The tug-of-war between state and federal governments over Medicaid funding continues, and the recently published study by the Lewin Group (Falls Church, Virginia), supports the complaint by states that Uncle Sam is too stingy with the Medicaid dollar. Financed by the Medicaid Health Plans of America (MHPA; Washington), the study concludes that 'the federal government's formula for calculating supplemental Medicaid matching funds for states can serve as a barrier to managed care expansion in the Medicaid program,' according to the accompanying press release. The Lewin study examined expansions of managed care in Florida, Georgia, California and Texas. The report recommends the Centers for Medicare & Medicaid Services (CMS) peg its annual ceiling on UPLs to inflation and 'in proportion to any changes in overall Medicaid eligibility and/or patient volume.' Beyond the use of a cap on federal costs, 'the hospital UPL funding mechanism should remain the same,' the Lewin report says, and should pay for 'any Medicaid hospital patient day or discharge equally, regardless of whether it occurs in the fee-for-service or capitated setting.' Such a policy would limit 'federal exposure' to UPL outlays and would remove a barrier to expanded use of capitation. In Congressional testimony in 2004, George Reeb, the assistant inspector general for CMS told the House Energy and Commerce's health subcommittee that intergovernmental transfers were still a problem for the Medicaid program and alleged 'the states' use of intergovernmental transfers (IGTs) as part of the enhanced payment program was only a financing mechanism designed to maximize the federal share of Medicaid while avoiding the federal/state matching requirements.'
