WARWICK –– Rhode Island could have a landmark deal in place with federal Medicaid officials by the end of the week.

That’s according to Governor Carcieri, who spoke out publicly yesterday alongside the head of the federal agency currently locked in negotiations with state leaders over an unprecedented agreement to transform Rhode Island’s health insurance system for the poor, elderly and disabled.

“I am very hopeful that we’ll have this thing resolved in the next week,” Carcieri said at an unrelated event at the Crowne Plaza Hotel yesterday, where he was joined by Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services.

It was the first time since negotiations began in August that the parties publicly discussed the “global Medicaid waiver” in detail.

The stakes are high.

Carcieri had been banking on the arrangement to save taxpayers $67 million this year, although he recently said that the delay has cut those prospective savings in half. If it is approved, Carcieri will have broad authority to change programs for the 180,000 Rhode Islanders on Medicaid. Few of the proposed changes have been discussed publicly.

But to get the flexibility, Rhode Island would agree to limit spending on Medicaid programs for the next five years. Critics fear that entitlement programs that currently guarantee things like nursing-home care and health insurance could be slashed if funds run out early. No other state has secured such a deal.

“While there is a lot of national concern about this, Medicaid is eating into state budgets very, very rapidly,” Weems said yesterday, standing next to Carcieri. “This is possibly a solution. We’re going to run the experiment. The states are the great laboratories of democracy.”

A handful of congressional Democrats have expressed concern in recent months.

“Medicaid provides a federal guarantee of health benefits for those in need,” U.S. Sen. Jay Rockefeller, of West Virginia, said in September. “And that guarantee cannot be negotiated away through secret pacts between the Bush administration and governors seeking to cut Medicaid.”

Weems, a Bush appointee and the top CMS official, acknowledged that changes in Washington would affect his agency.

“I will end my federal career with this administration,” he said, adding that he expected to have a deal with Rhode Island finalized before President-elect Barack Obama takes office on Jan. 20.

“We’re very close. We need to get through the details,” Weems said. “In my experience after 26 years in government, you start working through the details and sometimes it goes real smooth and sometimes you hit show-stoppers. … So I’m not going to speculate on a time frame.”

Carcieri confirmed that the parties had already agreed on a specific spending limit over the five-year agreement, but neither offered further details. Some of the changes, the governor said, would be “dramatic.”

The governor said negotiators are sorting potential Medicaid changes into three categories: those the state could adopt with no federal oversight, those that would require expedited federal approval and “dramatic kinds of changes” that would require more protracted discussions with CMS.

“It’s the details of what are in each of those categories that we’re really trying to work our way through,” Carcieri said.

Even if Rhode Island secures a deal in the near future, there’s no guarantee that it will go through.

Current law gives Rhode Island’s General Assembly 30 days to veto any tentative agreement that is reached.

“They could vote to reject it,” said Thomas Slater, a member of the House Finance Committee, which would probably convene a hearing once the governor has a signed deal. “It depends on what’s in it. We’re not accepting this administration’s word on anything.”

speoples@projo.com