In this article, we seek to explain variations in the Health Care Financing Administration's (HCFA) relationship to state governments. After reviewing several alternative models of the policy-making process, we argue that the utility of each model depends on certain issue characteristics, especially salience and conflict. We further argue that HCFA's choice of intergovernmental tools, rooted in a political setting, depends on the same issue characteristics. We illustrate our arguments by examining HCFA's behavior during the Clinton administration and by focusing on four cases: HMO performance measurement, nursing home regulation, lead screening for children,and the Children's Health Insurance Program (CHIP).

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