The CMS disagreed with a Government Accountability Office recommendation supporting a separate inflation index for Medicaid payments to federally qualified health centers and rural health clinics in medically underserved areas. The GAO said there was not sufficient evidence to change base payments under the Medicaid prospective payment system for such providers. However, it said the CMS should develop a better way to update the payments for inflation rather than continue to use the Medicare economic index. The Medicare index reflects changes in physicians' costs when the costs of the centers and clinics could be different, the GAO said. In response, the CMS said there was no evidence showing inflation updates had been inadequate. Medicaid paid a total of $1.5 billion to federally qualified health centers and rural health clinics in fiscal 2003. The program represented about 35% of health centers' revenue in 2003 and 24% of rural clinics' revenue in 2000, according to the GAO report. -- by Joseph Mantone
CMS, GAO disagree on pay for health centers, clinics
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