Special Medicaid Funds Help Most States, but Prompt Oversight Concerns

by | Apr 10, 2023 | Health

The extra federal money comes through an obscure, complicated mechanism called “directed payments” — available only for states that hire health insurers to deliver services for Medicaid.

It’s not Medicaid expansion, which Georgia Republican leaders have rejected. Instead, the state Department of Community Health is using an under-the-radar Medicaid funding opportunity that has been rapidly taken up by more than 35 states — including most of the states that have expanded the government insurance program.

Emanuel Medical Center in rural Georgia racks up more than $350,000 a month in losses providing health care for low-income and uninsured patients. But a new state funding proposal could significantly reduce those deficits, not just for the 66-bed Swainsboro facility but for most rural hospitals in Georgia, according to state Medicaid officials.

In 2020, these special funding streams, which are approved by federal health officials, sent more than $25 billion to states, according to the Medicaid and CHIP Payment and Access Commission (MACPAC), which advises Congress.

The Centers for Medicare & Medicaid Services, when asked for an updated total, referred KHN to individual states for their spending figures. “CMS has not publicly published total spending related to state directed payments,’’ said agency spokesperson Bruce Alexander.

But the Government Accountability Office, Congress’ watchdog agency, and MACPAC say federal health officials should do more to monitor directed payments and evaluate …

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