GAO recommends automatic increases in FMAP

Posted on November 10, 2011 | No Comments
Filed under Congressional Documents, Government Accountability Office, Health Care Quality and Delivery System Reform, Library

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Implementation Briefs

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A recent Government Accountability Office (GAO) report introduces a prototype formula to provide states with temporary Medicaid assistance during national economic downturn. Once a threshold number of states–26 in the GAO formula–demonstrate a sustained decrease in their employment-to-population ratio, temporary increases to the Federal Medical Assistance Percentage (FMAP) will be automatically triggered under the GAO plan. This assistance will end when fewer than the threshold number of states show a decline in the ratio. Targeted state assistance would be calculated based on 1) increases in unemployment, as a proxy for changes in Medicaid enrollment; and 2) reductions in total wages and salaries, as a proxy for changes in states’ revenues. Such assistance would facilitate state budget planning, provide states with greater fiscal stability, and better align federal assistance with the magnitude of the economic downturn’s effect on individual states.

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