The Relationship between Medicaid Financing and Provider Payment Policies

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September 2016

States and the federal government share responsibility for financing Medicaid, with the federal government’s contribution determined by the amount that states spend on the program. The Medicaid statute allows states to raise the non-federal share from a variety of sources, including state general revenue, local governments and publicly owned providers, and through taxes on health care providers. These financing mechanisms are subject to federal oversight but there are little good data how states finance the Medicaid program or whether the sources of non-federal financing are changing over time, raising questions about accountability and transparency.

The presentation complements earlier presentations at the same meeting on payment for hospital inpatient services and disproportionate share hospital payment. It also notes the relationship between financing arrangements and provider payment policy.

Publication Type: Presentations

From: September 2016 MACPAC Public Meeting

Tags: certified public expenditures (CPEs), Federal Medical Assistance Percentage (FMAP), federal/state partnership, financing, health care related taxes, intergovernmental transfers (IGTs), matching rate, Medicaid expansion, spending, state budgets, supplemental payments