking less likely now. And if states have adopted a budget that counts those funds as revenue, they could be in for an unpleasant surprise.

The $25.5 billion in additional ARRA funds, included in H.R. 4213, would be for the first six months of 2011. But concern over spending and the growing federal debt has put passage of the bill as written in doubt.

A recent review of state budgets by the National Conference of State Legislatures (NCSL) found that more than half the state budgets do not include a contingency for not receiving the funds. Some states, such as Texas, Arkansas and Missouri pegged stimulus funds as a one-time event. Florida will reduce cuts in Medicaid payments to hospitals and nursing homes if additional funds come through.

NCSL sent an alert to state legislatures asking them to urge Congress to act while states were still working on their budgets.