The CMS inappropriately granted some states transition periods to a new Medicaid upper payment limit that would have had the effect of reducing federal funding for the states' Medicaid programs, the General Accounting Office said in a new report. The CMS in 2002 reduced the Medicaid upper payment limit -- the maximum allowable Medicaid payment to nonstate-owned public healthcare facilities, including nursing homes, compared with the Medicare rate. Some states had a longstanding practice of paying the upper limit to increase their Medicaid spending and thus their federal matching funds. The states then would collect the excess payments and return them to their Medicaid budgets, or reportedly to their general budgets in some cases. The CMS granted transition periods of up to eight years to those states ostensibly most dependent on the financing system. The GAO report, which specifically examined nursing home payments, recommended eliminating transition periods for states using the upper payment limit for nursing homes, with some consideration for states with a longstanding reliance on the system. In particular, the GAO said it had trouble with the CMS' decision to grant transition periods to Nebraska and Wisconsin, which did not have a longstanding reliance on the system. -- by Tony Fong
GAO questions concessions to some state Medicaid programs
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