GAO Sees Oversight Gaps in States' Medicaid Funding

John Commins, July 30, 2014

The Government Accountability Office reports that states are finding ways to pay for Medicaid that involve cost-shifting schemes that leave the federal government stuck with the tab.

Have you ever wondered where your state finds the money to pay for its share of the federal Medicaid program?

You're not alone.

The Government Accountability Office told Congress this week that states are finding creative new ways to pay for the program that involve cost-shifting, back-scratching schemes with local governments and providers that leave the federal government stuck with the tab.

For example, in Illinois, a $220 million payment increase for nursing homes in 2012 was paid for with a tax on those nursing homes. GAO said the ploy brought back a $110 million increase in federal matching funds with no increase for Illinois' general fund, and a net payment increase of $105 million to the nursing homes after paying the taxes.

It would be hard to find a comparative revenue-generating tactic in the real world that doesn't involve spam emails soliciting "winning" Bulgarian lotto tickets or a dearly departed and long-lost uncle from Mombasa who's left you in his will.

John Commins

John Commins is a senior editor at HealthLeaders Media.


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