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entitled 'Medicaid: Assessment of Variation among States in Per-
Enrollee Spending' which was released on July 16, 2014. 

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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

June 2014: 

Medicaid: 

Assessment of Variation among States in Per-Enrollee Spending: 

GAO-14-456: 

GAO Highlights: 

Highlights of GAO-14-456, a report to congressional requesters. 

Why GAO Did This Study: 

Federal Medicaid expenditures totaled about $267 billion in fiscal 
year 2013. With the expansion of Medicaid under the Patient Protection 
and Affordable Care Act and rising health care costs, the 
Congressional Budget Office projects that such expenditures will grow 
to about $576 billion by fiscal year 2024. GAO was asked to examine 
variation among states in Medicaid spending and factors that influence 
such spending, and state approaches to setting rates per enrollee for 
Medicaid managed care plans. 

This report examines (1) Medicaid spending per enrollee by state; 
(2) selected factors that influence Medicaid spending per enrollee, by 
state; 
and (3) how states account for factors that influence expected per-
enrollee spending when setting rates for Medicaid managed care plans. 
GAO analyzed Medicaid enrollment and combined federal and state 
expenditure data provided by CMS for fiscal year 2008, and examined 
illustrative examples of factors that have been reported to influence 
health care spending, such as age, disability status, and scope of 
benefits received. GAO used 2008 data because they allowed a 
comparable view of spending per enrollee and factors that influence 
spending per enrollee—as 2008 was the most recent year for which 
certain data on factors influencing spending were readily available. 
GAO also interviewed officials in three states and five consulting 
firms with experience setting Medicaid managed care rates. 

The Department of Health and Human Services provided technical 
comments on a draft of this report, which GAO incorporated as 
appropriate. 

What GAO Found: 

Estimates of Medicaid spending developed from Centers for Medicare & 
Medicaid Services (CMS) data sources suggest wide variation among 
states in Medicaid spending per enrollee, overall and for each of four 
main eligibility groups—children, adults, disabled, and aged. 

Figure: Estimated Medicaid Spending per Enrollee, by State, Federal 
Fiscal Year 2008: 

[Refer to PDF for image: illustrated U.S. map] 

$10,500 or above (8 states): 
Alaska; 
District of Columbia; 
Minnesota; 
New Hampshire; 
New Jersey; 
New York; 
North Dakota; 
Rhode Island. 

$9,000 to $10,499 (4 states): 
Connecticut; 
Maryland; 
Montana; 
Pennsylvania. 

$7,500 to $8,999 (13 states): 
Colorado; 
Idaho; 
Indiana; 
Iowa; 
Kansas; 
Missouri; 
Nebraska; 
Ohio; 
Oregon; 
Utah; 
Vermont; 
Virginia; 
Wyoming. 

$6,000 to $7,499 (19 states): 
Arizona; 
Delaware; 
Florida; 
Georgia; 
Hawaii; 
Kentucky; 
Louisiana; 
Maine; 
Michigan; 
Nevada; 
New Mexico; 
North Carolina; 
Oklahoma; 
South Carolina; 
South Dakota; 
Texas; 
Washington; 
West Virginia; 
Wisconsin. 

Under $6,000 (6 states): 
Alabama; 
Arkansas; 
California; 
Illinois; 
Mississippi; 
Tennessee. 

Data excluded (1 state): 
Massachusetts. 

Sources: GAO analysis of Centers for Medicare & Medicaid Services data; 
Map Resources (map). GAO-14-456. 

Notes: Spending per enrollee includes federal and state spending on 
regular Medicaid payments for covered services, as well as 
supplemental payments, such as payments to hospitals for low-income 
patients, but does not include administrative costs. Estimates also do 
not reflect states' subsequent changes to the spending originally 
reported for this year. Enrollment is measured in terms of full-year-
equivalent enrollees, regardless of scope of benefits. Massachusetts 
was excluded because of errors in fiscal year 2008 CMS data for this 
state. 

[End of figure] 

Although estimates of spending per enrollee are based on the best data 
readily available from CMS, these data do not permit full assessment 
of state spending variation. Limitations include the difficulty of 
determining spending on services enrollees received during a 
particular time period and lack of complete, accurate information 
about supplemental payments. GAO has previously recommended that CMS 
take steps to improve states' reporting of supplemental payments and 
that Congress consider requiring CMS to take such steps. 

Certain factors that influence overall per-enrollee Medicaid spending, 
such as distribution of enrollees among eligibility groups, enrollee 
health service needs, and scope of benefits offered, varied widely by 
state. For example, in calendar year 2008, the percentage of enrollees 
in higher-need eligibility groups—individuals who are disabled or aged—
ranged from about 15 percent to 38 percent across states. 

States consider a range of demographic and health factors to predict 
expected spending per enrollee when setting Medicaid managed care 
rates. According to consulting firm officials, states often consider 
detailed information on enrollee heath status, particularly for aged 
and disabled enrollees. 

View [hyperlink, http://www.gao.gov/products/GAO-14-456]. For more 
information, contact Carolyn L. Yocom, Director, Health Care, (202) 
512-7114, yocomc@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

CMS Data Suggest Wide Variation among States in Medicaid Spending per 
Enrollee, but Data Limitations Hinder a More Complete Assessment: 

States Varied Widely on Program Characteristics and Other Factors That 
Influence Medicaid Per-Enrollee Spending: 

States Account for a Range of Demographic and Health Factors When 
Setting Medicaid Managed Care Rates: 

Concluding Observations: 

Agency Comments: 

Appendix I: Data and Methodology for Estimates of Medicaid Spending 
per Enrollee: 

Appendix II: Estimated Medicaid Spending per Enrollee by State: 

Appendix III: Total Medicaid Spending and Adjustments and Collections 
by State: 

Appendix IV: Estimated Medicaid Spending per Enrollee, by State, Using 
Two Possible Methods to Distribute DSH Payments: 

Appendix V: State DSH Payments as a Percentage of Total State Medicaid 
Spending and Effect on Overall Spending per Enrollee: 

Appendix VI: Distribution of State Medicaid Enrollees by Eligibility 
Group: 

Appendix VII: Selected Factors That Are Known to Influence Health Care 
Spending, by State: 

Appendix VIII: GAO Contacts and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Estimated Medicaid Spending per Enrollee for All Enrollees 
and for Each Eligibility Group, by State, Fiscal Year 2008: 

Table 2: Total Medicaid Spending and Adjustments and Collections 
Reported in Fiscal Year 2008: 

Table 3: Estimated Medicaid Spending per Enrollee Using Two Possible 
Methods to Distribute Disproportionate Share Hospital (DSH) Payments, 
by Eligibility Group and State, Fiscal Year 2008: 

Table 4: Disproportionate Share Hospital (DSH) Payments as a 
Percentage of Total State Medicaid Spending and Overall Spending per 
Enrollee Excluding and Including DSH Payments, Fiscal Year 2008: 

Table 5: Distribution of Medicaid Enrollees by Eligibility Group and 
State, Calendar Year 2008: 

Table 6: State Variation on Selected Factors That Can Influence Health 
Care Spending for Aged Medicaid Enrollees, Fiscal or Calendar Year 
2008: 

Table 7: State Variation on Selected Factors That Can Influence Health 
Care Spending for Children and Adults, Fiscal or Calendar Year 2008: 

Figures: 

Figure 1: Estimated Medicaid Spending per Enrollee, by State, Fiscal 
Year 2008: 

Figure 2: Estimated State Medicaid Spending per Enrollee, by 
Eligibility Group, Fiscal Year 2008: 

Figure 3: Estimated Medicaid Spending per Enrollee in New Hampshire 
Using Two Possible Methods of Distributing Disproportionate Share 
Hospital (DSH) Payments, Fiscal Year 2008: 

Figure 4: Percentage of Medicaid Enrollees Who Were Disabled or Aged, 
Highest and Lowest Five States, Calendar Year 2008: 

Figure 5: Percentage of Aged Medicaid Enrollees Receiving Long-Term 
Care Services, Highest and Lowest Five States, Fiscal Year 2008: 

Figure 6: Variation across States in the Percentage of Adult Medicaid 
Enrollees Who Received Only Family Planning Benefits, Calendar Year 
2008: 

Abbreviations: 

CDC: Centers for Disease Control and Prevention: 

CMS: Centers for Medicare & Medicaid Services: 

DSH: Disproportionate Share Hospital: 

FFS: fee-for-service: 

FMAP: Federal Medical Assistance Percentage: 

HHS: Department of Health and Human Services: 

MACPAC: Medicaid and CHIP Payment and Access Commission: 

MAX: Medicaid Analytic eXtract: 

MSIS: Medicaid Statistical Information System: 

OACT: Office of the Actuary: 

PCI: per capita income: 

PPACA: Patient Protection and Affordable Care Act: 

T-MSIS: Transformed-MSIS: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

June 16, 2014: 

The Honorable Orrin G. Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Fred Upton: 
Chairman: 
Committee on Energy and Commerce: 
House of Representatives: 

In fiscal year 2013, Medicaid, the federal-state health coverage 
program for certain low-income individuals, had over 70 million 
enrollees and expenditures totaling about $460 billion.[Footnote 1] Of 
these expenditures, the federal government financed about $267 
billion, with the rest financed by the states. With the expansion of 
Medicaid under the Patient Protection and Affordable Care Act (PPACA) 
and rising health care costs, increased Medicaid enrollment and 
spending are expected over the next 10 years--with federal Medicaid 
expenditures projected to grow to about $576 billion by 2024.[Footnote 
2] Prior studies have shown considerable differences among states both 
in total Medicaid spending and in average spending per enrollee. Much 
of the state variation in total Medicaid spending can be attributed to 
differences in enrollment, but the reasons for variation in average 
spending per enrollee are not as well understood. 

States and the federal government are interested in better 
understanding and controlling Medicaid program spending. At the state 
level, this interest is reflected in payment reform proposals and 
strategies such as the use of managed care service delivery systems, 
in which states seek to control costs by contracting with health plans 
to cover services provided to Medicaid enrollees for a fixed, or 
capitated, monthly rate per enrollee.[Footnote 3] At the federal 
level, Medicaid has been the focus of proposals to reform the 
structure of Medicaid financing and change the methods used to 
allocate funds across states. Some of these proposals would limit the 
amount of federal funding states receive, while other proposals aim to 
control spending by reducing the variation in average state spending 
per enrollee.[Footnote 4] 

As we have emphasized in prior work, to help ensure that Medicaid 
funds are allocated equitably, any new approach to program financing 
must take into account that the costs of providing Medicaid services 
can differ across states, due to a variety of factors.[Footnote 5] 
These factors include the size of the Medicaid population and certain 
factors that influence states' costs of providing Medicaid services 
per enrollee, such as differences in the health service needs of 
enrollees and the cost of delivering health care. Such considerations 
have some parallels to how states set managed care capitation rates to 
take into account that the costs of providing Medicaid services can 
differ among plans depending on the health service needs and other 
characteristics of individuals enrolled in each plan. 

Given concerns regarding Medicaid spending and the interest in program 
financing reform, you asked us to examine the variation among states 
in Medicaid spending and factors that influence state spending on 
Medicaid services for enrollees. In addition, because states have 
experience examining the factors that affect per-enrollee Medicaid 
spending in order to set capitation rates for health plans in their 
managed care programs, you asked us to examine states' approaches to 
setting these rates. In this report, we (1) examine what Centers for 
Medicare & Medicaid Services (CMS) data show about the variation among 
states in Medicaid spending per enrollee; (2) describe the variation 
among states in factors that influence Medicaid spending per enrollee; 
and (3) describe how states set capitation rates for Medicaid managed 
care plans to account for factors that influence plans' expected 
spending per enrollee. 

To examine what CMS data show about the variation among states in 
Medicaid spending per enrollee, we developed estimates for federal 
fiscal year 2008 using Medicaid enrollment data and combined federal 
and state expenditure data provided by the CMS Office of the Actuary 
(OACT).[Footnote 6] We chose fiscal year 2008 so that our estimates of 
Medicaid spending per enrollee were for the same year as the most 
readily available data on certain factors that influence this 
spending. We obtained from OACT (1) Medicaid enrollment data showing 
the number of full-year-equivalent enrollees, by state and eligibility 
group, which OACT calculated from enrollment data in the Medicaid 
Statistical Information System (MSIS),[Footnote 7] and (2) Medicaid 
expenditure estimates broken out by state, eligibility group, and 
service type, which OACT estimated using enrollment and expenditure 
data from MSIS and expenditure data from the CMS-64 data system. Our 
estimates of per-enrollee spending based on these data include 
supplemental payments to providers that are not linked to individual 
enrollees, including Disproportionate Share Hospital (DSH) payments, 
but do not include administrative costs.[Footnote 8] In our estimates 
of per-enrollee spending, we distributed DSH payments among 
eligibility groups based on each group's share of state spending for 
services provided in the types of facilities eligible to receive DSH 
payments. We also explored an alternative method of distributing DSH 
payments among eligibility groups. (See appendix I for more 
information about the methodology used by OACT to generate its 
estimates and our use of the OACT estimates to develop estimates of 
spending per enrollee.) To assess the reliability of the data, we 
reviewed documentation for these data sources, interviewed CMS 
officials knowledgeable about the data, and compared our estimates to 
those from other data sources. On the basis of this assessment, we 
excluded states with significant errors or omissions in fiscal year 
2008 data from certain analyses.[Footnote 9] We determined that for 
the rest of the states, the data were sufficiently reliable for our 
purposes. 

To describe the variation among states in factors that influence 
Medicaid spending per enrollee, we analyzed differences among states 
on selected indicators of enrollee health service needs and the 
geographic costs of delivering health care services. We focused on 
indicators that have been reported to influence health care spending 
and were readily available from previously published sources of 
Medicaid data and other federal data, such as U.S. Census Bureau or 
Centers for Disease Control and Prevention (CDC) data. For indicators 
drawn from Medicaid data, we relied to the extent possible on the 
Medicaid Analytic eXtract (MAX) 2008 Chartbook, the most recent year 
available.[Footnote 10] For certain Medicaid indicators that were not 
published in the MAX 2008 Chartbook, we obtained data directly from 
the MSIS 2008 Annual Person Summary File and the MSIS 2008 State 
Summary DataMart.[Footnote 11] We focused our review on 2008 fiscal or 
calendar year data for greater comparability with the readily 
available MAX data. We did not attempt to identify causal links 
between state Medicaid spending and factors that influence spending, 
nor did we analyze all factors that may influence such spending. To 
assess the reliability of the data, we reviewed documentation for 
these data sources and interviewed CMS officials knowledgeable about 
the data. On the basis of this assessment, we excluded four states--
Arizona, New Mexico, Wisconsin, and Maine--from analyses related to 
long-term care service use.[Footnote 12] We excluded one state--
Massachusetts--from all analyses based on the MSIS 2008 Annual Person 
Summary File or MSIS 2008 State Summary DataMart.[Footnote 13] 
Otherwise, we determined that the data were sufficiently reliable for 
our purposes. 

To describe how states set Medicaid managed care capitation rates to 
account for factors that influence plans' expected spending per 
enrollee, we reviewed documents from consulting firms, states, and 
CMS, as well as information from other sources, regarding how states 
establish Medicaid managed care capitation rates. We also interviewed 
officials at five consulting firms that have worked with at least 40 
states to establish state Medicaid managed care capitation 
rates.[Footnote 14] In addition, we interviewed officials from three 
states regarding their experiences establishing such capitation 
rates,[Footnote 15] and interviewed CMS officials about the managed 
care data that CMS receives from states. Our review focused on how 
states account for factors influencing Medicaid spending, and we did 
not examine other aspects of the rate setting process, such as 
documenting the actuarial soundness of rates. 

We conducted this performance audit from February 2013 to June 2014 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

Each state administers its Medicaid program in accordance with its own 
Medicaid plan--which must be reviewed and approved by CMS--and 
determines, among other things, the groups of individuals covered, 
services provided, and the service delivery system, such as fee-for-
service (FFS) or managed care. Within broad federal requirements, 
states have flexibility in deciding which individuals to cover and the 
range of medical services to provide in their Medicaid programs. For 
example, states must cover certain groups of individuals, such as 
children and pregnant women, but may elect to cover these groups above 
the required minimum income levels. States' Medicaid programs 
generally must cover a set of mandatory services, including those 
provided by primary and specialty care physicians, as well as services 
provided in hospitals, clinics, and other settings. States may also 
elect to cover additional optional benefits and services, such as home-
and community-based services or rehabilitative services.[Footnote 16] 
Subject to federal requirements, states have discretion in 
establishing the amount, duration, and scope of the mandatory and 
optional services covered in their Medicaid programs and may place 
appropriate limits on services based on certain criteria; 
thus, states may limit the number of visits or the days of care that 
are provided. In some cases, not all Medicaid enrollees are eligible 
for all covered services, such as those who receive only family 
planning benefits through demonstration waivers, or those who only 
qualify to receive assistance with Medicare premiums and cost 
sharing.[Footnote 17] 

States and the federal government share in the financing of the 
Medicaid program, with the federal government matching most state 
expenditures for Medicaid services on the basis of a statutory formula 
known as the Federal Medical Assistance Percentage (FMAP).[Footnote 
18] States pay health care providers or managed care plans for covered 
services provided to Medicaid enrollees, and then submit claims to CMS 
in order to receive federal matching funds for these payments. In 
addition to payments made directly to providers or managed care plans 
for services provided to enrollees, most states receive federal 
matching funds for other types of Medicaid payments, known as 
supplemental payments. For example, federal Medicaid law requires 
states to make DSH payments to qualifying hospitals that serve large 
numbers of Medicaid and uninsured low-income patients. States are 
required to report to CMS separate data on the two types of DSH 
payments: payments to inpatient hospitals and payments to inpatient 
mental health facilities.[Footnote 19] States also make other 
supplemental payments, which we refer to as non-DSH supplemental 
payments, to hospitals and other providers that, for example, serve 
high-cost Medicaid enrollees.[Footnote 20] Unlike regular Medicaid 
payments, supplemental payments are not necessarily made on the basis 
of claims for specific services to individual enrollees. 

CMS maintains two readily available sources of data on state Medicaid 
spending: the CMS-64 data set and MSIS.[Footnote 21] MSIS also 
contains state enrollment data. These two data sources have different 
roles and structures, and taken together have the potential to provide 
a robust picture of Medicaid spending. 

* The CMS-64 data set contains aggregate state data on program-benefit 
and administrative spending by quarter, such as each state's total 
quarterly expenditures for inpatient hospital services or prescription 
drugs. The CMS-64 data set also contains information on spending not 
linked to specific enrollees, such as DSH and other supplemental 
payments, but no information on spending for individual enrollees or 
on the services they received under Medicaid.[Footnote 22] States 
submit the CMS-64 quarterly data in order to obtain reimbursement for 
the federal share of Medicaid expenditures. CMS reviews the CMS-64 
submissions, and the data are the most reliable accounting of total 
Medicaid spending available. However, because the CMS-64 does not 
include enrollee-specific data it cannot be used on its own to assess 
per-enrollee spending. The CMS-64 data system is programmed to produce 
two reports that summarize states' total spending for a given fiscal 
year; the reports differ primarily in their treatment of states' 
subsequent adjustments to their reported spending. 

* MSIS is a national enrollment and claims data set and the federal 
source of Medicaid spending data that can be linked to specific 
enrollees on the basis of their medical claims for care.[Footnote 23] 
Unlike the CMS-64 data set, however, MSIS only contains information 
about Medicaid expenditures that are tied to specific enrollees, and 
thus does not include some provider payments such as DSH or non-DSH 
supplemental payments. Although CMS reviews these data for reliability 
and uses them for policy analysis, program utilization, and 
forecasting spending, it does not use these data to determine the 
federal share of states' Medicaid expenditures, nor do states use the 
data to manage the daily operations of their Medicaid programs. CMS is 
in the process of implementing a project to improve and expand MSIS, 
but the time frames for completion are uncertain.[Footnote 24] 

Estimates of per-enrollee Medicaid spending can be obtained by 
combining the more reliable aggregated spending data from the CMS-64 
with detailed enrollee-level information available from MSIS. For 
example, estimates of overall Medicaid spending per enrollee for a 
given fiscal year can be obtained by dividing total Medicaid 
expenditures, as shown in the annual state summary reports available 
from the CMS-64 data system, by total state Medicaid enrollment as 
derived from MSIS. In addition, through a more complex process, 
estimates of per-enrollee spending can be developed for particular 
eligibility groups. For example, the CMS-64 expenditures can be 
distributed among the four major Medicaid eligibility groups--
children, adults, disabled, and aged--based on MSIS expenditure 
patterns by eligibility group.[Footnote 25] 

CMS Data Suggest Wide Variation among States in Medicaid Spending per 
Enrollee, but Data Limitations Hinder a More Complete Assessment: 

Estimates of Medicaid spending per enrollee developed from CMS data 
sources suggest wide variation among states. However, due to certain 
data limitations, these estimates do not permit full assessment of 
differences in per-enrollee spending among states. 

CMS Data Suggest Wide Variation in Spending per Enrollee: 

CMS data suggest wide variation among states in Medicaid spending per 
enrollee, both overall and for each of the four major Medicaid 
eligibility groups--children, adults, disabled, and aged. Estimates 
based on expenditure data from CMS-64 annual summary reports and 
enrollment and expenditure data from MSIS indicate that overall 
spending per enrollee ranged from about $3,800 in California to about 
$11,700 in Rhode Island in fiscal year 2008.[Footnote 26] (See figure 
1 for a general comparison of per-enrollee spending levels across 
states, and table 1 in appendix II for specific state-by-state 
estimates.) 

Figure 1: Estimated Medicaid Spending per Enrollee, by State, Fiscal 
Year 2008: 

[Refer to PDF for image: illustrated U.S. map] 

$10,500 or above (8 states): 
Alaska; 
District of Columbia; 
Minnesota; 
New Hampshire; 
New Jersey; 
New York; 
North Dakota; 
Rhode Island. 

$9,000 to $10,499 (4 states): 
Connecticut; 
Maryland; 
Montana; 
Pennsylvania. 

$7,500 to $8,999 (13 states): 
Colorado; 
Idaho; 
Indiana; 
Iowa; 
Kansas; 
Missouri; 
Nebraska; 
Ohio; 
Oregon; 
Utah; 
Vermont; 
Virginia; 
Wyoming. 

$6,000 to $7,499 (19 states): 
Arizona; 
Delaware; 
Florida; 
Georgia; 
Hawaii; 
Kentucky; 
Louisiana; 
Maine; 
Michigan; 
Nevada; 
New Mexico; 
North Carolina; 
Oklahoma; 
South Carolina; 
South Dakota; 
Texas; 
Washington; 
West Virginia; 
Wisconsin. 

Under $6,000 (6 states): 
Alabama; 
Arkansas; 
California; 
Illinois; 
Mississippi; 
Tennessee. 

Data excluded (1 state): 
Massachusetts. 

Sources: GAO analysis of Centers for Medicare & Medicaid Services data; 
Map Resources (map). GAO-14-456. 

Notes: Estimates of spending per enrollee include federal and state 
spending on regular Medicaid payments to providers and managed care 
plans for covered services provided to enrollees, as well as 
Disproportionate Share Hospital (DSH) and non-DSH supplemental 
payments, but do not include administrative costs. Estimates also do 
not reflect states' subsequent changes, including adjustments or 
collections, to the spending originally reported for this year. 
Enrollment is measured in terms of full-year-equivalent enrollees. 
Both enrollment and expenditure data include all enrollees, regardless 
of the scope of benefits offered. For purposes of this analysis, we 
include the District of Columbia as a state. We excluded Massachusetts 
because of errors in fiscal year 2008 CMS data for this state. 

[End of figure] 

These data also suggest wide variation among states in spending per 
enrollee by eligibility group. (See figure 2.) For example, estimated 
per-enrollee spending for disabled enrollees ranged from about $9,000 
in Alabama to over $32,000 in New York; 
and per-enrollee spending for aged enrollees ranged from about $10,000 
to about $30,000 for these two states. (See table 1 in appendix II for 
state-by-state estimates.) The variation in estimated per-enrollee 
spending was smaller for the adult and child eligibility groups than 
for the disabled and aged groups, but was still substantial. For 
example, in fiscal year 2008, the estimates indicate that Vermont 
spent more than three times as much per child and per adult as 
California (about $5,900 versus about $1,700 for children, and about 
$5,700 versus about $1,500 for adults). 

Figure 2: Estimated State Medicaid Spending per Enrollee, by 
Eligibility Group, Fiscal Year 2008: 

[Refer to PDF for image: stacked vertical bar graph] 

All enrollees: 
Fourth quartile spending per enrollee: $11,680; 
Third quartile spending per enrollee: $8,732; 
Second quartile spending per enrollee: $6,550; 
First quartile spending per enrollee: $3,838; 
Average state spending per enrollee: $7,847; 
Median spending per enrollee: $7,486. 

Children: 
Fourth quartile spending per enrollee: $5,877; 
Third quartile spending per enrollee: $3,344; 
Second quartile spending per enrollee: $2,474; 
First quartile spending per enrollee: $1,702; 
Average state spending per enrollee: $2,973; 
Median spending per enrollee: $2,802. 

Adults: 
Fourth quartile spending per enrollee: $8,540; 
Third quartile spending per enrollee: $6,031; 
Second quartile spending per enrollee: $4,971; 
First quartile spending per enrollee: $1,480; 
Average state spending per enrollee: $5,497; 
Median spending per enrollee: $5,471. 

Disabled: 
Fourth quartile spending per enrollee: $32,185; 
Third quartile spending per enrollee: $22,795; 
Second quartile spending per enrollee: $14,510; 
First quartile spending per enrollee: $8,870; 
Average state spending per enrollee: $19,135; 
Median spending per enrollee: $18,902. 

Aged: 
Fourth quartile spending per enrollee: $29,734; 
Third quartile spending per enrollee: $21,662; 
Second quartile spending per enrollee: $12,694; 
First quartile spending per enrollee: $9,882; 
Average state spending per enrollee: $17,609; 
Median spending per enrollee: $15,863. 
Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Spending per enrollee includes federal and state spending on 
regular Medicaid payments to providers and managed care plans for 
covered services provided to enrollees as well as Disproportionate 
Share Hospital (DSH) and non-DSH supplemental payments, but does not 
include administrative costs. Estimates also do not reflect states' 
subsequent changes, including adjustments or collections, to the 
spending originally reported for this year. Enrollment is measured in 
terms of full-year-equivalent enrollees. Both enrollment and 
expenditure data include all enrollees, regardless of the scope of 
benefits offered. We excluded Massachusetts from all calculations and 
Maine from calculations at the eligibility group level because of 
errors or omissions in fiscal year 2008 data for these states. Average 
state spending per enrollee represents the sum of each state's 
spending per enrollee divided by the number of states. For purposes of 
this analysis, we include the District of Columbia as a state. Each 
box in the figure denotes the dollar range for states in the second 
and third quartiles in spending per enrollee. The horizontal line 
between the boxes denotes the median, the diamond denotes the average, 
and the vertical lines extending above and below each box denote the 
highest and lowest quartile state spending per enrollee. 

[End of figure] 

Data Limitations Hinder Assessment of State Variation in Spending per 
Enrollee: 

Although these estimates of spending per enrollee are based on the 
best data readily available from CMS Medicaid data sets--expenditure 
data from annual summary reports from the CMS-64 data set and 
expenditure and enrollment data from MSIS--they do not permit a full 
assessment of variation in per-enrollee spending among states, due to 
certain limitations of the CMS-64 data. These limitations include (1) 
the difficulty of determining spending on services received by 
enrollees during a specific time period, and (2) the lack of complete, 
accurate information about supplemental payments. These limitations 
constrain the accuracy of per-enrollee spending estimates based on 
these data, particularly at the eligibility group level, and thus 
hinder a complete assessment of how spending varies among states. 

Difficulty of Determining Spending on Services Received during a 
Specific Time Period: 

The first data limitation is that annual summary reports currently 
available from the CMS-64 data system do not accurately reflect 
spending on the services that were provided to enrollees during the 
year. This is because, in these annual reports, the spending 
originally reported for the year is not updated to account for 
adjustments to that spending, or collections, that states report in 
subsequent years.[Footnote 27] For example, if a state reports 
spending $500 million for nursing facility care in a given year, but 
then adjusts that amount up by $50 million, it is not possible to 
ascertain from the annual reports that the state's actual spending for 
this care in this year was $550 million. 

While these reports provide accurate records of the amount of 
expenditures states reported to CMS in a fiscal year to claim their 
federal matching funds--the programmatic purpose for which they were 
designed--the treatment of adjustments and collections in these 
reports limits the accuracy of estimates of per-enrollee spending 
based on these data. For example, in one of the two summary reports 
that provide data on states' total spending by type of service, all 
adjustments reported by a state that year are summed by type--for 
example, adjustments increasing claims--and reported as separate line 
items.[Footnote 28] The reported sums may include adjustments 
applicable to spending for the current year as well as prior 
years.[Footnote 29] As a result, neither including nor excluding the 
adjustments in the total spending shown in the report for a given year 
will yield an accurate picture of states' spending on the services 
provided to enrollees that year.[Footnote 30] Collections received by 
the states that apply to previous year claims are also reported as a 
line item in the summary reports for the year in which they were 
reported rather than the year of the claims to which they apply. 
[Footnote 31] 

Because the amount of adjustments and collections relative to current 
year spending is not consistent across states and fluctuates over time 
in some states, estimates of per-enrollee spending based on these 
annual summary reports, in combination with MSIS data, are not 
comparable across states or over time. The large amount of adjustments 
and collections reported by some states in fiscal year 2008 suggests 
that the states' actual spending for the services received by 
enrollees that year could differ significantly from estimates that do 
not account for these changes. For example, adjustments and 
collections represented 24 percent of reported spending for California 
in fiscal year 2008 and 5 to 9 percent of reported spending for five 
other states.[Footnote 32] (See table 2 in appendix III for state-by-
state data on total spending and adjustments and collections.) 

The effect of the adjustments and collections may be magnified when 
per-enrollee spending is estimated separately by eligibility group. To 
the extent that certain eligibility groups account for a 
disproportionate share of the spending that a state subsequently 
adjusts, failure to apply those adjustments to the original spending 
will disproportionately affect estimates of the spending for services 
provided to that group of enrollees. For example, because aged or 
disabled enrollees account for a greater share of spending for 
institutional long-term care, an adjustment to spending for that care 
will affect estimates of spending for aged or disabled enrollees more 
than those for children or adults. 

While the CMS-64 annual summary reports do not apply adjustments or 
collections to spending for the relevant time periods, the information 
needed to apply most of these changes is available in the CMS-64 data 
system. In fiscal year 2008, adjustments accounted for most of the 
changes states reported to their spending--particularly in states 
where adjustments and collections were highest relative to total 
spending--and states are required to report not only the dollar amount 
of adjustments, but also the time period to which they apply.[Footnote 
33] (For collections, states are required to report only the dollar 
amount.) Although this detailed information about adjustments is 
available in the CMS-64 data system, CMS officials told us that the 
system has not been programmed to produce a report that updates 
reported spending to account for subsequent adjustments. To manually 
extract and compile this information in order to apply adjustments to 
the correct time period of spending would be a laborious process that 
could involve compiling information from dozens of reports.[Footnote 
34] 

Lack of Complete, Accurate Information about Supplemental Payments: 

The second data limitation is the lack of complete and accurate 
information about states' use of supplemental payments, and the 
consequent uncertainty about whether and how these payments should be 
included in estimates of Medicaid spending per enrollee, particularly 
at the eligibility group level. This information gap is partly due to 
historical differences in the reporting requirements for the two types 
of supplemental payments: DSH and non-DSH. CMS requires states to 
report DSH payments as a separate line item in their CMS-64 reports, 
but the agency did not require states to separately report non-DSH 
supplemental payments until fiscal year 2010.[Footnote 35] As we have 
previously reported, state reporting of non-DSH payments in the CMS-64 
was incomplete in 2010,[Footnote 36] and according to CMS officials, 
reporting is still incomplete, as some states continue to fold at 
least some non-DSH supplemental payments into the spending reported 
for related services.[Footnote 37] As a result, it is not possible to 
exclude non-DSH supplemental payments from the spending reported in 
the CMS-64 prior to fiscal year 2010, or to fully exclude these 
payments from the spending reported in the following years. Since some 
states appear to use non-DSH supplemental payments more than DSH 
payments, while others appear to do the reverse,[Footnote 38] 
excluding one type of supplemental payment from estimates of per-
enrollee spending while including another would skew comparisons among 
states. For this reason, we included DSH payments in our estimates of 
per-enrollee spending. 

Even if it were possible to exclude both types of payments from 
estimates of per-enrollee spending, it is not clear that it would be 
appropriate to do so. Some researchers have suggested that 
supplemental payments should not be included, or should not be 
included in their entirety, in estimates of spending for Medicaid 
enrollees because these funds are intended to offset providers' 
uncompensated care costs not only for Medicaid enrollees but also for 
uninsured low-income individuals.[Footnote 39] However, it could also 
be argued that these payments should be included in estimates of per-
enrollee spending because it is possible that states' use of these 
payments may relate to how much they pay providers directly for the 
services furnished to enrollees. For example, if hospitals have higher 
uncompensated care costs in states with lower base payment rates, this 
would make these facilities eligible for larger DSH payments. 

Including supplemental payments in estimates of spending per enrollee 
by eligibility group requires judgment as to the share of payments 
that should be attributed to each group. For fiscal year 2008, this 
judgment concerns only DSH payments, as non-DSH supplemental payments 
were folded into payments for services rather than separately 
reported. Our analysis found that how DSH payments are distributed 
among eligibility groups can significantly affect estimates of 
spending per enrollee by eligibility group, particularly for states 
with relatively high DSH payments.[Footnote 40] We examined two 
possible distribution methods, each of which has advantages and 
disadvantages. 

* One possible method is to distribute DSH payments among eligibility 
groups based on each group's share of spending for relevant services--
for example, to distribute inpatient hospital DSH payments based on 
states' reported spending for services provided in these facilities 
(hospital inpatient and outpatient services).[Footnote 41] This method 
is intended to assign to each eligibility group a share of DSH 
payments that reflects that group's relative use of services at the 
types of facilities that are potentially eligible for these payments. 
However, because states report spending on hospital inpatient and 
outpatient services only for enrollees who receive care on an FFS 
basis, this method may disproportionately assign inpatient DSH dollars 
to eligibility groups that are less likely to be enrolled in 
comprehensive managed care programs.[Footnote 42] If, for example, 
none of a state's disabled and aged enrollees are in comprehensive 
managed care, while all of the state's child and adult enrollees are, 
the only FFS claims in MSIS for hospital inpatient and outpatient care 
would be for disabled and aged enrollees. Accordingly, under this 
method, all inpatient DSH funds would be assigned to these two 
eligibility groups, regardless of the amount of hospital inpatient and 
outpatient services children and adults received that were covered 
under managed care capitation payments. 

* A second possible method is to distribute DSH payments among 
eligibility groups based on each group's share of total spending, 
including both FFS claims and capitation payments. This method takes 
into account spending for enrollees in managed care plans, but assigns 
DSH dollars to eligibility groups based partly on their spending for 
services that are not provided in facilities eligible for DSH 
payments. For example, the share of inpatient hospital DSH payments 
assigned to the aged eligibility group under this method would be 
based not only on their spending for inpatient and outpatient hospital 
services, but also on their spending for institutional long-term care, 
which constitutes a larger proportion of their overall spending. 

For some eligibility groups in some states, the inclusion of DSH 
payments substantially increases estimates of spending per enrollee 
for fiscal year 2008. The amount of that increase varies depending on 
which of the two methods described above is used to distribute DSH 
payments. In three states, estimates of spending per enrollee for some 
groups differed by more than $1,000 depending on the distribution 
method used. For example, in New Hampshire--the state for which the 
choice of distribution method makes the greatest dollar difference--
the difference in Medicaid spending per enrollee for adults in fiscal 
year 2008 was $2,123--$8,508 using the first method and $6,385 using 
the second method (see figure 3, and see table 3 in appendix IV for 
state-by-state estimates). 

Figure 3: Estimated Medicaid Spending per Enrollee in New Hampshire 
Using Two Possible Methods of Distributing Disproportionate Share 
Hospital (DSH) Payments, Fiscal Year 2008: 

[Refer to PDF for image: vertical bar graph] 

Children: 
Total spending per enrollee using first method of DSH distribution: 
$3.905 million; 
Total spending per enrollee using second method of DSH distribution: 
$3.618 million; 
Base spending per enrollee without DSH: $2.976 million. 

Adults: 
Total spending per enrollee using first method of DSH distribution: 
$8.508 million; 
Total spending per enrollee using second method of DSH distribution: 
$6.385 million; 
Base spending per enrollee without DSH: $5,251 million. 

Disabled: 
Total spending per enrollee using first method of DSH distribution: 
$25.237 million; 
Total spending per enrollee using second method of DSH distribution: 
$26.31 million; 
Base spending per enrollee without DSH: $21,638 million. 

Aged: 
Total spending per enrollee using first method of DSH distribution: 
$29.613 million; 
Total spending per enrollee using second method of DSH distribution: 
$31.736 million; 
Base spending per enrollee without DSH: $26.101 million. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Spending per enrollee includes federal and state spending on 
regular Medicaid payments to providers and managed care plans for 
covered services provided to enrollees as well as DSH and non-DSH 
supplemental payments, but does not include administrative costs. 
Estimates also do not reflect states' subsequent changes, including 
adjustments or collections, to the spending originally reported for 
this year. Enrollment is measured in terms of full-year-equivalent 
enrollees. Both enrollment and expenditure data include all enrollees 
regardless of the scope of benefits offered. 

[End of figure] 

The first method distributes DSH payments among eligibility groups 
based on each group's share of spending for services delivered in the 
types of facilities that are potentially eligible for DSH payments. 
The second method distributes DSH payments among eligibility groups 
based on each group's share of total non-DSH spending. 

States Varied Widely on Program Characteristics and Other Factors That 
Influence Medicaid Per-Enrollee Spending: 

We found that the distribution of enrollees among the four major 
Medicaid eligibility groups (children, adults, disabled, and aged)--a 
program characteristic known to influence overall per-enrollee 
Medicaid spending--varied widely between states. Additionally, states 
varied on other selected factors that influence Medicaid spending for 
each of the four eligibility groups, including enrollee health 
services needs, scope of benefits offered, and the cost of delivering 
health services. 

Distribution of Enrollees across Medicaid Eligibility Groups Varies by 
State: 

The distribution of enrollees across the disabled, aged, adult, and 
child eligibility groups varies widely by state. For example, the 
percentage of enrollees in the higher-need disabled and aged 
eligibility groups ranged from about 15 percent in Arizona to 38 
percent in West Virginia in calendar year 2008.[Footnote 43] (See 
figure 4, and see table 5 in appendix VI for full information on all 
states.) 

Figure 4: Percentage of Medicaid Enrollees Who Were Disabled or Aged, 
Highest and Lowest Five States, Calendar Year 2008: 

[Refer to PDF for image: horizontal bar graph] 

Highest states: 
West Virginia: 38%; 
Kentucky: 36%; 
Alabama: 35%; 
Pennsylvania: 35%; 
Mississippi: 34%. 
State average: 26%. 

Lowest States: 
Alaska: 19%; 
California: 18%; 
Utah: 18%; 
New Mexico: 17%; 
Arizona: 15%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: State average represents the sum of state percentages of 
enrollees who were disabled or aged divided by the number of states. 
For purposes of this analysis, we include the District of Columbia as 
a state. 

[End of figure] 

Differences across states in the distribution of Medicaid enrollees 
across eligibility groups occur due to multiple factors, such as the 
age distribution and rate of disability within each state's Medicaid-
eligible population, as well as Medicaid eligibility rules. State-
specific data on the characteristics of the population in poverty--a 
proxy for the Medicaid-eligible population--illustrate variation in 
age and disability rates. For example, calendar year 2008 U.S. Census 
Bureau American Community Survey data show that the percentage of the 
population in poverty who were aged 75 or older ranged from 1 percent 
in Alaska to 9 percent in North Dakota, while the percentage of the 
working-age population in poverty who reported a disability ranged 
from 17 percent in Utah to 39 percent in Maine. In addition, one state 
may have a higher percentage of aged or disabled Medicaid enrollees 
than another due to a variety of circumstances, such as having a 
higher income eligibility limit for aged or disabled individuals than 
another state, or conversely, having lower income eligibility limits 
for other groups. 

Health Service Needs, Benefits, and Cost of Delivering Services Vary 
by State: 

Differences between states in the distribution of enrollees among the 
four major eligibility groups do not fully explain the variation among 
states in overall per-enrollee Medicaid spending, as states also vary 
in spending for each of the four eligibility groups. Although the 
Medicaid eligibility group itself is a key indicator of enrollees' 
average health service needs, the needs of individual enrollees within 
each group can differ substantially. As a result, the proportion of 
each Medicaid eligibility group that requires and uses higher-cost 
health services can vary by state. For example, the aged eligibility 
group includes a broad age range of individuals aged 65 and older. The 
chances of needing long-term care services, some of the most costly 
services covered by Medicaid, are higher for older enrollees within 
the aged eligibility group, and some states have a higher percentage 
of older enrollees than others. The proportion of enrollees in the 
aged eligibility group who were aged 85 and older ranged from 16.6 
percent in Nevada to 38.9 percent in South Dakota in fiscal year 2008, 
according to our analysis of MSIS data. Across states with available 
data, the proportion of aged enrollees receiving long-term care 
services ranged from 18.4 percent in Florida to 65.6 percent in Iowa. 
[Footnote 44] (See figure 5, and see table 6 in appendix VII for full 
information on all states.) 

Figure 5: Percentage of Aged Medicaid Enrollees Receiving Long-Term 
Care Services, Highest and Lowest Five States, Fiscal Year 2008: 

[Refer to PDF for image: horizontal bar graph] 

Highest states: 
Iowa: 66%; 
North Dakota: 55%; 
Kansas: 54%; 
Montana: 53%; 
Connecticut: 51%. 

State average: 38%. 

Lowest states: 
Tennessee: 25%; 
Alabama: 23%; 
Georgia: 23%; 
Hawaii: 23%; 
Florida: 18%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Four states were excluded because they did not have reliable 
data available on the proportion of aged enrollees receiving long-term 
care services. Specifically, in Arizona, New Mexico, and Wisconsin, 
more than 2 percent of all enrollees--and therefore likely a higher 
percentage of aged enrollees--received long-term care services through 
managed care plans and therefore were not represented in the fee-for-
service data used to identify enrollees who received long-term care 
services during the year. Maine was unable to accurately report its 
spending by service category. A fifth state, Massachusetts, was 
excluded because of errors in fiscal year 2008 data. State average 
represents the sum of state percentages of aged enrollees receiving 
long-term care services divided by the number of states. For purposes 
of this analysis, we include the District of Columbia as a state. 

[End of figure] 

Furthermore, the proportion of enrollees in specific eligibility 
groups who received long-term care services in institutional settings, 
which are typically more costly than home-and community-based 
services, also varied among states.[Footnote 45] Among states with 
available data, the proportion of aged enrollees who received 
institutional care ranged from 8.2 percent in Alaska to 46.1 percent 
in North Dakota.[Footnote 46] (See table 6 in appendix VII for full 
information on all states.) The setting in which long-term care 
services are provided may reflect factors other than or in addition to 
enrollees' health services needs, including state policy choices such 
as funding for home-and community-based services. 

The health service needs of Medicaid enrollees in the child and adult 
eligibility groups also vary by state. For example, research has 
documented that foster children have more health problems, especially 
mental health problems, than the general population or the population 
of poor children, and thus tend to generate higher health care 
spending.[Footnote 47] Across states, the proportion of the child 
eligibility category that is composed of children enrolled in Medicaid 
on the basis of being in foster care ranged from about 1 percent in 
Mississippi to about 11 percent in Nebraska in fiscal year 2008, 
according to our analysis of MSIS data. Among adults, certain 
indicators of greater health service needs and costs, such as obesity 
and tobacco use, also vary by state.[Footnote 48] Across states, 
calendar year 2008 CDC Behavioral Risk Factor Surveillance System data 
show that adult obesity rates ranged from 19 percent in Colorado to 33 
percent in Mississippi, and tobacco use rates ranged from 10 percent 
in Utah to 26 percent in Kentucky and West Virginia. (See table 7 in 
appendix VII for full information on all states.) 

The scope of benefits offered to enrollees within the same eligibility 
group is another factor that influences Medicaid spending, and this 
also varies across states. Expenditures for enrollees with limited 
benefits are considerably lower than for those enrollees who are 
entitled to the full range of benefits offered by their state. For 
example, average per-enrollee spending was $205 for enrollees 
receiving only family planning services in calendar year 2008, 
compared with $5,281 for enrollees eligible for the full range of 
benefits offered in the state.[Footnote 49] As a result, inclusion of 
spending data for enrollees with limited benefits, such as those 
receiving only family planning benefits, lowers a state's estimated 
average spending for an eligibility group as a whole. The proportion 
of enrollees with limited benefits can vary widely by state: the 
percentage of adult enrollees with only family planning benefits 
varied from 0 percent in 27 states to over 41 percent in 3 states in 
calendar year 2008.[Footnote 50] (See figure 6, and see table 7 in 
appendix VII for full information on all states.) 

Figure 6: Variation across States in the Percentage of Adult Medicaid 
Enrollees Who Received Only Family Planning Benefits, Calendar Year 
2008: 

[Refer to PDF for image: vertical bar graph] 

Percentage range: 0%; 
Number of states: 27. 

Percentage range: 1-20%; 
Number of states: 16. 

Percentage range: 21-40%; 
Number of states: 5. 

Percentage range: 41-61%; 
Number of states: 3. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Note: For purposes of this analysis, we include the District of 
Columbia as a state. 

[End of figure] 

The overall scope of benefits for enrollees receiving full benefits 
also varies by state. States may vary the amount, duration, or scope 
of benefits they are required to offer. States may also choose which, 
if any, optional benefits to offer. For example, dental services are 
an optional benefit for adults. State dental coverage for adults 
ranges from no coverage to full coverage. Dental services add to total 
per-enrollee spending for the adult eligibility group in states that 
cover such services for adults. 

Another factor that influences state Medicaid spending per enrollee 
and varies across states is the cost of delivering health services to 
enrollees. The cost to states of delivering health services includes 
not only medical equipment and supplies, but also costs that vary 
considerably by location due to different labor market and real estate 
market factors. Of these, personnel costs represent the greatest 
proportion of total health service costs. In a previous report, we 
calculated the average 2009 through 2011 wages, by state, for health 
care workers, and used the differences between states in average wages 
to estimate how the costs of providing health care services varied by 
state.[Footnote 51] The most conservatively calculated estimates 
showed an 18 percentage point difference between states in the cost of 
delivering health services.[Footnote 52] 

States Account for a Range of Demographic and Health Factors When 
Setting Medicaid Managed Care Rates: 

States consider a range of factors when setting Medicaid managed care 
capitation rates to account for differences among plans in expected 
spending per enrollee. The number and complexity of factors considered 
varies based, in part, on the populations and benefits covered through 
managed care, as well as on state experience with managed care. 
States' considerations offer insight into the range of factors that 
influence per-enrollee spending at the state level and that contribute 
to the variation among states in such spending. 

Officials from two consulting firms told us that some states are able 
to set sufficiently accurate rates--particularly for children and 
adults--by dividing enrollees into categories, known as rate cells. 
States pay distinct rates for enrollees in each cell based on the 
historical average spending for enrollees in the rate cell. The goal 
is for each rate cell to contain enrollees expected to generate 
relatively similar expenses; thus, states divide enrollees into rate 
cells based on eligibility and demographic data associated with health 
service needs and costs of delivering services, such as Medicaid 
eligibility group, age, gender, and geographic area. For example, 
states may divide children into multiple age group cells, and each of 
these rate cells may further differ depending on geographic area. The 
number of rate cells can vary widely across states. Officials from one 
consulting firm noted that states may use as few as 10 or more than 50 
rate cells depending on their analysis of prior costs for enrollees in 
each cell. 

Beyond demographic information, some states consider additional 
factors in establishing rate cells, such as receipt of high-cost 
services or the scope of benefits to which enrollees are entitled. For 
example, some state and consulting firm officials noted that states 
may establish separate rate cells for those with certain high-cost 
health needs, such as enrollees who are in neonatal intensive care, 
living with the human immunodeficiency virus or acquired 
immunodeficiency syndrome, dependent on ventilators, or in long-term 
care. Some states establish separate rate cells for children who are 
eligible for Medicaid on the basis of foster care, due to the greater 
health needs of foster children compared to other children.[Footnote 
53] In addition, states that offer different benefit packages to 
enrollees in specific eligibility groups may further divide such 
enrollees into distinct rate cells. 

In addition to establishing rate cells, states that cover aged and 
disabled enrollees under managed care generally use risk adjustment to 
set rates based on detailed encounter data that provide information on 
enrollee health status, such as medical diagnoses or pharmacy 
prescriptions.[Footnote 54] The risk adjustment process generally uses 
health status information, along with demographic factors, to predict 
the extent to which a particular enrollee is expected to require 
higher or lower spending than an average enrollee in the same rate 
cell. This information is used to proportionally adjust payments to 
managed care plans upward or downward. Specifically, plans enrolling a 
greater than average proportion of individuals who are expected to 
have costly health service needs receive proportionally higher 
payments, while plans enrolling a lower proportion of such individuals 
receive proportionally lower payments, and the state's overall payment 
remains unchanged. The types of health status data that can be 
incorporated in the risk adjustment process include diagnosed medical 
conditions, such as hypertension or asthma, along with other factors, 
such as age or gender. Some states also consider other types of health 
data in the risk adjustment process. For example, officials from one 
consulting firm told us that, for long-term care enrollees, some 
states are developing methods to incorporate assessments of frailty or 
ability to perform activities of daily living, such as the ability to 
walk or dress without assistance. Officials from two consulting firms 
told us that risk adjustment is particularly important for enrollees 
with the most variation in health service needs, such as disabled or 
aged enrollees, for whom age or other demographic factors are poor 
predictors of service use. 

According to state and consulting firm officials, states that use risk 
adjustment tend to be those with more managed care experience, because 
these states (1) tend to use managed care to cover the disabled and 
aged eligibility groups whose health service needs vary more and for 
whom risk adjustment therefore is most important; 
and (2) are more likely to have made the data improvements necessary 
to use risk adjustment.[Footnote 55] Risk adjustment requires detailed 
encounter data to measure health status;[Footnote 56] however, some 
states do not have reliable and accurate encounter data.[Footnote 57] 
Some of these officials said it has generally taken states about 3 to 
4 years to transition to risk adjustment from rate setting based 
solely on rate cells, due to the need to educate providers and plans 
about appropriately reporting encounter data and due to other 
considerations, such as changes to information technology systems and 
the potential need to phase in rate changes.[Footnote 58] 

Despite states' use of multiple factors to predict health service 
needs for rate setting purposes, the need for certain services remains 
difficult to predict, and many states find it necessary to exclude 
such services from capitation rates--instead they may provide one-time 
payments for such services or exclude them from the package of 
services that managed care plans provide. For example, officials from 
several states and consulting firms mentioned that some states pay 
plans an additional fixed amount per enrollee to cover maternity-
related services. Officials from two consulting firms also noted that 
some states use additional payments for enrollees who need certain 
high-cost services, such as organ transplants or neonatal intensive 
care. Alternately, states may exclude or "carve out" certain services 
or specific enrollee populations from coverage, rather than accounting 
for these costs in capitation rates. Officials from several states and 
consulting firms noted examples of services that some states exclude, 
such as maternity care or mental health, or enrollee populations that 
some states exclude, such as those receiving substance abuse treatment 
or children with special needs. States may use FFS or specific benefit 
plans, such as mental health or pharmacy plans, to cover these 
services or enrollees. 

In the event that rates significantly differ from the actual average 
per-enrollee spending of managed care plans, states have also adopted 
various risk mitigation strategies to minimize the losses or gains 
that may be incurred by either the state or managed care plans. These 
strategies include: 

* reinsurance--requiring managed care plans to obtain private or state-
financed insurance against unexpected expenses that may be 
significantly higher than the capitation rate payments they receive 
from the state, and: 

* risk corridors--limiting the losses or gains that states or managed 
care plans can incur, such as limiting the profits that a managed care 
plan could receive if capitation payments were significantly higher 
than plan spending. 

Without these strategies, states risk paying more than necessary if 
capitation rates are too high, and managed care plans may not be 
willing to participate in a state's Medicaid program if rates are too 
low. Officials from one firm told us that rates based on poor data 
have resulted in states paying plans too much, or conversely, plans 
losing money on state Medicaid contracts. 

Officials from one state and one consulting firm told us that states' 
reliance on risk mitigation strategies generally decreases as their 
managed care programs mature and the accuracy of their capitation 
rates increases. However, such strategies can continue to play an 
important role in the event of changes in circumstances, such as 
changes in the enrollee population due to economic conditions. For 
example, officials from one state with a long history of managed care 
experience told us that the state had considered dropping its risk 
corridors, but decided they still were necessary to limit managed care 
plan profits because the current adult Medicaid population--which 
increased during the recent recession--was healthier on average than 
the prior population on which rates were based.[Footnote 59] 

Concluding Observations: 

Understanding the variation among states in Medicaid spending is 
important for program oversight and for informing potential financing 
reform strategies. While the variation in overall spending among 
states is driven in large part by each state's Medicaid enrollment, it 
is also due to differences in spending per enrollee. The reasons for 
spending differences are not well understood, and some reasons for the 
differences may be within states' control--such as the extent to which 
states offer optional or limited benefits to enrollees. However, 
spending variation may also be due to different circumstances faced by 
states, such as geographic cost differences or the extent of enrollee 
health service needs, which are largely outside of states' control. 
The variety of demographic and health status indicators that states 
use to predict spending per enrollee when setting Medicaid managed 
care rates illustrates the complex array of factors potentially at 
play. 

The ability to reliably calculate each state's per-enrollee Medicaid 
spending is a prerequisite for understanding the extent of and reasons 
for variation among states in such spending. Better information about 
Medicaid expenditures is needed in order to do so. GAO has previously 
recommended that CMS take steps to improve states' reporting of 
supplemental payments, among other steps to improve accountability and 
transparency for supplemental payments, and that Congress consider 
requiring CMS to take such steps. CMS has taken some steps to improve 
state reporting of these payments and is in the process of 
implementing a project to improve and expand MSIS. Until better 
information about Medicaid spending per enrollee is available, it will 
not be possible to quantify the effects of particular drivers of 
spending growth, to identify spending that is unnecessary for covering 
the health service needs of Medicaid enrollees, or to evaluate the 
effectiveness of potential approaches to curtailing Medicaid spending 
and how such approaches may affect program objectives. 

Agency Comments: 

We provided the Secretary of Health and Human Services with a draft of 
this report. The Department of Health and Human Services provided 
technical comments, which we incorporated as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Administrator of CMS and other interested parties. In addition, the 
report will be available at no charge on the GAO website at 
[hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-7114 or yocomc@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made major contributions 
to this report are listed in appendix VIII. 

Signed by: 

Carolyn L. Yocom: 
Director, Health Care: 

[End of section] 

Appendix I: Data and Methodology for Estimates of Medicaid Spending 
per Enrollee: 

This appendix describes the methodology we used to examine what 
Centers for Medicare & Medicaid Services (CMS) data show about 
variation among states in Medicaid spending per enrollee. We developed 
state-specific estimates of Medicaid spending per enrollee for fiscal 
year 2008 using Medicaid enrollment data and combined federal and 
state expenditure data provided by the CMS Office of the Actuary 
(OACT). Specifically, we obtained from OACT (1) enrollment data 
showing the number of full-year-equivalent enrollees, by state and 
eligibility group, which OACT calculates using data in the Medicaid 
Statistical Information System (MSIS); 
and (2) expenditure data broken out by state, eligibility group, and 
service category. Both enrollment and expenditure data include all 
enrollees, regardless of the scope of benefits offered. 

OACT develops its expenditure estimates using data from two sources--
the CMS-64 data system and MSIS--in order to exploit the different 
strengths of these two sources. CMS-64 data are regarded as the most 
accurate and comprehensive source of information on state Medicaid 
expenditures, in part because these data are reviewed by CMS and used 
to reimburse states for their federal shares of Medicaid expenditures. 
The CMS-64 data system provides expenditure data at the aggregate 
level, such as a state's total expenditures for such categories of 
services as inpatient hospital services and prescription drugs, as 
well as data on expenditures that are not linked to specific 
enrollees, such as Disproportionate Share Hospital (DSH) payments and 
other supplemental payments, which we refer to as non-DSH supplemental 
payments.[Footnote 60] However, the CMS-64 data system provides no 
information on the amount of spending attributable to specific 
enrollees or eligibility groups. In contrast, MSIS provides detailed, 
individual-level enrollment and claims data, including data on 
expenditures for specific services provided to specific enrollees. 
[Footnote 61] However, MSIS expenditure data are not considered as 
reliable as CMS-64 data, because they are not reviewed for use in 
determining the federal share of Medicaid expenditures. MSIS data are 
also less complete than CMS-64 data, in that they lack information on 
expenditures that are not linked to specific enrollees. These 
expenditures include drug rebates, which effectively reduce states' 
expenditures for drugs, as well as DSH and non-DSH supplemental 
payments. 

OACT's expenditure estimates reflect the total spending reported in 
the CMS-64 data system, distributed across eligibility groups and 
service categories, as reported in MSIS. To develop these estimates, 
OACT obtains from the CMS-64 data system an annual summary report 
called the Base Financial Management Report, which shows expenditures 
for the year by category of service and also includes information on 
any changes states made to their quarterly expenditure reports for 
prior periods, such as adjustments and collections.[Footnote 62] From 
MSIS, OACT obtains tabulations of expenditures by service category and 
eligibility group. To combine the data from these two sources, OACT 
crosswalks the service categories in the CMS-64 annual summary report 
to the more detailed service categories in the MSIS data, and then 
distributes the spending reported in the CMS-64 annual summary report 
across eligibility groups accordingly. For example, if disabled 
enrollees accounted for 50 percent of the inpatient care expenditures 
reported in MSIS by a given state, OACT would assign to these 
enrollees 50 percent of the inpatient care expenditures reported in 
that state's CMS-64 Base Financial Management Report. These 
expenditure estimates do not include states' administrative costs. DSH 
payments, adjustments, and collections are all reported as separate 
line items. 

To estimate overall Medicaid spending per enrollee by state for the 
four major eligibility groups--children, adults, disabled, and aged--
we collapsed some of the eligibility groups by which the OACT 
enrollment and expenditure data were broken out and then totaled the 
expenditures attributed to each of the four groups in each 
state.[Footnote 63] To each group's total, we then added a share of 
state DSH payments. Although these payments do not represent 
expenditures on individual enrollees, we included them in estimates of 
spending per enrollee, in order to avoid skewing comparisons among 
states by excluding one type of supplemental payment while including 
another. In fiscal year 2008, states were required to separately 
report DSH payments in their CMS-64 quarterly reports, but lines to 
separately report non-DSH supplemental payments were not added to the 
CMS-64 until fiscal year 2010.[Footnote 64] In fiscal year 2008, these 
payments were folded into the spending reported for related services. 
(For example, some non-DSH supplemental payments to hospitals could be 
folded into spending for inpatient or outpatient care.) Because it was 
therefore not possible to exclude non-DSH supplemental payments and 
because some states appear to use these payments more than DSH 
payments, while others appear to do the reverse, we included both 
types of supplemental payments in our estimates. 

We distributed DSH payments among eligibility groups based on each 
group's share of state spending for relevant services. Specifically, 
we distributed inpatient DSH payments based on spending for services 
provided in these facilities (hospital inpatient and outpatient 
services), and mental health facility DSH payments based on spending 
for mental health facilities, nursing facilities, and public and 
private intermediate care facilities for individuals with intellectual 
disability.[Footnote 65] For example, if children accounted for 30 
percent of total spending for hospital inpatient and outpatient 
services in a state, we assigned 30 percent of the state's inpatient 
DSH payments to that eligibility group. We did not distribute 
adjustments or collections among eligibility groups or include them in 
our estimates of overall spending per enrollee because these amounts 
could apply to spending from prior years. Instead, we report the total 
adjustments and collections for each state as a separate dollar amount 
and as a percentage of the state's total expenditures for the year. 

To assess the reliability of the data, we reviewed documentation for 
the OACT estimates and for MSIS and CMS-64 data, interviewed CMS 
officials knowledgeable about these data sources, and compared our 
estimates to those from other data sources. On the basis of this 
assessment, we excluded two states from certain analyses because of 
significant errors or omissions in the data they reported to CMS for 
fiscal year 2008. We excluded Massachusetts from all analyses of state 
Medicaid spending because, according to CMS officials, fiscal year 
2008 enrollment data for the state mistakenly included information on 
many individuals who were not eligible for Medicaid and were instead 
covered with state funds. We excluded Maine from analyses of state 
Medicaid spending at the eligibility-group level, because the state 
was unable to report spending by service category, which OACT uses to 
estimate state spending by eligibility group. We determined that for 
the rest of the states the data were sufficiently reliable for our 
purposes. 

[End of section] 

Appendix II: Estimated Medicaid Spending per Enrollee by State: 

Table 1 illustrates state variation in estimated Medicaid spending per 
enrollee--for enrollees overall, and for the four major Medicaid 
eligibility groups--children, adults, disabled, and aged. Our analysis 
of expenditure data from CMS-64 annual summary reports and enrollment 
and expenditure data from the Medicaid Statistical Information System 
suggests wide variation across states in Medicaid spending per 
enrollee--estimated overall spending per enrollee ranged from about 
$3,800 in California to about $11,700 in Rhode Island in fiscal year 
2008. 

Table 1: Estimated Medicaid Spending per Enrollee for All Enrollees 
and for Each Eligibility Group, by State, Fiscal Year 2008: 

State: Alabama; 
Estimated Medicaid spending per enrollee: 
All enrollees: $5,410; 
Children: $2,890; 
Adults: $3,556; 
Disabled: $8,870; 
Aged: $9,882. 

State: Alaska; 
Estimated Medicaid spending per enrollee: 
All enrollees: $11,111; 
Children: $4,298; 
Adults: $7,920; 
Disabled: $31,835; 
Aged: $25,780. 

State: Arizona; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,331; 
Children: $3,344; 
Adults: $6,086; 
Disabled: $17,080; 
Aged: $11,064. 

State: Arkansas; 
Estimated Medicaid spending per enrollee: 
All enrollees: $5,913; 
Children: $2,606; 
Adults: $2,031; 
Disabled: $12,721; 
Aged: $15,205. 

State: California; 
Estimated Medicaid spending per enrollee: 
All enrollees: $3,838; 
Children: $1,702; 
Adults: $1,480; 
Disabled: $13,089; 
Aged: $9,938. 

State: Colorado; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,827; 
Children: $2,802; 
Adults: $6,132; 
Disabled: $20,776; 
Aged: $18,022. 

State: Connecticut; 
Estimated Medicaid spending per enrollee: 
All enrollees: $9,659; 
Children: $3,226; 
Adults: $3,765; 
Disabled: $30,396; 
Aged: $26,067. 

State: Delaware; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,333; 
Children: $2,937; 
Adults: $5,989; 
Disabled: $18,902; 
Aged: $17,364. 

State: District of Columbia; 
Estimated Medicaid spending per enrollee: 
All enrollees: $10,510; 
Children: $4,119; 
Adults: $6,006; 
Disabled: $23,220; 
Aged: $27,322. 

State: Florida; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,577; 
Children: $2,288; 
Adults: $5,314; 
Disabled: $14,510; 
Aged: $11,345. 

State: Georgia; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,062; 
Children: $2,562; 
Adults: $8,115; 
Disabled: $11,844; 
Aged: $12,117. 

State: Hawaii; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,756; 
Children: $2,306; 
Adults: $4,971; 
Disabled: $20,802; 
Aged: $14,000. 

State: Idaho; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,561; 
Children: $2,474; 
Adults: $8,540; 
Disabled: $19,337; 
Aged: $14,029. 

State: Illinois; 
Estimated Medicaid spending per enrollee: 
All enrollees: $5,799; 
Children: $2,227; 
Adults: $3,935; 
Disabled: $18,910; 
Aged: $11,261. 

State: Indiana; 
Estimated Medicaid spending per enrollee: 
All enrollees: $8,052; 
Children: $2,521; 
Adults: $4,995; 
Disabled: $23,213; 
Aged: $21,757. 

State: Iowa; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,608; 
Children: $2,535; 
Adults: $3,490; 
Disabled: $20,017; 
Aged: $19,828. 

State: Kansas; 
Estimated Medicaid spending per enrollee: 
All enrollees: $8,702; 
Children: $2,644; 
Adults: $5,966; 
Disabled: $20,217; 
Aged: $18,870. 

State: Kentucky; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,003; 
Children: $2,924; 
Adults: $6,736; 
Disabled: $11,082; 
Aged: $13,450. 

State: Louisiana; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,593; 
Children: $2,123; 
Adults: $5,471; 
Disabled: $16,911; 
Aged: $11,533. 

State: Maine[A]; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,452; 
Children: [Empty]; 
Adults: [Empty]; 
Disabled: [Empty]; 
Aged: [Empty]. 

State: Maryland; 
Estimated Medicaid spending per enrollee: 
All enrollees: $9,548; 
Children: $3,630; 
Adults: $5,871; 
Disabled: $22,795; 
Aged: $20,950. 

State: Massachusetts[B]; 
Estimated Medicaid spending per enrollee: 
All enrollees: [Empty]; 
Children: [Empty]; 
Adults: [Empty]; 
Disabled: [Empty]; 
Aged: [Empty]. 

State: Michigan; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,209; 
Children: $2,075; 
Adults: $5,672; 
Disabled: $14,388; 
Aged: $19,632. 

State: Minnesota; 
Estimated Medicaid spending per enrollee: 
All enrollees: $11,308; 
Children: $4,157; 
Adults: $5,229; 
Disabled: $31,570; 
Aged: $24,505. 

State: Mississippi; 
Estimated Medicaid spending per enrollee: 
All enrollees: $5,827; 
Children: $2,444; 
Adults: $3,983; 
Disabled: $10,441; 
Aged: $12,140. 

State: Missouri; 
Estimated Medicaid spending per enrollee: 
All enrollees: $8,695; 
Children: $3,815; 
Adults: $5,227; 
Disabled: $20,959; 
Aged: $17,162. 

State: Montana; 
Estimated Medicaid spending per enrollee: 
All enrollees: $9,613; 
Children: $3,112; 
Adults: $7,031; 
Disabled: $20,682; 
Aged: $28,564. 

State: Nebraska; 
Estimated Medicaid spending per enrollee: 
All enrollees: $8,742; 
Children: $3,394; 
Adults: $4,717; 
Disabled: $21,654; 
Aged: $21,179. 

State: Nevada; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,026; 
Children: $3,006; 
Adults: $5,029; 
Disabled: $17,876; 
Aged: $12,729. 

State: New Hampshire; 
Estimated Medicaid spending per enrollee: 
All enrollees: $10,854; 
Children: $3,905; 
Adults: $8,508; 
Disabled: $25,237; 
Aged: $29,613. 

State: New Jersey; 
Estimated Medicaid spending per enrollee: 
All enrollees: $11,612; 
Children: $2,758; 
Adults: $7,908; 
Disabled: $28,393; 
Aged: $22,817. 

State: New Mexico; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,133; 
Children: $3,603; 
Adults: $5,251; 
Disabled: $22,658; 
Aged: $12,314. 

State: New York; 
Estimated Medicaid spending per enrollee: 
All enrollees: $11,310; 
Children: $2,873; 
Adults: $5,635; 
Disabled: $32,185; 
Aged: $29,734. 

State: North Carolina; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,462; 
Children: $2,755; 
Adults: $5,938; 
Disabled: $17,401; 
Aged: $13,449. 

State: North Dakota; 
Estimated Medicaid spending per enrollee: 
All enrollees: $10,535; 
Children: $2,902; 
Adults: $5,087; 
Disabled: $25,087; 
Aged: $25,213. 

State: Ohio; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,510; 
Children: $2,105; 
Adults: $4,432; 
Disabled: $17,421; 
Aged: $21,800. 

State: Oklahoma; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,376; 
Children: $2,614; 
Adults: $5,119; 
Disabled: $16,081; 
Aged: $13,375. 

State: Oregon; 
Estimated Medicaid spending per enrollee: 
All enrollees: $8,191; 
Children: $2,704; 
Adults: $6,760; 
Disabled: $16,947; 
Aged: $19,463. 

State: Pennsylvania; 
Estimated Medicaid spending per enrollee: 
All enrollees: $9,030; 
Children: $3,026; 
Adults: $5,019; 
Disabled: $14,175; 
Aged: $27,207. 

State: Rhode Island; 
Estimated Medicaid spending per enrollee: 
All enrollees: $11,680; 
Children: $5,107; 
Adults: $5,982; 
Disabled: $22,972; 
Aged: $21,574. 

State: South Carolina; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,401; 
Children: $2,818; 
Adults: $4,941; 
Disabled: $13,247; 
Aged: $13,704. 

State: South Dakota; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,064; 
Children: $2,146; 
Adults: $6,031; 
Disabled: $19,587; 
Aged: $15,559. 

State: Tennessee; 
Estimated Medicaid spending per enrollee: 
All enrollees: $5,827; 
Children: $2,644; 
Adults: $5,338; 
Disabled: $10,262; 
Aged: $12,694. 

State: Texas; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,540; 
Children: $3,345; 
Adults: $7,131; 
Disabled: $15,680; 
Aged: $10,495. 

State: Utah; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,882; 
Children: $3,723; 
Adults: $4,857; 
Disabled: $23,896; 
Aged: $14,468. 

State: Vermont; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,706; 
Children: $5,877; 
Adults: $5,708; 
Disabled: $13,984; 
Aged: $10,981. 

State: Virginia; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,554; 
Children: $2,622; 
Adults: $5,494; 
Disabled: $17,251; 
Aged: $14,693. 

State: Washington; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,785; 
Children: $2,376; 
Adults: $5,107; 
Disabled: $17,432; 
Aged: $19,207. 

State: West Virginia; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,037; 
Children: $2,467; 
Adults: $5,759; 
Disabled: $11,584; 
Aged: $15,863. 

State: Wisconsin; 
Estimated Medicaid spending per enrollee: 
All enrollees: $6,432; 
Children: $1,902; 
Adults: $3,329; 
Disabled: $17,389; 
Aged: $11,262. 

State: Wyoming; 
Estimated Medicaid spending per enrollee: 
All enrollees: $8,358; 
Children: $3,250; 
Adults: $6,756; 
Disabled: $24,644; 
Aged: $21,662. 

State: State average; 
Estimated Medicaid spending per enrollee: 
All enrollees: $7,847; 
Children: $2,973; 
Adults: $5,497; 
Disabled: $19,135; 
Aged: $17,609. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Estimates of spending per enrollee include federal and state 
spending on regular Medicaid payments to providers and managed care 
plans for covered services provided to enrollees as well as 
Disproportionate Share Hospital (DSH) and non-DSH supplemental 
payments, but do not include administrative costs. Estimates also do 
not reflect states' subsequent changes, including adjustments or 
collections, to the spending originally reported for this year. 
Enrollment is measured in terms of full-year-equivalent enrollees. 
Both enrollment and expenditure data include all enrollees, regardless 
of the scope of benefits offered. State average spending per enrollee 
represents the sum of each state's estimated spending per enrollee 
divided by the number of states. For purposes of this table we refer 
to the District of Columbia as a state. 

[A] We excluded Maine from eligibility-group level estimates because 
the state was unable to report spending by service category for fiscal 
year 2008. 

[B] We excluded Massachusetts from the estimates because of errors in 
fiscal year 2008 CMS data for this state. 

[End of table] 

[End of section] 

Appendix III: Total Medicaid Spending and Adjustments and Collections 
by State: 

States are required to report to CMS each quarter any collections or 
adjustments to the Medicaid spending they previously reported. In one 
of the annual summary reports available from the CMS-64 data system, 
the adjustments and collections reported by a state that year are 
summed by type--for example, adjustments increasing claims--and 
reported as line items separate from other reported spending amounts. 
[Footnote 66] The reported sums may include adjustments and 
collections applicable to spending for the current year as well as 
prior years.[Footnote 67] For six states, the adjustments and 
collections reported in fiscal year 2008--an unknown amount of which 
was applicable to that year's spending--represented 5 percent or more 
of the total spending reported for that year. Table 2 shows the total 
spending states reported for fiscal year 2008, as well as the total 
adjustments and collections they reported that year, and the 
percentage of total spending that adjustments and collections 
represented. 

Table 2: Total Medicaid Spending and Adjustments and Collections 
Reported in Fiscal Year 2008: 

State: Alabama; 
Total spending: $4,065,658,513; 
Adjustments and collections: ($3,403,747); 
Adjustments and collections as a percentage of total spending: -0.1%. 

State: Alaska; 
Total spending: $962,595,105; 
Adjustments and collections: ($72,726,013); 
Adjustments and collections as a percentage of total spending: -7.6%. 

State: Arizona; 
Total spending: $7,285,798,764; 
Adjustments and collections: 217,986,033; 
Adjustments and collections as a percentage of total spending: 3.0%. 

State: Arkansas; 
Total spending: $3,328,009,018; 
Adjustments and collections: ($95,445,204); 
Adjustments and collections as a percentage of total spending: -2.9%. 

State: California; 
Total spending: $31,039,145,327; 
Adjustments and collections: 7,546,974,470; 
Adjustments and collections as a percentage of total spending: 24.3%. 

State: Colorado; 
Total spending: $3,186,825,239; 
Adjustments and collections: ($34,849,295); 
Adjustments and collections as a percentage of total spending: -1.1%. 

State: Connecticut; 
Total spending: $4,515,843,293; 
Adjustments and collections: ($98,177,252); 
Adjustments and collections as a percentage of total spending: -2.2%. 

State: Delaware; 
Total spending: $1,103,519,563; 
Adjustments and collections: ($1,363,880); 
Adjustments and collections as a percentage of total spending: -0.1%. 

State: District of Columbia; 
Total spending: $1,459,889,715; 
Adjustments and collections: ($31,962,688); 
Adjustments and collections as a percentage of total spending: -2.2%. 

State: Florida; 
Total spending: $14,674,721,802; 
Adjustments and collections: ($73,161,543); 
Adjustments and collections as a percentage of total spending: -0.5%. 

State: Georgia; 
Total spending: $7,654,184,658; 
Adjustments and collections: ($390,248,341); 
Adjustments and collections as a percentage of total spending: -5.1%. 

State: Hawaii; 
Total spending: $1,222,550,545; 
Adjustments and collections: ($20,392,992); 
Adjustments and collections as a percentage of total spending: -1.7%. 

State: Idaho; 
Total spending: $1,220,236,237; 
Adjustments and collections: ($32,553,305); 
Adjustments and collections as a percentage of total spending: -2.7%. 

State: Illinois; 
Total spending: $11,730,832,868; 
Adjustments and collections: ($263,433,221); 
Adjustments and collections as a percentage of total spending: -2.2%. 

State: Indiana; 
Total spending: $6,679,844,413; 
Adjustments and collections: ($565,918,130); 
Adjustments and collections as a percentage of total spending: -8.5%. 

State: Iowa; 
Total spending: $2,834,135,869; 
Adjustments and collections: ($56,770,325); 
Adjustments and collections as a percentage of total spending: -2.0%. 

State: Kansas; 
Total spending: $2,338,692,399; 
Adjustments and collections: ($114,140,708); 
Adjustments and collections as a percentage of total spending: -4.9%. 

State: Kentucky; 
Total spending: $4,781,853,623; 
Adjustments and collections: ($90,229,659); 
Adjustments and collections as a percentage of total spending: -1.9%. 

State: Louisiana; 
Total spending: $6,065,775,886; 
Adjustments and collections: ($234,590,878); 
Adjustments and collections as a percentage of total spending: -3.9%. 

State: Maine; 
Total spending: $2,186,642,908; 
Adjustments and collections: 47,453,663; 
Adjustments and collections as a percentage of total spending: 2.2%. 

State: Maryland; 
Total spending: $5,789,864,630; 
Adjustments and collections: ($151,620,736); 
Adjustments and collections as a percentage of total spending: -2.6%. 

State: Massachusetts[A]; 
Total spending: $With DSH payments distributed across groups based on 
share of total spending[B]: 
Adjustments and collections: With DSH payments distributed across 
groups based on share of total spending[B]: 
Adjustments and collections as a percentage of total spending: [Empty]. 

State: Michigan; 
Total spending: $9,763,205,475; 
Adjustments and collections: 31,721,058; 
Adjustments and collections as a percentage of total spending: 0.3%. 

State: Minnesota; 
Total spending: $6,963,611,523; 
Adjustments and collections: ($79,838,444); 
Adjustments and collections as a percentage of total spending: -1.1%. 

State: Mississippi; 
Total spending: $3,534,943,883; 
Adjustments and collections: 258,504,898; 
Adjustments and collections as a percentage of total spending: 7.3%. 

State: Missouri; 
Total spending: $7,065,432,032; 
Adjustments and collections: ($78,221,022); 
Adjustments and collections as a percentage of total spending: -1.1%. 

State: Montana; 
Total spending: $780,125,095; 
Adjustments and collections: ($10,369,615); 
Adjustments and collections as a percentage of total spending: -1.3%. 

State: Nebraska; 
Total spending: $1,585,314,119; 
Adjustments and collections: ($32,318,151); 
Adjustments and collections as a percentage of total spending: -2.0%. 

State: Nevada; 
Total spending: $1,308,662,237; 
Adjustments and collections: 3,712,625; 
Adjustments and collections as a percentage of total spending: 0.3%. 

State: New Hampshire; 
Total spending: $1,256,516,384; 
Adjustments and collections: ($16,206,643); 
Adjustments and collections as a percentage of total spending: -1.3%. 

State: New Jersey; 
Total spending: $9,390,013,827; 
Adjustments and collections: ($36,195,450); 
Adjustments and collections as a percentage of total spending: -0.4%. 

State: New Mexico; 
Total spending: $3,051,859,421; 
Adjustments and collections: ($27,864,999); 
Adjustments and collections as a percentage of total spending: -0.9%. 

State: New York; 
Total spending: $46,004,929,844; 
Adjustments and collections: 258,553,798; 
Adjustments and collections as a percentage of total spending: 0.6%. 

State: North Carolina; 
Total spending: $9,984,558,550; 
Adjustments and collections: ($370,706,876); 
Adjustments and collections as a percentage of total spending: -3.7%. 

State: North Dakota; 
Total spending: $555,283,315; 
Adjustments and collections: ($26,625,586); 
Adjustments and collections as a percentage of total spending: -4.8%. 

State: Ohio; 
Total spending: $12,208,921,164; 
Adjustments and collections: ($16,039,100); 
Adjustments and collections as a percentage of total spending: -0.1%. 

State: Oklahoma; 
Total spending: $3,525,551,862; 
Adjustments and collections: ($105,739,641); 
Adjustments and collections as a percentage of total spending: -3.0%. 

State: Oregon; 
Total spending: $3,188,916,042; 
Adjustments and collections: ($11,560,143); 
Adjustments and collections as a percentage of total spending: -0.4%. 

State: Pennsylvania; 
Total spending: $16,137,965,265; 
Adjustments and collections: 48,605,230; 
Adjustments and collections as a percentage of total spending: 0.3%. 

State: Rhode Island; 
Total spending: $1,846,481,589; 
Adjustments and collections: ($43,086,140); 
Adjustments and collections as a percentage of total spending: -2.3%. 

State: South Carolina; 
Total spending: $4,435,472,577; 
Adjustments and collections: ($209,104,361); 
Adjustments and collections as a percentage of total spending: -4.7%. 

State: South Dakota; 
Total spending: $672,641,093; 
Adjustments and collections: ($20,933,097); 
Adjustments and collections as a percentage of total spending: -3.1%. 

State: Tennessee; 
Total spending: $7,296,597,016; 
Adjustments and collections: ($162,724,231); 
Adjustments and collections as a percentage of total spending: -2.2%. 

State: Texas; 
Total spending: $20,942,941,607; 
Adjustments and collections: 154,234,451; 
Adjustments and collections as a percentage of total spending: 0.7%. 

State: Utah; 
Total spending: $1,570,682,903; 
Adjustments and collections: ($81,216,971); 
Adjustments and collections as a percentage of total spending: -5.2%. 

State: Vermont; 
Total spending: $1,034,050,857; 
Adjustments and collections: 45,268,884; 
Adjustments and collections as a percentage of total spending: 4.4%. 

State: Virginia; 
Total spending: $5,361,612,424; 
Adjustments and collections: ($33,874,206); 
Adjustments and collections as a percentage of total spending: -0.6%. 

State: Washington; 
Total spending: $6,381,271,503; 
Adjustments and collections: ($139,384,829); 
Adjustments and collections as a percentage of total spending: -2.2%. 

State: West Virginia; 
Total spending: $2,279,677,025; 
Adjustments and collections: ($16,083,970); 
Adjustments and collections as a percentage of total spending: -0.7%. 

State: Wisconsin; 
Total spending: $5,103,833,259; 
Adjustments and collections: ($182,497,433); 
Adjustments and collections as a percentage of total spending: -3.6%. 

State: Wyoming; 
Total spending: $485,726,260; 
Adjustments and collections: ($1,714,150); 
Adjustments and collections as a percentage of total spending: -0.4%. 

State: State Average; 
Total spending: $6,356,868,371; 
Adjustments and collections: $91,594,443; 
Adjustments and collections as a percentage of total spending: -1.1%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Total spending includes federal and state spending on regular 
Medicaid payments to providers and managed care plans for covered 
services provided to enrollees as well as Disproportionate Share 
Hospital (DSH) and non-DSH supplemental payments and does not include 
adjustments, collections, or administrative costs. For purposes of 
this table we refer to the District of Columbia as a state. 

[A] We excluded Massachusetts from the estimates because of errors in 
fiscal year 2008 CMS data for this state. 

[End of table] 

[End of section] 

Appendix IV: Estimated Medicaid Spending per Enrollee, by State, Using 
Two Possible Methods to Distribute DSH Payments: 

Federal Medicaid law requires states to make DSH payments to 
qualifying hospitals that serve large numbers of Medicaid and 
uninsured low-income patients. States are required to report to CMS 
separate data on the two types of DSH payments: payments to inpatient 
hospitals and payments to inpatient mental health facilities.[Footnote 
68] We included DSH payments in our estimates of spending per 
enrollee, and compared two possible methods of distributing these 
payments among eligibility groups. For the first method--the one used 
in our estimates of spending per enrollee--we distributed DSH payments 
among eligibility groups based on each group's share of state spending 
for services delivered in the types of facilities that are potentially 
eligible for DSH payments. Specifically, we distributed inpatient DSH 
payments based on spending for services provided in these facilities 
(hospital inpatient and outpatient services), and mental health 
facility DSH payments based on spending for mental health facilities, 
nursing facilities, and public and private intermediate care 
facilities for individuals with intellectual disability. For the 
second method, we distributed DSH payments among eligibility groups 
based on each group's share of total spending. We found that for some 
eligibility groups in some states, the method used to distribute DSH 
payments significantly affected estimates of spending per enrollee. 
Table 3 shows estimated Medicaid spending per enrollee by state and by 
eligibility group, for fiscal year 2008, using these two different 
methods to distribute DSH payments. 

Table 3: Estimated Medicaid Spending per Enrollee Using Two Possible 
Methods to Distribute Disproportionate Share Hospital (DSH) Payments, 
by Eligibility Group and State, Fiscal Year 2008: 

State: Alabama; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,890; 
Adults: $3,556; 
Disabled: $8,870; 
Aged: $9,882; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,995; 
Adults: $2,533; 
Disabled: $8,972; 
Aged: $10,450. 

State: Alaska; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $4,298; 
Adults: $7,920; 
Disabled: $31,835; 
Aged: $25,780; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $4,318; 
Adults: $7,983; 
Disabled: $31,844; 
Aged: $25,447. 

State: Arizona; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,344; 
Adults: $6,086; 
Disabled: $17,080; 
Aged: $11,064; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,351; 
Adults: $6,091; 
Disabled: $17,103; 
Aged: $10,936. 

State: Arkansas; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,606; 
Adults: $2,031; 
Disabled: $12,721; 
Aged: $15,205; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,603; 
Adults: $2,024; 
Disabled: $12,722; 
Aged: $15,227. 

State: California; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $1,702; 
Adults: $1,480; 
Disabled: $13,089; 
Aged: $9,938; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $1,711; 
Adults: $1,383; 
Disabled: $13,088; 
Aged: $10,329. 

State: Colorado; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,802; 
Adults: $6,132; 
Disabled: $20,776; 
Aged: $18,022; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,737; 
Adults: $5,660; 
Disabled: $20,970; 
Aged: $18,772. 

State: Connecticut; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,226; 
Adults: $3,765; 
Disabled: $30,396; 
Aged: $26,067; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,263; 
Adults: $3,797; 
Disabled: $30,194; 
Aged: $26,064. 

State: Delaware; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,937; 
Adults: $5,989; 
Disabled: $18,902; 
Aged: $17,364; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,951; 
Adults: $6,018; 
Disabled: $18,914; 
Aged: $17,134. 

State: District of Columbia; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $4,119; 
Adults: $6,006; 
Disabled: $23,220; 
Aged: $27,322; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $4,202; 
Adults: $6,132; 
Disabled: $22,721; 
Aged: $28,169. 

State: Florida; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,288; 
Adults: $5,314; 
Disabled: $14,510; 
Aged: $11,345; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,287; 
Adults: $5,273; 
Disabled: $14,550; 
Aged: $11,329. 

State: Georgia; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,562; 
Adults: $8,115; 
Disabled: $11,844; 
Aged: $12,117; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,589; 
Adults: $8,062; 
Disabled: $11,548; 
Aged: $12,660. 

State: Hawaii; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,306; 
Adults: $4,971; 
Disabled: $20,802; 
Aged: $14,000; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,334; 
Adults: $4,943; 
Disabled: $20,300; 
Aged: $14,558. 

State: Idaho; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,474; 
Adults: $8,540; 
Disabled: $19,337; 
Aged: $14,029; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,451; 
Adults: $8,327; 
Disabled: $19,418; 
Aged: $14,231. 

State: Illinois; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,227; 
Adults: $3,935; 
Disabled: $18,910; 
Aged: $11,261; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,230; 
Adults: $3,940; 
Disabled: $18,906; 
Aged: $11,236. 

State: Indiana; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,521; 
Adults: $4,995; 
Disabled: $23,213; 
Aged: $21,757; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,574; 
Adults: $5,127; 
Disabled: $22,775; 
Aged: $22,016. 

State: Iowa; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,535; 
Adults: $3,490; 
Disabled: $20,017; 
Aged: $19,828; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,525; 
Adults: $3,462; 
Disabled: $20,037; 
Aged: $19,913. 

State: Kansas; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,644; 
Adults: $5,966; 
Disabled: $20,217; 
Aged: $18,870; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,677; 
Adults: $6,023; 
Disabled: $20,259; 
Aged: $18,558. 

State: Kentucky; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,924; 
Adults: $6,736; 
Disabled: $11,082; 
Aged: $13,450; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,945; 
Adults: $6,593; 
Disabled: $11,073; 
Aged: $13,572. 

State: Louisiana; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,123; 
Adults: $5,471; 
Disabled: $16,911; 
Aged: $11,533; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,037; 
Adults: $4,825; 
Disabled: $16,920; 
Aged: $12,868. 

State: Maine[C]; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: [Empty]; 
Adults: [Empty]; 
Disabled: [Empty]; 
Aged: [Empty]; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: [Empty]; 
Adults: [Empty]; 
Disabled: [Empty]; 
Aged: [Empty]. 

State: Maryland; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,630; 
Adults: $5,871; 
Disabled: $22,795; 
Aged: $20,950; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,643; 
Adults: $5,907; 
Disabled: $22,841; 
Aged: $20,665. 

State: Massachusetts[D]; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: [Empty]; 
Adults: [Empty]; 
Disabled: [Empty]; 
Aged: [Empty]; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: [Empty]; 
Adults: [Empty]; 
Disabled: [Empty]; 
Aged: [Empty]. 

State: Michigan; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,075; 
Adults: $5,672; 
Disabled: $14,388; 
Aged: $19,632; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,073; 
Adults: $5,687; 
Disabled: $14,465; 
Aged: $19,418. 

State: Minnesota; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $4,157; 
Adults: $5,229; 
Disabled: $31,570; 
Aged: $24,505; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $4,155; 
Adults: $5,190; 
Disabled: $31,400; 
Aged: $24,864. 

State: Mississippi; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,444; 
Adults: $3,983; 
Disabled: $10,441; 
Aged: $12,140; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,396; 
Adults: $3,794; 
Disabled: $10,416; 
Aged: $12,664. 

State: Missouri; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,815; 
Adults: $5,227; 
Disabled: $20,959; 
Aged: $17,162; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,892; 
Adults: $5,335; 
Disabled: $20,821; 
Aged: $16,824. 

State: Montana; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,112; 
Adults: $7,031; 
Disabled: $20,682; 
Aged: $28,564; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,076; 
Adults: $6,894; 
Disabled: $20,663; 
Aged: $29,065. 

State: Nebraska; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,394; 
Adults: $4,717; 
Disabled: $21,654; 
Aged: $21,179; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,374; 
Adults: $4,630; 
Disabled: $21,658; 
Aged: $21,398. 

State: Nevada; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,006; 
Adults: $5,029; 
Disabled: $17,876; 
Aged: $12,729; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,041; 
Adults: $4,884; 
Disabled: $17,506; 
Aged: $13,376. 

State: New Hampshire; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,905; 
Adults: $8,508; 
Disabled: $25,237; 
Aged: $29,613; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,618; 
Adults: $6,385; 
Disabled: $26,310; 
Aged: $31,736. 

State: New Jersey; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,758; 
Adults: $7,908; 
Disabled: $28,393; 
Aged: $22,817; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,835; 
Adults: $8,005; 
Disabled: $28,203; 
Aged: $22,740. 

State: New Mexico; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,603; 
Adults: $5,251; 
Disabled: $22,658; 
Aged: $12,314; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,597; 
Adults: $5,228; 
Disabled: $22,693; 
Aged: $12,372. 

State: New York; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,873; 
Adults: $5,635; 
Disabled: $32,185; 
Aged: $29,734; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,809; 
Adults: $5,447; 
Disabled: $32,225; 
Aged: $30,606. 

State: North Carolina; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,755; 
Adults: $5,938; 
Disabled: $17,401; 
Aged: $13,449; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,770; 
Adults: $5,824; 
Disabled: $17,453; 
Aged: $13,442. 

State: North Dakota; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,902; 
Adults: $5,087; 
Disabled: $25,087; 
Aged: $25,213; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,904; 
Adults: $5,091; 
Disabled: $25,099; 
Aged: $25,186. 

State: Ohio; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,105; 
Adults: $4,432; 
Disabled: $17,421; 
Aged: $21,800; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,105; 
Adults: $4,432; 
Disabled: $17,421; 
Aged: $21,800. 

State: Oklahoma; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,614; 
Adults: $5,119; 
Disabled: $16,081; 
Aged: $13,375; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,602; 
Adults: $5,060; 
Disabled: $16,103; 
Aged: $13,489. 

State: Oregon; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,704; 
Adults: $6,760; 
Disabled: $16,947; 
Aged: $19,463; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,699; 
Adults: $6,734; 
Disabled: $16,991; 
Aged: $19,456. 

State: Pennsylvania; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,026; 
Adults: $5,019; 
Disabled: $14,175; 
Aged: $27,207; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,053; 
Adults: $4,929; 
Disabled: $14,266; 
Aged: $27,010. 

State: Rhode Island; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $5,107; 
Adults: $5,982; 
Disabled: $22,972; 
Aged: $21,574; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $5,263; 
Adults: $6,217; 
Disabled: $22,111; 
Aged: $22,530. 

State: South Carolina; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,818; 
Adults: $4,941; 
Disabled: $13,247; 
Aged: $13,704; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,813; 
Adults: $4,702; 
Disabled: $13,223; 
Aged: $14,304. 

State: South Dakota; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,146; 
Adults: $6,031; 
Disabled: $19,587; 
Aged: $15,559; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,147; 
Adults: $6,032; 
Disabled: $19,599; 
Aged: $15,531. 

State: Tennessee; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,644; 
Adults: $5,338; 
Disabled: $10,262; 
Aged: $12,694; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,644; 
Adults: $5,326; 
Disabled: $10,253; 
Aged: $12,766. 

State: Texas; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,345; 
Adults: $7,131; 
Disabled: $15,680; 
Aged: $10,495; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,369; 
Adults: $6,936; 
Disabled: $15,531; 
Aged: $10,723. 

State: Utah; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,723; 
Adults: $4,857; 
Disabled: $23,896; 
Aged: $14,468; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,706; 
Adults: $4,806; 
Disabled: $23,989; 
Aged: $14,578. 

State: Vermont; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $5,877; 
Adults: $5,708; 
Disabled: $13,984; 
Aged: $10,981; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $5,955; 
Adults: $5,532; 
Disabled: $13,924; 
Aged: $11,272. 

State: Virginia; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,622; 
Adults: $5,494; 
Disabled: $17,251; 
Aged: $14,693; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,617; 
Adults: $5,411; 
Disabled: $17,194; 
Aged: $14,908. 

State: Washington; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,376; 
Adults: $5,107; 
Disabled: $17,432; 
Aged: $19,207; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,463; 
Adults: $5,214; 
Disabled: $17,112; 
Aged: $19,027. 

State: West Virginia; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,467; 
Adults: $5,759; 
Disabled: $11,584; 
Aged: $15,863; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,507; 
Adults: $5,762; 
Disabled: $11,505; 
Aged: $15,919. 

State: Wisconsin; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $1,902; 
Adults: $3,329; 
Disabled: $17,389; 
Aged: $11,262; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $1,895; 
Adults: $3,325; 
Disabled: $17,297; 
Aged: $11,398. 

State: Wyoming; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $3,250; 
Adults: $6,756; 
Disabled: $24,644; 
Aged: $21,662; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $3,249; 
Adults: $6,755; 
Disabled: $24,645; 
Aged: $21,665. 

State: State average; 
With DSH payments distributed across groups based on share of spending 
for relevant services[A]: 
Children: $2,973; 
Adults: $5,497; 
Disabled: $19,135; 
Aged: $$7,609; 
With DSH payments distributed across groups based on share of total 
spending[B]: 
Children: $2,981; 
Adults: $5,381; 
Disabled: $19,086; 
Aged: $17,841. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Estimates of spending per enrollee include federal and state 
spending on regular Medicaid payments to providers and managed care 
plans for covered services provided to enrollees, as well DSH and non-
DSH supplemental payments, but do not include administrative costs. 
Estimates also do not reflect states' subsequent changes, including 
adjustments or collections, to the spending originally reported for 
this year. Enrollment is measured in terms of full-year-equivalent 
enrollees. Both enrollment and expenditure data include all enrollees, 
regardless of the scope of benefits offered. State average spending 
per enrollee represents the sum of each state's estimated spending per 
enrollee divided by the number of states. For purposes of this table 
we refer to the District of Columbia as a state. 

[A] For this method, we distributed DSH payments among eligibility 
groups based on each group's share of state spending for relevant 
services. Specifically, we distributed inpatient DSH payments based on 
spending for hospital inpatient and outpatient services and mental 
health facility DSH payments based on spending for mental health 
facilities, nursing facilities, and public and private intermediate 
care facilities for individuals with intellectual disability. 

[B] For this method, we distributed DSH payments among eligibility 
groups based on each group's share of total spending. 

[C] We excluded Maine from eligibility-group level estimates because 
the state was unable to report spending by service category for fiscal 
year 2008. 

[D] We excluded Massachusetts from the estimates because of errors in 
fiscal year 2008 CMS data for this state. 

[End of table] 

[End of section] 

Appendix V: State DSH Payments as a Percentage of Total State Medicaid 
Spending and Effect on Overall Spending per Enrollee: 

Federal Medicaid law requires states to make DSH payments to 
qualifying hospitals that serve large numbers of Medicaid and 
uninsured low-income patients. DSH payments represent varying 
proportions of states' total Medicaid spending, ranging from 0 to 18 
percent. Thus the effect of including these payments in estimates of 
state spending per enrollee also varies. Table 4 presents DSH payments 
as a percentage of each state's total Medicaid spending for fiscal 
year 2008, as well as overall state spending per enrollee excluding 
and including DSH payments. 

Table 4: Disproportionate Share Hospital (DSH) Payments as a 
Percentage of Total State Medicaid Spending and Overall Spending per 
Enrollee Excluding and Including DSH Payments, Fiscal Year 2008: 

State: Alabama; 
DSH payments as percentage of total state Medicaid spending: 10.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $4,840; 
Including DSH payments: $5,410. 

State: Alaska; 
DSH payments as percentage of total state Medicaid spending: 1.6%; 
Overall spending per enrollee: 
Excluding DSH payments: $10,931; 
Including DSH payments: $11,111. 

State: Arizona; 
DSH payments as percentage of total state Medicaid spending: 1.6%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,231; 
Including DSH payments: $6,331. 

State: Arkansas; 
DSH payments as percentage of total state Medicaid spending: 0.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,898; 
Including DSH payments: $5,913. 

State: California; 
DSH payments as percentage of total state Medicaid spending: 6.1%; 
Overall spending per enrollee: 
Excluding DSH payments: $3,604; 
Including DSH payments: $3,838. 

State: Colorado; 
DSH payments as percentage of total state Medicaid spending: 5.2%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,420; 
Including DSH payments: $7,827. 

State: Connecticut; 
DSH payments as percentage of total state Medicaid spending: 5.9%; 
Overall spending per enrollee: 
Excluding DSH payments: $9,091; 
Including DSH payments: $9,659. 

State: Delaware; 
DSH payments as percentage of total state Medicaid spending: 0.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,296; 
Including DSH payments: $7,333. 

State: District of Columbia; 
DSH payments as percentage of total state Medicaid spending: 4.8%; 
Overall spending per enrollee: 
Excluding DSH payments: $10,009; 
Including DSH payments: $10,510. 

State: Florida; 
DSH payments as percentage of total state Medicaid spending: 2.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,429; 
Including DSH payments: $6,577. 

State: Georgia; 
DSH payments as percentage of total state Medicaid spending: 5.2%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,744; 
Including DSH payments: $6,062. 

State: Hawaii; 
DSH payments as percentage of total state Medicaid spending: 2.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,585; 
Including DSH payments: $6,756. 

State: Idaho; 
DSH payments as percentage of total state Medicaid spending: 1.8%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,424; 
Including DSH payments: $7,561. 

State: Illinois; 
DSH payments as percentage of total state Medicaid spending: 1.7%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,703; 
Including DSH payments: $5,799. 

State: Indiana; 
DSH payments as percentage of total state Medicaid spending: 7.0%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,492; 
Including DSH payments: $8,052. 

State: Iowa; 
DSH payments as percentage of total state Medicaid spending: 0.6%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,566; 
Including DSH payments: $7,608. 

State: Kansas; 
DSH payments as percentage of total state Medicaid spending: 3.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $8,402; 
Including DSH payments: $8,702. 

State: Kentucky; 
DSH payments as percentage of total state Medicaid spending: 4.1%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,716; 
Including DSH payments: $7,003. 

State: Louisiana; 
DSH payments as percentage of total state Medicaid spending: 16.6%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,498; 
Including DSH payments: $6,593. 

State: Maine; 
DSH payments as percentage of total state Medicaid spending: 2.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,281; 
Including DSH payments: $7,452. 

State: Maryland; 
DSH payments as percentage of total state Medicaid spending: 1.9%; 
Overall spending per enrollee: 
Excluding DSH payments: $9,365; 
Including DSH payments: $9,548. 

State: Massachusetts[A]; 
DSH payments as percentage of total state Medicaid spending: [Empty]; 
Overall spending per enrollee: 
Excluding DSH payments: [Empty]: 
Including DSH payments: [Empty]. 

State: Michigan; 
DSH payments as percentage of total state Medicaid spending: 4.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,927; 
Including DSH payments: $6,209. 

State: Minnesota; 
DSH payments as percentage of total state Medicaid spending: 1.7%; 
Overall spending per enrollee: 
Excluding DSH payments: $11,120; 
Including DSH payments: $11,308. 

State: Mississippi; 
DSH payments as percentage of total state Medicaid spending: 5.1%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,532; 
Including DSH payments: $5,827. 

State: Missouri; 
DSH payments as percentage of total state Medicaid spending: 9.9%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,831; 
Including DSH payments: $8,695. 

State: Montana; 
DSH payments as percentage of total state Medicaid spending: 2.0%; 
Overall spending per enrollee: 
Excluding DSH payments: $9,422; 
Including DSH payments: $9,613. 

State: Nebraska; 
DSH payments as percentage of total state Medicaid spending: 1.7%; 
Overall spending per enrollee: 
Excluding DSH payments: $8,595; 
Including DSH payments: $8,742. 

State: Nevada; 
DSH payments as percentage of total state Medicaid spending: 6.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,582; 
Including DSH payments: $7,026. 

State: New Hampshire; 
DSH payments as percentage of total state Medicaid spending: 17.8%; 
Overall spending per enrollee: 
Excluding DSH payments: $8,926; 
Including DSH payments: $10,854. 

State: New Jersey; 
DSH payments as percentage of total state Medicaid spending: 16.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $9,721; 
Including DSH payments: $11,612. 

State: New Mexico; 
DSH payments as percentage of total state Medicaid spending: 0.9%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,072; 
Including DSH payments: $7,133. 

State: New York; 
DSH payments as percentage of total state Medicaid spending: 4.8%; 
Overall spending per enrollee: 
Excluding DSH payments: $10,764; 
Including DSH payments: $11,310. 

State: North Carolina; 
DSH payments as percentage of total state Medicaid spending: 4.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,144; 
Including DSH payments: $7,462. 

State: North Dakota; 
DSH payments as percentage of total state Medicaid spending: 0.2%; 
Overall spending per enrollee: 
Excluding DSH payments: $10,511; 
Including DSH payments: $10,535. 

State: Ohio; 
DSH payments as percentage of total state Medicaid spending: 0.0%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,510; 
Including DSH payments: $7,510. 

State: Oklahoma; 
DSH payments as percentage of total state Medicaid spending: 1.4%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,285; 
Including DSH payments: $6,376. 

State: Oregon; 
DSH payments as percentage of total state Medicaid spending: 1.9%; 
Overall spending per enrollee: 
Excluding DSH payments: $8,036; 
Including DSH payments: $8,191. 

State: Pennsylvania; 
DSH payments as percentage of total state Medicaid spending: 4.6%; 
Overall spending per enrollee: 
Excluding DSH payments: $8,615; 
Including DSH payments: $9,030. 

State: Rhode Island; 
DSH payments as percentage of total state Medicaid spending: 6.4%; 
Overall spending per enrollee: 
Excluding DSH payments: $10,938; 
Including DSH payments: $11,680. 

State: South Carolina; 
DSH payments as percentage of total state Medicaid spending: 10.0%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,763; 
Including DSH payments: $6,401. 

State: South Dakota; 
DSH payments as percentage of total state Medicaid spending: 0.2%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,050; 
Including DSH payments: $7,064. 

State: Tennessee; 
DSH payments as percentage of total state Medicaid spending: 0.6%; 
Overall spending per enrollee: 
Excluding DSH payments: $5,792; 
Including DSH payments: $5,827. 

State: Texas; 
DSH payments as percentage of total state Medicaid spending: 6.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,117; 
Including DSH payments: $6,540. 

State: Utah; 
DSH payments as percentage of total state Medicaid spending: 1.3%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,780; 
Including DSH payments: $7,882. 

State: Vermont; 
DSH payments as percentage of total state Medicaid spending: 3.5%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,439; 
Including DSH payments: $7,706. 

State: Virginia; 
DSH payments as percentage of total state Medicaid spending: 3.4%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,294; 
Including DSH payments: $7,554. 

State: Washington; 
DSH payments as percentage of total state Medicaid spending: 5.1%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,437; 
Including DSH payments: $6,785. 

State: West Virginia; 
DSH payments as percentage of total state Medicaid spending: 3.2%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,812; 
Including DSH payments: $7,037. 

State: Wisconsin; 
DSH payments as percentage of total state Medicaid spending: 1.7%; 
Overall spending per enrollee: 
Excluding DSH payments: $6,320; 
Including DSH payments: $6,432. 

State: Wyoming; 
DSH payments as percentage of total state Medicaid spending: 0.0%; 
Overall spending per enrollee: 
Excluding DSH payments: $8,356; 
Including DSH payments: $8,358. 

State: State average; 
DSH payments as percentage of total state Medicaid spending: 4.2%; 
Overall spending per enrollee: 
Excluding DSH payments: $7,504; 
Including DSH payments: $7,847. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 
GAO-14-456. 

Notes: Total state spending and spending per enrollee include federal 
and state spending on regular Medicaid payments to providers and 
managed care plans for covered services provided to enrollees as well 
as DSH and non-DSH supplemental payments. Estimates do not reflect 
states' subsequent changes, including adjustments or collections, to 
the spending originally reported for this year and do not include 
administrative costs. Enrollment is measured in terms of full-year-
equivalent enrollees. Both enrollment and expenditure data include all 
enrollees, regardless of the scope of benefits offered. The state 
averages represent the sum of state percentages or state spending per 
enrollee divided by the number of states. For the purposes of this 
table, we refer to the District of Columbia as a state. 

[A] We excluded Massachusetts because of errors in fiscal year 2008 
CMS data for this state. 

[End of table] 

[End of section] 

Appendix VI: Distribution of State Medicaid Enrollees by Eligibility 
Group: 

Table 5 illustrates that the distribution of Medicaid enrollees in 
each of the four major Medicaid eligibility groups (children, adults, 
disabled, and aged)--a program characteristic known to influence 
overall per-enrollee Medicaid spending--varied widely by state in 
calendar year 2008. 

Table 5: Distribution of Medicaid Enrollees by Eligibility Group and 
State, Calendar Year 2008: 

State: Alabama; 
Percentage of Medicaid Enrollees[A]: 
Children: 49.5%; 
Adults: 15.0%; 
Disabled: 24.3%; 
Aged: 11.1%. 

State: Alaska; 
Percentage of Medicaid Enrollees[A]: 
Children: 60.0%; 
Adults: 21.3%; 
Disabled: 12.9%; 
Aged: 5.7%. 

State: Arizona; 
Percentage of Medicaid Enrollees[A]: 
Children: 45.2%; 
Adults: 40.0%; 
Disabled: 9.2%; 
Aged: 5.5%. 

State: Arkansas; 
Percentage of Medicaid Enrollees[A]: 
Children: 57.3%; 
Adults: 16.1%; 
Disabled: 17.5%; 
Aged: 9.1%. 

State: California; 
Percentage of Medicaid Enrollees[A]: 
Children: 40.0%; 
Adults: 41.8%; 
Disabled: 10.8%; 
Aged: 7.4%. 

State: Colorado; 
Percentage of Medicaid Enrollees[A]: 
Children: 58.4%; 
Adults: 16.8%; 
Disabled: 15.3%; 
Aged: 9.4%. 

State: Connecticut; 
Percentage of Medicaid Enrollees[A]: 
Children: 51.9%; 
Adults: 23.9%; 
Disabled: 12.3%; 
Aged: 11.9%. 

State: Delaware; 
Percentage of Medicaid Enrollees[A]: 
Children: 42.7%; 
Adults: 38.5%; 
Disabled: 11.8%; 
Aged: 7.0%. 

State: District of Columbia; 
Percentage of Medicaid Enrollees[A]: 
Children: 47.3%; 
Adults: 23.3%; 
Disabled: 22.7%; 
Aged: 6.7%. 

State: Florida; 
Percentage of Medicaid Enrollees[A]: 
Children: 50.3%; 
Adults: 19.3%; 
Disabled: 18.1%; 
Aged: 12.3%. 

State: Georgia; 
Percentage of Medicaid Enrollees[A]: 
Children: 57.4%; 
Adults: 16.6%; 
Disabled: 17.9%; 
Aged: 8.1%. 

State: Hawaii; 
Percentage of Medicaid Enrollees[A]: 
Children: 46.3%; 
Adults: 33.6%; 
Disabled: 10.7%; 
Aged: 9.4%. 

State: Idaho; 
Percentage of Medicaid Enrollees[A]: 
Children: 63.4%; 
Adults: 12.6%; 
Disabled: 16.7%; 
Aged: 7.3%. 

State: Illinois; 
Percentage of Medicaid Enrollees[A]: 
Children: 55.9%; 
Adults: 25.1%; 
Disabled: 13.4%; 
Aged: 5.6%. 

State: Indiana; 
Percentage of Medicaid Enrollees[A]: 
Children: 58.0%; 
Adults: 20.6%; 
Disabled: 14.0%; 
Aged: 7.5%. 

State: Iowa; 
Percentage of Medicaid Enrollees[A]: 
Children: 48.4%; 
Adults: 28.1%; 
Disabled: 15.0%; 
Aged: 8.5%. 

State: Kansas; 
Percentage of Medicaid Enrollees[A]: 
Children: 55.8%; 
Adults: 14.6%; 
Disabled: 19.6%; 
Aged: 10.0%. 

State: Kentucky; 
Percentage of Medicaid Enrollees[A]: 
Children: 49.1%; 
Adults: 15.3%; 
Disabled: 25.1%; 
Aged: 10.6%. 

State: Louisiana; 
Percentage of Medicaid Enrollees[A]: 
Children: 58.2%; 
Adults: 15.8%; 
Disabled: 16.9%; 
Aged: 9.1%. 

State: Maine; 
Percentage of Medicaid Enrollees[A]: 
Children: 37.1%; 
Adults: 29.5%; 
Disabled: 17.2%; 
Aged: 16.2%. 

State: Maryland; 
Percentage of Medicaid Enrollees[A]: 
Children: 56.2%; 
Adults: 21.0%; 
Disabled: 16.2%; 
Aged: 6.6%. 

State: Massachusetts; 
Percentage of Medicaid Enrollees[A]: 
Children: 33.0%; 
Adults: 40.3%; 
Disabled: 16.2%; 
Aged: 10.5%. 

State: Michigan; 
Percentage of Medicaid Enrollees[A]: 
Children: 53.8%; 
Adults: 23.8%; 
Disabled: 15.6%; 
Aged: 6.7%. 

State: Minnesota; 
Percentage of Medicaid Enrollees[A]: 
Children: 48.4%; 
Adults: 25.5%; 
Disabled: 14.7%; 
Aged: 11.5%. 

State: Mississippi; 
Percentage of Medicaid Enrollees[A]: 
Children: 49.6%; 
Adults: 16.7%; 
Disabled: 23.4%; 
Aged: 10.3%. 

State: Missouri; 
Percentage of Medicaid Enrollees[A]: 
Children: 55.7%; 
Adults: 17.2%; 
Disabled: 18.2%; 
Aged: 8.9%. 

State: Montana; 
Percentage of Medicaid Enrollees[A]: 
Children: 54.4%; 
Adults: 18.5%; 
Disabled: 18.4%; 
Aged: 8.7%. 

State: Nebraska; 
Percentage of Medicaid Enrollees[A]: 
Children: 61.2%; 
Adults: 16.1%; 
Disabled: 13.7%; 
Aged: 8.9%. 

State: Nevada; 
Percentage of Medicaid Enrollees[A]: 
Children: 56.1%; 
Adults: 19.9%; 
Disabled: 15.0%; 
Aged: 8.9%. 

State: New Hampshire; 
Percentage of Medicaid Enrollees[A]: 
Children: 59.7%; 
Adults: 13.6%; 
Disabled: 16.7%; 
Aged: 10.0%. 

State: New Jersey; 
Percentage of Medicaid Enrollees[A]: 
Children: 51.4%; 
Adults: 20.5%; 
Disabled: 16.9%; 
Aged: 11.1%. 

State: New Mexico; 
Percentage of Medicaid Enrollees[A]: 
Children: 57.5%; 
Adults: 25.5%; 
Disabled: 12.3%; 
Aged: 4.7%. 

State: New York; 
Percentage of Medicaid Enrollees[A]: 
Children: 38.9%; 
Adults: 36.8%; 
Disabled: 15.0%; 
Aged: 9.3%. 

State: North Carolina; 
Percentage of Medicaid Enrollees[A]: 
Children: 53.2%; 
Adults: 19.3%; 
Disabled: 17.2%; 
Aged: 10.2%. 

State: North Dakota; 
Percentage of Medicaid Enrollees[A]: 
Children: 51.4%; 
Adults: 21.2%; 
Disabled: 15.0%; 
Aged: 12.4%. 

State: Ohio; 
Percentage of Medicaid Enrollees[A]: 
Children: 53.1%; 
Adults: 21.5%; 
Disabled: 17.3%; 
Aged: 8.1%. 

State: Oklahoma; 
Percentage of Medicaid Enrollees[A]: 
Children: 60.7%; 
Adults: 16.7%; 
Disabled: 14.5%; 
Aged: 8.1%. 

State: Oregon; 
Percentage of Medicaid Enrollees[A]: 
Children: 50.1%; 
Adults: 23.5%; 
Disabled: 16.5%; 
Aged: 9.9%. 

State: Pennsylvania; 
Percentage of Medicaid Enrollees[A]: 
Children: 45.1%; 
Adults: 19.8%; 
Disabled: 24.5%; 
Aged: 10.6%. 

State: Rhode Island; 
Percentage of Medicaid Enrollees[A]: 
Children: 45.1%; 
Adults: 24.6%; 
Disabled: 20.9%; 
Aged: 9.5%. 

State: South Carolina; 
Percentage of Medicaid Enrollees[A]: 
Children: 52.2%; 
Adults: 21.9%; 
Disabled: 17.4%; 
Aged: 8.5%. 

State: South Dakota; 
Percentage of Medicaid Enrollees[A]: 
Children: 62.2%; 
Adults: 15.4%; 
Disabled: 14.5%; 
Aged: 7.9%. 

State: Tennessee; 
Percentage of Medicaid Enrollees[A]: 
Children: 49.7%; 
Adults: 20.2%; 
Disabled: 23.2%; 
Aged: 6.9%. 

State: Texas; 
Percentage of Medicaid Enrollees[A]: 
Children: 62.2%; 
Adults: 14.1%; 
Disabled: 13.6%; 
Aged: 10.1%. 

State: Utah; 
Percentage of Medicaid Enrollees[A]: 
Children: 55.2%; 
Adults: 26.8%; 
Disabled: 13.2%; 
Aged: 4.8. 

State: Vermont; 
Percentage of Medicaid Enrollees[A]: 
Children: 38.2%; 
Adults: 37.1%; 
Disabled: 14.0%; 
Aged: 10.7%. 

State: Virginia; 
Percentage of Medicaid Enrollees[A]: 
Children: 56.1%; 
Adults: 15.4%; 
Disabled: 18.0%; 
Aged: 10.5%. 

State: Washington; 
Percentage of Medicaid Enrollees[A]: 
Children: 54.9%; 
Adults: 21.9%; 
Disabled: 15.7%; 
Aged: 7.6%. 

State: West Virginia; 
Percentage of Medicaid Enrollees[A]: 
Children: 47.4%; 
Adults: 14.6%; 
Disabled: 28.7%; 
Aged: 9.3%. 

State: Wisconsin; 
Percentage of Medicaid Enrollees[A]: 
Children: 43.9%; 
Adults: 29.4%; 
Disabled: 14.5%; 
Aged: 12.2%. 

State: Wyoming; 
Percentage of Medicaid Enrollees[A]: 
Children: 65.3%; 
Adults: 14.3%; 
Disabled: 13.3%; 
Aged: 7.1%. 

State: State average; 
Percentage of Medicaid Enrollees[A]: 
Children: 52.0%; 
Adults: 22.4%; 
Disabled: 16.6%; 
Aged: 9.0%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services (CMS) 
data. GAO-14-456. 

Notes: State average represents the sum of the state percentages 
divided by the number of states. For purposes of this table, we refer 
to the District of Columbia as a state. 

[A] Based on CMS Medicaid Analytic eXtract 2008 Chartbook data for 
calendar year 2008. 

[End of table] 

[End of section] 

Appendix VII: Selected Factors That Are Known to Influence Health Care 
Spending, by State: 

Tables 6 and 7 illustrate state variation on selected factors that are 
known to influence health care spending, such as indicators of 
enrollee health services needs and scope of benefits received. 

Table 6: State Variation on Selected Factors That Can Influence Health 
Care Spending for Aged Medicaid Enrollees, Fiscal or Calendar Year 
2008: 

State: Alabama; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 23.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 23.5%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 17.8%. 

State: Alaska; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 16.8%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 39.7%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 8.2%. 

State: Arizona[D]; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 17.9%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: [Empty]; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: [Empty]. 

State: Arkansas; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 23.1%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 34.6%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 21.9%. 

State: California; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 18.3%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 30.3%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 10.2%. 

State: Colorado; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.2%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 45.0%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 21.9%. 

State: Connecticut; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 30.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 51.1%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 35.7%. 

State: Delaware; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 23.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 26.6%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 21.8%. 

State: District of Columbia; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 21.2%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 27.7%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 20.4%. 

State: Florida; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 21.1%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 18.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 14.2%. 

State: Georgia; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.4%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 23.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 20.4%. 

State: Hawaii; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.2%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 23.3%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 15.9%. 

State: Idaho; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.6%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 47.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 22.2%. 

State: Illinois; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 27.0%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 33.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 28.2%. 

State: Indiana; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 24.4%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 37.9%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 36.3%. 

State: Iowa; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 30.2%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 65.6%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 37.2%. 

State: Kansas; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 28.8%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 54.2%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 35.0%. 

State: Kentucky; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 32.1%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 21.4%. 

State: Louisiana; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 19.1%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 25.2%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 20.3%. 

State: Maine[E]; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 21.9%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: [Empty]; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: [Empty]. 

State: Maryland; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 24.8%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 32.0%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 28.9%. 

State: Massachusetts[F]; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 
[Empty]; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: [Empty]; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 23.6%. 

State: Michigan; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 40.9%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 26.3%. 

State: Minnesota; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 33.4%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 36.0%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 23.9%. 

State: Mississippi; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 23.3%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 27.3%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 21.1%. 

State: Missouri; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 24.5%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 48.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 30.8%. 

State: Montana; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 31.3%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 52.9%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 42.5%. 

State: Nebraska; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 29.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 48.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 37.3%. 

State: Nevada; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 16.6%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 28.2%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 13.7%. 

State: New Hampshire; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 30.9%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 51.0%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 41.0%. 

State: New Jersey; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 29.9%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 38.3%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 26.0%. 

State: New Mexico[D]; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.4%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: [Empty]; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: [Empty]. 

State: New York; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 26.3%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 38.0%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 22.0%. 

State: North Carolina; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 22.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 40.5%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 18.9%. 

State: North Dakota; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 36.8%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 54.9%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 46.1%. 

State: Ohio; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 23.7%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 47.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 34.9%. 

State: Oklahoma; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 20.1%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 44.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 25.5%. 

State: Oregon; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 21.3%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 44.9%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 13.9%. 

State: Pennsylvania; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 24.5%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 32.5%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 29.6%. 

State: Rhode Island; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 33.0%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 38.2%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 35.8%. 

State: South Carolina; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 23.6%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 29.1%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 18.7%. 

State: South Dakota; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 38.9%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 49.6%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 42.5%. 

State: Tennessee; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 24.8%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 24.7%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 23.4%. 

State: Texas; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 19.1%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 35.9%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 17.0%. 

State: Utah; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 19.4%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 28.7%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 23.3%. 

State: Vermont; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 26.3%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 27.3%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 16.4%. 

State: Virginia; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 21.9%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 31.4%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 21.2%. 

State: Washington; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 20.8%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 45.8%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 16.1%. 

State: West Virginia; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 18.1%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 29.3%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 24.3%. 

State: Wisconsin[D]; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 33.2; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: [Empty]; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: [Empty]. 

State: Wyoming; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 26.4%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 48.7%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 35.7%. 

State: State average; 
Percentage of aged Medicaid enrollees who were 85 and older[A]: 24.6%; 
Percentage of aged Medicaid enrollees receiving long-term care 
services[A]: 37.7%; 
Percentage of aged Medicaid enrollees ever institutionalized during 
the year[B,C]: 24.5%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services (CMS) 
data. GAO-14-456. 

Notes: State average represents the sum of state percentages, divided 
by the number of states. For purposes of this table, we refer to the 
District of Columbia as a state. 

[A] Based on CMS Medicaid Statistical Information System (MSIS) data 
for fiscal year 2008. 

[B] Based on CMS Medicaid Analytic eXtract 2008 Chartbook data for 
calendar year 2008. 

[C] Institutionalized enrollees include those receiving Medicaid-
covered services in nursing homes, intermediate care facilities for 
individuals with intellectual disability, mental hospitals for the 
aged, or inpatient psychiatric facilities for those under age 21 at 
any time in 2008. 

[D] Excluded from long-term care service use and ever-
institutionalized data because more than 2 percent of all enrollees in 
the state--and therefore likely a higher percentage of aged enrollees--
received long-term care services through managed care plans and 
therefore were not represented in the fee-for-service data used to 
identify enrollees who received long-term care services during the 
year. 

[E] Excluded from long-term care service use and ever-
institutionalized data because of the state's inability to accurately 
report data related to service use in 2008. 

[F] Excluded from percentage of aged who were 85 years or older and 
long-term care service use data because of errors in fiscal year 2008 
CMS MSIS data. 

[End of table] 

Table 7: State Variation on Selected Factors That Can Influence Health 
Care Spending for Children and Adults, Fiscal or Calendar Year 2008: 

State: Alabama; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 53%; 
Percentage of adult state residents who reported being obese[C]: 32%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
22%. 

State: Alaska; 
Percentage of child Medicaid enrollees in foster care[A]: 5%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0; 
Percentage of adult state residents who reported being obese[C]: 27%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
21%. 

State: Arizona; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 1%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: Arkansas; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 61%; 
Percentage of adult state residents who reported being obese[C]: 30%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
22%. 

State: California; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 55%; 
Percentage of adult state residents who reported being obese[C]: 24%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
14%. 

State: Colorado; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0; 
Percentage of adult state residents who reported being obese[C]: 19%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Connecticut; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0; 
Percentage of adult state residents who reported being obese[C]: 21%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: Delaware; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 4%; 
Percentage of adult state residents who reported being obese[C]: 28%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: District of Columbia; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0; 
Percentage of adult state residents who reported being obese[C]: 22%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: Florida; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 7%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Georgia; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0; 
Percentage of adult state residents who reported being obese[C]: 28%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: Hawaii; 
Percentage of child Medicaid enrollees in foster care[A]: 7%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0; 
Percentage of adult state residents who reported being obese[C]: 2%3; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: Idaho; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: Illinois; 
Percentage of child Medicaid enrollees in foster care[A]: 5%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 5%; 
Percentage of adult state residents who reported being obese[C]: 27%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
20%. 

State: Indiana; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 27%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
24%. 

State: Iowa; 
Percentage of child Medicaid enrollees in foster care[A]: 5%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 20%; 
Percentage of adult state residents who reported being obese[C]: 27%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: Kansas; 
Percentage of child Medicaid enrollees in foster care[A]: 8%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 28%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Kentucky; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 30%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
26%. 

State: Louisiana; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 24%; 
Percentage of adult state residents who reported being obese[C]: 29%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
22%. 

State: Maine; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: Maryland; 
Percentage of child Medicaid enrollees in foster care[A]: 5%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 15%; 
Percentage of adult state residents who reported being obese[C]: 27%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: Massachusetts[D]; 
Percentage of child Medicaid enrollees in foster care[A]: With DSH 
payments distributed across groups based on share of total spending[B]: 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 22%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: Michigan; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 10%; 
Percentage of adult state residents who reported being obese[C]: 30%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
20%. 

State: Minnesota; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 15%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: Mississippi; 
Percentage of child Medicaid enrollees in foster care[A]: 1%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 30%; 
Percentage of adult state residents who reported being obese[C]: 33%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
23%. 

State: Missouri; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 7%; 
Percentage of adult state residents who reported being obese[C]: 29%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
24%. 

State: Montana; 
Percentage of child Medicaid enrollees in foster care[A]: 7%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 24%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Nebraska; 
Percentage of child Medicaid enrollees in foster care[A]: 11%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 27%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Nevada; 
Percentage of child Medicaid enrollees in foster care[A]: 7%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
22%. 

State: New Hampshire; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: New Jersey; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 24%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: New Mexico; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 17%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: New York; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 3%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: North Carolina; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 12%; 
Percentage of adult state residents who reported being obese[C]: 30%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
21%. 

State: North Dakota; 
Percentage of child Medicaid enrollees in foster care[A]: 5%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 28%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: Ohio; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 29%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
21%. 

State: Oklahoma; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 19%; 
Percentage of adult state residents who reported being obese[C]: 31%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
25%. 

State: Oregon; 
Percentage of child Medicaid enrollees in foster care[A]: 7%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: Pennsylvania; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 11%; 
Percentage of adult state residents who reported being obese[C]: 28%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
21%. 

State: Rhode Island; 
Percentage of child Medicaid enrollees in foster care[A]: 7%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 1%; 
Percentage of adult state residents who reported being obese[C]: 22%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: South Carolina; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 27%; 
Percentage of adult state residents who reported being obese[C]: 31%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
21%. 

State: South Dakota; 
Percentage of child Medicaid enrollees in foster care[A]: 8%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 28%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Tennessee; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 31%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
23%. 

State: Texas; 
Percentage of child Medicaid enrollees in foster care[A]: 2%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 29%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: Utah; 
Percentage of child Medicaid enrollees in foster care[A]: 6%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 23%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
10%. 

State: Vermont; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 23%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
17%. 

State: Virginia; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 6%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
18%. 

State: Washington; 
Percentage of child Medicaid enrollees in foster care[A]: 3%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 31%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
16%. 

State: West Virginia; 
Percentage of child Medicaid enrollees in foster care[A]: 4%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 32%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
26%. 

State: Wisconsin; 
Percentage of child Medicaid enrollees in foster care[A]: 5%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 22%; 
Percentage of adult state residents who reported being obese[C]: 26%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

State: Wyoming; 
Percentage of child Medicaid enrollees in foster care[A]: 7%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 0%; 
Percentage of adult state residents who reported being obese[C]: 25%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
21%. 

State: State average; 
Percentage of child Medicaid enrollees in foster care[A]: 4%%; 
Percentage of adult Medicaid enrollees receiving only family planning 
benefits[B]: 9%%; 
Percentage of adult state residents who reported being obese[C]: 27%%; 
Percentage of adult state residents who reported smoking tobacco[C]: 
19%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services (CMS) 
and Centers for Disease Control and Prevention (CDC) data. | GAO-14-
456: 

Notes: State average represents the sum of state percentages, divided 
by the number of states. For purposes of this table, we refer to the 
District of Columbia as a state. 

[A] Based on CMS Medicaid Statistical Information System (MSIS) fiscal 
year 2008 data. 

[B] Based on CMS Medicaid Analytic eXtract 2008 Chartbook data for 
calendar year 2008. 

[C] Based on CDC's Behavioral Risk Factor Surveillance Survey data for 
calendar year 2008. 

[D] Excluded from foster care data because of errors in fiscal year 
2008 CMS MSIS data. 

[End of table] 

[End of section] 

Appendix VIII: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

Carolyn L. Yocom, Director, Health Care, (202) 512-7114, 
yocomc@gao.gov: 

Staff Acknowledgments: 

In addition to the contacts named above, Robert Copeland, Assistant 
Director; Emily Beller; Kye Briesath; Greg Dybalski; Nancy Fasciano; 
Drew S. Long; Vikki Porter; Max Sawicky; Rachel Svoboda; and Hemi 
Tewarson made key contributions to this report. 

[End of section] 

Related GAO Products: 

Medicaid: Use of Claims Data for Analysis of Provider Payment Rates. 
[hyperlink, http://www.gao.gov/products/GAO-14-56R]. Washington, D.C.: 
January 6, 2014. 

Medicaid: Alternative Measures Could Be Used to Allocate Funding More 
Equitably. [hyperlink, http://www.gao.gov/products/GAO-13-434]. 
Washington, D.C.: May 10, 2013. 

Medicaid: More Transparency of and Accountability for Supplemental 
Payments Are Needed. [hyperlink, 
http://www.gao.gov/products/GAO-13-48]. Washington, D.C.: November 26, 
2012. 

Medicaid: Data Sets Provide Inconsistent Picture of Expenditures. 
[hyperlink, http://www.gao.gov/products/GAO-13-47]. Washington, D.C.: 
October 29, 2012. 

Medicaid: States Reported Billions More in Supplemental Payments in 
Recent Years. [hyperlink, http://www.gao.gov/products/GAO-12-694]. 
Washington, D.C.: July 20, 2012. 

Medicaid: Prototype Formula Would Provide Automatic, Targeted 
Assistance to States during Economic Downturns. [hyperlink, 
http://www.gao.gov/products/GAO-12-38]. Washington, D.C.: November 10, 
2011. 

Medicaid: Improving Responsiveness of Federal Assistance to States 
during Economic Downturns. [hyperlink, 
http://www.gao.gov/products/GAO-11-395]. Washington, D.C.: March 31, 
2011. 

Medicaid Managed Care: CMS's Oversight of States' Rate Setting Needs 
Improvement. [hyperlink, http://www.gao.gov/products/GAO-10-810]. 
Washington, D.C.: August 4, 2010. 

Medicaid: CMS Needs More Information on the Billions of Dollars Spent 
on Supplemental Payments. [hyperlink, 
http://www.gao.gov/products/GAO-08-614]. Washington, D.C.: May 30, 
2008. 

[End of section] 

Footnotes: 

[1] States administer their individual Medicaid programs subject to 
approval and oversight by the Centers for Medicare & Medicaid Services 
(CMS), a federal agency within the Department of Health and Human 
Services (HHS). Medicaid serves certain categories of low-income 
individuals, such as children, pregnant women, parents, persons with 
disabilities, and persons aged 65 and older. 

[2] See Congressional Budget Office, Updated Budget Projections: 2014 
to 2024 (Washington, D.C.: April 2014). Under PPACA, states are 
permitted to expand eligibility for Medicaid to nonpregnant, 
nonelderly adults whose income does not exceed 133 percent of the 
federal poverty level and will receive enhanced federal funding for 
this newly eligible population. As of April 1, 2014, 26 states and the 
District of Columbia had decided to implement this expansion. 

[3] See National Conference of State Legislators, Payment Reform 
(Denver, Colo.: 2013). 

[4] For example, a fiscal year 2012 appropriations bill passed by the 
House would have made Medicaid a block grant program, and other 
recently proposed legislation would place per capita caps on federal 
Medicaid funding. Under block grant proposals, the federal government 
generally provides states fixed grant amounts indexed to grow at a 
specified rate over time. In general, such block grants would not 
otherwise increase to reflect changes in states' Medicaid costs and 
enrollment. Under per capita cap proposals, the federal government 
generally provides states with a specified amount of funding per 
enrollee, but enrollment and overall spending are not necessarily 
limited. 

[5] For example, we previously reported that the formula used under 
the current financing structure is an incomplete measure to equitably 
allocate federal funding among states and that available data sources 
could be used to more equitably allocate funding. See GAO, Medicaid: 
Alternative Measures Could Be Used to Allocate Funding More Equitably, 
[hyperlink, http://www.gao.gov/products/GAO-13-434] (Washington, D.C.: 
May 10, 2013). 

[6] In this report, we use "fiscal year" to refer to the federal 
fiscal year, and references to Medicaid spending refer to combined 
federal and state expenditures. 

[7] Both enrollment and expenditure data include all enrollees, 
regardless of the scope of benefits offered. 

[8] Federal Medicaid law requires states to make DSH payments to 
qualifying hospitals that serve large numbers of Medicaid and 
uninsured low-income patients. Data in CMS's 2010 Actuarial Report on 
the Financial Outlook for Medicaid indicate that, nationally, 
administrative costs represented about 5 percent of Medicaid outlays 
in fiscal year 2009. 

[9] We excluded Massachusetts from all analyses of state Medicaid 
spending because, according to CMS officials, the state's fiscal year 
2008 enrollment data included information on many individuals who were 
not eligible for Medicaid and were instead covered with state funds. 
We excluded Maine from analyses of state Medicaid spending at the 
eligibility-group level (children, adults, disabled, and aged), 
because the state was unable to accurately report spending by service 
category, which OACT uses to estimate state spending by eligibility 
group. See appendix I for more information on OACT's methodology. 

[10] See CMS, Medicaid Analytic eXtract 2008 Chartbook, research 
conducted by Mathematica Policy Research (Washington, D.C.: 2012). 
MSIS data are available in several formats. MAX files are considered 
to have the highest-quality MSIS data, but also have delayed 
availability. 

[11] The MSIS Annual Person Summary files include enrollment data and 
annual expenditure data for each person by type of service. The MSIS 
State Summary DataMart files include aggregated summary information on 
Medicaid enrollees, such as the number of enrollees in particular age 
or eligibility groups. 

[12] In Arizona, New Mexico, and Wisconsin, more than 2 percent of all 
enrollees--and therefore likely a higher percentage of aged enrollees-
-received long-term care services through managed care plans and 
therefore were not represented in the fee-for-service data used to 
identify enrollees who had received long-term care services during the 
year. Maine was unable to accurately report spending by service 
category, such as long-term care services. 

[13] According to CMS officials, fiscal year 2008 MSIS data for 
Massachusetts mistakenly included information on many individuals who 
were not eligible for Medicaid and were instead covered with state 
funds; 
however, the problem was corrected in MAX. 

[14] We interviewed representatives from the following consulting 
firms: Deloitte Consulting LLP, Mercer Government Human Services 
Consulting, Milliman, Optumas, and PricewaterhouseCoopers LLP. We 
included the District of Columbia as a state. 

[15] We selected three states--Arizona, Florida, and New York--that 
have a high proportion of their Medicaid population, including 
individuals in the aged or disabled eligibility groups, enrolled in 
managed care plans. 

[16] One study estimated that, nationally, optional populations 
accounted for about 30 percent of Medicaid enrollment in 2007, while 
optional services--primarily long-term care services--accounted for 
about 33 percent of Medicaid expenditures. See Kaiser Commission on 
Medicaid and the Uninsured, January 2012 Update: Medicaid Enrollment 
and Expenditures by Federal Core Requirements and State Options 
(Washington, D.C.: Kaiser Family Foundation, 2012). 

[17] Under Section 1115 of the Social Security Act, states may apply 
for and receive CMS approval for demonstration waivers that allow 
states to deviate from their traditional Medicaid program. 
Specifically, states may receive a waiver for certain Medicaid 
requirements and approval to claim federal matching funds for items 
not otherwise covered by Medicaid. For example, states may apply for a 
Section 1115 demonstration waiver in order to provide only family 
planning benefits for individuals--typically women of childbearing age-
-who are not otherwise eligible for Medicaid. In addition, most 
Medicaid enrollees who are aged 65 and older or disabled are also 
eligible for Medicare, the federal health insurance program that 
covers seniors aged 65 and older, disabled persons, and individuals 
with end-stage renal disease. While many of these enrollees, referred 
to as "dual-eligibles," qualify for the full range of Medicaid 
benefits provided in their state, others qualify only to receive 
assistance for Medicare premiums and cost-sharing. 

[18] The FMAP is calculated using a statutory formula based on the 
state's per capita income (PCI) in relation to the national PCI: FMAP 
= 1.00 - 0.45 (State PCI/U.S. PCI)and may range from 50 to 83 percent. 
The federal government pays a larger portion of Medicaid expenditures 
in states with low PCI relative to the national average, and a smaller 
portion for states with higher PCIs. 

[19] Under federal law, states may only claim federal matching funds 
for DSH payments made to qualifying hospitals up to the states' DSH 
allotments, which are based on a statutory formula and vary across the 
states. Individual hospitals may only receive DSH payments up to their 
hospital-specific limit. States also make DSH payments out of their 
allotment to institutions for mental disease and other mental health 
facilities that provide inpatient services. However, federal law 
limits the total amount of federal matching funds that states may 
claim for DSH payments made to these mental health facilities.42 
U.S.C. § 1396r-4. 

[20] Unlike DSH payments, non-DSH supplemental payments are not 
required to be made under federal law or regulations. One type of non-
DSH supplemental payment, also known as upper payment limit payments, 
can be made to providers above the standard Medicaid payment rates but 
within the upper payment limit, which is the estimated amount that 
Medicare pays for comparable services. In addition, under upper 
payment limit arrangements, payments are subject to aggregate limits 
by provider type, but there are not firm dollar limits on individual 
providers or at the state level. See 42 C.F.R. §§ 447.272, 447.321. 
Some states also receive CMS approval to make supplemental payments to 
hospitals and other providers under Section 1115 demonstration 
waivers. These supplemental payments are governed by the terms and 
conditions of the individual demonstration waiver and may be subject 
to firm dollar limits and other requirements. 

[21] States also maintain data that could be used to analyze per-
enrollee spending, such as encounter data used by some states to 
develop managed care capitation rates. However, states' data are not 
suitable for purposes of examining spending across states as such data 
may not be fully comparable across states. 

[22] State Medicaid agencies are required to submit the quarterly 
expenditure data by means of the Quarterly Medicaid Statement of 
Expenditures for the Medical Assistance Program, also known as the 
form CMS-64, within 30 days of the end of each quarter. 42 C.F.R. § 
430.30. The data are stored in the Medicaid Budget and Expenditure 
System. 

[23] States are required to have in operation a mechanized claims-
processing and information-retrieval system based on certain federal 
requirements. See 42 U.S.C. § 1396b(r). For all claims filed on or 
after January 1, 1999, states have been required to electronically 
transmit claims data, including detailed individual enrollee encounter 
data, in a format consistent with MSIS. See 42 U.S.C. § 1396b(r)(1)(F). 

[24] This project will result in a new data system known as 
Transformed-MSIS, or T-MSIS. The goals of T-MSIS include improving the 
timeliness, quality, and level of detail of the MSIS data and 
providing a link to the CMS-64 data in order to support improved 
program and financial management, evaluations, fraud identification, 
and program efficiency. T-MSIS data are not intended to replace the 
CMS-64 data. T-MSIS is scheduled to be implemented July 1, 2014. In 
September, 2013, the HHS Office of Inspector General reported that CMS 
had made some progress in implementing T-MSIS with 12 volunteer 
states, but raised concerns about the completeness and accuracy of T-
MSIS data upon national implementation. See Department of Health and 
Human Services Office of Inspector General, Early Outcomes Show 
Limited Progress for the Transformed Medicaid Statistical Information 
System, OEI-05-12-00610 (Washington, D.C.: September 2013). 

[25] For examples, see CMS, 2012 Actuarial Report on Financial Outlook 
for Medicaid (Baltimore, Md.: 2012), and Medicaid and CHIP Payment and 
Access Commission (MACPAC), March 2013 Report to the Congress on 
Medicaid and CHIP (Washington, D.C.: March 15, 2013). 

[26] These spending estimates include federal and state spending on 
regular Medicaid payments made to providers and managed care plans for 
covered services, as well as DSH and non-DSH supplemental payments, 
but do not include administrative costs. Enrollment is measured in 
terms of full-year-equivalent enrollees. Both enrollment and 
expenditure data include all enrollees, regardless of the scope of 
benefits offered. 

[27] Adjustments are made by states to correct overpayments, 
underpayments, or reporting errors to spending reported in prior 
quarterly reports. Collections include reimbursement from private or 
public insurance plans or other third parties that are liable for some 
portion of enrollees' health care costs, as well as recoveries made 
through efforts to reduce waste, fraud, and abuse. The annual summary 
reports "roll up," or aggregate, the dollar amounts states reported in 
their quarterly reports for the year. 

[28] This report is called the CMS-64 Base Financial Management 
Report. The other annual summary report that provides data on states' 
total spending by type of service is called the CMS-64 Net Services 
Financial Management Report. 

[29] These sums may also include adjustments to spending for Medicaid 
expansion programs under the State Children's Health Insurance Program 
as well as for the traditional Medicaid program. 

[30] In the other summary report, the CMS-64 Net Services Financial 
Management Report, the adjustments are applied to the current year's 
spending, by type of service, and program. For example, if a state 
reported negative adjustments totaling $20 million to its spending on 
inpatient care services during the prior fiscal year, that $20 million 
would be subtracted from the state's current reported spending for 
that service, rather than being subtracted from its spending on 
inpatient care services for the prior year. 

[31] As they do for adjustments, states must also submit a separate 
form to report collections but are not required to indicate the time 
period in which the original claims were paid. 

[32] For California and the other five states (Alaska, Georgia, 
Indiana, Mississippi, and Utah), most of the difference is due to 
adjustments rather than collections. According to CMS officials, some 
states consistently report more adjustments than others. 

[33] When states submit their quarterly CMS-64 expenditure reports, 
they must also submit an additional form or forms detailing any 
adjustments to spending reported for prior periods. In each form, the 
state indicates the amount of adjustment, positive or negative, by 
type of service, and the federal match that was claimed for that 
spending. 

[34] The number of forms states must submit to report adjustments--and 
which would therefore need to be reviewed to manually apply 
adjustments to the appropriate time period--partly depends on the time 
period over which the original spending occurred. According to CMS 
officials, states report any adjustments to previously reported 
spending on separate forms by the quarter--or, in the case of spending 
from fiscal year 2008 or before, by the year--in which the spending 
was originally reported. For example, if a state needed to correct 
amounts reported throughout fiscal years 2009 and 2010, it would need 
to submit at least eight prior period adjustment forms--four for each 
year. The number of forms required also depends on whether the 
original spending was for the traditional Medicaid program operated 
under the Medicaid state plan, for programs operated under waivers, or 
both, because adjustments to spending for waiver programs must be 
reported separately for each waiver. CMS officials also told us that 
states report most adjustments within 2 years, but may report some 
adjustments, including those resulting from federal audits, 3 or more 
years after the original spending occurred. In such a case, adjusting 
a state's reported spending for a given year could involve compiling a 
dozen or more subsequent quarterly reports. 

[35] In addition, while states were required to submit annual audits 
and reports on DSH payments in 2010, there are not similar reporting 
requirements for non-DSH supplemental payments. We have previously 
recommended that CMS take steps to improve states' reporting of 
supplemental payments and that Congress consider requiring CMS to take 
such steps. See GAO, Medicaid: More Transparency of and Accountability 
for Supplemental Payments Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-13-48] (Washington, D.C.: Nov. 26, 
2012). 

[36] GAO, Medicaid: States Reported Billions More in Supplemental 
Payments in Recent Years, [hyperlink, 
http://www.gao.gov/products/GAO-12-694] (Washington, D.C.: July 20, 
2012). 

[37] For example, some non-DSH supplemental payments to hospitals may 
be included with spending for inpatient or outpatient care. According 
to HHS officials, CMS has held training for states on completing the 
CMS-64 form and are continuing to work with states to help ensure 
accurate reporting of non-DSH supplemental payments on the CMS-64. 
Officials also noted that, in 2013, CMS began requiring states to 
annually submit data to demonstrate that Medicaid provider payments, 
including certain types of non-DSH supplemental payments, are below 
federal limits. CMS anticipates these submissions will assist the 
agency to identify errors in state reporting. 

[38] Data from fiscal year 2013 suggest that many states that reported 
higher DSH payments reported lower non-DSH supplemental payments and 
vice versa. 

[39] See Debra Lipson, Margaret Colby, Tim Lake, Su Liu, and Sarah 
Turchin, Value for the Money Spent? Exploring the Relationship between 
Medicaid Costs and Quality (Washington, D.C.: Mathematica Policy 
Research, 2010), p. 6. Another argument for excluding these funds is 
that some states have used these payments to inappropriately increase 
federal Medicaid matching payments. See GAO, High Risk Series: An 
Update, [hyperlink, http://www.gao.gov/products/GAO-11-278] 
(Washington, D.C.: February 2011), p. 163. 

[40] On average, DSH payments represented about 4 percent of states' 
overall spending in fiscal year 2008, but that percentage varied 
significantly and, in three states (Louisiana, New Hampshire, and New 
Jersey), these payments represented more than 15 percent of overall 
spending. See table 3 in appendix IV and table 4 in appendix V for 
more detailed information about DSH payments in fiscal year 2008. 

[41] This is the general approach that the Medicaid and CHIP Payment 
and Access Commission (MACPAC) used to distribute DSH payments among 
eligibility groups in its estimates of spending per enrollee. See 
Medicaid and CHIP Payment and Access Commission, Report to the 
Congress on Medicaid and CHIP (Washington, D.C.: June 2012), p. 138. 

[42] In the CMS-64, spending for enrollees in capitated managed care 
plans is reported as payments to managed care organizations or prepaid 
health plans, not as payments for specific types of services. 

[43] See Medicaid Analytic eXtract 2008 Chartbook, Table 3.2. 

[44] Four states did not have reliable data available on the 
proportion of aged enrollees receiving long-term care services. 
Specifically, in Arizona, New Mexico and Wisconsin, more than 2 
percent of all enrollees--and therefore likely a higher percentage of 
aged enrollees-
-received long-term care services through managed care plans and 
therefore were not represented in the FFS data used to identify 
enrollees who received long-term care services during the year. Maine 
was unable to accurately report its spending by service category. We 
also excluded a fifth state, Massachusetts, from this analysis because 
of errors in fiscal year 2008 CMS data. 

[45] Our analysis of MSIS data showed that, on average, states spent 
$41,752 per enrollee for those receiving long-term care services in 
institutional settings in fiscal year 2008, compared to an average of 
$20,736 per enrollee for those receiving long-term care services in 
home-and community-based settings. 

[46] See Medicaid Analytic eXtract 2008 Chartbook, Table A3.5. Four 
states did not have reliable data available on the proportion of 
enrollees receiving institutional care services. Specifically, in 
Arizona, New Mexico, and Wisconsin, more than 2 percent of all 
enrollees--and therefore likely a higher percentage of aged enrollees-
-received long-term care services through managed care plans and 
therefore were not represented in the FFS data used to identify 
enrollees who were ever institutionalized during the year. Maine was 
unable to accurately report its spending by service category. 

[47] Our analysis of MSIS data showed that, for children who received 
services, states spent an average of about $8,056 per foster care 
child in fiscal year 2008 compared to an average of about $2,055 per 
non-foster-care child. 

[48] One study found that, across all payers, per capita medical 
spending was $1,429 (about 42 percent) higher for obese people than 
for people of normal weight in 2006. The authors noted that costs 
attributable to obesity are due almost entirely to costs of treating 
diseases that obesity promotes, such as diabetes. See Eric A. 
Finkelstein, Justin G. Trogdon, Joel W. Cohen, and William Dietz, 
"Annual Medical Spending Attributable to Obesity: Payer-and Service-
Specific Estimates," Health Affairs, 28, no. 5 (2009). The 
Congressional Budget Office found that annual per capita health care 
spending for current or former smokers was 11 to 16 percent higher 
than for people who have never smoked, depending on their ages, in 
2008 dollars. See Congressional Budget Office, Raising the Excise Tax 
on Cigarettes: Effects on Health and the Federal Budget (Washington, 
D.C.: June 2012). 

[49] See Medicaid Analytic eXtract 2008 Chartbook, Figure 2.10. These 
spending figures do not include DSH payments or other supplemental 
payments. 

[50] See Medicaid Analytic eXtract 2008 Chartbook , Table A7.2. 

[51] We did not assess differences among states in actual Medicaid FFS 
provider payment rates for specific services. To the extent that 
payment rates are driven by the costs of delivering health care 
services, differences across states in average wages for health care 
workers would translate into corresponding differences in payment 
rates. For more information on state Medicaid provider payment rates, 
see GAO, Medicaid: Use of Claims Data for Analysis of Provider Payment 
Rates, [hyperlink, http://www.gao.gov/products/GAO-14-56R]. 
(Washington, D.C.: Jan. 6, 2014.) 

[52] See [hyperlink, http://www.gao.gov/products/GAO-13-434], pp. 24-
27. The most conservatively calculated health services cost index 
assumed that personnel accounted for 50 percent of the total cost to 
provide health services--the minimum proportion of costs attributed to 
personnel in Medicare's prospective payment systems for a variety of 
services. The differences among states were greater based on an index 
that assumed that personnel account for a higher percentage of total 
costs. 

[53] Children in foster care, most of whom are eligible for Medicaid, 
are an especially vulnerable population because often they have been 
subjected to traumatic experiences involving abuse or neglect and they 
may suffer from multiple, serious mental health conditions. See GAO, 
Children's Mental Health: Concerns Remain About Appropriate Services 
for Children in Medicaid and Foster Care, [hyperlink, 
http://www.gao.gov/products/GAO-13-15] (Washington, D.C.: Dec. 10, 
2013). 

[54] For example, encounter data may specify an enrollee's diagnosed 
health conditions or prescribed medications that may be used to infer 
such conditions. 

[55] One consulting firm official told us that states with small 
populations in managed care may decide that the data and other 
challenges and costs involved with implementing risk adjustment 
outweigh the benefits. 

[56] States initially base managed care rates on FFS data, but need to 
transition to encounter data after enrollees have been in managed care 
for several years because the FFS data become outdated. 

[57] Some of the state and consulting firm officials told us that some 
managed care plans do not provide states with the complete or accurate 
encounter data that states are required to submit to CMS in MSIS. Some 
consulting firm officials suggested that states build incentives into 
their plan contracts to encourage plans to report accurate data. In 
addition, PPACA gives the Secretary of Health and Human Services the 
authority to withhold a state's federal Medicaid matching funds if the 
state does not report enrollee encounter data to MSIS, as required by 
HHS. 42 U.S.C. § 1396b(i)(25). A CMS official recently indicated that 
CMS has prioritized obtaining and validating states' encounter data in 
MSIS. In a prior report, we found that CMS planned to emphasize the 
need for more complete encounter data because the agency has 
determined that states' encounter data that do not include pricing 
information are not sufficient for setting rates. See GAO, Medicaid 
Managed Care: CMS's Oversight of States' Rate Setting Needs 
Improvement, [hyperlink, http://www.gao.gov/products/GAO-10-810] 
(Washington, D.C.: Aug. 4, 2010). 

[58] State officials told us that since the state transitions to risk 
adjustment may have resulted in plans receiving higher or lower 
payments, they have phased in risk-adjusted rate changes over several 
years to allow plans to adapt to potential payment changes. 

[59] For more information on how economic changes may affect Medicaid 
enrollment, see GAO, Medicaid: Prototype Formula Would Provide 
Automatic, Targeted Assistance to States during Economic Downturns. 
[hyperlink, http://www.gao.gov/products/GAO-12-38], (Washington, D.C.: 
Nov. 10, 2011); 
and Medicaid: Improving Responsiveness of Federal Assistance to States 
during Economic Downturns. [hyperlink, 
http://www.gao.gov/products/GAO-11-395] (Washington, D.C.: Mar. 31, 
2011). 

[60] State Medicaid agencies are required to submit these aggregate 
expenditure data 30 days after a quarter has ended by means of the 
Quarterly Medicaid Statement of Expenditures for the Medical 
Assistance Program--also known as the form CMS-64--within the Medicaid 
Budget and Expenditure System. CMS uses the data to compute the 
federal financial participation for each state's Medicaid program 
costs. Federal Medicaid law requires states to make DSH payments to 
qualifying hospitals that serve large numbers of Medicaid and 
uninsured low-income patients. States also make other supplemental 
payments to hospitals and other providers that, for example, serve 
high-cost Medicaid enrollees. 

[61] State Medicaid agencies are required to provide CMS, through 
MSIS, with quarterly electronic files approximately 45 days after a 
quarter has ended that contain data on the persons covered by Medicaid 
and on claims for medical services reimbursed by the Medicaid program. 

[62] Adjustments are made to correct overpayments, underpayments, or 
reporting errors that relate to spending reported in prior quarterly 
reports. Collections include reimbursement from private or public 
insurance plans or other third parties that are liable for some 
portion of enrollees' health care costs, as well as recoveries made 
through efforts to reduce waste, fraud, and abuse. 

[63] Specifically, we collapsed three eligibility groups (adults, 
unemployed adults, and enrollees who qualify for Medicaid under 
provisions of the Breast and Cervical Cancer Act) into the adult 
eligibility group, and three other eligibility groups (children, 
children of unemployed adults, and foster care children) into the 
children eligibility group. 

[64] States were not required to separately report non-DSH 
supplemental payments until fiscal year 2010, and have not done so 
consistently since then. See GAO, Medicaid: More Transparency and 
Accountability for Supplemental Payments Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-13-48] (Washington, D.C., Nov. 26, 
2012). 

[65] This is the general approach that the Medicaid and CHIP Payment 
and Access Commission (MACPAC) uses to distribute DSH payments among 
eligibility groups in its estimates of spending per enrollee. See 
Medicaid and CHIP Payment and Access Commission, Report to the 
Congress on Medicaid and CHIP (Washington, D.C.: June 2012), pp. 138-
141. 

[66] In the other annual summary report, collections are reported as a 
separate line item, but adjustments are folded into the current year's 
spending, by type of service, and program. 

[67] These sums may also include adjustments to spending for Medicaid 
expansion programs under the State Children's Health Insurance Program 
as well as for the traditional Medicaid program. 

[68] Under federal law, states may only claim federal matching funds 
for DSH payments made to qualifying hospitals up to the states' DSH 
allotments, which are based on a statutory formula and vary across the 
states. Individual hospitals may only receive DSH payments up to their 
hospital-specific limit. States also make DSH payments out of their 
allotment to institutions for mental disease and other mental health 
facilities that provide inpatient services. However, federal law 
limits the total amount of federal matching funds that states may 
claim for DSH payments made to these mental health facilities. 42 
U.S.C. § 1396r-4. 

[End of section] 

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