MACPAC calls for greater transparency amid steep rise in Medicaid directed payments

Healthcare DIVE November 5, 2024
Rebecca Pifer

Dramatic growth in an opaque Medicaid funding mechanism is exacerbating concerns about the program’s fiscal integrity.

A widespread Medicaid funding mechanism could help increase healthcare access for some of America’s most vulnerable patients, but needs additional transparency, according to key congressional advisors.

Spending through the arrangements, called state directed payments, is projected to skyrocket, exacerbating concerns that states could be using creative financing schemes to inflate Medicaid funding from the federal government.

Higher state directed payments could also create a windfall for the hospital industry. Caring for Medicaid patients has historically been a low-margin or altogether unprofitable business, but hospitals are already reporting millions of dollars in extra quarterly revenue from the supplemental funding — and those sums are only...

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