Noteworthy News

GAO Suggests Changes in Federal Medicaid Funding Formula

The U.S. Government Accountability Office has recommended changes in how the federal government matches state Medicaid funding for its share of overall Medicaid spending.

In testimony submitted to the House Energy and Commerce Committee’s Health Subcommittee, GAO reminded Congress that in the past

…GAO has examined multiple concerns regarding how the FMAP [federal medical assistance formula] allocates funds among states, including during times of economic downturn, and has suggested improvements.

gaoIn particular, the GAO is concerned about how the FMAP formula’s use of per capita income in targeting federal Medicaid matching funds may not accurate reflect economic conditions at the state level, especially during economic downturns, and fail to respond to states’ individual needs during those downturns.

In response to these concerns, the GAO suggested

…that Congress could consider an FMAP formula that targets variable state Medicaid needs and provides automatic, timely, and temporary assistance in response to national economic downturns.

For a closer look at what the GAO investigated, what it concluded, and what it recommended to Congress, go here to see the GAO report Medicaid: Changes to Funding Formula Could Improve Allocation of Funds to States.

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