oversight

Medicaid: States Reported Billions More in Supplemental Payments in Recent Years

Published by the Government Accountability Office on 2012-07-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             United States Government Accountability Office

GAO                          Report to the Committee on Finance,
                             U.S. Senate



July 2012
                             MEDICAID

                             States Reported
                             Billions More in
                             Supplemental
                             Payments in Recent
                             Years




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GAO-12-694
                                                 July 2012

                                                 MEDICAID
                                                 States Reported Billions More in Supplemental
                                                 Payments in Recent Years
Highlights of GAO-12-694, a report to the
Committee on Finance, U.S. Senate




Why GAO Did This Study                           What GAO Found
GAO designated Medicaid a high-risk              States reported $32 billion in Medicaid supplemental payments during fiscal year
program because of concerns about its            2010, but the exact amount of supplemental payments is unknown because state
size, growth, and inadequate fiscal              reporting was incomplete. On expenditure reports used to obtain federal funds
oversight. The program cost the                  filed with the Department of Health and Human Services’ (HHS) Centers for
federal government and states an                 Medicare & Medicaid Services (CMS), states reported the following:
estimated $383 billion in fiscal year
2010. In addition to regular Medicaid            •   A total of $17.6 billion in Disproportionate Share Hospital (DSH) payments.
payments to providers, states make                   The 10 states reporting the largest total DSH payments in fiscal year 2010
supplemental payments, including                     accounted for more than 70 percent of the nationwide total, with 4 states—
DSH payments, which are intended to                  New York, California, Texas, and New Jersey—accounting for almost half
offset the uncompensated costs of                    (47 percent). DSH payments as a percentage of total Medicaid payments
care provided to uninsured individuals               varied considerably—ranging from 1 to 17 percent—among the 50 states that
and Medicaid beneficiaries. States also              reported DSH payments.
make other supplemental payments,
which we refer to as non-DSH                     •   A total of $14.4 billion in non-DSH supplemental payments to hospitals and
supplemental payments, to hospitals                  other providers. Because not all states reported these payments separately,
and other providers, for example, to                 complete information is not available. Like DSH payments, non-DSH
help offset the costs of care provided               supplemental payments as a percentage of total state Medicaid spending
to Medicaid beneficiaries. GAO and                   varied considerably—also ranging from 1 to 17 percent—among the 30
others have raised concerns about the                reporting states. These payments can also constitute a large portion of
transparency of states’ Medicaid                     states’ expenditures for particular categories of services, such as inpatient or
supplemental payments. GAO was
                                                     outpatient hospital, nursing facility, or physician and surgical services. For
asked to provide information on
                                                     example, non-DSH supplemental payments for inpatient hospital services
supplemental payments.
                                                     ranged from 1 to 48 percent of state expenditures for these services among
GAO examined (1) how much states                     reporting states.
reported paying in supplemental
Medicaid payments during fiscal year             CMS officials told GAO that they were taking steps to improve states’ reporting of
2010 and (2) how non-DSH                         non-DSH supplemental payments, including working with states to train staff on
supplemental payments reported                   reporting of payments and on identifying and resolving reporting problems.
during 2010 compared with those
                                                 States’ reported non-DSH supplemental payments were more than $8 billion
reported during 2006 and reasons for
differences. GAO analyzed CMS’s                  higher during 2010 than during 2006, the year for which GAO previously reported
Medicaid expenditure data for all states         on the amount of these payments. More complete state reporting of payments
and information from CMS and other               and new and modified supplemental payments were factors in this increase. The
sources about non-DSH supplemental               information available to identify changes from 2006 to 2010 came from 39 states
payments in a nongeneralizable                   that separately reported non-DSH supplemental payments during either 2006 or
sample of 11 states selected to capture          2010 or both. Most of the increase was from the 15 states that reported some
a mix of relevant characteristics.               payments in both years and reported higher non-DSH supplemental payments
                                                 during 2010 than 2006. In addition, most of the reported increase was for
In its comments on a draft of GAO’s
                                                 inpatient hospital services. In 11 selected states, GAO found that new and
report, HHS stated that HHS and CMS
                                                 modified supplemental payments contributed to some increases. For example,
will continue their ongoing efforts to
improve states’ reporting of                     new and modified supplemental payments for hospital services in Colorado and
supplemental Medicaid payments.                  Illinois are estimated to increase the states’ non-DSH supplemental payments by
                                                 about $300 million and $1 billion per year, respectively. However, data limitations
                                                 prevented GAO from quantifying the full extent to which the increase was
                                                 attributable to new and modified payments. In light of the apparent increase in
View GAO-12-694. For more information,           non-DSH supplemental payments, ongoing federal efforts to improve the
contact Katherine Iritani at (202) 512-7114 or   completeness of reporting are important for effective oversight and to better
iritanik@gao.gov.
                                                 understand the payments’ role in financing Medicaid services.
                                                                                          United States Government Accountability Office
Contents


Letter                                                                                             1
                       Background                                                                  6
                       States Reported $32 Billion in Supplemental Medicaid Payments
                         during Fiscal Year 2010, but the Exact Amount of Supplemental
                         Payments Is Unknown                                                       9
                       Reported Non-DSH Supplemental Payments Were over $8 Billion
                         Higher during 2010 Than during 2006, and New and Modified
                         Supplemental Payments Were a Factor in the Increase                     17
                       Concluding Observations                                                   24
                       Agency Comments                                                           24

Appendix I             Scope and Methodology                                                     26



Appendix II            Supplemental Medicaid Payments Reported during 2010                       30



Appendix III           Non-DSH Supplemental Medicaid Payments Reported during 2006
                       and 2010                                                                  52



Appendix IV            Comments from the Department of Health and Human Services                 58



Appendix V             GAO Contact and Staff Acknowledgments                                     59



Related GAO Products                                                                             60



Tables
                       Table 1: States’ Separate Reporting of Non-DSH Supplemental
                                Payments during 2006 and 2010, by Relative Payment
                                Amount                                                           20
                       Table 2: State Supplemental Medicaid Payments Reported during
                                Fiscal Year 2010 as a Percentage of Total Reported State
                                Medicaid Payments                                                31



                       Page i                               GAO-12-694 Supplemental Medicaid Payments
          Table 3: DSH Supplemental Payments for Traditional Hospital and
                   Mental Health Facility Services Reported during Fiscal
                   Year 2010                                                        33
          Table 4: Non-DSH Supplemental Payments Reported during Fiscal
                   Year 2010 by Category of Service                                 35
          Table 5: Non-DSH Supplemental Payments for Inpatient Hospital
                   Services Reported during Fiscal Year 2010                        38
          Table 6: Non-DSH Supplemental Payments for Outpatient Hospital
                   Services Reported during Fiscal Year 2010                        40
          Table 7: Non-DSH Supplemental Payments for Nursing Facility
                   Services Reported during Fiscal Year 2010                        42
          Table 8: Non-DSH Supplemental Payments for Physician and
                   Surgical Services Reported during Fiscal Year 2010               44
          Table 9: Non-DSH Supplemental Payments for Other Practitioners’
                   Services Reported during Fiscal Year 2010                        46
          Table 10: Non-DSH Supplemental Payments for Intermediate Care
                   Facility Services Reported during Fiscal Year 2010               49
          Table 11: Non-DSH Supplemental Payments Reported during Fiscal
                   Years 2006 and 2010                                              53
          Table 12: Non-DSH Supplemental Payments States Reported during
                   Fiscal Years 2006 and 2010 by Category of Service                55


Figures
          Figure 1: DSH Payments Reported by States during Federal Fiscal
                   Year 2010, in Dollars and as a Percentage of the State’s
                   Total Medicaid Payments                                          11
          Figure 2: Non-DSH Supplemental Payments Separately Reported by
                   States during Federal Fiscal Year 2010, in Dollars and as a
                   Percentage of the State’s Total Medicaid Payments                14
          Figure 3: Non-DSH Supplemental Payments Separately Reported
                   during 2010 by Category of Service (Dollars in Millions)         15
          Figure 4: States’ Separate Reporting of Non-DSH Supplemental
                   Payments during Fiscal Years 2006 and 2010                       19




          Page ii                              GAO-12-694 Supplemental Medicaid Payments
Abbreviations

CMS        Centers for Medicare & Medicaid Services
DSH        Disproportionate Share Hospital
FMR        Financial Management Report
HHS        Department of Health and Human Services
UPL        Upper Payment Limit



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Page iii                                     GAO-12-694 Supplemental Medicaid Payments
United States Government Accountability Office
Washington, DC 20548




                                   July 20, 2012

                                   The Honorable Max Baucus
                                   Chairman
                                   The Honorable Orrin G. Hatch
                                   Ranking Member
                                   Committee on Finance
                                   United States Senate

                                   In 2003, GAO designated Medicaid—the federal-state program that
                                   finances health care for certain low-income individuals—as a high-risk
                                   program because of growing concern about its size, growth, and
                                   inadequate fiscal oversight, including federal oversight of supplemental
                                   payments. 1 Supplemental payments are separate from and in addition to
                                   payments made at a state’s regular Medicaid rates. The federal
                                   government and states share in the cost of Medicaid, which in fiscal year
                                   2010 totaled about $383 billion. 2 As the program continues to grow in cost
                                   and significance, policymakers and others need better information to
                                   manage the program, including information about the amount and
                                   purposes of Medicaid provider payments. GAO has found that this
                                   includes a need for information about supplemental payments, which
                                   have contributed to Medicaid cost growth in the past. 3

                                   Medicaid financing is a joint responsibility of the federal government and
                                   states. States pay qualified health care providers for covered services
                                   provided to Medicaid beneficiaries, and then seek reimbursement for the
                                   federal share of those payments. Under the Social Security Act, state
                                   Medicaid payments are required to be consistent with efficiency,
                                   economy, and quality of care and sufficient to enlist an adequate number


                                   1
                                    GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011).
                                   2
                                    This figure represents combined federal and state Medicaid expenditures for provider
                                   services in fiscal year 2010, the latest year for which data were available when we
                                   conducted our work. For the purpose of this report, expenditures for administration are not
                                   included. Medicaid programs are administered by the 50 states, the District of Columbia,
                                   Puerto Rico, and four U.S. territories—American Samoa, Guam, the Northern Mariana
                                   Islands, and the U.S. Virgin Islands.
                                   3
                                    See, for example, GAO, Medicaid: CMS Needs More Information on the Billions of
                                   Dollars Spent on Supplemental Payments, GAO-08-614 (Washington, D.C.: May 30,
                                   2008).




                                   Page 1                                       GAO-12-694 Supplemental Medicaid Payments
of providers. The federal government oversees states’ Medicaid programs
and, by a formula established in law, pays from half to more than
three-fourths of each state’s allowable Medicaid expenditures. 4

In addition to their regular Medicaid payments, all states make
supplemental payments that are also matched by federal funds. 5 For the
purposes of this report, we classified supplemental payments into two
general categories: Disproportionate Share Hospital (DSH) and non-DSH
supplemental payments.

•    DSH payments are payments to hospitals that serve a
     disproportionate share of low-income and Medicaid patients to help
     offset hospitals’ uncompensated costs for serving these individuals. 6
     DSH payments are required by law and are limited (or capped) at the
     facility-specific level and the state level.

•    Non-DSH supplemental payments are other supplemental
     payments that states have made under Medicaid Upper Payment
     Limit (UPL) regulations. The UPL is the ceiling on federal matching
     funds for Medicaid payments and is based on an estimate of what
     Medicare would pay for comparable services. 7 Because states’
     regular Medicaid payments are often less than the UPL, most states
     have established supplemental payments above regular Medicaid
     rates, but within the UPL. Unlike regular Medicaid payments, which
     are paid on the basis of covered Medicaid services provided to


4
 Under a statutory formula, the federal government may reimburse from 50 to 83 percent
of a state’s Medicaid expenditures for services. States with lower per capita incomes
receive higher federal matching rates. 42 U.S.C. §§ 1396b(a), 1396d(b).
5
 In this report, we use the term state to refer to the 50 states and the District of Columbia.
We do not include Puerto Rico or the U.S. territories of American Samoa, Guam, the
Northern Mariana Islands, or the U.S. Virgin Islands (which have Medicaid programs)
because they did not report supplemental Medicaid payments in 2010.
6
 See 42 U.S.C. §§ 1396a(13)(A)(iv), 1396r-4.
7
 Medicare is the federal health program that covers seniors aged 65 and older and some
disabled persons. Separate UPLs exist for inpatient services provided by hospitals,
nursing facilities, and intermediate care facilities for individuals with intellectual disabilities,
and for outpatient services provided by hospitals and clinics. These UPLs are applied on
an aggregate basis to three categories of providers: local (nonstate) government-owned or
government-operated facilities, state-government-owned or state-government-operated
facilities, and privately owned and operated facilities. See 42 C.F.R. §§ 447.272, 447.321
(2011).




Page 2                                            GAO-12-694 Supplemental Medicaid Payments
      Medicaid beneficiaries through an automated claims process, these
      non-DSH supplemental payments are not necessarily made on the
      basis of claims submitted for the delivery of specific services to
      particular patients. States have made non-DSH payments to
      hospitals, nursing homes, physician groups, and other Medicaid
      providers. 8 Unlike DSH payments, states are not required to make
      non-DSH supplemental payments, and payments are not subject to
      overall state spending or provider-specific limits.

For more than a decade, we and others have reported concerns with the
oversight and transparency of states’ financing arrangements involving
supplemental payments. 9 Our past work had found that the Centers for
Medicare & Medicaid Services (CMS)—the agency within the Department
of Health and Human Services (HHS) with oversight responsibility for
Medicaid—lacked information on the billions of dollars spent on
supplemental payments, including the magnitude of payments, how
individual states were calculating payment amounts, the providers that
received the payments, and the purposes for which they were received.
States have flexibility for making such payments, which could greatly
affect the total Medicaid payments that individual providers receive. To
the extent that some providers receive a substantial proportion of their
Medicaid payments as supplemental payments that are not directly linked
to services or costs, it becomes difficult to compare payment levels
across providers or to evaluate the impact of Medicaid payment policies.

In May 2008, we reported that for federal fiscal year 2006, states reported
making at least $23 billion in supplemental payments, with a federal share
totaling over $13 billion. States reported $17 billion in DSH payments and
$6 billion in non-DSH supplemental payments. However, the exact
amount of non-DSH supplemental payments was unknown because
states did not report all of their payments to CMS separately from
payments based on their regular payment rates. 10 In the absence of
transparent information about how much states are spending on non-DSH
supplemental payments, the relative significance of non-DSH
supplemental payments in comparison to regular Medicaid payments or


8
 In this report, we use the terms non-DSH payments and non-DSH supplemental
payments interchangeably.
9
A list of related GAO products can be found at the end of this report.
10
    GAO-08-614.




Page 3                                       GAO-12-694 Supplemental Medicaid Payments
DSH payments has not been clear. Beginning in fiscal year 2010, CMS
implemented new expenditure reporting procedures under which states
were to report certain non-DSH supplemental payments separately from
their regular payments.

Given the lack of transparency of states’ supplemental Medicaid
payments, members of Congress and others have expressed interest in
them. You asked for information regarding how much states reported
spending on supplemental payments, including changes in reported
payments since 2006, the year for which GAO had previously reported on
these payments, and oversight of supplemental payments. 11 This report
addresses the following questions:

1. How much did states report paying in supplemental Medicaid
   payments during fiscal year 2010?

2. How did non-DSH supplemental payments reported during 2010
   compare with those payments reported during 2006, and what were
   reasons for differences?

To determine how much states reported paying for supplemental
Medicaid payments during 2010, we analyzed Medicaid expenditure data
that CMS had finalized for federal fiscal year 2010. 12 These are data that
states reported to CMS during fiscal year 2010 using a standardized form,
the CMS-64, to claim federal matching funds. 13 To understand Medicaid
supplemental payments and processes for reporting these payments, we
reviewed relevant federal laws, regulations, and guidance and


11
  In a separate report, we plan to examine information available for overseeing DSH and
non-DSH supplemental payments.
12
 Throughout this report, the term fiscal year refers to the federal fiscal year.
13
  We include payments reported on the CMS-64s submitted for the four quarters of fiscal
year 2010. States are to file their expenditure reports within 30 days of the end of a
quarter. CMS reviews this information and, if necessary, obtains clarifications or revisions
before finalizing the data. States may make adjustments to their expenditure reports for up
to 2 years. Adjustments are made to the payment amounts reported during the fiscal year
in which a state reports an adjustment rather than the fiscal year in which the original
payment was made. For example, if a state reported in fiscal year 2010 that it made an
overpayment in fiscal year 2009, the adjustment would be treated as a reduction to the
amount the state reported paying during fiscal year 2010. We did not include any
adjustments to payments reported during fiscal year 2010 that may have been included in
quarterly CMS-64s submitted after fiscal year 2010.




Page 4                                         GAO-12-694 Supplemental Medicaid Payments
interviewed CMS officials. We examined the amount of DSH and
non-DSH supplemental payments reported by individual states and the
nationwide totals, and we analyzed the amounts reported for different
categories of service. In addition, to better understand the contribution of
supplemental payments to state Medicaid spending, we examined the
share of state spending attributed to supplemental payments.

To determine how non-DSH supplemental payments reported during
2010 compared with those payments reported during 2006, we analyzed
2006 and 2010 expenditures for non-DSH supplemental payments that
states reported to CMS separately from their other payments. 14 To
examine reasons for differences between 2006 and 2010 in reported
non-DSH supplemental payments, and to obtain additional information
about states’ reports of these payments, we obtained information from
CMS and public sources about non-DSH supplemental payments in a
judgmental sample of 11 states selected to include a mix of relevant
characteristics. Our selections included some states that separately
reported such payments in only 1 of the 2 years, and states that differed
in absolute and relative changes in reported non-DSH supplemental
payments and changes in categories of payment. The information we
used to select states included published information, as well as
preliminary information from CMS. 15 For each of these states, we
examined information that could help explain net changes from 2006 to
2010 in the state’s reported non-DSH supplemental payment amounts,
such as establishment of new non-DSH supplemental payments,
modification of existing non-DSH supplemental payments, or a change in
reporting that would result in an increase or decrease in the state’s
reported payments. The information we reviewed included information
that states submitted to CMS prior to changing their supplemental
payments. 16 When this information indicated that a supplemental payment
had been established, modified, or terminated, we examined
documentation of how much the state’s payments were expected to



14
 We obtained data about expenditures reported during fiscal year 2006 as part of work
we reported in 2008. See GAO-08-614.
15
  We selected Arkansas, Colorado, Georgia, Illinois, Maine, Massachusetts, Missouri,
North Carolina, Pennsylvania, South Carolina, and Texas. Expenditure data from fiscal
year 2010 had not been finalized at the time we made our selections.
16
  To receive federal matching funds, states must obtain approval from CMS for any
changes to their Medicaid payment rates.




Page 5                                      GAO-12-694 Supplemental Medicaid Payments
             change as a result. Information from these states cannot be generalized
             to other states. A more detailed description of our scope and
             methodology can be found in appendix I.

             To assess the reliability of the data on supplemental Medicaid payments
             reported to CMS by the states in 2006 and 2010, we reviewed the
             procedures CMS used to obtain and compile the data and discussed the
             data with CMS officials. We determined that the data were sufficiently
             reliable to describe the amounts of supplemental payments that were
             reported separately by states during 2006 and 2010. Because some
             states did not separately report all of their non-DSH supplemental
             payments during 2006 or 2010, our analysis only captures changes in
             non-DSH supplemental payments that were separately reported.
             Information is not available that would have allowed us to quantify the
             extent to which states did not separately report these supplemental
             payments. Therefore, we may not be capturing the full amount of states’
             supplemental payments or the degree to which they have changed over
             time. We did not examine whether changes in non-DSH supplemental
             payments were associated with changes in states’ regular Medicaid
             payments.

             We conducted this performance audit from November 2011 to July 2012
             in accordance with generally accepted government auditing standards.
             Those standards require that we plan and perform the audit to obtain
             sufficient, appropriate evidence to provide a reasonable basis for our
             findings and conclusions based on our audit objectives. We believe that
             the evidence obtained provides a reasonable basis for our findings and
             conclusions based on our audit objectives.


             Title XIX of the Social Security Act established Medicaid as a
Background   federal-state partnership that finances health care for low-income
             individuals, including children, families, the aged, and the disabled. 17
             Medicaid is an open-ended entitlement program and provided health
             coverage for an estimated 53.9 million individuals in 2010. 18 Within broad
             federal requirements, each state administers and operates its Medicaid


             17
              42 U.S.C. § 1396a et seq. (2010).
             18
              See Department of Health and Human Services, 2011 Actuarial Report on the Financial
             Outlook for Medicaid (Washington, D.C.: 2012).




             Page 6                                    GAO-12-694 Supplemental Medicaid Payments
program in accordance with a state Medicaid plan, which must be
approved by CMS. A state Medicaid plan details the populations that are
served, the categories of services that are covered (such as inpatient
hospital services, nursing facility services, and physician services), and
the methods for calculating payments to providers. The state Medicaid
plan also describes the supplemental payments established by the state
and specifies which providers are eligible to receive supplemental
payments and what categories of service are covered. Any changes a
state wishes to make in its Medicaid plan, such as establishing new
payments or changing methods for developing provider payment rates,
must be submitted to CMS for review and approval as a state plan
amendment. States may also receive approval from CMS for a waiver
from certain Medicaid requirements in order to conduct a Medicaid
demonstration, and these demonstrations may include supplemental
payments. These demonstrations allow states to test new approaches to
deliver or pay for health services through Medicaid. Under certain
demonstrations, a state may cover populations or services that would not
otherwise be eligible for federal Medicaid funding under federal rules.
Some states, including California and Massachusetts, have also in recent
years been allowed to make supplemental payments under Medicaid
demonstrations. The terms and conditions governing such
demonstrations are specific to each demonstration.

All states make supplemental Medicaid payments to certain providers.
DSH payments are made to hospitals and cannot exceed the
unreimbursed cost of furnishing inpatient and outpatient services to
Medicaid beneficiaries and the uninsured. 19 Non-DSH supplemental


19
  Under the Patient Protection and Affordable Care Act, the annual cap on the amount of
federal matching funds available for DSH payments nationwide will be reduced in fiscal
years 2014 through 2020. See Pub. L. No. 111-148, §§ 2551, 10201(e)(1)(B), 10201(f),
124 Stat. 119, 312, 920, 922 (Mar. 23, 2010), as amended by Pub. L. No. 111-152,
§ 1203(b), 124 Stat. 1029, 1053 (Mar. 30, 2010). Annual reductions in federal DSH
funding during these years range from $500 million to $5.6 billion, and reductions for all
years total $18.1 billion. The Middle Class Tax Relief and Job Creation Act of 2012
extended these reductions through fiscal year 2021. See Pub. L. No. 112-96, § 3203,
126 Stat. 156, 193 (Feb. 22, 2012). States’ DSH allotments—the maximum amount
of federal matching funds that each state may receive for DSH payments—were first
established in 1991 based on each state’s historical DSH spending. See the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Pub. L.
 No. 102-234, § 3, 105 Stat. 1793, 1799-1804 (Dec. 12, 1991) (codified, as amended,
at 42 U.S.C. § 1396r-4(f)). Congress has amended requirements for calculating these
DSH allotments since their establishment. Currently, CMS calculates each state’s fiscal
year DSH allotment using a statutorily defined formula.




Page 7                                        GAO-12-694 Supplemental Medicaid Payments
payments can be made to hospitals or other providers (such as nursing
homes or groups of physicians) for any category of service provided on a
fee-for-service basis. 20 For example, a state might make non-DSH
supplemental payments on a quarterly basis to county-owned nursing
facilities that serve low-income populations to fill the gap between what
regular Medicaid rates pay toward the cost of services and higher
payments permitted through the UPL. Supplemental payments are
typically made for services provided on a fee-for-service basis, rather
than those provided through Medicaid managed care contracts. 21
Non-DSH supplemental payments need to be approved by CMS.

To obtain the federal matching funds for Medicaid payments made to
providers, each state files a quarterly expenditure report to CMS—the
CMS-64. This form compiles state payments in over 20 categories of
medical services, such as inpatient hospital services and outpatient
hospital services. States are required to report total DSH payments made
to hospitals and mental health facilities separately from other Medicaid
payments in order to receive reimbursement for them. From 2001 through
2009, when completing the CMS-64 to obtain federal matching funds for
non-DSH supplemental payments, states combined their non-DSH
supplemental payments with their regular payments—those made using
states’ regular Medicaid payment rates. During this period, CMS
requested that states report their non-DSH supplemental payments in a
separate informational section of the CMS-64 that was not the basis for
states receipt of federal matching funds. Instead, states received federal
matching funds based on their reports of expenditure totals that included
both regular and non-DSH supplemental payments. In 2008, we found
that states reported making $6.3 billion in non-DSH supplemental
payments during fiscal year 2006, but that not all states reported their
non-DSH supplemental payments separately from other expenditures of
the same type. 22 Starting with the first quarter of fiscal year 2010, CMS’s
new reporting procedures requested that states report certain non-DSH



20
  Including regular and supplemental payments, states reported spending about
$284 billion for fee-for-service benefits during fiscal year 2010, representing about
73 percent of Medicaid spending for benefits during that year.
21
  Federal law generally prohibits states from making separate payment for services
covered under a managed care contract. See 42 C.F.R. § 438.60 (2011).
22
  See GAO-08-614. At the time of our review, fiscal year 2006 was the most recent year
for which data were available.




Page 8                                         GAO-12-694 Supplemental Medicaid Payments
                         supplemental payments separately from their regular payments on the
                         section of the CMS-64 used to claim federal matching funds. 23 However,
                         CMS continues to provide federal matching funds to states that report
                         these payments in combination with regular payments on this form.


                         The data CMS finalized for fiscal year 2010 show that states and the
States Reported          federal government spent at least $32 billion for DSH and non-DSH
$32 Billion in           supplemental payments during fiscal year 2010, with the federal share of
                         these payments totaling at least $19.8 billion. States reported $17.6 billion
Supplemental             in DSH payments and $14.4 billion in non-DSH supplemental payments
Medicaid Payments        during fiscal year 2010, but state reporting of non-DSH supplemental
during Fiscal Year       payments separately from regular payments was incomplete, so the exact
                         amount of non-DSH supplemental payments is unknown.
2010, but the Exact
Amount of
Supplemental
Payments Is
Unknown
States Reported          States reported $17.6 billion in DSH payments during fiscal year 2010,
$17.6 Billion in DSH     with the federal government reimbursing states $9.9 billion for its share of
Payments during Fiscal   these payments. Fifty of the 51 states reported making DSH payments
                         during fiscal year 2010, with total reported payments ranging from about
Year 2010                $650,000 for South Dakota to over $3.1 billion for New York. 24 The
                         10 states reporting the largest total DSH payments in fiscal year 2010



                         23
                           Separate reporting applies to six categories of service: inpatient hospital services,
                         outpatient hospital services, nursing facility services, physician and surgical services,
                         other practitioners’ services, and intermediate care facility services. CMS did not request
                         that states report non-DSH supplemental payments for all categories of services
                         separately from their regular payments. For example, CMS did not request separate
                         reporting of non-DSH supplemental payments for mental health services or home health
                         services. The section of the CMS-64 that states were requested to use to report non-DSH
                         supplemental payments during fiscal year 2006 allowed reporting of such payments for all
                         categories of service for which the state could report regular payments.
                         24
                           Massachusetts did not report DSH payments in fiscal year 2010 because it conducted a
                         Medicaid demonstration that exempted it from making DSH payments. This
                         demonstration, called the MassHealth Medicaid demonstration, was approved by CMS in
                         2005 and has been approved through June 30, 2014.




                         Page 9                                        GAO-12-694 Supplemental Medicaid Payments
accounted for more than 70 percent of the $17.6 billion nationwide total,
and the 4 states with the largest total DSH payments—New York,
California, Texas, and New Jersey—accounted for almost half
(47 percent) of the nationwide total.

In assessing the contribution of DSH payments to each state’s overall
spending, we found that DSH payments as a percentage of states’
reported Medicaid payments varied considerably among the states. 25
Among states that reported DSH payments, the percentage ranged from
less than 1 percent (Arizona, Delaware, North Dakota, South Dakota,
Wisconsin, and Wyoming) to 17 percent (New Hampshire). Figure 1
provides information on the amount of each state’s DSH payments and
each state’s DSH payments as a percentage of its total Medicaid
expenditures. (App. II lists each state’s reported DSH payments during
fiscal year 2010, the federal share of those payments, the state’s total
Medicaid payments, and each state’s total reported DSH payment as a
percentage of the state’s total Medicaid payments and of total nationwide
DSH payments.)




25
  We use the term Medicaid payments to refer to a state’s medical assistance payments,
which are the total Medicaid payments made by a state for medical services, including
supplemental payments, but not including administrative costs.




Page 10                                    GAO-12-694 Supplemental Medicaid Payments
Figure 1: DSH Payments Reported by States during Federal Fiscal Year 2010, in Dollars and as a Percentage of the State’s
Total Medicaid Payments

Dollars        Percentages




                                          Notes: Puerto Rico and the U.S. territories that operate Medicaid programs are not included on this
                                          map because they were not authorized to make DSH payments in fiscal year 2010. Massachusetts
                                          did not report DSH payments in fiscal year 2010 because it conducted a Medicaid demonstration
                                          that exempted it from making DSH payments. This demonstration, called the MassHealth Medicaid
                                          demonstration, was approved by CMS in 2005 and has been approved through June 30, 2014.




                                        Page i
                                             11                                              GAO-12-694 Supplemental Medicaid Payments
                                                                                                                          GAO-09-XXX
                           The majority of DSH payments were to hospitals for traditional inpatient
                           and outpatient services. During fiscal year 2010, 83 percent of the
                           nationwide total of reported DSH payments ($14.7 billion) was paid to
                           hospitals for traditional inpatient and outpatient services and 17 percent of
                           the total ($2.9 billion) was paid to mental health facilities for inpatient and
                           outpatient mental health services. 26


States Reported            During fiscal year 2010, states separately reported making $14.4 billion in
$14.4 Billion in Non-DSH   non-DSH supplemental payments (of which the federal share was
Supplemental Payments      $9.9 billion), primarily for inpatient hospital services. 27 Beginning in 2010,
                           states were to report non-DSH supplemental payments on the CMS-64
during Fiscal Year 2010,
                           separately from their regular payments for six categories of service. Thirty
but the Exact Amount of    states separately reported non-DSH payments during fiscal year 2010,
These Payments Is Not      with reported payments ranging from $125,000 for Vermont to $3.1 billion
Known                      for Texas.

                           In assessing the contribution of non-DSH supplemental payments to each
                           state’s overall spending, we found that non-DSH supplemental payments
                           as a percentage of states’ Medicaid spending also varied considerably
                           across the 30 states that separately reported these payments, ranging
                           from 1 percent for Vermont to over 17 percent for Illinois. Figure 2
                           provides information on the amount of each state’s non-DSH
                           supplemental payments and each state’s non-DSH supplemental
                           payments as a percentage of its total Medicaid expenditures. (App. II lists
                           each state’s reported non-DSH supplemental payments during fiscal year
                           2010, the federal share of those payments, the state’s total Medicaid




                           26
                             Traditional inpatient and outpatient services include services that are furnished in a
                           hospital for the care and treatment of inpatients and outpatients, other than services
                           provided in mental health facilities. See 42 C.F.R. §§ 440.10, 440.20 (2011).
                           27
                             The federal share was larger for non-DSH supplemental payments ($9.9 billion of
                           $14.4 billion) than for DSH payments ($9.9 billion of $17.6 billion) because states could
                           claim an enhanced matching rate for non-DSH supplemental payments under the
                           American Recovery and Reinvestment Act of 2009, but were explicitly prohibited from
                           claiming an enhanced match for DSH payments. Under the American Recovery and
                           Reinvestment Act of 2009, as amended by Public Law 111-226, states could claim an
                           enhanced matching rate for non-DSH supplemental payments from October 1, 2008,
                           through June 30, 2011. Pub. L. No. 111-226, § 201, 124 Stat. 2389, 2393 (Aug. 10, 2010),
                           amending Pub. L. No. 111-5, § 5001, 123 Stat. 115, 496 (Feb. 17, 2009).




                           Page 12                                        GAO-12-694 Supplemental Medicaid Payments
payments, and each state’s total reported non-DSH supplemental
payments as a percentage of the state’s total Medicaid payments and of
total nationwide non-DSH supplemental payments.)




Page 13                             GAO-12-694 Supplemental Medicaid Payments
Figure 2: Non-DSH Supplemental Payments Separately Reported by States during Federal Fiscal Year 2010, in Dollars and as a
Percentage of the State’s Total Medicaid Payments

Dollars        Percentages




                                         Note: Puerto Rico and the U.S. territories that operate Medicaid programs are not included on this map
                                         because they did not report any supplemental Medicaid payments during 2010.




                                       Page i14
                                       Page                                                GAO-12-694 Supplemental Medicaid Payments
                                                                                                                        GAO-09-XXX
Of the six categories of service for which states reported making
non-DSH supplemental payments, states reported the largest amount of
payments for inpatient hospital services. States reported $11 billion in
non-DSH supplemental payments for inpatient services (with a federal
share of $7.7 billion). States reported $1.8 billion in non-DSH
supplemental payments for outpatient services (with a federal share of
$1.15 billion). (See fig. 3.)

Figure 3: Non-DSH Supplemental Payments Separately Reported during 2010 by
Category of Service (Dollars in Millions)




Note: Combined non-DSH supplemental payments for other practitioners’ services and for
intermediate care facility services totaled less than 0.01 percent of states’ total Medicaid payments
reported during fiscal year 2010.


The proportion of a state’s reported expenditures that were non-DSH
supplemental payments varied across states and categories of service. In
some states, non-DSH supplemental payments represented very little of
the state’s reported expenditures for a category of service, while in other
states, non-DSH supplemental payments represented more than
one-third of the state’s reported expenditures for a category of service.
For example,

•    27 states separately reported non-DSH supplemental payments for
     inpatient hospital services, and the percentage of their expenditures
     for inpatient hospital services that were non-DSH supplemental




Page 15                                             GAO-12-694 Supplemental Medicaid Payments
     payments ranged from less than 1 percent (Virginia and Washington)
     to 48 percent (Tennessee); 28

•    13 states separately reported non-DSH supplemental payments for
     outpatient hospital services, and the percentage of their expenditures
     for outpatient hospital services that were non-DSH supplemental
     payments ranged from less than 1 percent (Texas) to 57 percent
     (Illinois); and

•    16 states separately reported non-DSH supplemental payments for
     physician and surgical services, and the percentage of their
     expenditures for physician and surgical hospital services that were
     non-DSH supplemental payments ranged from less than 1 percent
     (Oklahoma) to 34 percent (West Virginia).

See appendix II for more information about each state’s reported total and
non-DSH supplemental payments for inpatient hospital services,
outpatient hospital services, nursing facility services, physician and
surgical services, other practitioners’ services, and intermediate care
facility services.

The exact amount of non-DSH supplemental payments nationwide is
unknown, in part because not all states that made non-DSH supplemental
payments in 2010 reported them on the CMS-64 separately from regular
payments, and some states separately reported some but not all of their
non-DSH supplemental payments. For example, Georgia reported $0 for
non-DSH supplemental payments during fiscal year 2010, but according
to CMS, it made non-DSH supplemental payments of $120.6 million for
nursing home services during 2010.

CMS officials told us that they are aware that some states did not
separately report all of their non-DSH supplemental payments. Officials
stated that they have taken, and are taking, steps to improve states’
reporting of non-DSH supplemental payments for the six categories of
service. They told us that after revising the form CMS-64 to include lines
for separate reporting of certain non-DSH supplemental payments, they
monitored states’ reports of these payments and, as a result, they learned


28
  Total expenditures for inpatient hospital services for this analysis consisted of regular
Medicaid payments, DSH supplemental payments, non-DSH supplemental payments, and
payments to help support graduate medical education.




Page 16                                      GAO-12-694 Supplemental Medicaid Payments
                         that some states had not reported these payments separately. They then
                         took steps to improve states’ reporting of these payments, for example,
                         by training state staff in the use of the revised form CMS-64 and asking
                         regional CMS staff to work with states to identify and resolve reporting
                         problems. CMS officials also noted, however, that some states
                         encountered technical difficulties with their state databases. For example,
                         CMS officials told us that the data systems used by some states in 2010
                         did not permit them to separate the non-DSH supplemental payments
                         from their regular payments. CMS officials confirmed that states did not
                         separately report all non-DSH supplemental payments in 2010 and
                         acknowledged that CMS cannot definitively determine the extent to which
                         reporting is incomplete.


                         The 39 states that separately reported non-DSH supplemental payments
Reported Non-DSH         during either 2006 or 2010 (or both) reported an increase of $8.1 billion in
Supplemental             non-DSH supplemental payments during this period. 29 Most of this
Payments Were over       increase was from 15 states that reported during both years, and most of
                         the reported increase was for inpatient hospital services. However,
$8 Billion Higher        because of the potential for underreporting of supplemental payments for
during 2010 Than         one or both years, the extent of the actual increase and the contributing
                         factors cannot be quantified. Our examination of information from CMS
during 2006, and New     and from public sources about changes in 11 judgmentally selected
and Modified             states indicates that some states were making new and modified
                         non-DSH supplemental payments during this period, contributing to the
Supplemental             reported increase. Changes in reporting also contributed to the increase.
Payments Were a
Factor in the Increase




                         29
                           In constant dollars, we estimate that the $6.3 billion in non-DSH supplemental payments
                         reported by states in 2006 would have totaled $7 billion in 2010, or an increase of about
                         $700 million. This estimate is based on the Bureau of Economic Analysis price index for
                         Health Care Services, downloaded June 5, 2012.




                         Page 17                                     GAO-12-694 Supplemental Medicaid Payments
States Reported        The 39 states that separately reported non-DSH supplemental payments
$8.1 Billion More in   during either 2006 or 2010, or during both years, together reported
Non-DSH Supplemental   $8.1 billion more in non-DSH supplemental payments during 2010 than
                       2006. 30 Nineteen states separately reported some non-DSH supplemental
Payments during 2010
                       payments during both years, with 15 of those states reporting more for
Than during 2006       these payments during 2010 and 4 of those states reporting less for these
                       payments during 2010. Eleven states reported non-DSH supplemental
                       payments separately only during 2010, and 9 states reported non-DSH
                       supplemental payments separately only during 2006. (See fig. 4 and
                       table 1.) Most of the $8.1 billion increase was from the 15 states that
                       separately reported non-DSH supplemental payments during both years,
                       with higher non-DSH supplemental payments reported during 2010. The
                       increase in these states ranged from $1 million (Washington) to
                       $2.3 billion (Texas). For the 4 states that separately reported lower
                       non-DSH supplemental payments during 2010, the decrease ranged
                       from $12 million (Oklahoma) to $608 million (North Carolina).




                       30
                         There were 12 states that did not separately report non-DSH supplemental payments
                       during either 2006 or 2010.




                       Page 18                                    GAO-12-694 Supplemental Medicaid Payments
Figure 4: States’ Separate Reporting of Non-DSH Supplemental Payments during Fiscal Years 2006 and 2010




                                       Note: Puerto Rico and the U.S. territories that operate Medicaid programs are not included on this
                                       map because they did not report any supplemental Medicaid payments during 2010.




                                       Page 19                                            GAO-12-694 Supplemental Medicaid Payments
Table 1: States’ Separate Reporting of Non-DSH Supplemental Payments during 2006 and 2010, by Relative Payment Amount

                                      Reported higher payments                     Reported lower payments
                                             during 2010                                 during 2010                           Total
                                          Number              Amount                Number             Amount        Number
State reporting category                 of states        of increase              of states       of decrease      of states      Net change
                                  a
Reported during 2006 and 2010                     15        $8.5 billion                      4    ($0.9 billion)          19      $7.7 billion
Reported during 2010, but not
during 2006                                       11        $1.1 billion                     NA               $0           11      $1.1 billion
Did not report during 2010, but
did report during 2006                           NA                     $0                    9    ($0.7 billion)            9 ($0.7 billion)
                                                                                                                               b
Total                                             26       $9.6 billion                      13   ($1.5 billion)          39       $8.1 billion
                                          Source: GAO analysis of CMS-64 expenditure data.

                                          Note: Values do not sum because of rounding.
                                          a
                                           Listed amounts for increases and decreases are based on net changes within states. Some states’
                                          reported non-DSH supplemental payments were higher in 2010 than in 2006 for one or more
                                          categories of service, but were lower in 2010 than in 2006 for one or more other categories of service,
                                          and some states that reported payments in both years reported $0 in payments for some categories
                                          of service in one of the years.
                                          b
                                           Twelve states did not separately report non-DSH supplemental payments during either 2006 or
                                          2010.


                                          The largest change in non-DSH supplemental payments separately
                                          reported during 2006 and 2010 was for inpatient hospital services. The
                                          net increase in these separately reported payments was $6.3 billion, and
                                          the number of states that separately reported non-DSH supplemental
                                          payments for inpatient hospital services increased from 23 during 2006 to
                                          27 during 2010. (App. III lists the amounts each state reported separately
                                          for non-DSH supplemental payments during 2006 and 2010 and the
                                          categories of service for which they reported these payments.)

                                          Because of the potential underreporting of non-DSH supplemental
                                          payments during one or both of the years examined, the extent of the
                                          actual increase cannot be quantified. On the basis of some reports,
                                          Medicaid spending on hospital services is increasing, and growth in
                                          non-DSH supplemental payments has been cited as a contributing factor.
                                          A January 2012 article on the growth in U.S. health spending found that
                                          while overall Medicaid spending growth slowed in 2010, Medicaid
                                          spending growth on hospital services increased in 2010 compared to




                                          Page 20                                                 GAO-12-694 Supplemental Medicaid Payments
                              2009. 31 The researchers attributed the growth in Medicaid spending for
                              hospital services, in part, to a large amount of non-DSH supplemental
                              payments reported during the last quarter of calendar year 2010. A March
                              2012 report by the Medicaid and CHIP Payment and Access Commission
                              found that states reported over $23 billion in non-DSH supplemental
                              payments for hospital services during 2011. 32


New and Modified              Information from CMS and from public sources about changes in 11
Supplemental Payments         judgmentally selected states suggests that some increases from 2006 to
Contributed to Increases in   2010 in reported non-DSH supplemental payments were due to increases
                              in payments states made after establishing new non-DSH supplemental
Reported Payments             payments or increasing their existing non-DSH supplemental payments.
                              The available information suggests that changes to existing payments
                              also resulted in some decreases from 2006 to 2010 in reported non-DSH
                              supplemental payments, including, for example, when states terminated
                              non-DSH supplemental payments.

                              In recent years, states have submitted and received approval to
                              implement new non-DSH supplemental payments, according to CMS
                              officials. Available information, maintained by CMS and derived from state
                              Medicaid plans from 11 selected states, indicates that new or modified
                              supplemental payments made by states contributed to increased
                              non-DSH supplemental payments. For example:

                              •    Illinois reported $1.4 billion more for non-DSH supplemental payments
                                   for inpatient hospital services during 2010 than during 2006. From
                                   2006 through 2010, Illinois established new non-DSH supplemental
                                   payments for inpatient hospital services and also modified several
                                   existing payments for these services. Taken together, these new and
                                   modified payments were estimated to result in an increase in Illinois’s



                              31
                                Researchers compared health care spending growth for calendar years 2009 and 2010.
                              They found that Medicaid spending growth slowed from 8.9 percent in 2009 to 7.2 percent
                              in 2010, whereas Medicaid spending for hospital services grew from 10.4 percent in 2009
                              to 11.2 percent in 2010. Anne B. Martin, David Lassman, Benjamin Washington, Aaron
                              Catlin, and the National Health Expenditure Accounts Team, “Growth in U.S. Health
                              Spending Remained Slow in 2010; Health Share of Gross Domestic Product Was
                              Unchanged from 2009,” Health Affairs, vol. 31, no. 1 (2012).
                              32
                               Medicaid and CHIP Payment and Access Commission, Report to the Congress on
                              Medicaid and CHIP (Washington, D.C.: 2012).




                              Page 21                                    GAO-12-694 Supplemental Medicaid Payments
    supplemental payments for inpatient services by about $1.2 billion
    during fiscal year 2010.

•   Colorado reported $411 million more for non-DSH supplemental
    payments for inpatient and outpatient hospital services during 2010
    than during 2006. Colorado established a set of new non-DSH
    supplemental payments for inpatient and outpatient hospital services.
    These supplemental payments were to a variety of hospital types,
    including rural hospitals, hospitals with neonatal intensive care units,
    and state teaching hospitals. Effective on July 1, 2009, these new
    payments were estimated to result in an increase in payments of
    about $300 million during fiscal year 2010.

•   Arkansas reported $173 million more for non-DSH supplemental
    payments for inpatient hospital services during 2010 than during
    2006. Arkansas made new non-DSH supplemental payments for
    inpatient hospital services provided by private hospitals, and it also
    modified existing non-DSH supplemental payments for inpatient
    hospital services. Arkansas’s new supplemental payments, effective
    July 1, 2009, were estimated to increase the state’s supplemental
    payments for inpatient services by about $110 million during fiscal
    year 2010.

•   South Carolina reported $39 million for non-DSH supplemental
    payments for nursing facility services during 2010, but did not report
    making such payments during 2006. South Carolina had suspended
    certain non-DSH supplemental payments for nursing facility services
    prior to fiscal year 2006, but it reinstated these payments, effective on
    October 1, 2008, with a slight change to payment qualification criteria.
    Reinstating these payments was estimated to increase payments by
    about $25 million during fiscal year 2010.

According to the available information about changes in these 11
judgmentally selected states, some states’ non-DSH supplemental
payments decreased from 2006 to 2010 because they terminated
supplemental payments or made changes to their Medicaid programs that
reduced supplemental payments. For example:

•   North Carolina reported $607 million less in non-DSH supplemental
    payments for inpatient and outpatient hospital services in 2010 than in
    2006. According to CMS, North Carolina discontinued making
    non-DSH supplemental payments to non-state government hospitals,
    effective on October 1, 2006. Discontinuation of these payments for



Page 22                                GAO-12-694 Supplemental Medicaid Payments
                                 inpatient and outpatient hospitals would have resulted in a reduction
                                 in payments.

                             •   Georgia reported $221 million less in non-DSH supplemental
                                 payments for inpatient and outpatient hospital services in 2010 than in
                                 2006. Georgia implemented a managed care program in 2007, and
                                 according to CMS, the state estimated that its supplemental payments
                                 (which generally can only be made for services provided on a
                                 fee-for-service basis) were reduced by more than $100 million per
                                 year as a result.

                             •   Missouri reported paying $70 million in non-DSH supplemental
                                 payments for inpatient hospital services during 2006 and did not
                                 report making such payments during fiscal year 2010. According to
                                 CMS, the state reported that it did not make non-DSH supplemental
                                 payments for inpatient services during fiscal year 2010 because the
                                 State General Assembly did not approve funding for such payments.


Changes in State Reporting   Changes in state reporting of non-DSH supplemental payments also
Also Contributed to          contributed to differences in amounts between 2006 and 2010. In some
Differences in Reported      cases, an apparent increase in non-DSH supplemental payments was
                             due, at least in part, to more complete reporting of non-DSH
Supplemental Payments        supplemental payments in 2010 than in 2006. For example:

                             •   Pennsylvania reported $0 for non-DSH supplemental payments during
                                 2006 and $410 million for non-DSH supplemental payments for
                                 nursing facility services during 2010, for an apparent increase of
                                 $410 million in supplemental payments. However, Pennsylvania
                                 made, but did not separately report, non-DSH supplemental payments
                                 for nursing home services during 2006.

                             •   South Carolina reported $0 for non-DSH supplemental payments for
                                 physician and surgical services during 2006 and $46 million for
                                 non-DSH supplemental payments for these services during 2010, for
                                 an apparent increase of $46 million in supplemental payments.
                                 However, CMS told us that South Carolina paid $43 million for
                                 non-DSH supplemental payments for physician and surgical services
                                 during 2006, so the actual increase in payments for these services
                                 from 2006 to 2010 was $3 million, not $46 million.

                             In contrast, an apparent decrease in some states’ non-DSH supplemental
                             payments was due, at least in part, to not reporting these payments
                             separately during 2010. For example, as noted above, Georgia made, but


                             Page 23                              GAO-12-694 Supplemental Medicaid Payments
                  did not separately report, non-DSH supplemental payments during 2010.
                  States that did not separately report payments during 2010, but did
                  separately report them in 2006, created the appearance of decreases in
                  non-DSH supplemental payments.


                  Medicaid supplemental payments can help ensure that providers make
Concluding        important services available to Medicaid beneficiaries. However, the
Observations      transparency and accountability of these often very large payments have
                  been lacking. Although CMS has instituted new reporting procedures for,
                  and more complete reporting of, non-DSH supplemental payments, the
                  exact amount of these payments is still not known because not all states
                  have provided complete information as CMS requested during 2010.
                  Nevertheless, as reporting of non-DSH supplemental payments becomes
                  more complete, the significance of these payments, in terms of cost,
                  growth, and contribution to total Medicaid payments for those providers
                  receiving them, is becoming clearer. Identifying and monitoring Medicaid
                  supplemental payments and ensuring that they, along with regular
                  Medicaid payments, are consistent with federal requirements are complex
                  tasks that will require continued vigilance by CMS. Ongoing federal efforts
                  to improve the completeness of reporting of Medicaid supplemental
                  payments are important for effective oversight and to better understand
                  these payments’ role in financing Medicaid services.


                  We provided a draft of this report to HHS for review. HHS stated that
Agency Comments   HHS and CMS will continue their ongoing efforts to improve states’
                  reporting of Medicaid supplemental payments. HHS’s letter is reprinted
                  in appendix IV.


                  As agreed with your offices, unless you publicly announce the contents of
                  this report earlier, we plan no further distribution until 30 days from the
                  report date. At that time, we will send copies to the Secretary of Health
                  and Human Services, the Administrator of the Centers for Medicare &
                  Medicaid Services, and other interested parties. In addition, the report will
                  be available at no charge on the GAO website at http://www.gao.gov.




                  Page 24                               GAO-12-694 Supplemental Medicaid Payments
If you or your staff members have any questions, please contact me at
(202) 512-7114 or iritanik@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Major contributors to this report are listed in appendix V.




Katherine M. Iritani
Director, Health Care




Page 25                              GAO-12-694 Supplemental Medicaid Payments
Appendix I: Scope and Methodology
               Appendix I: Scope and Methodology




               This appendix provides information about our analyses of reported
               supplemental Medicaid expenditures and our analyses of information
               from selected states. Supplemental Medicaid payments include
               Disproportionate Share Hospital (DSH) payments to hospitals and other
               supplemental payments to hospitals or other providers, which we refer to
               as non-DSH supplemental payments. To determine what supplemental
               Medicaid payments states reported during fiscal year 2010 and how
               non-DSH supplemental payments reported during 2010 compared with
               those reported during 2006, we obtained and analyzed data about the
               Medicaid expenditures states reported during these 2 years. 1 To examine
               reasons for differences between 2006 and 2010 in reported non-DSH
               supplemental payments, and to obtain additional information about states’
               reports of these payments, we obtained information from the Centers for
               Medicare & Medicaid Services (CMS) and public sources about non-DSH
               supplemental payments in a nongeneralizable, judgmental sample of
               11 states. In addition, we reviewed relevant federal laws, regulations, and
               guidance; our prior work on supplemental Medicaid payments; and other
               relevant documentation. We also interviewed officials from CMS.


               To determine what Medicaid payments states reported, we examined
Reported       data from the standardized expenditure reports states submit to CMS on
Expenditures   a quarterly basis using form CMS-64. States have 30 days after the end
               of a quarter to submit this form and must certify that the data are correct
               to the best of their knowledge. CMS reviews these reports and works with
               states to resolve any questions before certifying them as final. CMS
               transfers the certified, finalized data into a Financial Management Report
               (FMR) and makes annual data available on its website. CMS allows
               states to make adjustments to their prior CMS-64 submissions for up to
               2 years. The annual FMR incorporates adjustments reported by the states
               by applying reported adjustments to the fiscal year during which they are
               reported, even if an adjustment corrects expenditures reported during an
               earlier fiscal year.

               Expenditures reported during fiscal year 2010. We obtained fiscal year
               2010 FMR data from CMS on December 22, 2011. These data reflected
               adjustments to expenditures reported by states on the quarterly reports
               filed during fiscal year 2010 and included states’ reported total Medicaid



               1
               Throughout this report, the term fiscal year refers to the federal fiscal year.




               Page 26                                        GAO-12-694 Supplemental Medicaid Payments
Appendix I: Scope and Methodology




expenditures, DSH expenditures, and any non-DSH expenditures the
states reported separately from their other expenditures. Fiscal year 2010
was the most recent year for which certified data were available from all
50 states and the District of Columbia. 2 To assess the reliability of the
fiscal year 2010 data, we reviewed the steps CMS took to ensure the
accuracy of expenditure data and we examined the data for outliers or
other unusual values, which we discussed with CMS officials. We
determined that the data were sufficiently reliable to describe the
expenditures reported by the states during fiscal year 2010, although as
discussed in this report, we found that states’ separate reporting of
non-DSH supplemental payments was incomplete.

Expenditures reported during fiscal year 2006. We obtained data
about expenditures reported during fiscal year 2006 as part of work we
reported in 2008. 3 For that work, we obtained reported DSH payments
from CMS’s FMR for fiscal year 2006, which included adjustments
reported by states for prior years. To obtain data about non-DSH
supplemental payments, we extracted expenditure data that had been
reported on a section of the CMS expenditure report—the form
CMS-64.9I—that states were to use for informational purposes during
2006 to identify non-DSH supplemental payments made under Medicaid’s
Upper Payment Limit regulations. 4 We adjusted these data to reflect
adjustments states reported through their CMS-64.9I entries during fiscal
year 2006 and through October 5, 2007. As described in our 2008 report,
our assessment of the reliability of the fiscal year 2006 data included
review of the steps CMS took to ensure the accuracy of expenditure data
submitted to the Medicaid Budget and Expenditure System, comparison
to data we obtained from a nongeneralizable sample of 5 states, and


2
 Data from Puerto Rico and the U.S. territories that operate Medicaid programs (American
Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands), which did not
report supplemental Medicaid payments during fiscal year 2010, were not necessarily
complete.
3
See GAO-08-614.
4
 For expenditures incurred during fiscal year 2006, states received federal matching funds
for non-DSH payments based on the information they provided on sections of the CMS-64
other than the CMS-64.9I. Specifically, reimbursement for non-DSH supplemental
payments was normally based on the CMS-64.9 base form, on which states reported
regular payments and non-DSH supplemental payments together. Reimbursement for
supplemental payments made under Medicaid demonstrations was based on CMS-64.9
waiver forms. Specific reporting requirements for supplemental payments made under
demonstration waivers varied.




Page 27                                      GAO-12-694 Supplemental Medicaid Payments
                   Appendix I: Scope and Methodology




                   comparison to similar data published by the Urban Institute. 5 We
                   determined that the data were sufficiently reliable to describe the
                   expenditures identified by the states during fiscal year 2006, although as
                   we discussed in our earlier report, we concluded that states’ separate
                   reporting of non-DSH supplemental payments was incomplete.

                   Our analyses of reported DSH and non-DSH payments included
                   identification of state-by-state and nationwide expenditures for DSH and
                   non-DSH supplemental payments in both absolute (dollar amount) and
                   relative (percentage) terms. DSH payments can be made to hospitals for
                   traditional inpatient and outpatient services and to mental health facilities
                   for inpatient and outpatient mental health services; we examined reported
                   payments to both types of hospitals. Non-DSH supplemental payments
                   can be made for various categories of service (such as inpatient hospital
                   services or physician and surgical services) provided by hospitals or other
                   types of providers (such as nursing homes or intermediate care facilities);
                   we examined payments for specific categories of services.

                   Some states may not have separately reported all of their non-DSH
                   supplemental payments during 2006 or 2010. We did not quantify the
                   extent to which states did not separately report their supplemental
                   payments. Therefore, we may not be capturing the full amount of states’
                   non-DSH supplemental payments or the degree to which these payments
                   have changed over time. We did not examine whether changes in
                   non-DSH supplemental payments were associated with changes in
                   states’ regular Medicaid payments.


                   To examine reasons for differences between 2006 and 2010 in reported
Information from   non-DSH supplemental payments, and to obtain additional information
Selected States    about states’ reports of these payments, we obtained information from
                   CMS and public sources about non-DSH supplemental payments in a
                   judgmental sample of 11 states selected to include a mix of relevant
                   characteristics. We selected a nongeneralizable sample of states,
                   including some that separately reported non-DSH supplemental
                   payments (1) in fiscal year 2006, but not 2010 (Georgia and Missouri);
                   (2) in fiscal year 2010, but not 2006 (Maine, Massachusetts, and


                   5
                    See T. A. Coughlin, S. Zuckerman, and J. McFeeters, “Restoring Fiscal Integrity to
                   Medicaid Financing? Some Progress Has Been Made in Reforming Medicaid Financing,
                   Yet Problems Persist,” Health Affairs, vol. 26, no. 5 (2007).




                   Page 28                                   GAO-12-694 Supplemental Medicaid Payments
Appendix I: Scope and Methodology




Pennsylvania); and (3) both (Arkansas, Colorado, Illinois, North Carolina,
South Carolina, and Texas). These states differed in absolute and relative
changes in reported non-DSH supplemental payments and changes in
categories of service for which payments were reported. The information
we used to select states included published information as well as
preliminary information from CMS. 6 (For more information about non-DSH
supplemental payments made by these states in 2006 and 2010, see
app. III.)

For each of our selected states, we asked CMS to provide us with
documentation, such as state plan amendments, that could shed light on
observed differences from 2006 to 2010 in reported non-DSH
supplemental payments. We reviewed this information, along with
information from other public sources (such as states’ websites) to
identify possible reasons for changes in reported payments and to
develop rough estimates of the financial impact of planned changes. The
state plan amendments states submit when proposing new supplemental
payments, or modifications to existing payments, include an estimate of
the financial impact of the state plan amendment. This estimate is
intended to reflect the impact of the state plan amendment as a whole,
even if the amendment covers several changes. CMS officials told us that
these estimates are the best available estimates of the financial impact of
changes states make to their state plans.

We did not attempt to develop a full, dollar-by-dollar explanation of any
state’s changes from 2006 to 2010 in reported amounts of non-DSH
supplemental payments. We did not determine the accuracy of states’
estimates of the financial impact of their state plan amendments.
Information from our judgmental sample of 11 states cannot be
generalized to other states.




6
 Expenditure data from fiscal year 2010 had not been finalized at the time we made our
selections.




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Appendix II: Supplemental Medicaid
              Appendix II: Supplemental Medicaid Payments
              Reported during 2010



Payments Reported during 2010

              This appendix provides state-by-state and nationwide information about
              the DSH and non-DSH supplemental Medicaid payments reported during
              fiscal year 2010 by the states and the District of Columbia. 1

              •   Table 2 shows states’ reported Medicaid payments, their DSH and
                  non-DSH supplemental payments, the federal share of DSH and
                  non-DSH supplemental payments, and the percentage of the state
                  Medicaid payments that was for DSH and non-DSH supplemental
                  payments.

              •   Table 3 shows states’ reported DSH payments, including payments
                  for traditional and mental health hospitals (as dollar amounts and as a
                  percentage of the state DSH payments), total DSH payments, and
                  total DSH payments as a percentage of the national total for DSH
                  payments.

              •   Table 4 shows states’ reported non-DSH supplemental payments,
                  including the amounts states reported for certain categories of service
                  (as dollar amounts and as a percentage of the state non-DSH
                  supplemental payments), total non-DSH supplemental payments, and
                  total non-DSH supplemental payments as a percentage of the
                  national total for non-DSH supplemental payments. The six categories
                  of service listed are those for which CMS requested information—
                  inpatient hospital services, outpatient hospital services, nursing facility
                  services, physician and surgical services, other practitioners’ services,
                  and intermediate care facility services.

              •   Tables 5 through 10 provide additional information about states’
                  reported Medicaid payments for the six categories of service for which
                  CMS obtained information about non-DSH supplemental payments—
                  inpatient hospital services, outpatient hospital services, nursing facility
                  services, physician and surgical services, other practitioners’ services,
                  and intermediate care facility services. For each of these six
                  categories, the tables provide the states’ reported Medicaid payments,
                  non-DSH supplemental payments, the federal share of the non-DSH
                  payments, and the percentage of the state Medicaid payments for this
                  category that was for non-DSH supplemental payments.



              1
               Puerto Rico and the U.S. territories that operate Medicaid programs—American Samoa,
              Guam, the Northern Mariana Islands, and the U.S. Virgin Islands—did not report
              supplemental Medicaid payments during fiscal year 2010.




              Page 30                                       GAO-12-694 Supplemental Medicaid Payments
                                        Appendix II: Supplemental Medicaid Payments
                                        Reported during 2010




Table 2: State Supplemental Medicaid Payments Reported during Fiscal Year 2010 as a Percentage of Total Reported State
Medicaid Payments

Dollars in millions
                                           DSH supplemental payments                      Non-DSH supplemental payments
                                                                          Total as                                      Total as
                        Total state                                percentage of                                 percentage of
                         Medicaid                     Federal    state’s Medicaid                   Federal    state’s Medicaid
                                  a
State                   payments           Total        share           payments           Total      share           payments
Alabama                     $4,709         $467          $318                  10          $227        $176                   5
Alaska                       1,208           25            13                   2              0           0                  0
Arizona                      9,380           28            19                  <1              0           0                  0
Arkansas                     3,881           61            44                   2            292        237                   8
California                  41,643        2,157         1,079                   5          1,786       1,160                  4
Colorado                     4,028          200           100                   5            682        418                  17
Connecticut                  5,528          269           134                   5              0           0                  0
Delaware                     1,287            6              3                 <1              0           0                  0
District of Columbia         1,772           67            47                   4              0           0                  0
Florida                     17,262          376           207                   2          1,485       1,004                  9
Georgia                      7,711          435           283                   6              0           0                  0
Hawaii                       1,361            8              4                  1             22         15                   2
Idaho                        1,345           24            17                   2              0           0                  0
Illinois                    15,196          565           283                   4          2,659       1,646                 18
Indiana                      5,879          156           100                   3            178        134                   3
Iowa                         3,047           49            31                   2              0           0                  0
Kansas                       2,408           68            41                   3             54         38                   2
Kentucky                     5,522          211           150                   4             77         62                   1
Louisiana                    6,720          791           521                  12              0           0                  0
Maine                        2,266           50            32                   2             57         43                   3
Maryland                     7,012          113            56                   2              0           0                  0
Massachusetts               11,595            0              0                  0            213        131                   2
Michigan                    11,556          377           238                   3            914        669                   8
Minnesota                    7,496          109            55                   1              0           0                  0
Mississippi                  4,106          208           158                   5            434        368                  11
Missouri                     7,994          739           476                   9              0           0                  0
Montana                        928           17            12                   2              0           0                  0
Nebraska                     1,595           48            29                   3              0           0                  0
Nevada                       1,505           95            48                   6             39         25                   3
New Hampshire                1,319          230           115                  17              0           0                  0




                                        Page 31                                       GAO-12-694 Supplemental Medicaid Payments
                                      Appendix II: Supplemental Medicaid Payments
                                      Reported during 2010




Dollars in millions
                                           DSH supplemental payments                                Non-DSH supplemental payments
                                                                                  Total as                                        Total as
                      Total state                                          percentage of                                   percentage of
                       Medicaid                           Federal        state’s Medicaid                     Federal    state’s Medicaid
                                a
State                 payments            Total             share               payments             Total      share           payments
New Jersey                10,163          1,340                 670                       13             0           0                  0
New Mexico                 3,457              29                  21                       1           100         80                   3
New York                  50,453          3,117               1,559                        6           513        316                   1
North Carolina            10,319            468                 305                        5           218        163                   2
North Dakota                 682               2                    1                     <1             8           6                  1
Ohio                      15,122            656                 409                        4           155        114                   1
Oklahoma                   3,862              40                  26                       1            16         12                  <1
Oregon                     3,973              54                  34                       1             0           0                  0
Pennsylvania              18,634            844                 462                        5           410        270                   2
Rhode Island               1,912            125                   66                       7             0           0                  0
South Carolina             4,992            418                 294                        8           145        116                   3
South Dakota                 775               1                  <1                      <1             0           0                  0
Tennessee                  8,441            140                   92                       2           444        392                   5
Texas                     26,331          1,688                 992                        6         3,099       2,184                 12
Utah                       1,687              27                  19                       2            17         14                   1
Vermont                    1,247              37                  21                       3            <1         <1                  <1
Virginia                   6,408            199                   99                       3            29         17                  <1
Washington                 6,989            368                 184                        5            11           7                 <1
West Virginia              2,539              74                  55                       3           137        112                   5
Wisconsin                  6,432               4                    2                     <1             0           0                  0
Wyoming                      530               1                  <1                      <1             0           0                  0
                                  b
Total                  $383,368       $17,581               $9,925                       4.59      $14,420     $9,928                3.76
                                      Source: GAO analysis of CMS-64 expenditure data.

                                      Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
                                      adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
                                      data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
                                      or 1 percent, the cell includes the entry “<1.”
                                      a
                                       Total state Medicaid payments include both the state and federal share of payments and include all
                                      payments made by states to providers, including DSH and non-DSH payments as well as regular
                                      payments. They do not include expenditures for program administration.
                                      b
                                       The nationwide total for state Medicaid payments includes about $1,160 million in payments reported
                                      by Puerto Rico and the U.S. territories.




                                      Page 32                                                   GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 3: DSH Supplemental Payments for Traditional Hospital and Mental Health
Facility Services Reported during Fiscal Year 2010

Dollars in millions
                              DSH payments
                       (percentage of state DSH total)
                                                                           State total as
                                           Mental health    Total state   percentage of
                             Traditional         facility         DSH           national
                                       a
State                 hospital services        services      payments          DSH total
Alabama                       $464 (99)            $3 (1)         $467                 3
Alaska                           11 (45)          14 (55)          $25                <1
Arizona                            0 (0)        28 (100)           $28                <1
Arkansas                         60 (99)            1 (1)          $61                <1
California                   2,157 (100)            0 (0)       $2,157                12
Colorado                      200 (100)             0 (0)         $200                 1
Connecticut                     160 (60)        109 (40)          $269                 2
Delaware                           0 (0)          6 (100)           $6                <1
District of Columbia             65 (97)            2 (3)          $67                <1
Florida                         254 (68)        122 (32)          $376                 2
Georgia                       435 (100)             0 (0)         $435                 2
Hawaii                           8 (100)            0 (0)           $8                <1
Idaho                           24 (100)            0 (0)          $24                <1
Illinois                        475 (84)          89 (16)         $565                 3
Indiana                          58 (37)          98 (63)         $156                 1
Iowa                            49 (100)            0 (0)          $49                <1
Kansas                           45 (66)          23 (34)          $68                <1
Kentucky                        174 (82)          37 (18)         $211                 1
Louisiana                       682 (86)        108 (14)          $791                 4
Maine                              0 (0)        50 (100)           $50                <1
Maryland                         61 (54)          52 (46)         $113                 1
Massachusetts                      0 (0)            0 (0)           $0                 0
Michigan                        283 (75)          94 (25)         $377                 2
Minnesota                     109 (100)          <1 (<1)          $109                 1
Mississippi                   208 (100)             0 (0)         $208                 1
Missouri                        546 (74)        193 (26)          $739                 4
Montana                         17 (100)            0 (0)          $17                <1
Nebraska                        55 (114)         -7 (-14)          $48                <1
Nevada                          95 (100)            0 (0)          $95                 1
New Hampshire                   195 (85)          35 (15)         $230                 1




Page 33                                       GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




    Dollars in millions
                                    DSH payments
                             (percentage of state DSH total)
                                                                                         State total as
                                                       Mental health    Total state     percentage of
                                  Traditional                facility         DSH             national
                                            a
    State                  hospital services               services      payments            DSH total
    New Jersey                            983 (73)          357 (27)        $1,340                         8
    New Mexico                             29 (99)             <1 (1)           $29                    <1
    New York                           2,714 (87)           403 (13)        $3,117                     18
    North Carolina                        313 (67)          154 (33)          $468                         3
    North Dakota                             1 (43)            1 (57)            $2                    <1
    Ohio                                  563 (86)            93 (14)         $656                         4
    Oklahoma                               37 (92)              3 (8)           $40                    <1
    Oregon                                 34 (63)            20 (37)           $54                    <1
    Pennsylvania                          518 (61)          326 (39)          $844                         5
    Rhode Island                        125 (100)               0 (0)         $125                         1
    South Carolina                        370 (88)            49 (12)         $418                         2
    South Dakota                               0 (0)          1 (100)            $1                    <1
    Tennessee                           140 (100)               0 (0)         $140                         1
    Texas                              1,396 (83)           293 (17)        $1,688                     10
    Utah                                   26 (97)              1 (3)           $27                    <1
    Vermont                               37 (100)              0 (0)           $37                    <1
    Virginia                              192 (97)              6 (3)         $199                         1
    Washington                            242 (66)          126 (34)          $368                         2
    West Virginia                          55 (74)            19 (26)           $74                    <1
    Wisconsin                              4 (100)              0 (0)            $4                    <1
    Wyoming                                1 (100)              0 (0)            $1                    <1
    Total                      $14,669 (83.44)         $2,912 (16.56)      $17,581                   100
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.”
a
 Traditional inpatient and outpatient services include services that are furnished in a hospital for the
care and treatment of inpatients and outpatients, other than services provided in mental health
facilities. See 42 C.F.R. §§ 440.10, 440.20 (2011).




Page 34                                                   GAO-12-694 Supplemental Medicaid Payments
                                          Appendix II: Supplemental Medicaid Payments
                                          Reported during 2010




Table 4: Non-DSH Supplemental Payments Reported during Fiscal Year 2010 by Category of Service

Dollars in millions
                                          Non-DSH supplemental payments
                                                                                 a
                                    (percentage of total state non-DSH payments)
                                                                                                                              State
                                                                                                                            total as
                                                              Physician                                   Total state   percentage
                       Inpatient Outpatient     Nursing             and          Other   Intermediate       non-DSH     of national
                        hospital   hospital       facility     surgical practitioners’    care facility supplemental      non-DSH
                                                                                     b                c
State                   services  services      services       services     services         services      payments            total
Alabama                $210 (92)     $17 (8)         $0 (0)       $0 (0)        $0 (0)          $0 (0)          $227              2
Alaska                      0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Arizona                     0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Arkansas                236 (81)     46 (16)          0 (0)       10 (3)         0 (0)           0 (0)          $292              2
California             1,668 (93)      96 (5)        21 (1)        0 (0)         0 (0)           0 (0)        $1,786             12
Colorado                417 (61)    132 (19)    119 (17)          15 (2)         0 (0)           0 (0)          $682              5
Connecticut                 0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Delaware                    0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
District of Columbia        0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Florida                1,334 (90)       0 (0)        14 (1)      137 (9)         0 (0)           0 (0)        $1,485             10
Georgia                     0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Hawaii                    18 (83)      4 (17)         0 (0)        0 (0)         0 (0)           0 (0)           $22             <1
Idaho                       0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Illinois               1,923 (72)   736 (28)          0 (0)        0 (0)         0 (0)           0 (0)        $2,659             18
Indiana                   43 (24)       0 (0)       88 (50)      47 (27)         0 (0)           0 (0)          $178              1
Iowa                        0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Kansas                    20 (37)    18 (33)          0 (0)      16 (29)        <1 (1)           0 (0)           $54             <1
Kentucky                  54 (69)       0 (0)        <1 (1)      23 (30)         0 (0)           0 (0)           $77              1
Louisiana                   0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Maine                     28 (48)    26 (46)          0 (0)        3 (5)         1 (1)           0 (0)           $57             <1
Maryland                    0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Massachusetts             46 (21)   167 (79)          0 (0)        0 (0)         0 (0)           0 (0)          $213              1
Michigan                428 (47)    116 (13)    306 (33)          64 (7)         0 (0)           0 (0)          $914              6
Minnesota                   0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Mississippi            434 (100)        0 (0)         0 (0)        0 (0)         0 (0)           0 (0)          $434              3
Missouri                    0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Montana                     0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Nebraska                    0 (0)       0 (0)         0 (0)        0 (0)         0 (0)           0 (0)            $0              0
Nevada                    35 (90)       0 (0)         0 (0)       4 (10)         0 (0)           0 (0)           $39             <1




                                          Page 35                                        GAO-12-694 Supplemental Medicaid Payments
                                        Appendix II: Supplemental Medicaid Payments
                                        Reported during 2010




Dollars in millions
                                         Non-DSH supplemental payments
                                                                                a
                                   (percentage of total state non-DSH payments)
                                                                                                                                        State
                                                                                                                                      total as
                                                               Physician                                            Total state   percentage
                      Inpatient Outpatient      Nursing              and          Other            Intermediate       non-DSH     of national
                       hospital   hospital        facility      surgical practitioners’             care facility supplemental      non-DSH
                                                                                      b                         c
State                  services  services       services        services     services                  services      payments            total
New Hampshire              0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
New Jersey                 0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
New Mexico               96 (96)       0 (0)          0 (0)            4 (4)               0 (0)           0 (0)          $100              1
New York                  45 (9)   425 (83)         44 (9)             0 (0)               0 (0)           0 (0)          $513              4
North Carolina        218 (100)        0 (0)          0 (0)            0 (0)               0 (0)           0 (0)          $218              2
North Dakota              4 (47)       0 (0)          0 (0)            0 (0)               0 (0)          4 (53)            $8             <1
Ohio                  155 (100)        0 (0)          0 (0)            0 (0)               0 (0)           0 (0)          $155              1
Oklahoma               16 (100)        0 (0)          0 (0)         <1 (<1)                0 (0)           0 (0)           $16             <1
Oregon                     0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
Pennsylvania               0 (0)       0 (0)   410 (100)               0 (0)               0 (0)           0 (0)          $410              3
Rhode Island               0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
South Carolina           36 (25)    24 (16)        39 (27)          46 (32)                0 (0)           0 (0)          $145              1
South Dakota               0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
Tennessee             444 (100)        0 (0)          0 (0)            0 (0)               0 (0)           0 (0)          $444              3
Texas                 3,050 (98)     4 (<1)           0 (0)           45 (1)               0 (0)           0 (0)        $3,099             21
Utah                       0 (0)       0 (0)          0 (0)       17 (100)                 0 (0)           0 (0)           $17             <1
Vermont                    0 (0)       0 (0)     <1 (100)              0 (0)               0 (0)           0 (0)           <$1             <1
Virginia                   1 (4)       0 (0)        4 (14)        29 (100)                 0 (0)        -5 (-17)           $29             <1
Washington                <1 (1)       0 (0)     11 (103)              0 (0)               0 (0)         <0 (-4)           $11             <1
West Virginia            74 (55)       0 (0)          0 (0)         62 (45)                0 (0)           0 (0)          $137              1
Wisconsin                  0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
Wyoming                    0 (0)       0 (0)          0 (0)            0 (0)               0 (0)           0 (0)            $0              0
Total                   $11,031     $1,811         $1,056              $522            $1 (0.01)     $-1 (-0.01)       $14,420            100
                         (76.50)    (12.56)         (7.32)            (3.62)
                                        Source: GAO analysis of CMS-64 expenditure data.

                                        Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
                                        adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
                                        data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
                                        or 1 percent, the cell includes the entry “<1.” When a value was less than 0, but did not round to
                                        ($1) million or (1 percent), the cell includes the entry “<0.”
                                        a
                                         CMS did not ask states to report non-DSH supplemental payments for other categories of service,
                                        such as mental health facility services or clinic services.




                                        Page 36                                                    GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




b
 Other practitioners’ services that may be covered by Medicaid vary from state to state and include
health-related or remedial care or services, other than physicians’ services, provided by licensed
practitioners acting within the scope of practice defined under state law. For example, depending on
the state, such services could be provided by chiropractors, nurse midwives, nurse practitioners, and
others.
c
 Intermediate care facility services include those provided by facilities serving individuals with
intellectual disabilities.




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Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 5: Non-DSH Supplemental Payments for Inpatient Hospital Services Reported
during Fiscal Year 2010

Dollars in millions
                                              Non-DSH supplemental payments for
                                                  inpatient hospital services
                                                                              Non-DSH
                                                                         supplemental
                              Total state                               payments as a
                      Medicaid payments                           percentage of state’s
                            for inpatient               Federal      total for inpatient
                                        a
State                  hospital services        Total     share       hospital services
Alabama                             $790        $210       $163                      27
Alaska                               185            0         0                       0
Arizona                              136            0         0                       0
Arkansas                             740         236        191                      32
California                         8,667        1,668     1,092                      19
Colorado                             975         417        257                      43
Connecticut                          597            0         0                       0
Delaware                              52            0         0                       0
District of Columbia                 369            0         0                       0
Florida                            3,956        1,334       902                      34
Georgia                            1,728            0         0                       0
Hawaii                                81           18        12                      23
Idaho                                228            0         0                       0
Illinois                           5,567        1,923     1,190                      35
Indiana                              366           43        32                      12
Iowa                                 206            0         0                       0
Kansas                               302           20        14                       7
Kentucky                           1,027           54        43                       5
Louisiana                          2,159            0         0                       0
Maine                                209           28        21                      13
Maryland                             809            0         0                       0
Massachusetts                      1,129           46        28                       4
Michigan                           1,346         428        313                      32
Minnesota                            528            0         0                       0
Mississippi                        1,252         434        368                      35
Missouri                           2,220            0         0                       0
Montana                              164            0         0                       0
Nebraska                             259            0         0                       0




Page 38                                       GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




    Dollars in millions
                                                           Non-DSH supplemental payments for
                                                               inpatient hospital services
                                                                                           Non-DSH
                                                                                      supplemental
                                    Total state                                      payments as a
                            Medicaid payments                                  percentage of state’s
                                  for inpatient                      Federal      total for inpatient
                                              a
    State                    hospital services               Total     share       hospital services
    Nevada                                          285         35        22                       12
    New Hampshire                                   258          0         0                         0
    New Jersey                                     1,717         0         0                         0
    New Mexico                                      460         96        77                       21
    New York                                       8,781        45        28                         1
    North Carolina                                 1,983      218        163                       11
    North Dakota                                     50          4         3                         8
    Ohio                                           1,714      155        114                         9
    Oklahoma                                        934         16        12                         2
    Oregon                                          241          0         0                         0
    Pennsylvania                                   1,146         0         0                         0
    Rhode Island                                    322          0         0                         0
    South Carolina                                 1,070        36        29                         3
    South Dakota                                    155          0         0                         0
    Tennessee                                       932       444        392                       48
    Texas                                          6,629     3,050     2,150                       46
    Utah                                            360          0         0                         0
    Vermont                                          40          0         0                         0
    Virginia                                        852          1         1                       <1
    Washington                                      914         <1        <1                       <1
    West Virginia                                   293         74        62                       25
    Wisconsin                                       434          0         0                         0
    Wyoming                                          96          0         0                         0
                                                       b
    Total                                   $65,762        $11,031    $7,678                   16.77
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.”
a
 Total state Medicaid payments for inpatient hospital services include both the state and federal share
of payments and include all payments made by states to providers, including DSH and non-DSH
payments as well as regular payments. They do not include expenditures for program administration.
b
 The nationwide total for state Medicaid payments for inpatient hospital services includes about
$48 million in payments reported by Puerto Rico and the U.S. territories.




Page 39                                                    GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 6: Non-DSH Supplemental Payments for Outpatient Hospital Services
Reported during Fiscal Year 2010

Dollars in millions
                                              Non-DSH supplemental payments for
                                                  outpatient hospital services
                                                                               Non-DSH
                                                                          supplemental
                              Total state                               payments as a
                      Medicaid payments                           percentage of state’s
                           for outpatient               Federal     total for outpatient
                                        a
State                  hospital services       Total      share       hospital services
Alabama                             $267        $17         $13                       6
Alaska                               108           0          0                       0
Arizona                              311           0          0                       0
Arkansas                             171          46         38                      27
California                         1,346          96         57                       7
Colorado                             305        132          81                      43
Connecticut                          165           0          0                       0
Delaware                              18           0          0                       0
District of Columbia                  40           0          0                       0
Florida                              840           0          0                       0
Georgia                              316           0          0                       0
Hawaii                                17           4          3                      23
Idaho                                 54           0          0                       0
Illinois                           1,289        736         455                      57
Indiana                               99           0          0                       0
Iowa                                 190           0          0                       0
Kansas                                56          18         12                      32
Kentucky                             289           0          0                       0
Louisiana                            424           0          0                       0
Maine                                215          26         20                      12
Maryland                             198           0          0                       0
Massachusetts                        837        167         103                      20
Michigan                             315        116          85                      37
Minnesota                            101           0          0                       0
Mississippi                          324           0          0                       0
Missouri                             535           0          0                       0
Montana                               59           0          0                       0
Nebraska                              92           0          0                       0




Page 40                                       GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




    Dollars in millions
                                                           Non-DSH supplemental payments for
                                                               outpatient hospital services
                                                                                            Non-DSH
                                                                                       supplemental
                                   Total state                                       payments as a
                           Medicaid payments                                   percentage of state’s
                                for outpatient                       Federal     total for outpatient
                                             a
    State                   hospital services               Total      share       hospital services
    Nevada                                           97         0          0                         0
    New Hampshire                                    75         0          0                         0
    New Jersey                                      282         0          0                         0
    New Mexico                                      104         0          0                         0
    New York                                       2,079     425         262                        20
    North Carolina                                  697         0          0                         0
    North Dakota                                     25         0          0                         0
    Ohio                                            383         0          0                         0
    Oklahoma                                        230         0          0                         0
    Oregon                                           15         0          0                         0
    Pennsylvania                                    359         0          0                         0
    Rhode Island                                     37         0          0                         0
    South Carolina                                  225        24         19                        11
    South Dakota                                     50         0          0                         0
    Tennessee                                        17         0          0                         0
    Texas                                          1,112        4          3                        <1
    Utah                                             58         0          0                         0
    Vermont                                           2         0          0                         0
    Virginia                                        135         0          0                         0
    Washington                                      244         0          0                         0
    West Virginia                                    93         0          0                         0
    Wisconsin                                       165         0          0                         0
    Wyoming                                          38         0          0                         0
                                                       b
    Total                                   $15,506         1,811     $1,150                   11.68
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.”
a
 Total state Medicaid payments for outpatient hospital services include both the state and federal
share of payments and include all payments made by states to providers, including non-DSH
payments as well as regular payments. They do not include expenditures for program administration.
b
 The nationwide total for state Medicaid payments for outpatient hospital services includes about
$5 million in payments reported by Puerto Rico and the U.S. territories.




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Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 7: Non-DSH Supplemental Payments for Nursing Facility Services Reported
during Fiscal Year 2010

Dollars in millions
                                              Non-DSH supplemental payments for
                                                   nursing facility services
                                                                             Non-DSH
                                                                       supplemental
                                Total state                           payments as a
                      Medicaid payments                         percentage of state’s
                               for nursing            Federal       total for nursing
                                          a
State                   facility services     Total     share        facility services
Alabama                              $875       $0         $0                       0
Alaska                                 118       0          0                       0
Arizona                                 34       0          0                       0
Arkansas                               615       0          0                       0
California                           4,268      21         11                      <1
Colorado                               573     119         73                      21
Connecticut                          1,254       0          0                       0
Delaware                               186       0          0                       0
District of Columbia                   205       0          0                       0
Florida                              2,786      14          9                      <1
Georgia                              1,133       0          0                       0
Hawaii                                   2       0          0                       0
Idaho                                  125       0          0                       0
Illinois                             1,520       0          0                       0
Indiana                              1,166      88         67                       8
Iowa                                   501       0          0                       0
Kansas                                 355       0          0                       0
Kentucky                               837      <1         <1                      <1
Louisiana                              776       0          0                       0
Maine                                  237       0          0                       0
Maryland                             1,060       0          0                       0
Massachusetts                        1,583       0          0                       0
Michigan                             1,686     306        224                      18
Minnesota                              812       0          0                       0
Mississippi                            748       0          0                       0
Missouri                               905       0          0                       0
Montana                                156       0          0                       0
Nebraska                               314       0          0                       0




Page 42                                        GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




    Dollars in millions
                                                          Non-DSH supplemental payments for
                                                               nursing facility services
                                                                                         Non-DSH
                                                                                   supplemental
                                    Total state                                   payments as a
                          Medicaid payments                                 percentage of state’s
                                   for nursing                    Federal       total for nursing
                                              a
    State                   facility services             Total     share        facility services
    Nevada                                         171       0          0                          0
    New Hampshire                                  309       0          0                          0
    New Jersey                                 1,968         0          0                          0
    New Mexico                                      5        0          0                          0
    New York                                   6,852        44         27                          1
    North Carolina                             1,228         0          0                          0
    North Dakota                                   187       0          0                          0
    Ohio                                       2,743         0          0                          0
    Oklahoma                                       508       0          0                          0
    Oregon                                         323       0          0                          0
    Pennsylvania                               3,504       410        270                         12
    Rhode Island                                   304       0          0                          0
    South Carolina                                 571      39         31                          7
    South Dakota                                   144       0          0                          0
    Tennessee                                      624       0          0                          0
    Texas                                      2,307         0          0                          0
    Utah                                           158       0          0                          0
    Vermont                                        115      <1         <1                         <1
    Virginia                                       806       4          2                         <1
    Washington                                     576      11          7                          2
    West Virginia                                  480       0          0                          0
    Wisconsin                                      923       0          0                          0
    Wyoming                                         74       0          0                          0
                                                     b
    Total                                 $49,713        $1,056      $722                        2.12
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.”
a
 Total state Medicaid payments for nursing facility services include both the state and federal share of
payments and include all payments made by states to providers, including non-DSH payments as
well as regular payments. They do not include expenditures for program administration.
b
 The nationwide total for state Medicaid payments for nursing facility services includes about
$2 million in payments reported by Puerto Rico and the U.S. territories.




Page 43                                                    GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 8: Non-DSH Supplemental Payments for Physician and Surgical Services
Reported during Fiscal Year 2010

Dollars in millions
                                                Non-DSH supplemental payments for
                                                  physician and surgical services
                                                                             Non-DSH
                                                                         supplemental
                       Total state Medicaid                             payments as a
                              payments for                       percentage of state’s
                             physician and             Federal total for physician and
                                           a
State                    surgical services       Total   share       surgical services
Alabama                                $301         $0       $0                       0
Alaska                                   94          0        0                       0
Arizona                                  38          0        0                       0
Arkansas                                276         10        8                       4
California                            1,388          0        0                       0
Colorado                                272         15        8                       5
Connecticut                              70          0        0                       0
Delaware                                 22          0        0                       0
District of Columbia                     55          0        0                       0
Florida                               1,089       137        93                      13
Georgia                                 355          0        0                       0
Hawaii                                    7          0        0                       0
Idaho                                   100          0        0                       0
Illinois                                880          0        0                       0
Indiana                                 189         47       36                      25
Iowa                                    174          0        0                       0
Kansas                                   97         16       11                      16
Kentucky                                374         23       19                       6
Louisiana                               516          0        0                       0
Maine                                   100          3        3                       3
Maryland                                101          0        0                       0
Massachusetts                           314          0        0                       0
Michigan                                263         64       46                      24
Minnesota                               189          0        0                       0
Mississippi                             298          0        0                       0
Missouri                                 30          0        0                       0
Montana                                  52          0        0                       0
Nebraska                                 88          0        0                       0




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Appendix II: Supplemental Medicaid Payments
Reported during 2010




    Dollars in millions
                                                              Non-DSH supplemental payments for
                                                                physician and surgical services
                                                                                           Non-DSH
                                                                                       supplemental
                              Total state Medicaid                                    payments as a
                                     payments for                              percentage of state’s
                                    physician and                    Federal total for physician and
                                                  a
    State                       surgical services              Total   share       surgical services
    Nevada                                           88            4        3                       4
    New Hampshire                                    55            0        0                       0
    New Jersey                                       63            0        0                       0
    New Mexico                                       41            4        4                      11
    New York                                        361            0        0                       0
    North Carolina                                  944            0        0                       0
    North Dakota                                     48            0        0                       0
    Ohio                                            317            0        0                       0
    Oklahoma                                        402           <1       <1                      <1
    Oregon                                           19            0        0                       0
    Pennsylvania                                    209            0        0                       0
    Rhode Island                                     15            0        0                       0
    South Carolina                                  276           46       36                      17
    South Dakota                                     60            0        0                       0
    Tennessee                                        28            0        0                       0
    Texas                                          1,156          45       31                       4
    Utah                                            113           17       14                      15
    Vermont                                           2            0        0                       0
    Virginia                                        197           29       17                      15
    Washington                                      193            0        0                       0
    West Virginia                                   183           62       50                      34
    Wisconsin                                        63            0        0                       0
    Wyoming                                          52            0        0                       0
                                                         b
    Total                                      $12,622         $522      $377                    4.13
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.”
a
 Total state Medicaid payments for physician and surgical services include both the state and federal
share of payments and include all payments made by states to providers, including non-DSH
payments as well as regular payments. They do not include expenditures for program administration.
b
 The nationwide total for state Medicaid payments for physician and surgical services includes about
$5 million in payments reported by Puerto Rico and the U.S. territories.




Page 45                                                      GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 9: Non-DSH Supplemental Payments for Other Practitioners’ Services
Reported during Fiscal Year 2010

Dollars in millions
                                                 Non-DSH supplemental payments for
                                                                                 b
                                                    other practitioners’ services
                                                                                Non-DSH
                                                                           supplemental
                       Total state Medicaid                               payments as a
                              payments for                        percentage of state’s
                        other practitioners’             Federal           total for other
                                            a
State                              services      Total     share practitioners’ services
Alabama                                  $40        $0        $0                        0
Alaska                                    17         0         0                        0
Arizona                                    3         0         0                        0
Arkansas                                  17         0         0                        0
California                                74         0         0                        0
Colorado                                   0         0         0                        0
Connecticut                              117         0         0                        0
Delaware                                   1         0         0                        0
District of Columbia                       2         0         0                        0
Florida                                   37         0         0                        0
Georgia                                   31         0         0                        0
Hawaii                                     1         0         0                        0
Idaho                                     42         0         0                        0
Illinois                                 106         0         0                        0
Indiana                                   10         0         0                        0
Iowa                                      53         0         0                        0
Kansas                                     4       <1         <1                       10
Kentucky                                  26         0         0                        0
Louisiana                                  0         0         0                        0
Maine                                     46         1        <1                        1
Maryland                                  10         0         0                        0
Massachusetts                             29         0         0                        0
Michigan                                   4         0         0                        0
Minnesota                                148         0         0                        0
Mississippi                                4         0         0                        0
Missouri                                  12         0         0                        0




Page 46                                         GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




 Dollars in millions
                                                                 Non-DSH supplemental payments for
                                                                                                 b
                                                                    other practitioners’ services
                                                                                                Non-DSH
                                                                                           supplemental
                            Total state Medicaid                                          payments as a
                                   payments for                                   percentage of state’s
                             other practitioners’                        Federal           total for other
                                                 a
 State                                  services                 Total     share practitioners’ services
 Montana                                               14            0         0                        0
 Nebraska                                               5            0         0                        0
 Nevada                                                10            0         0                        0
 New Hampshire                                         15            0         0                        0
 New Jersey                                            46            0         0                        0
 New Mexico                                            40            0         0                        0
 New York                                             232            0         0                        0
 North Carolina                                        29            0         0                        0
 North Dakota                                           3            0         0                        0
 Ohio                                                  60            0         0                        0
 Oklahoma                                              24            0         0                        0
 Oregon                                                25            0         0                        0
 Pennsylvania                                           8            0         0                        0
 Rhode Island                                           1            0         0                        0
 South Carolina                                        27            0         0                        0
 South Dakota                                           2            0         0                        0
 Tennessee                                             <1            0         0                        0
 Texas                                                849            0         0                        0
 Utah                                                   4            0         0                        0
 Vermont                                               <1            0         0                        0
 Virginia                                              25            0         0                        0
 Washington                                            33            0         0                        0
 West Virginia                                         12            0         0                        0
 Wisconsin                                             79            0         0                        0
 Wyoming                                                7            0         0                        0
                                                            c
 Total                                             $2,386           $1        $1                     0.04
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.”




Page 47                                                         GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




a
 Total state Medicaid payments for other practitioners’ services include both the state and federal
share of payments and include all payments made by states to providers, including non-DSH
payments as well as regular payments. They do not include expenditures for program administration.
b
 Other practitioners’ services that may be covered by Medicaid vary from state to state and include
health-related or remedial care or services, other than physicians’ services, provided by licensed
practitioners acting within the scope of practice defined under state law. For example, depending on
the state, such services could be provided by chiropractors, nurse midwives, nurse practitioners, and
others.
c
 The nationwide total for state Medicaid payments for other practitioners’ services includes less than
$1 million in payments reported by Puerto Rico and the U.S. territories.




Page 48                                             GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




Table 10: Non-DSH Supplemental Payments for Intermediate Care Facility Services
Reported during Fiscal Year 2010

Dollars in millions
                                               Non-DSH supplemental payments for
                                                                                    b
                                                intermediate care facility services
                               Total state                    Non-DSH supplemental
                                 Medicaid                               payments as a
                            payments for                        percentage of state’s
                       intermediate care              Federal   total for intermediate
                                          a
State                   facility services     Total     share    care facility services
Alabama                               $35        $0        $0                           0
Alaska                                   2        0         0                           0
Arizona                                  0        0         0                           0
Arkansas                              159         0         0                           0
California                            716         0         0                           0
Colorado                                28        0         0                           0
Connecticut                           292         0         0                           0
Delaware                                31        0         0                           0
District of Columbia                    69        0         0                           0
Florida                               334         0         0                           0
Georgia                                 93        0         0                           0
Hawaii                                   9        0         0                           0
Idaho                                   66        0         0                           0
Illinois                              767         0         0                           0
Indiana                               309         0         0                           0
Iowa                                  287         0         0                           0
Kansas                                  62        0         0                           0
Kentucky                              146         0         0                           0
Louisiana                             472         0         0                           0
Maine                                   59        0         0                           0
Maryland                                <1        0         0                           0
Massachusetts                         243         0         0                           0
Michigan                                 0        0         0                           0
Minnesota                             167         0         0                           0
Mississippi                           270         0         0                           0
Missouri                              134         0         0                           0
Montana                                 13        0         0                           0




Page 49                                       GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




 Dollars in millions
                                                             Non-DSH supplemental payments for
                                                                                                  b
                                                              intermediate care facility services
                                        Total state                         Non-DSH supplemental
                                          Medicaid                                    payments as a
                                     payments for                             percentage of state’s
                                intermediate care                   Federal   total for intermediate
                                                   a
 State                           facility services          Total     share    care facility services
 Nebraska                                            34         0         0                            0
 Nevada                                              18         0         0                            0
 New Hampshire                                        3         0         0                            0
 New Jersey                                         619         0         0                            0
 New Mexico                                          25         0         0                            0
 New York                                          3,602        0         0                            0
 North Carolina                                     499         0         0                            0
 North Dakota                                        87         4         3                            5
 Ohio                                               826         0         0                            0
 Oklahoma                                           124         0         0                            0
 Oregon                                               2         0         0                            0
 Pennsylvania                                       603         0         0                            0
 Rhode Island                                        11         0         0                            0
 South Carolina                                     141         0         0                            0
 South Dakota                                        25         0         0                            0
 Tennessee                                          225         0         0                            0
 Texas                                             1,100        0         0                            0
 Utah                                                67         0         0                            0
 Vermont                                              0         0         0                            0
 Virginia                                           271        -5         -3                          -2
 Washington                                         141       <0         <0                           <0
 West Virginia                                       63         0         0                            0
 Wisconsin                                          142         0         0                            0
 Wyoming                                             19         0         0                            0
                                                        c
 Total                                        $13,406         $-1       <$1                      -0.01
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include
adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these
data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million
or 1 percent, the cell includes the entry “<1.” When a value was less than 0, but did not round to
($1) million or (1 percent), the cell includes the entry “<0.”




Page 50                                                     GAO-12-694 Supplemental Medicaid Payments
Appendix II: Supplemental Medicaid Payments
Reported during 2010




a
 Total state Medicaid payments for intermediate care facility services include both the state and
federal share of payments and include all payments made by states to providers, including non-DSH
payments as well as regular payments. They do not include expenditures for program administration.
b
 Intermediate care facility services include those provided by facilities serving individuals with
intellectual disabilities.
c
 Puerto Rico and the U.S. territories did not report any payments for intermediate care facility
services.




Page 51                                              GAO-12-694 Supplemental Medicaid Payments
Appendix III: Non-DSH Supplemental
             Appendix III: Non-DSH Supplemental Medicaid
             Payments Reported during 2006 and 2010



Medicaid Payments Reported during 2006
and 2010
             This appendix provides state-by-state and nationwide information about
             non-DSH supplemental Medicaid payments reported during 2006 by the
             states and District of Columbia in comparison to similar payments reported
             during 2010. 1

             •   Table 11 shows the total amount of non-DSH supplemental payments
                 states reported during 2006 and 2010 and the change from 2006 to
                 2010 in these amounts, both as a dollar amount and as a percentage of
                 the 2006 total.

             •   Table 12 shows states’ reported non-DSH supplemental payments for
                 specific categories of service during 2006 and 2010.




             1
              Puerto Rico and the U.S. territories that operate Medicaid programs—American Samoa,
             Guam, the Northern Mariana Islands, and the U.S. Virgin Islands—did not report
             supplemental Medicaid payments during 2010.




             Page 52                                       GAO-12-694 Supplemental Medicaid Payments
Appendix III: Non-DSH Supplemental Medicaid
Payments Reported during 2006 and 2010




Table 11: Non-DSH Supplemental Payments Reported during Fiscal Years 2006 and
2010

Dollars in millions
                                                          Change from 2006 to 2010
                       Total reported non-DSH               in reported non-DSH
                       supplemental payments               supplemental payments
                                                                      As a percentage
State                          2006            2010      In dollars       of 2006 total
Alabama                        $275            $227           $-48                 -18
Alaska                            30              0            -30                -100
Arizona                            0              0              0                   0
Arkansas                          63            292            229                 361
California                     1,024          1,786            762                   74
Colorado                        140             682            542                 388
Connecticut                        0              0              0                   0
Delaware                           0              0              0                   0
District of Columbia               0              0              0                   0
Florida                         681           1,485            804                 118
Georgia                         332               0           -332                -100
Hawaii                            18             22              4                   21
Idaho                              0              0              0                   0
Illinois                        631           2,659          2,029                 322
Indiana                            0            178            178                 N/A
Iowa                               0              0              0                   0
Kansas                             0             54             54                 N/A
Kentucky                           0             77             77                 N/A
Louisiana                         31              0            -31                -100
Maine                              0             57             57                 N/A
Maryland                           0              0              0                   0
Massachusetts                      0            213            213                 N/A
Michigan                          13            914            901               6,806
Minnesota                          0              0              0                   0
Mississippi                     175             434            259                 149
Missouri                        116               0           -116                -100
Montana                           33              0            -33                -100
Nebraska                          48              0            -48                -100
Nevada                             0             39             39                 N/A
New Hampshire                     19              0            -19                -100




Page 53                                       GAO-12-694 Supplemental Medicaid Payments
Appendix III: Non-DSH Supplemental Medicaid
Payments Reported during 2006 and 2010




 Dollars in millions
                                                                     Change from 2006 to 2010
                                Total reported non-DSH                 in reported non-DSH
                                supplemental payments                 supplemental payments
                                                                                  As a percentage
 State                                       2006         2010      In dollars        of 2006 total
 New Jersey                                        0         0              0                       0
 New Mexico                                        49      100             51                    103
 New York                                      385         513            129                      33
 North Carolina                                825         218           -608                     -74
 North Dakota                                      0         8              8                    N/A
 Ohio                                              46      155            109                    240
 Oklahoma                                          28       16            -12                     -43
 Oregon                                            15        0            -15                   -100
 Pennsylvania                                      0       410            410                    N/A
 Rhode Island                                      0         0              0                       0
 South Carolina                                335         145           -189                     -57
 South Dakota                                      0         0              0                       0
 Tennessee                                     127         444            317                    251
 Texas                                         818        3,099         2,281                    279
 Utah                                              0        17             17                    N/A
 Vermont                                           0        <1             <1                    N/A
 Virginia                                          0        29             29                    N/A
 Washington                                        9        11              1                      13
 West Virginia                                     36      137            101                    282
 Wisconsin                                         29        0            -29                   -100
 Wyoming                                           0         0              0                       0
 Total                                    $6,332        $14,420        $8,088                 127.72
Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal years and may include adjustments
(positive or negative) to payments made during prior fiscal years. CMS provided the data for fiscal year
2010 to GAO on December 22, 2011. The data for fiscal year 2006 reflect adjustments reported by
states through October 5, 2007. When a value was greater than 0, but did not round to $1 million or
1 percent, the cell includes the entry “<1.” If a state did not report non-DSH supplemental payments during
2006, but did report such payments during 2010, the percentage change from 2006 could not be
computed and is indicated by “N/A.”




Page 54                                                  GAO-12-694 Supplemental Medicaid Payments
                                                 Appendix III: Non-DSH Supplemental Medicaid
                                                 Payments Reported during 2006 and 2010




Table 12: Non-DSH Supplemental Payments States Reported during Fiscal Years 2006 and 2010 by Category of Service

Dollars in millions
                        Inpatient         Outpatient         Nursing           Physician Intermediate Mental health    Other
                         hospital          hospital           facility        and surgical care facility  facility  practitioners’      Other
                        services           services          services           services    servicesa    servicesb   servicesc,d      servicesb
State                  2006    2010       2006    2010      2006   2010       2006   2010   2006   2010   2006   2010   2006   2010   2006 2010
Alabama                $130    $210        $96     $17      $50          $0     $0     $0    $0     $0     $0    N/A     N/A     $0     $0   N/A
Alaska                  30           0       0         0      0           0      0      0     0      0      1    N/A     N/A     0       0   N/A
Arizona                  0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Arkansas                63          236      0         46     0           0      0     10     0      0      1    N/A     N/A     0       0   N/A
California              748    1,668       221         96    54          21      0      0     0      0      0    N/A     N/A     0       0   N/A
Colorado                126         417     12     132        2      119         0     15      0      0     0     N/A    N/A      0     <1   N/A
Connecticut              0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Delaware                 0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
District of Columbia     0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Florida                 663    1,334         0         0     18          14      0    137     0      0      0     N/A    N/A      0      0   N/A
Georgia                 156          0      65         0    110           0      0      0     0      0      0    N/A     N/A     0       0   N/A
Hawaii                  10          18       2         4      6           0      0      0     0      0      0    N/A     N/A     0       0   N/A
Idaho                    0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Illinois               474     1,923       156     736        0           0      0      0     0      0      0    N/A     N/A     0       0   N/A
Indiana                  0          43       0         0      0          88      0     47     0      0      0    N/A     N/A     0       0   N/A
Iowa                     0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Kansas                   0          20       0         18     0           0      0     16     0      0      0    N/A     N/A    <1       0   N/A
Kentucky                 0          54       0         0      0          <1      0     23     0      0      0    N/A    N/A      0       0   N/A
Louisiana                1           0      13         0      0           0     17      0     0      0      0    N/A     N/A     0       0   N/A
Maine                    0          28       0         26     0           0      0      3     0      0      0    N/A     N/A     1       0   N/A
Maryland                 0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Massachusetts            0          46       0     167        0           0      0      0     0      0      0    N/A     N/A     0       0   N/A
Michigan                 0          428     13     116        0      306         0     64     0      0      0     N/A    N/A      0      0   N/A
Minnesota                0           0       0         0      0           0      0      0     0      0      0    N/A    N/A      0       0   N/A
Mississippi            150          434     20         0      5           0      0      0     0      0      0     N/A    N/A      0      0   N/A
Missouri                70           0      16         0      0           0      5      0    25      0      0    N/A     N/A     0       0   N/A
Montana                 27           0       0         0      6           0      0      0     0      0      0    N/A     N/A     0      <1   N/A
Nebraska                 0           0       0         0     48           0      0      0     0      0      0    N/A     N/A     0       0   N/A
Nevada                   0          35       0         0      0           0      0      4     0      0      0    N/A     N/A     0       0   N/A
New Hampshire            0           0       0         0     19           0      0      0     0      0      0    N/A     N/A     0       0   N/A




                                                 Page 55                                            GAO-12-694 Supplemental Medicaid Payments
                                                  Appendix III: Non-DSH Supplemental Medicaid
                                                  Payments Reported during 2006 and 2010




Dollars in millions
                        Inpatient          Outpatient           Nursing           Physician Intermediate Mental health    Other
                         hospital           hospital             facility        and surgical care facility  facility  practitioners’               Other
                        services            services            services           services    servicesa    servicesb   servicesc,d               servicesb
State                  2006    2010        2006       2010   2006       2010      2006     2010      2006   2010   2006   2010   2006    2010     2006 2010
New Jersey                0          0        0         0         0          0        0         0      0      0      0    N/A     N/A        0        0    N/A
New Mexico                0         96        0         0         0          0        0         4      0      0      0    N/A     N/A        0       49    N/A
New York                385         45        0       425         0         44        0         0      0      0      0    N/A     N/A        0        0    N/A
North Carolina          572         218     253         0         0          0        0         0      0      0      0     N/A    N/A        0        0    N/A
North Dakota              0          4        0         0         0          0        0         0      0      4      0    N/A     N/A        0        0    N/A
Ohio                     46         155       0         0         0          0        0         0      0      0      0    N/A     N/A        0        0    N/A
Oklahoma                 24         16        0         0         0          0        0       <1       0      0      0    N/A     N/A        0        5    N/A
Oregon                   10          0        0         0         0          0        4         0      0      0      0    N/A     N/A        0        0    N/A
Pennsylvania              0          0        0         0         0       410         0         0      0      0      0    N/A     N/A        0        0    N/A
Rhode Island              0          0        0         0         0          0        0         0      0      0      0    N/A     N/A        0        0    N/A
South Carolina          205         36      129         24        0         39        0       46       0      0      0    N/A     N/A        0        0    N/A
South Dakota              0          0        0         0         0          0        0         0      0      0      0    N/A     N/A        0        0    N/A
Tennessee                 0         444       0         0      127           0        0         0      0      0      0    N/A     N/A        0        0    N/A
Texas                   787    3,050          6         4         0          0       25       45       0      0      0    N/A     N/A        0        0    N/A
Utah                      0          0        0         0         0          0        0       17       0      0      0    N/A     N/A        0        0    N/A
Vermont                   0          0        0         0         0         <1        0         0      0      0      0    N/A     N/A        0        0    N/A
Virginia                  0          1        0         0         0          4        0       29       0      -5     0    N/A     N/A        0        0    N/A
Washington                9         <1        0         0         0         11        0         0      0     <0      0    N/A     N/A        0        0    N/A
West Virginia            21         74        0         0         0          0       14       62       0      0      0    N/A     N/A        0        1    N/A
Wisconsin                 3          0       <1         0       24           0        0         0     <1      0     <1    N/A     N/A        0        1    N/A
Wyoming                   0          0        0         0         0          0        0         0      0      0      0    N/A     N/A        0        0    N/A
Total                 $4,711 $11,031      $1,003 $1,811      $469 $1,056           $66     $522      $25     $-1    $2    N/A     N/A      $1      $57     N/A
                                                  Source: GAO analysis of CMS-64 expenditure data.

                                                  Notes: Amounts represent payments reported during federal fiscal years and may include adjustments
                                                  (positive or negative) to payments made during prior fiscal years. CMS provided the data for fiscal year
                                                  2010 to GAO on December 22, 2011. The data for fiscal year 2006 reflect adjustments reported by
                                                  states through October 5, 2007. When a value was greater than 0, but did not round to $1 million or
                                                  1 percent, the cell includes the entry “<1.” When a value was less than 0, but did not round to ($1) million
                                                  or (1 percent), the cell includes the entry “<0.”
                                                  a
                                                   Intermediate care facility services include those provided by facilities serving individuals with intellectual
                                                  disabilities.
                                                  b
                                                   The expenditure reporting form used in fiscal year 2010 did not include a way for states to separately
                                                  report non-DSH supplemental payments for services other than inpatient hospital services, outpatient
                                                  hospital services, nursing facility services, physician and surgical services, intermediate care facility
                                                  services, or other practitioners’ services. For example, there was no line on which states could report
                                                  non-DSH supplemental payments for mental health facility services or clinic services. Cells
                                                  corresponding to categories of service for which no lines were included on the reporting form for 2010—
                                                  those for mental health facility services and other services—are marked “N/A” (not applicable).




                                                  Page 56                                                    GAO-12-694 Supplemental Medicaid Payments
Appendix III: Non-DSH Supplemental Medicaid
Payments Reported during 2006 and 2010




c
 Other practitioners’ services that may be covered by Medicaid vary from state to state and include
health-related or remedial care or services, other than physicians’ services, provided by licensed
practitioners acting within the scope of practice defined under state law. For example, depending on the
state, such services could be provided by chiropractors, nurse midwives, nurse practitioners, and
others.
d
 Although the expenditure reporting form used in fiscal year 2006 included a way for states to separately
report non-DSH supplemental payments for other practitioners’ services, we designated all non-DSH
supplemental payments other than inpatient hospital services, outpatient hospital services, nursing
facility services, physician and surgical services, intermediate care facility services, and mental health
facility services as payments for other services. Cells corresponding to other practitioners’ services for
2006 are marked “N/A” (not applicable).




Page 57                                             GAO-12-694 Supplemental Medicaid Payments
Appendix IV: Comments from the
             Appendix IV: Comments from the Department
             of Health and Human Services



Department of Health and Human Services




             Page 58                                     GAO-12-694 Supplemental Medicaid Payments
Appendix V: GAO Contact and Staff
                  Appendix V: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Katherine M. Iritani, (202) 512-7114 or iritanik@gao.gov
GAO Contact
                  In addition to the contact named above, Tim Bushfield, Assistant Director;
Staff             Kristen Joan Anderson; Helen Desaulniers; Sandra George; Giselle
Acknowledgments   Hicks; Roseanne Price; and Jessica C. Smith made key contributions to
                  this report.




                  Page 59                              GAO-12-694 Supplemental Medicaid Payments
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             Medicaid: Ongoing Federal Oversight of Payments to Offset
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             Page 60                              GAO-12-694 Supplemental Medicaid Payments
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           Medicaid: Disproportionate Share Payments to State Psychiatric
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           Medicaid: States Use Illusory Approaches to Shift Program Costs to
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           1994.




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           Page 61                            GAO-12-694 Supplemental Medicaid Payments
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