MEDICAID

States Reported 

Billions More in 

Supplemental 

Payments in Recent 

Years

Report to the Committee on Finance, 

U.S. Senate

July 2012

GAO-12-694

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United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-694, a report to the 

Committee on Finance, U.S. Senate

July 2012

MEDICAID

States Reported Billions More in Supplemental 

Payments in Recent Years

Why GAO Did This Study

GAO designated Medicaid a high-risk 

program because of concerns about its 

size, growth, and inadequate fiscal 

oversight. The program cost the 

federal government and states an 

estimated $383 billion in fiscal year 

2010. In addition to regular Medicaid 

payments to providers, states make 

supplemental payments, including 

DSH payments, which are intended to 

offset the uncompensated costs of 

care provided to uninsured individuals 

and Medicaid beneficiaries. States also 

make other supplemental payments, 

which we refer to as non-DSH 

supplemental payments, to hospitals 

and other providers, for example, to 

help offset the costs of care provided 

to Medicaid beneficiaries. GAO and 

others have raised concerns about the 

transparency of states’ Medicaid 

supplemental payments. GAO was 

asked to provide information on 

supplemental payments.

GAO examined (1) how much states

reported paying in supplemental 

Medicaid payments during fiscal year 

2010 and (2) how non-DSH 

supplemental payments reported 

during 2010 compared with those 

reported during 2006 and reasons for 

differences. GAO analyzed CMS’s 

Medicaid expenditure data for all states 

and information from CMS and other 

sources about non-DSH supplemental 

payments in a nongeneralizable 

sample of 11 states selected to capture 

a mix of relevant characteristics. 

In its comments on a draft of GAO’s 

report, HHS stated that HHS and CMS 

will continue their ongoing efforts to 

improve states’ reporting of 

supplemental Medicaid payments.

What GAO Found

States reported $32 billion in Medicaid supplemental payments during fiscal year 

2010, but the exact amount of supplemental payments is unknown because state 

reporting was incomplete. On expenditure reports used to obtain federal funds 

filed with the Department of Health and Human Services’ (HHS) Centers for 

Medicare & Medicaid Services (CMS), states reported the following: 

• A total of $17.6 billion in Disproportionate Share Hospital (DSH) payments. 

The 10 states reporting the largest total DSH payments in fiscal year 2010 

accounted for more than 70 percent of the nationwide total, with 4 states—

New York, California, Texas, and New Jersey—accounting for almost half 

(47 percent). DSH payments as a percentage of total Medicaid payments 

varied considerably—ranging from 1 to 17 percent—among the 50 states that 

reported DSH payments. 

• A total of $14.4 billion in non-DSH supplemental payments to hospitals and 

other providers. Because not all states reported these payments separately, 

complete information is not available. Like DSH payments, non-DSH 

supplemental payments as a percentage of total state Medicaid spending 

varied considerably—also ranging from 1 to 17 percent—among the 30 

reporting states. These payments can also constitute a large portion of 

states’ expenditures for particular categories of services, such as inpatient or 

outpatient hospital, nursing facility, or physician and surgical services. For 

example, non-DSH supplemental payments for inpatient hospital services 

ranged from 1 to 48 percent of state expenditures for these services among 

reporting states.

CMS officials told GAO that they were taking steps to improve states’ reporting of 

non-DSH supplemental payments, including working with states to train staff on 

reporting of payments and on identifying and resolving reporting problems. 

States’ reported non-DSH supplemental payments were more than $8 billion 

higher during 2010 than during 2006, the year for which GAO previously reported 

on the amount of these payments. More complete state reporting of payments 

and new and modified supplemental payments were factors in this increase. The 

information available to identify changes from 2006 to 2010 came from 39 states 

that separately reported non-DSH supplemental payments during either 2006 or 

2010 or both. Most of the increase was from the 15 states that reported some 

payments in both years and reported higher non-DSH supplemental payments 

during 2010 than 2006. In addition, most of the reported increase was for 

inpatient hospital services. In 11 selected states, GAO found that new and 

modified supplemental payments contributed to some increases. For example, 

new and modified supplemental payments for hospital services in Colorado and 

Illinois are estimated to increase the states’ non-DSH supplemental payments by 

about $300 million and $1 billion per year, respectively. However, data limitations 

prevented GAO from quantifying the full extent to which the increase was 

attributable to new and modified payments. In light of the apparent increase in 

non-DSH supplemental payments, ongoing federal efforts to improve the 

completeness of reporting are important for effective oversight and to better 

understand the payments’ role in financing Medicaid services. 

View GAO-12-694. For more information, 

contact Katherine Iritani at (202) 512-7114 or 

iritanik@gao.gov.
Page i GAO-12-694 Supplemental Medicaid Payments

Letter 1 

Background 6

States Reported $32 Billion in Supplemental Medicaid Payments 

during Fiscal Year 2010, but the Exact Amount of Supplemental 

Payments Is Unknown 9

Reported Non-DSH Supplemental Payments Were over $8 Billion 

Higher during 2010 Than during 2006, and New and Modified 

Supplemental Payments Were a Factor in the Increase 17

Concluding Observations 24

Agency Comments 24

Appendix I Scope and Methodology 26

Appendix II Supplemental Medicaid Payments Reported during 2010 30

Appendix III Non-DSH Supplemental Medicaid Payments Reported during 2006 

and 2010 52

Appendix IV Comments from the Department of Health and Human Services 58

Appendix V GAO Contact and Staff Acknowledgments 59

Related GAO Products 60

Tables

Table 1: States’ Separate Reporting of Non-DSH Supplemental 

Payments during 2006 and 2010, by Relative Payment 

Amount 20

Table 2: State Supplemental Medicaid Payments Reported during 

Fiscal Year 2010 as a Percentage of Total Reported State 

Medicaid Payments 31

Contents
Page ii GAO-12-694 Supplemental Medicaid Payments

Table 3: DSH Supplemental Payments for Traditional Hospital and 

Mental Health Facility Services Reported during Fiscal 

Year 2010 33

Table 4: Non-DSH Supplemental Payments Reported during Fiscal 

Year 2010 by Category of Service 35

Table 5: Non-DSH Supplemental Payments for Inpatient Hospital 

Services Reported during Fiscal Year 2010 38

Table 6: Non-DSH Supplemental Payments for Outpatient Hospital 

Services Reported during Fiscal Year 2010 40

Table 7: Non-DSH Supplemental Payments for Nursing Facility 

Services Reported during Fiscal Year 2010 42

Table 8: Non-DSH Supplemental Payments for Physician and 

Surgical Services Reported during Fiscal Year 2010 44

Table 9: Non-DSH Supplemental Payments for Other Practitioners’ 

Services Reported during Fiscal Year 2010 46

Table 10: Non-DSH Supplemental Payments for Intermediate Care 

Facility Services Reported during Fiscal Year 2010 49

Table 11: Non-DSH Supplemental Payments Reported during Fiscal 

Years 2006 and 2010 53

Table 12: Non-DSH Supplemental Payments States Reported during 

Fiscal Years 2006 and 2010 by Category of Service 55

Figures

Figure 1: DSH Payments Reported by States during Federal Fiscal 

Year 2010, in Dollars and as a Percentage of the State’s 

Total Medicaid Payments 11

Figure 2: Non-DSH Supplemental Payments Separately Reported by 

States during Federal Fiscal Year 2010, in Dollars and as a 

Percentage of the State’s Total Medicaid Payments 14

Figure 3: Non-DSH Supplemental Payments Separately Reported 

during 2010 by Category of Service (Dollars in Millions) 15

Figure 4: States’ Separate Reporting of Non-DSH Supplemental 

Payments during Fiscal Years 2006 and 2010 19
Page iii GAO-12-694 Supplemental Medicaid Payments

Abbreviations

CMS Centers for Medicare & Medicaid Services

DSH Disproportionate Share Hospital

FMR Financial Management Report

HHS Department of Health and Human Services

UPL Upper Payment Limit

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Page 1 GAO-12-694 Supplemental Medicaid Payments

United States Government Accountability Office

Washington, DC 20548

July 20, 2012

The Honorable Max Baucus

Chairman

The Honorable Orrin G. Hatch

Ranking Member

Committee on Finance

United States Senate

In 2003, GAO designated Medicaid—the federal-state program that 

finances health care for certain low-income individuals—as a high-risk 

program because of growing concern about its size, growth, and 

inadequate fiscal oversight, including federal oversight of supplemental 

payments.1 Supplemental payments are separate from and in addition to 

payments made at a state’s regular Medicaid rates. The federal 

government and states share in the cost of Medicaid, which in fiscal year 

2010 totaled about $383 billion.2 As the program continues to grow in cost 

and significance, policymakers and others need better information to 

manage the program, including information about the amount and 

purposes of Medicaid provider payments. GAO has found that this 

includes a need for information about supplemental payments, which 

have contributed to Medicaid cost growth in the past.3

Medicaid financing is a joint responsibility of the federal government and 

states. States pay qualified health care providers for covered services 

provided to Medicaid beneficiaries, and then seek reimbursement for the 

federal share of those payments. Under the Social Security Act, state 

Medicaid payments are required to be consistent with efficiency, 

economy, and quality of care and sufficient to enlist an adequate number 

 

1

GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011).

2

This figure represents combined federal and state Medicaid expenditures for provider 

services in fiscal year 2010, the latest year for which data were available when we 

conducted our work. For the purpose of this report, expenditures for administration are not 

included. Medicaid programs are administered by the 50 states, the District of Columbia, 

Puerto Rico, and four U.S. territories—American Samoa, Guam, the Northern Mariana 

Islands, and the U.S. Virgin Islands.

3

See, for example, GAO, Medicaid: CMS Needs More Information on the Billions of 

Dollars Spent on Supplemental Payments, GAO-08-614 (Washington, D.C.: May 30, 

2008).

 
 

Page 2 GAO-12-694 Supplemental Medicaid Payments

of providers. The federal government oversees states’ Medicaid programs 

and, by a formula established in law, pays from half to more than 

three-fourths of each state’s allowable Medicaid expenditures.4

In addition to their regular Medicaid payments, all states make 

supplemental payments that are also matched by federal funds.5

• DSH payments are payments to hospitals that serve a 

disproportionate share of low-income and Medicaid patients to help 

offset hospitals’ uncompensated costs for serving these individuals.

For the 

purposes of this report, we classified supplemental payments into two 

general categories: Disproportionate Share Hospital (DSH) and non-DSH 

supplemental payments.

6

DSH payments are required by law and are limited (or capped) at the 

facility-specific level and the state level.

• Non-DSH supplemental payments are other supplemental 

payments that states have made under Medicaid Upper Payment 

Limit (UPL) regulations. The UPL is the ceiling on federal matching 

funds for Medicaid payments and is based on an estimate of what 

Medicare would pay for comparable services.7

 

4

Under a statutory formula, the federal government may reimburse from 50 to 83 percent 

of a state’s Medicaid expenditures for services. States with lower per capita incomes 

receive higher federal matching rates. 42 U.S.C. §§ 1396b(a), 1396d(b).

Because states’ 

regular Medicaid payments are often less than the UPL, most states 

have established supplemental payments above regular Medicaid 

rates, but within the UPL. Unlike regular Medicaid payments, which 

are paid on the basis of covered Medicaid services provided to 

5

In this report, we use the term state to refer to the 50 states and the District of Columbia. 

We do not include Puerto Rico or the U.S. territories of American Samoa, Guam, the 

Northern Mariana Islands, or the U.S. Virgin Islands (which have Medicaid programs) 

because they did not report supplemental Medicaid payments in 2010.

6

See 42 U.S.C. §§ 1396a(13)(A)(iv), 1396r-4.

7

Medicare is the federal health program that covers seniors aged 65 and older and some 

disabled persons. Separate UPLs exist for inpatient services provided by hospitals, 

nursing facilities, and intermediate care facilities for individuals with intellectual disabilities, 

and for outpatient services provided by hospitals and clinics. These UPLs are applied on 

an aggregate basis to three categories of providers: local (nonstate) government-owned or 

government-operated facilities, state-government-owned or state-government-operated 

facilities, and privately owned and operated facilities. See 42 C.F.R. §§ 447.272, 447.321 

(2011).
 

Page 3 GAO-12-694 Supplemental Medicaid Payments

Medicaid beneficiaries through an automated claims process, these 

non-DSH supplemental payments are not necessarily made on the 

basis of claims submitted for the delivery of specific services to 

particular patients. States have made non-DSH payments to 

hospitals, nursing homes, physician groups, and other Medicaid 

providers.8 Unlike DSH payments, states are not required to make 

non-DSH supplemental payments, and payments are not subject to 

overall state spending or provider-specific limits.

For more than a decade, we and others have reported concerns with the 

oversight and transparency of states’ financing arrangements involving 

supplemental payments.9

In May 2008, we reported that for federal fiscal year 2006, states reported 

making at least $23 billion in supplemental payments, with a federal share 

totaling over $13 billion. States reported $17 billion in DSH payments and 

$6 billion in non-DSH supplemental payments. However, the exact 

amount of non-DSH supplemental payments was unknown because 

states did not report all of their payments to CMS separately from 

payments based on their regular payment rates.

Our past work had found that the Centers for 

Medicare & Medicaid Services (CMS)—the agency within the Department 

of Health and Human Services (HHS) with oversight responsibility for 

Medicaid—lacked information on the billions of dollars spent on 

supplemental payments, including the magnitude of payments, how 

individual states were calculating payment amounts, the providers that 

received the payments, and the purposes for which they were received. 

States have flexibility for making such payments, which could greatly 

affect the total Medicaid payments that individual providers receive. To 

the extent that some providers receive a substantial proportion of their 

Medicaid payments as supplemental payments that are not directly linked 

to services or costs, it becomes difficult to compare payment levels 

across providers or to evaluate the impact of Medicaid payment policies.

10

 

8

In this report, we use the terms non-DSH payments and non-DSH supplemental 

payments interchangeably.

In the absence of 

transparent information about how much states are spending on non-DSH 

supplemental payments, the relative significance of non-DSH 

supplemental payments in comparison to regular Medicaid payments or 

9

A list of related GAO products can be found at the end of this report.

10GAO-08-614. 
 

Page 4 GAO-12-694 Supplemental Medicaid Payments

DSH payments has not been clear. Beginning in fiscal year 2010, CMS 

implemented new expenditure reporting procedures under which states 

were to report certain non-DSH supplemental payments separately from 

their regular payments.

Given the lack of transparency of states’ supplemental Medicaid 

payments, members of Congress and others have expressed interest in 

them. You asked for information regarding how much states reported 

spending on supplemental payments, including changes in reported 

payments since 2006, the year for which GAO had previously reported on 

these payments, and oversight of supplemental payments.11

1. How much did states report paying in supplemental Medicaid 

payments during fiscal year 2010?

This report 

addresses the following questions:

2. How did non-DSH supplemental payments reported during 2010 

compare with those payments reported during 2006, and what were 

reasons for differences?

To determine how much states reported paying for supplemental 

Medicaid payments during 2010, we analyzed Medicaid expenditure data 

that CMS had finalized for federal fiscal year 2010.12 These are data that 

states reported to CMS during fiscal year 2010 using a standardized form, 

the CMS-64, to claim federal matching funds.13

 

11In a separate report, we plan to examine information available for overseeing DSH and 

non-DSH supplemental payments.

To understand Medicaid 

supplemental payments and processes for reporting these payments, we 

reviewed relevant federal laws, regulations, and guidance and 

12Throughout this report, the term fiscal year refers to the federal fiscal year.

13We include payments reported on the CMS-64s submitted for the four quarters of fiscal 

year 2010. States are to file their expenditure reports within 30 days of the end of a 

quarter. CMS reviews this information and, if necessary, obtains clarifications or revisions 

before finalizing the data. States may make adjustments to their expenditure reports for up 

to 2 years. Adjustments are made to the payment amounts reported during the fiscal year 

in which a state reports an adjustment rather than the fiscal year in which the original 

payment was made. For example, if a state reported in fiscal year 2010 that it made an 

overpayment in fiscal year 2009, the adjustment would be treated as a reduction to the 

amount the state reported paying during fiscal year 2010. We did not include any 

adjustments to payments reported during fiscal year 2010 that may have been included in 

quarterly CMS-64s submitted after fiscal year 2010.
 

Page 5 GAO-12-694 Supplemental Medicaid Payments

interviewed CMS officials. We examined the amount of DSH and 

non-DSH supplemental payments reported by individual states and the 

nationwide totals, and we analyzed the amounts reported for different 

categories of service. In addition, to better understand the contribution of 

supplemental payments to state Medicaid spending, we examined the 

share of state spending attributed to supplemental payments.

To determine how non-DSH supplemental payments reported during 

2010 compared with those payments reported during 2006, we analyzed 

2006 and 2010 expenditures for non-DSH supplemental payments that 

states reported to CMS separately from their other payments.14 To 

examine reasons for differences between 2006 and 2010 in reported 

non-DSH supplemental payments, and to obtain additional information 

about states’ reports of these payments, we obtained information from 

CMS and public sources about non-DSH supplemental payments in a 

judgmental sample of 11 states selected to include a mix of relevant 

characteristics. Our selections included some states that separately 

reported such payments in only 1 of the 2 years, and states that differed 

in absolute and relative changes in reported non-DSH supplemental 

payments and changes in categories of payment. The information we 

used to select states included published information, as well as 

preliminary information from CMS.15 For each of these states, we 

examined information that could help explain net changes from 2006 to 

2010 in the state’s reported non-DSH supplemental payment amounts, 

such as establishment of new non-DSH supplemental payments, 

modification of existing non-DSH supplemental payments, or a change in 

reporting that would result in an increase or decrease in the state’s 

reported payments. The information we reviewed included information 

that states submitted to CMS prior to changing their supplemental 

payments.16

 

14We obtained data about expenditures reported during fiscal year 2006 as part of work 

we reported in 2008. See 

When this information indicated that a supplemental payment 

had been established, modified, or terminated, we examined 

documentation of how much the state’s payments were expected to 

GAO-08-614. 

15We selected Arkansas, Colorado, Georgia, Illinois, Maine, Massachusetts, Missouri, 

North Carolina, Pennsylvania, South Carolina, and Texas. Expenditure data from fiscal 

year 2010 had not been finalized at the time we made our selections.

16To receive federal matching funds, states must obtain approval from CMS for any 

changes to their Medicaid payment rates. 
 

Page 6 GAO-12-694 Supplemental Medicaid Payments

change as a result. Information from these states cannot be generalized 

to other states. A more detailed description of our scope and 

methodology can be found in appendix I.

To assess the reliability of the data on supplemental Medicaid payments 

reported to CMS by the states in 2006 and 2010, we reviewed the 

procedures CMS used to obtain and compile the data and discussed the 

data with CMS officials. We determined that the data were sufficiently 

reliable to describe the amounts of supplemental payments that were 

reported separately by states during 2006 and 2010. Because some 

states did not separately report all of their non-DSH supplemental 

payments during 2006 or 2010, our analysis only captures changes in 

non-DSH supplemental payments that were separately reported. 

Information is not available that would have allowed us to quantify the 

extent to which states did not separately report these supplemental 

payments. Therefore, we may not be capturing the full amount of states’ 

supplemental payments or the degree to which they have changed over 

time. We did not examine whether changes in non-DSH supplemental 

payments were associated with changes in states’ regular Medicaid 

payments.

We conducted this performance audit from November 2011 to July 2012 

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.

Title XIX of the Social Security Act established Medicaid as a 

federal-state partnership that finances health care for low-income 

individuals, including children, families, the aged, and the disabled.17

Medicaid is an open-ended entitlement program and provided health 

coverage for an estimated 53.9 million individuals in 2010.18

 

1742 U.S.C. § 1396a et seq. (2010).

Within broad 

federal requirements, each state administers and operates its Medicaid 

18See Department of Health and Human Services, 2011 Actuarial Report on the Financial 

Outlook for Medicaid (Washington, D.C.: 2012).

Background 
 

Page 7 GAO-12-694 Supplemental Medicaid Payments

program in accordance with a state Medicaid plan, which must be 

approved by CMS. A state Medicaid plan details the populations that are 

served, the categories of services that are covered (such as inpatient 

hospital services, nursing facility services, and physician services), and 

the methods for calculating payments to providers. The state Medicaid 

plan also describes the supplemental payments established by the state 

and specifies which providers are eligible to receive supplemental 

payments and what categories of service are covered. Any changes a 

state wishes to make in its Medicaid plan, such as establishing new 

payments or changing methods for developing provider payment rates, 

must be submitted to CMS for review and approval as a state plan 

amendment. States may also receive approval from CMS for a waiver 

from certain Medicaid requirements in order to conduct a Medicaid 

demonstration, and these demonstrations may include supplemental 

payments. These demonstrations allow states to test new approaches to 

deliver or pay for health services through Medicaid. Under certain 

demonstrations, a state may cover populations or services that would not 

otherwise be eligible for federal Medicaid funding under federal rules. 

Some states, including California and Massachusetts, have also in recent 

years been allowed to make supplemental payments under Medicaid 

demonstrations. The terms and conditions governing such 

demonstrations are specific to each demonstration.

All states make supplemental Medicaid payments to certain providers. 

DSH payments are made to hospitals and cannot exceed the 

unreimbursed cost of furnishing inpatient and outpatient services to 

Medicaid beneficiaries and the uninsured.19

 

19Under the Patient Protection and Affordable Care Act, the annual cap on the amount of 

federal matching funds available for DSH payments nationwide will be reduced in fiscal 

years 2014 through 2020. See Pub. L. No. 111-148, §§ 2551, 10201(e)(1)(B), 10201(f), 

124 Stat. 119, 312, 920, 922 (Mar. 23, 2010), as amended by Pub. L. No. 111-152, 

§ 1203(b), 124 Stat. 1029, 1053 (Mar. 30, 2010). Annual reductions in federal DSH 

funding during these years range from $500 million to $5.6 billion, and reductions for all 

years total $18.1 billion. The Middle Class Tax Relief and Job Creation Act of 2012 

extended these reductions through fiscal year 2021. See Pub. L. No. 112-96, § 3203, 

126 Stat. 156, 193 (Feb. 22, 2012). States’ DSH allotments—the maximum amount 

of federal matching funds that each state may receive for DSH payments—were first 

established in 1991 based on each state’s historical DSH spending. See the Medicaid 

Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Pub. L.

No. 102-234, § 3, 105 Stat. 1793, 1799-1804 (Dec. 12, 1991) (codified, as amended, 

at 42 U.S.C. § 1396r-4(f)). Congress has amended requirements for calculating these 

DSH allotments since their establishment. Currently, CMS calculates each state’s fiscal 

year DSH allotment using a statutorily defined formula.

Non-DSH supplemental 
 

Page 8 GAO-12-694 Supplemental Medicaid Payments

payments can be made to hospitals or other providers (such as nursing 

homes or groups of physicians) for any category of service provided on a 

fee-for-service basis.20 For example, a state might make non-DSH 

supplemental payments on a quarterly basis to county-owned nursing 

facilities that serve low-income populations to fill the gap between what 

regular Medicaid rates pay toward the cost of services and higher 

payments permitted through the UPL. Supplemental payments are 

typically made for services provided on a fee-for-service basis, rather 

than those provided through Medicaid managed care contracts.21

To obtain the federal matching funds for Medicaid payments made to 

providers, each state files a quarterly expenditure report to CMS—the 

CMS-64. This form compiles state payments in over 20 categories of 

medical services, such as inpatient hospital services and outpatient 

hospital services. States are required to report total DSH payments made 

to hospitals and mental health facilities separately from other Medicaid 

payments in order to receive reimbursement for them. From 2001 through 

2009, when completing the CMS-64 to obtain federal matching funds for 

non-DSH supplemental payments, states combined their non-DSH 

supplemental payments with their regular payments—those made using 

states’ regular Medicaid payment rates. During this period, CMS 

requested that states report their non-DSH supplemental payments in a 

separate informational section of the CMS-64 that was not the basis for 

states receipt of federal matching funds. Instead, states received federal 

matching funds based on their reports of expenditure totals that included 

both regular and non-DSH supplemental payments. In 2008, we found 

that states reported making $6.3 billion in non-DSH supplemental 

payments during fiscal year 2006, but that not all states reported their 

non-DSH supplemental payments separately from other expenditures of 

the same type.

Non-DSH supplemental payments need to be approved by CMS.

22

 

20Including regular and supplemental payments, states reported spending about 

$284 billion for fee-for-service benefits during fiscal year 2010, representing about 

73 percent of Medicaid spending for benefits during that year.

Starting with the first quarter of fiscal year 2010, CMS’s 

new reporting procedures requested that states report certain non-DSH 

21Federal law generally prohibits states from making separate payment for services 

covered under a managed care contract. See 42 C.F.R. § 438.60 (2011).

22See GAO-08-614. At the time of our review, fiscal year 2006 was the most recent year 

for which data were available.
 

Page 9 GAO-12-694 Supplemental Medicaid Payments

supplemental payments separately from their regular payments on the 

section of the CMS-64 used to claim federal matching funds.23 However, 

CMS continues to provide federal matching funds to states that report 

these payments in combination with regular payments on this form.

The data CMS finalized for fiscal year 2010 show that states and the 

federal government spent at least $32 billion for DSH and non-DSH 

supplemental payments during fiscal year 2010, with the federal share of 

these payments totaling at least $19.8 billion. States reported $17.6 billion 

in DSH payments and $14.4 billion in non-DSH supplemental payments 

during fiscal year 2010, but state reporting of non-DSH supplemental 

payments separately from regular payments was incomplete, so the exact 

amount of non-DSH supplemental payments is unknown.

States reported $17.6 billion in DSH payments during fiscal year 2010, 

with the federal government reimbursing states $9.9 billion for its share of 

these payments. Fifty of the 51 states reported making DSH payments 

during fiscal year 2010, with total reported payments ranging from about 

$650,000 for South Dakota to over $3.1 billion for New York.24

 

23Separate reporting applies to six categories of service: inpatient hospital services, 

outpatient hospital services, nursing facility services, physician and surgical services, 

other practitioners’ services, and intermediate care facility services. CMS did not request 

that states report non-DSH supplemental payments for all categories of services 

separately from their regular payments. For example, CMS did not request separate 

reporting of non-DSH supplemental payments for mental health services or home health 

services. The section of the CMS-64 that states were requested to use to report non-DSH 

supplemental payments during fiscal year 2006 allowed reporting of such payments for all 

categories of service for which the state could report regular payments.

The 

10 states reporting the largest total DSH payments in fiscal year 2010 

24Massachusetts did not report DSH payments in fiscal year 2010 because it conducted a 

Medicaid demonstration that exempted it from making DSH payments. This 

demonstration, called the MassHealth Medicaid demonstration, was approved by CMS in 

2005 and has been approved through June 30, 2014.

States Reported 

$32 Billion in 

Supplemental 

Medicaid Payments 

during Fiscal Year 

2010, but the Exact 

Amount of 

Supplemental 

Payments Is 

Unknown 

States Reported 

$17.6 Billion in DSH 

Payments during Fiscal 

Year 2010
 

Page 10 GAO-12-694 Supplemental Medicaid Payments

accounted for more than 70 percent of the $17.6 billion nationwide total, 

and the 4 states with the largest total DSH payments—New York, 

California, Texas, and New Jersey—accounted for almost half 

(47 percent) of the nationwide total.

In assessing the contribution of DSH payments to each state’s overall 

spending, we found that DSH payments as a percentage of states’ 

reported Medicaid payments varied considerably among the states.25

Among states that reported DSH payments, the percentage ranged from 

less than 1 percent (Arizona, Delaware, North Dakota, South Dakota, 

Wisconsin, and Wyoming) to 17 percent (New Hampshire). Figure 1 

provides information on the amount of each state’s DSH payments and 

each state’s DSH payments as a percentage of its total Medicaid 

expenditures. (App. II lists each state’s reported DSH payments during 

fiscal year 2010, the federal share of those payments, the state’s total 

Medicaid payments, and each state’s total reported DSH payment as a 

percentage of the state’s total Medicaid payments and of total nationwide 

DSH payments.)

 

25We use the term Medicaid payments to refer to a state’s medical assistance payments, 

which are the total Medicaid payments made by a state for medical services, including 

supplemental payments, but not including administrative costs.
Page i Page 11 GAO-12-694 Supplemental Medicaid Payments GAO-09-XXX

Dollars Percentages

Figure 1: DSH Payments Reported by States during Federal Fiscal Year 2010, in Dollars and as a Percentage of the State’s 

Total Medicaid Payments

Notes: Puerto Rico and the U.S. territories that operate Medicaid programs are not included on this 

map because they were not authorized to make DSH payments in fiscal year 2010. Massachusetts 

did not report DSH payments in fiscal year 2010 because it conducted a Medicaid demonstration 

that exempted it from making DSH payments. This demonstration, called the MassHealth Medicaid 

demonstration, was approved by CMS in 2005 and has been approved through June 30, 2014.
 

Page 12 GAO-12-694 Supplemental Medicaid Payments

The majority of DSH payments were to hospitals for traditional inpatient 

and outpatient services. During fiscal year 2010, 83 percent of the 

nationwide total of reported DSH payments ($14.7 billion) was paid to 

hospitals for traditional inpatient and outpatient services and 17 percent of 

the total ($2.9 billion) was paid to mental health facilities for inpatient and 

outpatient mental health services.26

During fiscal year 2010, states separately reported making $14.4 billion in 

non-DSH supplemental payments (of which the federal share was 

$9.9 billion), primarily for inpatient hospital services.27

In assessing the contribution of non-DSH supplemental payments to each 

state’s overall spending, we found that non-DSH supplemental payments 

as a percentage of states’ Medicaid spending also varied considerably 

across the 30 states that separately reported these payments, ranging 

from 1 percent for Vermont to over 17 percent for Illinois. Figure 2 

provides information on the amount of each state’s non-DSH 

supplemental payments and each state’s non-DSH supplemental 

payments as a percentage of its total Medicaid expenditures. (App. II lists 

each state’s reported non-DSH supplemental payments during fiscal year 

2010, the federal share of those payments, the state’s total Medicaid

Beginning in 2010, 

states were to report non-DSH supplemental payments on the CMS-64 

separately from their regular payments for six categories of service. Thirty 

states separately reported non-DSH payments during fiscal year 2010, 

with reported payments ranging from $125,000 for Vermont to $3.1 billion 

for Texas.

 

26Traditional inpatient and outpatient services include services that are furnished in a 

hospital for the care and treatment of inpatients and outpatients, other than services 

provided in mental health facilities. See 42 C.F.R. §§ 440.10, 440.20 (2011).

27The federal share was larger for non-DSH supplemental payments ($9.9 billion of 

$14.4 billion) than for DSH payments ($9.9 billion of $17.6 billion) because states could 

claim an enhanced matching rate for non-DSH supplemental payments under the 

American Recovery and Reinvestment Act of 2009, but were explicitly prohibited from 

claiming an enhanced match for DSH payments. Under the American Recovery and 

Reinvestment Act of 2009, as amended by Public Law 111-226, states could claim an 

enhanced matching rate for non-DSH supplemental payments from October 1, 2008, 

through June 30, 2011. Pub. L. No. 111-226, § 201, 124 Stat. 2389, 2393 (Aug. 10, 2010), 

amending Pub. L. No. 111-5, § 5001, 123 Stat. 115, 496 (Feb. 17, 2009).

States Reported 

$14.4 Billion in Non-DSH 

Supplemental Payments 

during Fiscal Year 2010, 

but the Exact Amount of 

These Payments Is Not 

Known 
 

Page 13 GAO-12-694 Supplemental Medicaid Payments

payments, and each state’s total reported non-DSH supplemental 

payments as a percentage of the state’s total Medicaid payments and of 

total nationwide non-DSH supplemental payments.)
Page i GAO-09-XXX

Figure 2: Non-DSH Supplemental Payments Separately Reported by States during Federal Fiscal Year 2010, in Dollars and as a 

Percentage of the State’s Total Medicaid Payments

Note: Puerto Rico and the U.S. territories that operate Medicaid programs are not included on this map 

because they did not report any supplemental Medicaid payments during 2010.

Page 14 GAO-12-694 Supplemental Medicaid Payments

Dollars Percentages
 

Page 15 GAO-12-694 Supplemental Medicaid Payments

Of the six categories of service for which states reported making 

non-DSH supplemental payments, states reported the largest amount of 

payments for inpatient hospital services. States reported $11 billion in 

non-DSH supplemental payments for inpatient services (with a federal 

share of $7.7 billion). States reported $1.8 billion in non-DSH 

supplemental payments for outpatient services (with a federal share of 

$1.15 billion). (See fig. 3.)

Figure 3: Non-DSH Supplemental Payments Separately Reported during 2010 by 

Category of Service (Dollars in Millions)

Note: Combined non-DSH supplemental payments for other practitioners’ services and for 

intermediate care facility services totaled less than 0.01 percent of states’ total Medicaid payments 

reported during fiscal year 2010.

The proportion of a state’s reported expenditures that were non-DSH 

supplemental payments varied across states and categories of service. In 

some states, non-DSH supplemental payments represented very little of 

the state’s reported expenditures for a category of service, while in other 

states, non-DSH supplemental payments represented more than 

one-third of the state’s reported expenditures for a category of service. 

For example,

• 27 states separately reported non-DSH supplemental payments for 

inpatient hospital services, and the percentage of their expenditures 

for inpatient hospital services that were non-DSH supplemental 
 

Page 16 GAO-12-694 Supplemental Medicaid Payments

payments ranged from less than 1 percent (Virginia and Washington) 

to 48 percent (Tennessee);28

• 13 states separately reported non-DSH supplemental payments for 

outpatient hospital services, and the percentage of their expenditures 

for outpatient hospital services that were non-DSH supplemental 

payments ranged from less than 1 percent (Texas) to 57 percent 

(Illinois); and

• 16 states separately reported non-DSH supplemental payments for 

physician and surgical services, and the percentage of their 

expenditures for physician and surgical hospital services that were 

non-DSH supplemental payments ranged from less than 1 percent 

(Oklahoma) to 34 percent (West Virginia).

See appendix II for more information about each state’s reported total and 

non-DSH supplemental payments for inpatient hospital services, 

outpatient hospital services, nursing facility services, physician and 

surgical services, other practitioners’ services, and intermediate care 

facility services.

The exact amount of non-DSH supplemental payments nationwide is 

unknown, in part because not all states that made non-DSH supplemental 

payments in 2010 reported them on the CMS-64 separately from regular 

payments, and some states separately reported some but not all of their 

non-DSH supplemental payments. For example, Georgia reported $0 for 

non-DSH supplemental payments during fiscal year 2010, but according 

to CMS, it made non-DSH supplemental payments of $120.6 million for 

nursing home services during 2010.

CMS officials told us that they are aware that some states did not 

separately report all of their non-DSH supplemental payments. Officials 

stated that they have taken, and are taking, steps to improve states’ 

reporting of non-DSH supplemental payments for the six categories of 

service. They told us that after revising the form CMS-64 to include lines 

for separate reporting of certain non-DSH supplemental payments, they 

monitored states’ reports of these payments and, as a result, they learned 

 

28Total expenditures for inpatient hospital services for this analysis consisted of regular 

Medicaid payments, DSH supplemental payments, non-DSH supplemental payments, and 

payments to help support graduate medical education.
 

Page 17 GAO-12-694 Supplemental Medicaid Payments

that some states had not reported these payments separately. They then 

took steps to improve states’ reporting of these payments, for example, 

by training state staff in the use of the revised form CMS-64 and asking 

regional CMS staff to work with states to identify and resolve reporting 

problems. CMS officials also noted, however, that some states 

encountered technical difficulties with their state databases. For example, 

CMS officials told us that the data systems used by some states in 2010 

did not permit them to separate the non-DSH supplemental payments 

from their regular payments. CMS officials confirmed that states did not 

separately report all non-DSH supplemental payments in 2010 and 

acknowledged that CMS cannot definitively determine the extent to which 

reporting is incomplete.

The 39 states that separately reported non-DSH supplemental payments 

during either 2006 or 2010 (or both) reported an increase of $8.1 billion in 

non-DSH supplemental payments during this period.29 Most of this 

increase was from 15 states that reported during both years, and most of 

the reported increase was for inpatient hospital services. However, 

because of the potential for underreporting of supplemental payments for 

one or both years, the extent of the actual increase and the contributing 

factors cannot be quantified. Our examination of information from CMS 

and from public sources about changes in 11 judgmentally selected 

states indicates that some states were making new and modified 

non-DSH supplemental payments during this period, contributing to the 

reported increase. Changes in reporting also contributed to the increase.

 

29In constant dollars, we estimate that the $6.3 billion in non-DSH supplemental payments 

reported by states in 2006 would have totaled $7 billion in 2010, or an increase of about 

$700 million. This estimate is based on the Bureau of Economic Analysis price index for 

Health Care Services, downloaded June 5, 2012.

Reported Non-DSH 

Supplemental 

Payments Were over 

$8 Billion Higher 

during 2010 Than 

during 2006, and New 

and Modified 

Supplemental 

Payments Were a 

Factor in the Increase
 

Page 18 GAO-12-694 Supplemental Medicaid Payments

The 39 states that separately reported non-DSH supplemental payments 

during either 2006 or 2010, or during both years, together reported 

$8.1 billion more in non-DSH supplemental payments during 2010 than 

2006.30 Nineteen states separately reported some non-DSH supplemental 

payments during both years, with 15 of those states reporting more for 

these payments during 2010 and 4 of those states reporting less for these 

payments during 2010. Eleven states reported non-DSH supplemental 

payments separately only during 2010, and 9 states reported non-DSH 

supplemental payments separately only during 2006. (See fig. 4 and 

table 1.) Most of the $8.1 billion increase was from the 15 states that 

separately reported non-DSH supplemental payments during both years, 

with higher non-DSH supplemental payments reported during 2010. The 

increase in these states ranged from $1 million (Washington) to 

$2.3 billion (Texas). For the 4 states that separately reported lower 

non-DSH supplemental payments during 2010, the decrease ranged 

from $12 million (Oklahoma) to $608 million (North Carolina).

 

30There were 12 states that did not separately report non-DSH supplemental payments 

during either 2006 or 2010.

States Reported 

$8.1 Billion More in 

Non-DSH Supplemental 

Payments during 2010 

Than during 2006
 

Page 19 GAO-12-694 Supplemental Medicaid Payments

Figure 4: States’ Separate Reporting of Non-DSH Supplemental Payments during Fiscal Years 2006 and 2010

Note: Puerto Rico and the U.S. territories that operate Medicaid programs are not included on this 

map because they did not report any supplemental Medicaid payments during 2010.
 

Page 20 GAO-12-694 Supplemental Medicaid Payments

Table 1: States’ Separate Reporting of Non-DSH Supplemental Payments during 2006 and 2010, by Relative Payment Amount

Reported higher payments 

during 2010

Reported lower payments 

during 2010 Total

State reporting category

Number 

of states

Amount 

of increase

Number 

of states 

Amount

of decrease

Number 

of states Net change

Reported during 2006 and 2010a 15 $8.5 billion 4 ($0.9 billion) 19 $7.7 billion

Reported during 2010, but not 

during 2006 11 $1.1 billion NA $0 11 $1.1 billion

Did not report during 2010, but 

did report during 2006 NA $0 9 ($0.7 billion) 9 ($0.7 billion)

Total 26 $9.6 billion 13 ($1.5 billion) 39b $8.1 billion

Source: GAO analysis of CMS-64 expenditure data.

Note: Values do not sum because of rounding.

a

Listed amounts for increases and decreases are based on net changes within states. Some states’ 

reported non-DSH supplemental payments were higher in 2010 than in 2006 for one or more 

categories of service, but were lower in 2010 than in 2006 for one or more other categories of service, 

and some states that reported payments in both years reported $0 in payments for some categories 

of service in one of the years.

b

Twelve states did not separately report non-DSH supplemental payments during either 2006 or 

2010.

The largest change in non-DSH supplemental payments separately 

reported during 2006 and 2010 was for inpatient hospital services. The 

net increase in these separately reported payments was $6.3 billion, and 

the number of states that separately reported non-DSH supplemental 

payments for inpatient hospital services increased from 23 during 2006 to 

27 during 2010. (App. III lists the amounts each state reported separately 

for non-DSH supplemental payments during 2006 and 2010 and the 

categories of service for which they reported these payments.)

Because of the potential underreporting of non-DSH supplemental 

payments during one or both of the years examined, the extent of the 

actual increase cannot be quantified. On the basis of some reports, 

Medicaid spending on hospital services is increasing, and growth in 

non-DSH supplemental payments has been cited as a contributing factor. 

A January 2012 article on the growth in U.S. health spending found that 

while overall Medicaid spending growth slowed in 2010, Medicaid 

spending growth on hospital services increased in 2010 compared to 
 

Page 21 GAO-12-694 Supplemental Medicaid Payments

2009.31 The researchers attributed the growth in Medicaid spending for 

hospital services, in part, to a large amount of non-DSH supplemental 

payments reported during the last quarter of calendar year 2010. A March 

2012 report by the Medicaid and CHIP Payment and Access Commission 

found that states reported over $23 billion in non-DSH supplemental 

payments for hospital services during 2011.

32

Information from CMS and from public sources about changes in 11 

judgmentally selected states suggests that some increases from 2006 to 

2010 in reported non-DSH supplemental payments were due to increases 

in payments states made after establishing new non-DSH supplemental 

payments or increasing their existing non-DSH supplemental payments. 

The available information suggests that changes to existing payments 

also resulted in some decreases from 2006 to 2010 in reported non-DSH 

supplemental payments, including, for example, when states terminated 

non-DSH supplemental payments.

In recent years, states have submitted and received approval to 

implement new non-DSH supplemental payments, according to CMS 

officials. Available information, maintained by CMS and derived from state 

Medicaid plans from 11 selected states, indicates that new or modified 

supplemental payments made by states contributed to increased 

non-DSH supplemental payments. For example:

• Illinois reported $1.4 billion more for non-DSH supplemental payments 

for inpatient hospital services during 2010 than during 2006. From 

2006 through 2010, Illinois established new non-DSH supplemental 

payments for inpatient hospital services and also modified several 

existing payments for these services. Taken together, these new and 

modified payments were estimated to result in an increase in Illinois’s 

 

31Researchers compared health care spending growth for calendar years 2009 and 2010. 

They found that Medicaid spending growth slowed from 8.9 percent in 2009 to 7.2 percent 

in 2010, whereas Medicaid spending for hospital services grew from 10.4 percent in 2009 

to 11.2 percent in 2010. Anne B. Martin, David Lassman, Benjamin Washington, Aaron 

Catlin, and the National Health Expenditure Accounts Team, “Growth in U.S. Health 

Spending Remained Slow in 2010; Health Share of Gross Domestic Product Was 

Unchanged from 2009,” Health Affairs, vol. 31, no. 1 (2012).

32Medicaid and CHIP Payment and Access Commission, Report to the Congress on 

Medicaid and CHIP (Washington, D.C.: 2012).

New and Modified 

Supplemental Payments 

Contributed to Increases in 

Reported Payments
 

Page 22 GAO-12-694 Supplemental Medicaid Payments

supplemental payments for inpatient services by about $1.2 billion 

during fiscal year 2010.

• Colorado reported $411 million more for non-DSH supplemental 

payments for inpatient and outpatient hospital services during 2010 

than during 2006. Colorado established a set of new non-DSH 

supplemental payments for inpatient and outpatient hospital services. 

These supplemental payments were to a variety of hospital types, 

including rural hospitals, hospitals with neonatal intensive care units, 

and state teaching hospitals. Effective on July 1, 2009, these new 

payments were estimated to result in an increase in payments of 

about $300 million during fiscal year 2010.

• Arkansas reported $173 million more for non-DSH supplemental 

payments for inpatient hospital services during 2010 than during 

2006. Arkansas made new non-DSH supplemental payments for 

inpatient hospital services provided by private hospitals, and it also 

modified existing non-DSH supplemental payments for inpatient 

hospital services. Arkansas’s new supplemental payments, effective 

July 1, 2009, were estimated to increase the state’s supplemental 

payments for inpatient services by about $110 million during fiscal 

year 2010.

• South Carolina reported $39 million for non-DSH supplemental 

payments for nursing facility services during 2010, but did not report 

making such payments during 2006. South Carolina had suspended 

certain non-DSH supplemental payments for nursing facility services 

prior to fiscal year 2006, but it reinstated these payments, effective on 

October 1, 2008, with a slight change to payment qualification criteria. 

Reinstating these payments was estimated to increase payments by 

about $25 million during fiscal year 2010.

According to the available information about changes in these 11 

judgmentally selected states, some states’ non-DSH supplemental 

payments decreased from 2006 to 2010 because they terminated 

supplemental payments or made changes to their Medicaid programs that 

reduced supplemental payments. For example:

• North Carolina reported $607 million less in non-DSH supplemental

payments for inpatient and outpatient hospital services in 2010 than in 

2006. According to CMS, North Carolina discontinued making 

non-DSH supplemental payments to non-state government hospitals, 

effective on October 1, 2006. Discontinuation of these payments for 
 

Page 23 GAO-12-694 Supplemental Medicaid Payments

inpatient and outpatient hospitals would have resulted in a reduction 

in payments.

• Georgia reported $221 million less in non-DSH supplemental 

payments for inpatient and outpatient hospital services in 2010 than in 

2006. Georgia implemented a managed care program in 2007, and 

according to CMS, the state estimated that its supplemental payments 

(which generally can only be made for services provided on a 

fee-for-service basis) were reduced by more than $100 million per 

year as a result.

• Missouri reported paying $70 million in non-DSH supplemental 

payments for inpatient hospital services during 2006 and did not 

report making such payments during fiscal year 2010. According to 

CMS, the state reported that it did not make non-DSH supplemental 

payments for inpatient services during fiscal year 2010 because the 

State General Assembly did not approve funding for such payments.

Changes in state reporting of non-DSH supplemental payments also 

contributed to differences in amounts between 2006 and 2010. In some 

cases, an apparent increase in non-DSH supplemental payments was 

due, at least in part, to more complete reporting of non-DSH 

supplemental payments in 2010 than in 2006. For example:

• Pennsylvania reported $0 for non-DSH supplemental payments during 

2006 and $410 million for non-DSH supplemental payments for 

nursing facility services during 2010, for an apparent increase of 

$410 million in supplemental payments. However, Pennsylvania 

made, but did not separately report, non-DSH supplemental payments 

for nursing home services during 2006.

• South Carolina reported $0 for non-DSH supplemental payments for 

physician and surgical services during 2006 and $46 million for 

non-DSH supplemental payments for these services during 2010, for 

an apparent increase of $46 million in supplemental payments. 

However, CMS told us that South Carolina paid $43 million for 

non-DSH supplemental payments for physician and surgical services 

during 2006, so the actual increase in payments for these services 

from 2006 to 2010 was $3 million, not $46 million.

In contrast, an apparent decrease in some states’ non-DSH supplemental 

payments was due, at least in part, to not reporting these payments 

separately during 2010. For example, as noted above, Georgia made, but 

Changes in State Reporting 

Also Contributed to 

Differences in Reported 

Supplemental Payments
 

Page 24 GAO-12-694 Supplemental Medicaid Payments

did not separately report, non-DSH supplemental payments during 2010. 

States that did not separately report payments during 2010, but did 

separately report them in 2006, created the appearance of decreases in 

non-DSH supplemental payments.

Medicaid supplemental payments can help ensure that providers make 

important services available to Medicaid beneficiaries. However, the 

transparency and accountability of these often very large payments have 

been lacking. Although CMS has instituted new reporting procedures for, 

and more complete reporting of, non-DSH supplemental payments, the 

exact amount of these payments is still not known because not all states 

have provided complete information as CMS requested during 2010. 

Nevertheless, as reporting of non-DSH supplemental payments becomes 

more complete, the significance of these payments, in terms of cost, 

growth, and contribution to total Medicaid payments for those providers 

receiving them, is becoming clearer. Identifying and monitoring Medicaid 

supplemental payments and ensuring that they, along with regular 

Medicaid payments, are consistent with federal requirements are complex 

tasks that will require continued vigilance by CMS. Ongoing federal efforts 

to improve the completeness of reporting of Medicaid supplemental 

payments are important for effective oversight and to better understand 

these payments’ role in financing Medicaid services.

We provided a draft of this report to HHS for review. HHS stated that 

HHS and CMS will continue their ongoing efforts to improve states’ 

reporting of Medicaid supplemental payments. HHS’s letter is reprinted 

in appendix IV.

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 Secretary of Health 

and Human Services, the Administrator of the Centers for Medicare & 

Medicaid Services, and other interested parties. In addition, the report will 

be available at no charge on the GAO website at http://www.gao.gov. 

Concluding 

Observations 

Agency Comments
 

Page 25 GAO-12-694 Supplemental Medicaid Payments

If you or your staff members have any questions, please contact me at 

(202) 512-7114 or iritanik@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Major contributors to this report are listed in appendix V.

Katherine M. Iritani

Director, Health Care
Appendix I: Scope and Methodology

Page 26 GAO-12-694 Supplemental Medicaid Payments

This appendix provides information about our analyses of reported 

supplemental Medicaid expenditures and our analyses of information 

from selected states. Supplemental Medicaid payments include 

Disproportionate Share Hospital (DSH) payments to hospitals and other 

supplemental payments to hospitals or other providers, which we refer to 

as non-DSH supplemental payments. To determine what supplemental 

Medicaid payments states reported during fiscal year 2010 and how 

non-DSH supplemental payments reported during 2010 compared with 

those reported during 2006, we obtained and analyzed data about the 

Medicaid expenditures states reported during these 2 years.1 To examine 

reasons for differences between 2006 and 2010 in reported non-DSH 

supplemental payments, and to obtain additional information about states’ 

reports of these payments, we obtained information from the Centers for 

Medicare & Medicaid Services (CMS) and public sources about non-DSH 

supplemental payments in a nongeneralizable, judgmental sample of 

11 states. In addition, we reviewed relevant federal laws, regulations, and 

guidance; our prior work on supplemental Medicaid payments; and other 

relevant documentation. We also interviewed officials from CMS.

To determine what Medicaid payments states reported, we examined 

data from the standardized expenditure reports states submit to CMS on 

a quarterly basis using form CMS-64. States have 30 days after the end 

of a quarter to submit this form and must certify that the data are correct 

to the best of their knowledge. CMS reviews these reports and works with 

states to resolve any questions before certifying them as final. CMS 

transfers the certified, finalized data into a Financial Management Report 

(FMR) and makes annual data available on its website. CMS allows 

states to make adjustments to their prior CMS-64 submissions for up to 

2 years. The annual FMR incorporates adjustments reported by the states 

by applying reported adjustments to the fiscal year during which they are 

reported, even if an adjustment corrects expenditures reported during an 

earlier fiscal year.

Expenditures reported during fiscal year 2010. We obtained fiscal year 

2010 FMR data from CMS on December 22, 2011. These data reflected 

adjustments to expenditures reported by states on the quarterly reports 

filed during fiscal year 2010 and included states’ reported total Medicaid 

 

1

Throughout this report, the term fiscal year refers to the federal fiscal year. 

Appendix I: Scope and Methodology

Reported 

Expenditures 
Appendix I: Scope and Methodology

Page 27 GAO-12-694 Supplemental Medicaid Payments

expenditures, DSH expenditures, and any non-DSH expenditures the 

states reported separately from their other expenditures. Fiscal year 2010 

was the most recent year for which certified data were available from all 

50 states and the District of Columbia.2

Expenditures reported during fiscal year 2006. We obtained data 

about expenditures reported during fiscal year 2006 as part of work we 

reported in 2008.

To assess the reliability of the 

fiscal year 2010 data, we reviewed the steps CMS took to ensure the

accuracy of expenditure data and we examined the data for outliers or 

other unusual values, which we discussed with CMS officials. We 

determined that the data were sufficiently reliable to describe the 

expenditures reported by the states during fiscal year 2010, although as 

discussed in this report, we found that states’ separate reporting of 

non-DSH supplemental payments was incomplete.

3 For that work, we obtained reported DSH payments 

from CMS’s FMR for fiscal year 2006, which included adjustments 

reported by states for prior years. To obtain data about non-DSH 

supplemental payments, we extracted expenditure data that had been 

reported on a section of the CMS expenditure report—the form 

CMS-64.9I—that states were to use for informational purposes during 

2006 to identify non-DSH supplemental payments made under Medicaid’s 

Upper Payment Limit regulations.4

 

2

Data from Puerto Rico and the U.S. territories that operate Medicaid programs (American 

Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands), which did not 

report supplemental Medicaid payments during fiscal year 2010, were not necessarily 

complete.

 We adjusted these data to reflect 

adjustments states reported through their CMS-64.9I entries during fiscal 

year 2006 and through October 5, 2007. As described in our 2008 report, 

our assessment of the reliability of the fiscal year 2006 data included 

review of the steps CMS took to ensure the accuracy of expenditure data 

submitted to the Medicaid Budget and Expenditure System, comparison 

to data we obtained from a nongeneralizable sample of 5 states, and 

3

See GAO-08-614. 

4

For expenditures incurred during fiscal year 2006, states received federal matching funds

for non-DSH payments based on the information they provided on sections of the CMS-64 

other than the CMS-64.9I. Specifically, reimbursement for non-DSH supplemental 

payments was normally based on the CMS-64.9 base form, on which states reported 

regular payments and non-DSH supplemental payments together. Reimbursement for 

supplemental payments made under Medicaid demonstrations was based on CMS-64.9 

waiver forms. Specific reporting requirements for supplemental payments made under 

demonstration waivers varied.
Appendix I: Scope and Methodology

Page 28 GAO-12-694 Supplemental Medicaid Payments

comparison to similar data published by the Urban Institute.5

Our analyses of reported DSH and non-DSH payments included 

identification of state-by-state and nationwide expenditures for DSH and 

non-DSH supplemental payments in both absolute (dollar amount) and 

relative (percentage) terms. DSH payments can be made to hospitals for 

traditional inpatient and outpatient services and to mental health facilities 

for inpatient and outpatient mental health services; we examined reported 

payments to both types of hospitals. Non-DSH supplemental payments 

can be made for various categories of service (such as inpatient hospital 

services or physician and surgical services) provided by hospitals or other 

types of providers (such as nursing homes or intermediate care facilities); 

we examined payments for specific categories of services.

We 

determined that the data were sufficiently reliable to describe the 

expenditures identified by the states during fiscal year 2006, although as 

we discussed in our earlier report, we concluded that states’ separate

reporting of non-DSH supplemental payments was incomplete.

Some states may not have separately reported all of their non-DSH 

supplemental payments during 2006 or 2010. We did not quantify the 

extent to which states did not separately report their supplemental 

payments. Therefore, we may not be capturing the full amount of states’ 

non-DSH supplemental payments or the degree to which these payments 

have changed over time. We did not examine whether changes in 

non-DSH supplemental payments were associated with changes in 

states’ regular Medicaid payments.

To examine reasons for differences between 2006 and 2010 in reported 

non-DSH supplemental payments, and to obtain additional information 

about states’ reports of these payments, we obtained information from 

CMS and public sources about non-DSH supplemental payments in a 

judgmental sample of 11 states selected to include a mix of relevant 

characteristics. We selected a nongeneralizable sample of states, 

including some that separately reported non-DSH supplemental 

payments (1) in fiscal year 2006, but not 2010 (Georgia and Missouri); 

(2) in fiscal year 2010, but not 2006 (Maine, Massachusetts, and 

 

5

See T. A. Coughlin, S. Zuckerman, and J. McFeeters, “Restoring Fiscal Integrity to 

Medicaid Financing? Some Progress Has Been Made in Reforming Medicaid Financing, 

Yet Problems Persist,” Health Affairs, vol. 26, no. 5 (2007).

Information from 

Selected States
Appendix I: Scope and Methodology

Page 29 GAO-12-694 Supplemental Medicaid Payments

Pennsylvania); and (3) both (Arkansas, Colorado, Illinois, North Carolina, 

South Carolina, and Texas). These states differed in absolute and relative 

changes in reported non-DSH supplemental payments and changes in 

categories of service for which payments were reported. The information 

we used to select states included published information as well as 

preliminary information from CMS.6

For each of our selected states, we asked CMS to provide us with 

documentation, such as state plan amendments, that could shed light on 

observed differences from 2006 to 2010 in reported non-DSH 

supplemental payments. We reviewed this information, along with 

information from other public sources (such as states’ websites) to 

identify possible reasons for changes in reported payments and to 

develop rough estimates of the financial impact of planned changes. The 

state plan amendments states submit when proposing new supplemental 

payments, or modifications to existing payments, include an estimate of 

the financial impact of the state plan amendment. This estimate is 

intended to reflect the impact of the state plan amendment as a whole, 

even if the amendment covers several changes. CMS officials told us that 

these estimates are the best available estimates of the financial impact of 

changes states make to their state plans.

(For more information about non-DSH 

supplemental payments made by these states in 2006 and 2010, see 

app. III.)

We did not attempt to develop a full, dollar-by-dollar explanation of any 

state’s changes from 2006 to 2010 in reported amounts of non-DSH 

supplemental payments. We did not determine the accuracy of states’ 

estimates of the financial impact of their state plan amendments. 

Information from our judgmental sample of 11 states cannot be 

generalized to other states.

 

6

Expenditure data from fiscal year 2010 had not been finalized at the time we made our 

selections.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 30 GAO-12-694 Supplemental Medicaid Payments

This appendix provides state-by-state and nationwide information about 

the DSH and non-DSH supplemental Medicaid payments reported during 

fiscal year 2010 by the states and the District of Columbia.1

• Table 2 shows states’ reported Medicaid payments, their DSH and 

non-DSH supplemental payments, the federal share of DSH and 

non-DSH supplemental payments, and the percentage of the state 

Medicaid payments that was for DSH and non-DSH supplemental 

payments.

• Table 3 shows states’ reported DSH payments, including payments 

for traditional and mental health hospitals (as dollar amounts and as a 

percentage of the state DSH payments), total DSH payments, and 

total DSH payments as a percentage of the national total for DSH 

payments.

• Table 4 shows states’ reported non-DSH supplemental payments, 

including the amounts states reported for certain categories of service 

(as dollar amounts and as a percentage of the state non-DSH 

supplemental payments), total non-DSH supplemental payments, and 

total non-DSH supplemental payments as a percentage of the 

national total for non-DSH supplemental payments. The six categories 

of service listed are those for which CMS requested information—

inpatient hospital services, outpatient hospital services, nursing facility 

services, physician and surgical services, other practitioners’ services, 

and intermediate care facility services.

• Tables 5 through 10 provide additional information about states’ 

reported Medicaid payments for the six categories of service for which 

CMS obtained information about non-DSH supplemental payments—

inpatient hospital services, outpatient hospital services, nursing facility 

services, physician and surgical services, other practitioners’ services, 

and intermediate care facility services. For each of these six 

categories, the tables provide the states’ reported Medicaid payments, 

non-DSH supplemental payments, the federal share of the non-DSH 

payments, and the percentage of the state Medicaid payments for this 

category that was for non-DSH supplemental payments.

 

1

Puerto Rico and the U.S. territories that operate Medicaid programs—American Samoa, 

Guam, the Northern Mariana Islands, and the U.S. Virgin Islands—did not report 

supplemental Medicaid payments during fiscal year 2010. 

Appendix II: Supplemental Medicaid 

Payments Reported during 2010
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 31 GAO-12-694 Supplemental Medicaid Payments

Table 2: State Supplemental Medicaid Payments Reported during Fiscal Year 2010 as a Percentage of Total Reported State 

Medicaid Payments 

Dollars in millions

DSH supplemental payments Non-DSH supplemental payments

State 

Total state 

Medicaid 

paymentsa Total

Federal 

share

Total as 

percentage of 

state’s Medicaid 

payments Total

Federal 

share

Total as 

percentage of 

state’s Medicaid 

payments

Alabama $4,709 $467 $318 10 $227 $176 5 

Alaska 1,208 25 13 2 0 0 0 

Arizona 9,380 28 19 <1 0 0 0 

Arkansas 3,881 61 44 2 292 237 8 

California 41,643 2,157 1,079 5 1,786 1,160 4 

Colorado 4,028 200 100 5 682 418 17

Connecticut 5,528 269 134 5 0 0 0 

Delaware 1,287 6 3 <1 0 0 0 

District of Columbia 1,772 67 47 4 0 0 0 

Florida 17,262 376 207 2 1,485 1,004 9 

Georgia 7,711 435 283 6 0 0 0 

Hawaii 1,361 8 4 1 22 15 2 

Idaho 1,345 24 17 2 0 0 0 

Illinois 15,196 565 283 4 2,659 1,646 18

Indiana 5,879 156 100 3 178 134 3 

Iowa 3,047 49 31 2 0 0 0 

Kansas 2,408 68 41 3 54 38 2 

Kentucky 5,522 211 150 4 77 62 1 

Louisiana 6,720 791 521 12 0 0 0 

Maine 2,266 50 32 2 57 43 3 

Maryland 7,012 113 56 2 0 0 0 

Massachusetts 11,595 0 0 0 213 131 2 

Michigan 11,556 377 238 3 914 669 8 

Minnesota 7,496 109 55 1 0 0 0 

Mississippi 4,106 208 158 5 434 368 11

Missouri 7,994 739 476 9 0 0 0 

Montana 928 17 12 2 0 0 0 

Nebraska 1,595 48 29 3 0 0 0 

Nevada 1,505 95 48 6 39 25 3 

New Hampshire 1,319 230 115 17 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 32 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

DSH supplemental payments Non-DSH supplemental payments

State 

Total state 

Medicaid 

paymentsa Total

Federal 

share

Total as 

percentage of 

state’s Medicaid 

payments Total

Federal 

share

Total as 

percentage of 

state’s Medicaid 

payments

New Jersey 10,163 1,340 670 13 0 0 0 

New Mexico 3,457 29 21 1 100 80 3 

New York 50,453 3,117 1,559 6 513 316 1 

North Carolina 10,319 468 305 5 218 163 2 

North Dakota 682 2 1 <1 8 6 1 

Ohio 15,122 656 409 4 155 114 1 

Oklahoma 3,862 40 26 1 16 12 <1

Oregon 3,973 54 34 1 0 0 0 

Pennsylvania 18,634 844 462 5 410 270 2 

Rhode Island 1,912 125 66 7 0 0 0 

South Carolina 4,992 418 294 8 145 116 3 

South Dakota 775 1 <1 <1 0 0 0 

Tennessee 8,441 140 92 2 444 392 5 

Texas 26,331 1,688 992 6 3,099 2,184 12

Utah 1,687 27 19 2 17 14 1 

Vermont 1,247 37 21 3 <1 <1 <1

Virginia 6,408 199 99 3 29 17 <1

Washington 6,989 368 184 5 11 7 <1

West Virginia 2,539 74 55 3 137 112 5 

Wisconsin 6,432 4 2 <1 0 0 0 

Wyoming 530 1 <1 <1 0 0 0 

Total $383,368b $17,581 $9,925 4.59 $14,420 $9,928 3.76

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 

a

Total state Medicaid payments include both the state and federal share of payments and include all 

payments made by states to providers, including DSH and non-DSH payments as well as regular 

payments. They do not include expenditures for program administration.

b

The nationwide total for state Medicaid payments includes about $1,160 million in payments reported 

by Puerto Rico and the U.S. territories.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 33 GAO-12-694 Supplemental Medicaid Payments

Table 3: DSH Supplemental Payments for Traditional Hospital and Mental Health 

Facility Services Reported during Fiscal Year 2010

Dollars in millions

DSH payments 

(percentage of state DSH total)

State 

Traditional 

hospital servicesa

Mental health 

facility 

services

Total state 

DSH 

payments

State total as 

percentage of 

national 

DSH total

Alabama $464 (99) $3 (1) $467 3 

Alaska 11 (45) 14 (55) $25 <1

Arizona 0 (0) 28 (100) $28 <1

Arkansas 60 (99) 1 (1) $61 <1

California 2,157 (100) 0 (0) $2,157 12

Colorado 200 (100) 0 (0) $200 1 

Connecticut 160 (60) 109 (40) $269 2 

Delaware 0 (0) 6 (100) $6 <1

District of Columbia 65 (97) 2 (3) $67 <1

Florida 254 (68) 122 (32) $376 2 

Georgia 435 (100) 0 (0) $435 2 

Hawaii 8 (100) 0 (0) $8 <1

Idaho 24 (100) 0 (0) $24 <1

Illinois 475 (84) 89 (16) $565 3 

Indiana 58 (37) 98 (63) $156 1 

Iowa 49 (100) 0 (0) $49 <1

Kansas 45 (66) 23 (34) $68 <1

Kentucky 174 (82) 37 (18) $211 1 

Louisiana 682 (86) 108 (14) $791 4 

Maine 0 (0) 50 (100) $50 <1

Maryland 61 (54) 52 (46) $113 1 

Massachusetts 0 (0) 0 (0) $0 0 

Michigan 283 (75) 94 (25) $377 2 

Minnesota 109 (100) <1 (<1) $109 1 

Mississippi 208 (100) 0 (0) $208 1 

Missouri 546 (74) 193 (26) $739 4 

Montana 17 (100) 0 (0) $17 <1

Nebraska 55 (114) -7 (-14) $48 <1

Nevada 95 (100) 0 (0) $95 1 

New Hampshire 195 (85) 35 (15) $230 1 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 34 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

DSH payments 

(percentage of state DSH total)

State 

Traditional 

hospital servicesa

Mental health 

facility 

services

Total state 

DSH 

payments

State total as 

percentage of 

national 

DSH total

New Jersey 983 (73) 357 (27) $1,340 8 

New Mexico 29 (99) <1 (1) $29 <1

New York 2,714 (87) 403 (13) $3,117 18

North Carolina 313 (67) 154 (33) $468 3 

North Dakota 1 (43) 1 (57) $2 <1

Ohio 563 (86) 93 (14) $656 4 

Oklahoma 37 (92) 3 (8) $40 <1

Oregon 34 (63) 20 (37) $54 <1

Pennsylvania 518 (61) 326 (39) $844 5 

Rhode Island 125 (100) 0 (0) $125 1 

South Carolina 370 (88) 49 (12) $418 2 

South Dakota 0 (0) 1 (100) $1 <1

Tennessee 140 (100) 0 (0) $140 1 

Texas 1,396 (83) 293 (17) $1,688 10

Utah 26 (97) 1 (3) $27 <1

Vermont 37 (100) 0 (0) $37 <1

Virginia 192 (97) 6 (3) $199 1 

Washington 242 (66) 126 (34) $368 2 

West Virginia 55 (74) 19 (26) $74 <1

Wisconsin 4 (100) 0 (0) $4 <1

Wyoming 1 (100) 0 (0) $1 <1

Total $14,669 (83.44) $2,912 (16.56) $17,581 100

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 

a

Traditional inpatient and outpatient services include services that are furnished in a hospital for the 

care and treatment of inpatients and outpatients, other than services provided in mental health 

facilities. See 42 C.F.R. §§ 440.10, 440.20 (2011).
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 35 GAO-12-694 Supplemental Medicaid Payments

Table 4: Non-DSH Supplemental Payments Reported during Fiscal Year 2010 by Category of Service

Dollars in millions

Non-DSH supplemental payments 

(percentage of total state non-DSH payments)a

State 

Inpatient 

hospital 

services

Outpatient 

hospital 

services

Nursing 

facility 

services

Physician 

and 

surgical 

services

Other 

practitioners’ 

servicesb

Intermediate 

care facility 

servicesc

Total state 

non-DSH 

supplemental 

payments

State 

total as 

percentage 

of national 

non-DSH 

total 

Alabama $210 (92) $17 (8) $0 (0) $0 (0) $0 (0) $0 (0) $227 2 

Alaska 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Arizona 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Arkansas 236 (81) 46 (16) 0 (0) 10 (3) 0 (0) 0 (0) $292 2 

California 1,668 (93) 96 (5) 21 (1) 0 (0) 0 (0) 0 (0) $1,786 12

Colorado 417 (61) 132 (19) 119 (17) 15 (2) 0 (0) 0 (0) $682 5 

Connecticut 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Delaware 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

District of Columbia 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Florida 1,334 (90) 0 (0) 14 (1) 137 (9) 0 (0) 0 (0) $1,485 10

Georgia 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Hawaii 18 (83) 4 (17) 0 (0) 0 (0) 0 (0) 0 (0) $22 <1

Idaho 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Illinois 1,923 (72) 736 (28) 0 (0) 0 (0) 0 (0) 0 (0) $2,659 18

Indiana 43 (24) 0 (0) 88 (50) 47 (27) 0 (0) 0 (0) $178 1 

Iowa 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Kansas 20 (37) 18 (33) 0 (0) 16 (29) <1 (1) 0 (0) $54 <1

Kentucky 54 (69) 0 (0) <1 (1) 23 (30) 0 (0) 0 (0) $77 1 

Louisiana 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Maine 28 (48) 26 (46) 0 (0) 3 (5) 1 (1) 0 (0) $57 <1

Maryland 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Massachusetts 46 (21) 167 (79) 0 (0) 0 (0) 0 (0) 0 (0) $213 1 

Michigan 428 (47) 116 (13) 306 (33) 64 (7) 0 (0) 0 (0) $914 6 

Minnesota 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Mississippi 434 (100) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $434 3 

Missouri 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Montana 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Nebraska 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Nevada 35 (90) 0 (0) 0 (0) 4 (10) 0 (0) 0 (0) $39 <1
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 36 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments 

(percentage of total state non-DSH payments)a

State 

Inpatient 

hospital 

services

Outpatient 

hospital 

services

Nursing 

facility 

services

Physician 

and 

surgical 

services

Other 

practitioners’ 

servicesb

Intermediate 

care facility 

servicesc

Total state 

non-DSH 

supplemental 

payments

State 

total as 

percentage 

of national 

non-DSH 

total 

New Hampshire 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

New Jersey 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

New Mexico 96 (96) 0 (0) 0 (0) 4 (4) 0 (0) 0 (0) $100 1 

New York 45 (9) 425 (83) 44 (9) 0 (0) 0 (0) 0 (0) $513 4 

North Carolina 218 (100) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $218 2 

North Dakota 4 (47) 0 (0) 0 (0) 0 (0) 0 (0) 4 (53) $8 <1

Ohio 155 (100) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $155 1 

Oklahoma 16 (100) 0 (0) 0 (0) <1 (<1) 0 (0) 0 (0) $16 <1

Oregon 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Pennsylvania 0 (0) 0 (0) 410 (100) 0 (0) 0 (0) 0 (0) $410 3 

Rhode Island 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

South Carolina 36 (25) 24 (16) 39 (27) 46 (32) 0 (0) 0 (0) $145 1 

South Dakota 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Tennessee 444 (100) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $444 3 

Texas 3,050 (98) 4 (<1) 0 (0) 45 (1) 0 (0) 0 (0) $3,099 21

Utah 0 (0) 0 (0) 0 (0) 17 (100) 0 (0) 0 (0) $17 <1

Vermont 0 (0) 0 (0) <1 (100) 0 (0) 0 (0) 0 (0) <$1 <1

Virginia 1 (4) 0 (0) 4 (14) 29 (100) 0 (0) -5 (-17) $29 <1

Washington <1 (1) 0 (0) 11 (103) 0 (0) 0 (0) <0 (-4) $11 <1

West Virginia 74 (55) 0 (0) 0 (0) 62 (45) 0 (0) 0 (0) $137 1 

Wisconsin 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Wyoming 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) $0 0 

Total $11,031 

(76.50)

$1,811 

(12.56)

$1,056 

(7.32)

$522 

(3.62)

$1 (0.01) $-1 (-0.01) $14,420 100

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” When a value was less than 0, but did not round to 

($1) million or (1 percent), the cell includes the entry “<0.” 

a

CMS did not ask states to report non-DSH supplemental payments for other categories of service, 

such as mental health facility services or clinic services.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 37 GAO-12-694 Supplemental Medicaid Payments

b

Other practitioners’ services that may be covered by Medicaid vary from state to state and include 

health-related or remedial care or services, other than physicians’ services, provided by licensed 

practitioners acting within the scope of practice defined under state law. For example, depending on 

the state, such services could be provided by chiropractors, nurse midwives, nurse practitioners, and 

others.

c

Intermediate care facility services include those provided by facilities serving individuals with 

intellectual disabilities.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 38 GAO-12-694 Supplemental Medicaid Payments

Table 5: Non-DSH Supplemental Payments for Inpatient Hospital Services Reported 

during Fiscal Year 2010

Dollars in millions

Non-DSH supplemental payments for 

inpatient hospital services

State 

Total state 

Medicaid payments 

for inpatient 

hospital servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for inpatient 

hospital services

Alabama $790 $210 $163 27

Alaska 185 0 0 0 

Arizona 136 0 0 0 

Arkansas 740 236 191 32

California 8,667 1,668 1,092 19

Colorado 975 417 257 43

Connecticut 597 0 0 0 

Delaware 52 0 0 0 

District of Columbia 369 0 0 0 

Florida 3,956 1,334 902 34

Georgia 1,728 0 0 0 

Hawaii 81 18 12 23

Idaho 228 0 0 0 

Illinois 5,567 1,923 1,190 35

Indiana 366 43 32 12

Iowa 206 0 0 0 

Kansas 302 20 14 7 

Kentucky 1,027 54 43 5 

Louisiana 2,159 0 0 0 

Maine 209 28 21 13

Maryland 809 0 0 0 

Massachusetts 1,129 46 28 4 

Michigan 1,346 428 313 32

Minnesota 528 0 0 0 

Mississippi 1,252 434 368 35

Missouri 2,220 0 0 0 

Montana 164 0 0 0 

Nebraska 259 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 39 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments for 

inpatient hospital services

State 

Total state 

Medicaid payments 

for inpatient 

hospital servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for inpatient 

hospital services

Nevada 285 35 22 12

New Hampshire 258 0 0 0 

New Jersey 1,717 0 0 0 

New Mexico 460 96 77 21

New York 8,781 45 28 1 

North Carolina 1,983 218 163 11

North Dakota 50 4 3 8 

Ohio 1,714 155 114 9 

Oklahoma 934 16 12 2 

Oregon 241 0 0 0 

Pennsylvania 1,146 0 0 0 

Rhode Island 322 0 0 0 

South Carolina 1,070 36 29 3 

South Dakota 155 0 0 0 

Tennessee 932 444 392 48

Texas 6,629 3,050 2,150 46

Utah 360 0 0 0 

Vermont 40 0 0 0 

Virginia 852 1 1 <1

Washington 914 <1 <1 <1

West Virginia 293 74 62 25

Wisconsin 434 0 0 0 

Wyoming 96 0 0 0 

Total $65,762b $11,031 $7,678 16.77

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 

a

Total state Medicaid payments for inpatient hospital services include both the state and federal share 

of payments and include all payments made by states to providers, including DSH and non-DSH 

payments as well as regular payments. They do not include expenditures for program administration.

b

The nationwide total for state Medicaid payments for inpatient hospital services includes about 

$48 million in payments reported by Puerto Rico and the U.S. territories.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 40 GAO-12-694 Supplemental Medicaid Payments

Table 6: Non-DSH Supplemental Payments for Outpatient Hospital Services 

Reported during Fiscal Year 2010 

Dollars in millions

Non-DSH supplemental payments for 

outpatient hospital services

State 

Total state 

Medicaid payments 

for outpatient 

hospital servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for outpatient 

hospital services

Alabama $267 $17 $13 6 

Alaska 108 0 0 0 

Arizona 311 0 0 0 

Arkansas 171 46 38 27

California 1,346 96 57 7 

Colorado 305 132 81 43

Connecticut 165 0 0 0 

Delaware 18 0 0 0 

District of Columbia 40 0 0 0 

Florida 840 0 0 0 

Georgia 316 0 0 0 

Hawaii 17 4 3 23

Idaho 54 0 0 0 

Illinois 1,289 736 455 57

Indiana 99 0 0 0 

Iowa 190 0 0 0 

Kansas 56 18 12 32

Kentucky 289 0 0 0 

Louisiana 424 0 0 0 

Maine 215 26 20 12

Maryland 198 0 0 0 

Massachusetts 837 167 103 20

Michigan 315 116 85 37

Minnesota 101 0 0 0 

Mississippi 324 0 0 0 

Missouri 535 0 0 0 

Montana 59 0 0 0 

Nebraska 92 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 41 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments for 

outpatient hospital services

State 

Total state 

Medicaid payments 

for outpatient 

hospital servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for outpatient 

hospital services

Nevada 97 0 0 0 

New Hampshire 75 0 0 0 

New Jersey 282 0 0 0 

New Mexico 104 0 0 0 

New York 2,079 425 262 20

North Carolina 697 0 0 0 

North Dakota 25 0 0 0 

Ohio 383 0 0 0 

Oklahoma 230 0 0 0 

Oregon 15 0 0 0 

Pennsylvania 359 0 0 0 

Rhode Island 37 0 0 0 

South Carolina 225 24 19 11

South Dakota 50 0 0 0 

Tennessee 17 0 0 0 

Texas 1,112 4 3 <1

Utah 58 0 0 0 

Vermont 2 0 0 0 

Virginia 135 0 0 0 

Washington 244 0 0 0 

West Virginia 93 0 0 0 

Wisconsin 165 0 0 0 

Wyoming 38 0 0 0 

Total $15,506b 1,811 $1,150 11.68

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 

a

Total state Medicaid payments for outpatient hospital services include both the state and federal 

share of payments and include all payments made by states to providers, including non-DSH 

payments as well as regular payments. They do not include expenditures for program administration.

b

The nationwide total for state Medicaid payments for outpatient hospital services includes about 

$5 million in payments reported by Puerto Rico and the U.S. territories.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 42 GAO-12-694 Supplemental Medicaid Payments

Table 7: Non-DSH Supplemental Payments for Nursing Facility Services Reported 

during Fiscal Year 2010

Dollars in millions

Non-DSH supplemental payments for 

nursing facility services

State 

Total state 

Medicaid payments 

for nursing 

facility servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for nursing 

facility services

Alabama $875 $0 $0 0 

Alaska 118 0 0 0 

Arizona 34 0 0 0 

Arkansas 615 0 0 0 

California 4,268 21 11 <1

Colorado 573 119 73 21

Connecticut 1,254 0 0 0 

Delaware 186 0 0 0 

District of Columbia 205 0 0 0 

Florida 2,786 14 9 <1 

Georgia 1,133 0 0 0 

Hawaii 2 0 0 0 

Idaho 125 0 0 0 

Illinois 1,520 0 0 0 

Indiana 1,166 88 67 8 

Iowa 501 0 0 0 

Kansas 355 0 0 0 

Kentucky 837 <1 <1 <1

Louisiana 776 0 0 0 

Maine 237 0 0 0 

Maryland 1,060 0 0 0 

Massachusetts 1,583 0 0 0 

Michigan 1,686 306 224 18

Minnesota 812 0 0 0 

Mississippi 748 0 0 0 

Missouri 905 0 0 0 

Montana 156 0 0 0 

Nebraska 314 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 43 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments for 

nursing facility services

State 

Total state 

Medicaid payments 

for nursing 

facility servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for nursing 

facility services

Nevada 171 0 0 0 

New Hampshire 309 0 0 0 

New Jersey 1,968 0 0 0 

New Mexico 5 0 0 0 

New York 6,852 44 27 1 

North Carolina 1,228 0 0 0 

North Dakota 187 0 0 0 

Ohio 2,743 0 0 0 

Oklahoma 508 0 0 0 

Oregon 323 0 0 0 

Pennsylvania 3,504 410 270 12

Rhode Island 304 0 0 0 

South Carolina 571 39 31 7 

South Dakota 144 0 0 0 

Tennessee 624 0 0 0 

Texas 2,307 0 0 0 

Utah 158 0 0 0 

Vermont 115 <1 <1 <1

Virginia 806 4 2 <1

Washington 576 11 7 2 

West Virginia 480 0 0 0 

Wisconsin 923 0 0 0 

Wyoming 74 0 0 0 

Total $49,713b $1,056 $722 2.12

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 

a

Total state Medicaid payments for nursing facility services include both the state and federal share of 

payments and include all payments made by states to providers, including non-DSH payments as 

well as regular payments. They do not include expenditures for program administration.

b

The nationwide total for state Medicaid payments for nursing facility services includes about 

$2 million in payments reported by Puerto Rico and the U.S. territories.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 44 GAO-12-694 Supplemental Medicaid Payments

Table 8: Non-DSH Supplemental Payments for Physician and Surgical Services 

Reported during Fiscal Year 2010

Dollars in millions

Non-DSH supplemental payments for 

physician and surgical services

State 

Total state Medicaid 

payments for 

physician and 

surgical servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for physician and 

surgical services

Alabama $301 $0 $0 0 

Alaska 94 0 0 0 

Arizona 38 0 0 0 

Arkansas 276 10 8 4 

California 1,388 0 0 0 

Colorado 272 15 8 5 

Connecticut 70 0 0 0 

Delaware 22 0 0 0 

District of Columbia 55 0 0 0 

Florida 1,089 137 93 13

Georgia 355 0 0 0 

Hawaii 7 0 0 0 

Idaho 100 0 0 0 

Illinois 880 0 0 0 

Indiana 189 47 36 25

Iowa 174 0 0 0 

Kansas 97 16 11 16

Kentucky 374 23 19 6 

Louisiana 516 0 0 0 

Maine 100 3 3 3 

Maryland 101 0 0 0 

Massachusetts 314 0 0 0 

Michigan 263 64 46 24

Minnesota 189 0 0 0 

Mississippi 298 0 0 0 

Missouri 30 0 0 0 

Montana 52 0 0 0 

Nebraska 88 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 45 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments for 

physician and surgical services

State 

Total state Medicaid 

payments for 

physician and 

surgical servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for physician and 

surgical services

Nevada 88 4 3 4 

New Hampshire 55 0 0 0 

New Jersey 63 0 0 0 

New Mexico 41 4 4 11

New York 361 0 0 0 

North Carolina 944 0 0 0 

North Dakota 48 0 0 0 

Ohio 317 0 0 0 

Oklahoma 402 <1 <1 <1

Oregon 19 0 0 0 

Pennsylvania 209 0 0 0 

Rhode Island 15 0 0 0 

South Carolina 276 46 36 17

South Dakota 60 0 0 0 

Tennessee 28 0 0 0 

Texas 1,156 45 31 4 

Utah 113 17 14 15

Vermont 2 0 0 0 

Virginia 197 29 17 15

Washington 193 0 0 0 

West Virginia 183 62 50 34

Wisconsin 63 0 0 0 

Wyoming 52 0 0 0 

Total $12,622b $522 $377 4.13

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 

a

Total state Medicaid payments for physician and surgical services include both the state and federal 

share of payments and include all payments made by states to providers, including non-DSH 

payments as well as regular payments. They do not include expenditures for program administration.

b

The nationwide total for state Medicaid payments for physician and surgical services includes about 

$5 million in payments reported by Puerto Rico and the U.S. territories.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 46 GAO-12-694 Supplemental Medicaid Payments

Table 9: Non-DSH Supplemental Payments for Other Practitioners’ Services 

Reported during Fiscal Year 2010

Dollars in millions

Non-DSH supplemental payments for 

other practitioners’ servicesb

State 

Total state Medicaid 

payments for 

other practitioners’ 

servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for other 

practitioners’ services

Alabama $40 $0 $0 0 

Alaska 17 0 0 0 

Arizona 3 0 0 0 

Arkansas 17 0 0 0 

California 74 0 0 0 

Colorado 0 0 0 0 

Connecticut 117 0 0 0 

Delaware 1 0 0 0 

District of Columbia 2 0 0 0 

Florida 37 0 0 0 

Georgia 31 0 0 0 

Hawaii 1 0 0 0 

Idaho 42 0 0 0 

Illinois 106 0 0 0 

Indiana 10 0 0 0 

Iowa 53 0 0 0 

Kansas 4 <1 <1 10

Kentucky 26 0 0 0 

Louisiana 0 0 0 0 

Maine 46 1 <1 1 

Maryland 10 0 0 0 

Massachusetts 29 0 0 0 

Michigan 4 0 0 0 

Minnesota 148 0 0 0 

Mississippi 4 0 0 0 

Missouri 12 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 47 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments for 

other practitioners’ servicesb

State 

Total state Medicaid 

payments for 

other practitioners’ 

servicesa Total

Federal 

share

Non-DSH 

supplemental 

payments as a 

percentage of state’s 

total for other 

practitioners’ services

Montana 14 0 0 0 

Nebraska 5 0 0 0 

Nevada 10 0 0 0 

New Hampshire 15 0 0 0 

New Jersey 46 0 0 0 

New Mexico 40 0 0 0 

New York 232 0 0 0 

North Carolina 29 0 0 0 

North Dakota 3 0 0 0 

Ohio 60 0 0 0 

Oklahoma 24 0 0 0 

Oregon 25 0 0 0 

Pennsylvania 8 0 0 0 

Rhode Island 1 0 0 0 

South Carolina 27 0 0 0 

South Dakota 2 0 0 0 

Tennessee <1 0 0 0 

Texas 849 0 0 0 

Utah 4 0 0 0 

Vermont <1 0 0 0 

Virginia 25 0 0 0 

Washington 33 0 0 0 

West Virginia 12 0 0 0 

Wisconsin 79 0 0 0 

Wyoming 7 0 0 0 

Total $2,386c $1 $1 0.04

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 48 GAO-12-694 Supplemental Medicaid Payments

a

Total state Medicaid payments for other practitioners’ services include both the state and federal 

share of payments and include all payments made by states to providers, including non-DSH 

payments as well as regular payments. They do not include expenditures for program administration.

b

Other practitioners’ services that may be covered by Medicaid vary from state to state and include 

health-related or remedial care or services, other than physicians’ services, provided by licensed 

practitioners acting within the scope of practice defined under state law. For example, depending on 

the state, such services could be provided by chiropractors, nurse midwives, nurse practitioners, and 

others.

c

The nationwide total for state Medicaid payments for other practitioners’ services includes less than 

$1 million in payments reported by Puerto Rico and the U.S. territories.
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 49 GAO-12-694 Supplemental Medicaid Payments

Table 10: Non-DSH Supplemental Payments for Intermediate Care Facility Services 

Reported during Fiscal Year 2010

Dollars in millions

Non-DSH supplemental payments for 

intermediate care facility servicesb

State 

Total state 

Medicaid 

payments for 

intermediate care 

facility servicesa Total

Federal 

share

Non-DSH supplemental 

payments as a 

percentage of state’s 

total for intermediate 

care facility services

Alabama $35 $0 $0 0 

Alaska 2 0 0 0 

Arizona 0 0 0 0 

Arkansas 159 0 0 0 

California 716 0 0 0 

Colorado 28 0 0 0 

Connecticut 292 0 0 0 

Delaware 31 0 0 0 

District of Columbia 69 0 0 0 

Florida 334 0 0 0 

Georgia 93 0 0 0 

Hawaii 9 0 0 0 

Idaho 66 0 0 0 

Illinois 767 0 0 0 

Indiana 309 0 0 0 

Iowa 287 0 0 0 

Kansas 62 0 0 0 

Kentucky 146 0 0 0 

Louisiana 472 0 0 0 

Maine 59 0 0 0 

Maryland <1 0 0 0 

Massachusetts 243 0 0 0 

Michigan 0 0 0 0 

Minnesota 167 0 0 0 

Mississippi 270 0 0 0 

Missouri 134 0 0 0 

Montana 13 0 0 0 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 50 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Non-DSH supplemental payments for 

intermediate care facility servicesb

State 

Total state 

Medicaid 

payments for 

intermediate care 

facility servicesa Total

Federal 

share

Non-DSH supplemental 

payments as a 

percentage of state’s 

total for intermediate 

care facility services

Nebraska 34 0 0 0 

Nevada 18 0 0 0 

New Hampshire 3 0 0 0 

New Jersey 619 0 0 0 

New Mexico 25 0 0 0 

New York 3,602 0 0 0 

North Carolina 499 0 0 0 

North Dakota 87 4 3 5 

Ohio 826 0 0 0 

Oklahoma 124 0 0 0 

Oregon 2 0 0 0 

Pennsylvania 603 0 0 0 

Rhode Island 11 0 0 0 

South Carolina 141 0 0 0 

South Dakota 25 0 0 0 

Tennessee 225 0 0 0 

Texas 1,100 0 0 0 

Utah 67 0 0 0 

Vermont 0 0 0 0 

Virginia 271 -5 -3 -2 

Washington 141 <0 <0 <0

West Virginia 63 0 0 0 

Wisconsin 142 0 0 0 

Wyoming 19 0 0 0 

Total $13,406c $-1 <$1 -0.01

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal year 2010 and may include 

adjustments (positive or negative) to payments made during prior fiscal years. CMS provided these 

data to GAO on December 22, 2011. When a value was greater than 0, but did not round to $1 million 

or 1 percent, the cell includes the entry “<1.” When a value was less than 0, but did not round to 

($1) million or (1 percent), the cell includes the entry “<0.” 
Appendix II: Supplemental Medicaid Payments 

Reported during 2010

Page 51 GAO-12-694 Supplemental Medicaid Payments

a

Total state Medicaid payments for intermediate care facility services include both the state and 

federal share of payments and include all payments made by states to providers, including non-DSH 

payments as well as regular payments. They do not include expenditures for program administration.

b

Intermediate care facility services include those provided by facilities serving individuals with 

intellectual disabilities.

c

Puerto Rico and the U.S. territories did not report any payments for intermediate care facility 

services.
Appendix III: Non-DSH Supplemental Medicaid 

Payments Reported during 2006 and 2010

Page 52 GAO-12-694 Supplemental Medicaid Payments

This appendix provides state-by-state and nationwide information about 

non-DSH supplemental Medicaid payments reported during 2006 by the 

states and District of Columbia in comparison to similar payments reported 

during 2010.1

• Table 11 shows the total amount of non-DSH supplemental payments 

states reported during 2006 and 2010 and the change from 2006 to 

2010 in these amounts, both as a dollar amount and as a percentage of 

the 2006 total.

• Table 12 shows states’ reported non-DSH supplemental payments for 

specific categories of service during 2006 and 2010.

 

1

Puerto Rico and the U.S. territories that operate Medicaid programs—American Samoa, 

Guam, the Northern Mariana Islands, and the U.S. Virgin Islands—did not report 

supplemental Medicaid payments during 2010. 

Appendix III: Non-DSH Supplemental 

Medicaid Payments Reported during 2006 

and 2010
Appendix III: Non-DSH Supplemental Medicaid 

Payments Reported during 2006 and 2010

Page 53 GAO-12-694 Supplemental Medicaid Payments

Table 11: Non-DSH Supplemental Payments Reported during Fiscal Years 2006 and 

2010

Dollars in millions

Total reported non-DSH 

supplemental payments

Change from 2006 to 2010 

in reported non-DSH 

supplemental payments

State 2006 2010 In dollars

As a percentage 

of 2006 total

Alabama $275 $227 $-48 -18

Alaska 30 0 -30 -100

Arizona 0 0 0 0 

Arkansas 63 292 229 361

California 1,024 1,786 762 74

Colorado 140 682 542 388

Connecticut 0 0 0 0 

Delaware 0 0 0 0 

District of Columbia 0 0 0 0 

Florida 681 1,485 804 118

Georgia 332 0 -332 -100

Hawaii 18 22 4 21

Idaho 0 0 0 0 

Illinois 631 2,659 2,029 322

Indiana 0 178 178 N/A

Iowa 0 0 0 0 

Kansas 0 54 54 N/A

Kentucky 0 77 77 N/A

Louisiana 31 0 -31 -100

Maine 0 57 57 N/A

Maryland 0 0 0 0 

Massachusetts 0 213 213 N/A

Michigan 13 914 901 6,806

Minnesota 0 0 0 0 

Mississippi 175 434 259 149

Missouri 116 0 -116 -100

Montana 33 0 -33 -100

Nebraska 48 0 -48 -100

Nevada 0 39 39 N/A

New Hampshire 19 0 -19 -100
Appendix III: Non-DSH Supplemental Medicaid 

Payments Reported during 2006 and 2010

Page 54 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Total reported non-DSH 

supplemental payments

Change from 2006 to 2010 

in reported non-DSH 

supplemental payments

State 2006 2010 In dollars

As a percentage 

of 2006 total

New Jersey 0 0 0 0 

New Mexico 49 100 51 103

New York 385 513 129 33

North Carolina 825 218 -608 -74

North Dakota 0 8 8 N/A

Ohio 46 155 109 240

Oklahoma 28 16 -12 -43

Oregon 15 0 -15 -100

Pennsylvania 0 410 410 N/A

Rhode Island 0 0 0 0 

South Carolina 335 145 -189 -57

South Dakota 0 0 0 0 

Tennessee 127 444 317 251

Texas 818 3,099 2,281 279

Utah 0 17 17 N/A

Vermont 0 <1 <1 N/A

Virginia 0 29 29 N/A

Washington 9 11 1 13

West Virginia 36 137 101 282

Wisconsin 29 0 -29 -100

Wyoming 0 0 0 0 

Total $6,332 $14,420 $8,088 127.72

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal years and may include adjustments 

(positive or negative) to payments made during prior fiscal years. CMS provided the data for fiscal year 

2010 to GAO on December 22, 2011. The data for fiscal year 2006 reflect adjustments reported by 

states through October 5, 2007. When a value was greater than 0, but did not round to $1 million or 

1 percent, the cell includes the entry “<1.” If a state did not report non-DSH supplemental payments during 

2006, but did report such payments during 2010, the percentage change from 2006 could not be 

computed and is indicated by “N/A.” 
Appendix III: Non-DSH Supplemental Medicaid 

Payments Reported during 2006 and 2010

Page 55 GAO-12-694 Supplemental Medicaid Payments

Table 12: Non-DSH Supplemental Payments States Reported during Fiscal Years 2006 and 2010 by Category of Service

Dollars in millions

Inpatient 

hospital 

services

Outpatient 

hospital 

services

Nursing 

facility 

services

Physician 

and surgical 

services

Intermediate 

care facility 

servicesa

Mental health 

facility 

servicesb

Other 

practitioners’ 

servicesc,d

Other 

servicesb

State 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010

Alabama $130 $210 $96 $17 $50 $0 $0 $0 $0 $0 $0 N/A N/A $0 $0 N/A

Alaska 30 0 0 0 0 0 0 0 0 0 1 N/A N/A 0 0 N/A

Arizona 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Arkansas 63 236 0 46 0 0 0 10 0 0 1 N/A N/A 0 0 N/A

California 748 1,668 221 96 54 21 0 0 0 0 0 N/A N/A 0 0 N/A

Colorado 126 417 12 132 2 119 0 15 0 0 0 N/A N/A 0 <1 N/A

Connecticut 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Delaware 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

District of Columbia 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Florida 663 1,334 0 0 18 14 0 137 0 0 0 N/A N/A 0 0 N/A

Georgia 156 0 65 0 110 0 0 0 0 0 0 N/A N/A 0 0 N/A

Hawaii 10 18 2 4 6 0 0 0 0 0 0 N/A N/A 0 0 N/A

Idaho 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Illinois 474 1,923 156 736 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Indiana 0 43 0 0 0 88 0 47 0 0 0 N/A N/A 0 0 N/A

Iowa 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Kansas 0 20 0 18 0 0 0 16 0 0 0 N/A N/A <1 0 N/A

Kentucky 0 54 0 0 0 <1 0 23 0 0 0 N/A N/A 0 0 N/A

Louisiana 1 0 13 0 0 0 17 0 0 0 0 N/A N/A 0 0 N/A

Maine 0 28 0 26 0 0 0 3 0 0 0 N/A N/A 1 0 N/A

Maryland 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Massachusetts 0 46 0 167 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Michigan 0 428 13 116 0 306 0 64 0 0 0 N/A N/A 0 0 N/A

Minnesota 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Mississippi 150 434 20 0 5 0 0 0 0 0 0 N/A N/A 0 0 N/A

Missouri 70 0 16 0 0 0 5 0 25 0 0 N/A N/A 0 0 N/A

Montana 27 0 0 0 6 0 0 0 0 0 0 N/A N/A 0 <1 N/A

Nebraska 0 0 0 0 48 0 0 0 0 0 0 N/A N/A 0 0 N/A

Nevada 0 35 0 0 0 0 0 4 0 0 0 N/A N/A 0 0 N/A

New Hampshire 0 0 0 0 19 0 0 0 0 0 0 N/A N/A 0 0 N/A
Appendix III: Non-DSH Supplemental Medicaid 

Payments Reported during 2006 and 2010

Page 56 GAO-12-694 Supplemental Medicaid Payments

Dollars in millions

Inpatient 

hospital 

services

Outpatient 

hospital 

services

Nursing 

facility 

services

Physician 

and surgical 

services

Intermediate 

care facility 

servicesa

Mental health 

facility 

servicesb

Other 

practitioners’ 

servicesc,d

Other 

servicesb

State 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010 2006 2010

New Jersey 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

New Mexico 0 96 0 0 0 0 0 4 0 0 0 N/A N/A 0 49 N/A

New York 385 45 0 425 0 44 0 0 0 0 0 N/A N/A 0 0 N/A

North Carolina 572 218 253 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

North Dakota 0 4 0 0 0 0 0 0 0 4 0 N/A N/A 0 0 N/A

Ohio 46 155 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Oklahoma 24 16 0 0 0 0 0 <1 0 0 0 N/A N/A 0 5 N/A

Oregon 10 0 0 0 0 0 4 0 0 0 0 N/A N/A 0 0 N/A

Pennsylvania 0 0 0 0 0 410 0 0 0 0 0 N/A N/A 0 0 N/A

Rhode Island 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

South Carolina 205 36 129 24 0 39 0 46 0 0 0 N/A N/A 0 0 N/A

South Dakota 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Tennessee 0 444 0 0 127 0 0 0 0 0 0 N/A N/A 0 0 N/A

Texas 787 3,050 6 4 0 0 25 45 0 0 0 N/A N/A 0 0 N/A

Utah 0 0 0 0 0 0 0 17 0 0 0 N/A N/A 0 0 N/A

Vermont 0 0 0 0 0 <1 0 0 0 0 0 N/A N/A 0 0 N/A

Virginia 0 1 0 0 0 4 0 29 0 -5 0 N/A N/A 0 0 N/A

Washington 9 <1 0 0 0 11 0 0 0 <0 0 N/A N/A 0 0 N/A

West Virginia 21 74 0 0 0 0 14 62 0 0 0 N/A N/A 0 1 N/A

Wisconsin 3 0 <1 0 24 0 0 0 <1 0 <1 N/A N/A 0 1 N/A

Wyoming 0 0 0 0 0 0 0 0 0 0 0 N/A N/A 0 0 N/A

Total $4,711 $11,031 $1,003 $1,811 $469 $1,056 $66 $522 $25 $-1 $2 N/A N/A $1 $57 N/A

Source: GAO analysis of CMS-64 expenditure data.

Notes: Amounts represent payments reported during federal fiscal years and may include adjustments 

(positive or negative) to payments made during prior fiscal years. CMS provided the data for fiscal year 

2010 to GAO on December 22, 2011. The data for fiscal year 2006 reflect adjustments reported by 

states through October 5, 2007. When a value was greater than 0, but did not round to $1 million or 

1 percent, the cell includes the entry “<1.” When a value was less than 0, but did not round to ($1) million 

or (1 percent), the cell includes the entry “<0.” 

a

Intermediate care facility services include those provided by facilities serving individuals with intellectual 

disabilities.

b

The expenditure reporting form used in fiscal year 2010 did not include a way for states to separately 

report non-DSH supplemental payments for services other than inpatient hospital services, outpatient 

hospital services, nursing facility services, physician and surgical services, intermediate care facility 

services, or other practitioners’ services. For example, there was no line on which states could report 

non-DSH supplemental payments for mental health facility services or clinic services. Cells 

corresponding to categories of service for which no lines were included on the reporting form for 2010—

those for mental health facility services and other services—are marked “N/A” (not applicable).
Appendix III: Non-DSH Supplemental Medicaid 

Payments Reported during 2006 and 2010

Page 57 GAO-12-694 Supplemental Medicaid Payments

c

Other practitioners’ services that may be covered by Medicaid vary from state to state and include 

health-related or remedial care or services, other than physicians’ services, provided by licensed 

practitioners acting within the scope of practice defined under state law. For example, depending on the 

state, such services could be provided by chiropractors, nurse midwives, nurse practitioners, and 

others.

d

Although the expenditure reporting form used in fiscal year 2006 included a way for states to separately 

report non-DSH supplemental payments for other practitioners’ services, we designated all non-DSH 

supplemental payments other than inpatient hospital services, outpatient hospital services, nursing 

facility services, physician and surgical services, intermediate care facility services, and mental health 

facility services as payments for other services. Cells corresponding to other practitioners’ services for 

2006 are marked “N/A” (not applicable).
Appendix IV: Comments from the Department 

of Health and Human Services

Page 58 GAO-12-694 Supplemental Medicaid Payments

Appendix IV: Comments from the 

Department of Health and Human Services
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 59 GAO-12-694 Supplemental Medicaid Payments

Katherine M. Iritani, (202) 512-7114 or iritanik@gao.gov

In addition to the contact named above, Tim Bushfield, Assistant Director; 

Kristen Joan Anderson; Helen Desaulniers; Sandra George; Giselle 

Hicks; Roseanne Price; and Jessica C. Smith made key contributions to 

this report.

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 
Related GAO Products

Page 60 GAO-12-694 Supplemental Medicaid Payments

Opportunities to Reduce Potential Duplication in Government Programs, 

Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington, 

D.C.: March 1, 2011.

High-Risk Series: An Update. GAO-11-278. Washington, D.C.: February 

2011.

Medicaid: Ongoing Federal Oversight of Payments to Offset 

Uncompensated Hospital Care Costs Is Warranted. GAO-10-69. 

Washington, D.C.: November 20, 2009.

Medicaid: CMS Needs More Information on the Billions of Dollars Spent 

on Supplemental Payments. GAO-08-614. Washington, D.C.: May 30, 

2008.

Medicaid Financing: Long-standing Concerns about Inappropriate State 

Arrangements Support Need for Improved Federal Oversight. 

GAO-08-650T. Washington, D.C.: April 3, 2008.

Medicaid Financing: Long-Standing Concerns about Inappropriate State 

Arrangements Support Need for Improved Federal Oversight. 

GAO-08-255T. Washington, D.C.: November 1, 2007.

Medicaid Financing: Federal Oversight Initiative Is Consistent with 

Medicaid Payment Principles but Needs Greater Transparency. 

GAO-07-214. Washington, D.C.: March 30, 2007.

Medicaid Financial Management: Steps Taken to Improve Federal 

Oversight but Other Actions Needed to Sustain Efforts. GAO-06-705. 

Washington, D.C.: June 22, 2006.

Medicaid Financing: States’ Use of Contingency-Fee Consultants to 

Maximize Federal Reimbursements Highlights Need for Improved Federal 

Oversight. GAO-05-748. Washington, D.C.: June 28, 2005.

Medicaid: States’ Efforts to Maximize Federal Reimbursements Highlight 

Need for Improved Federal Oversight. GAO-05-836T. Washington, D.C.: 

June 28, 2005.

Medicaid: Intergovernmental Transfers Have Facilitated State Financing 

Schemes. GAO-04-574T. Washington, D.C.: March 18, 2004.

Related GAO Products
Related GAO Products

Page 61 GAO-12-694 Supplemental Medicaid Payments

Medicaid: Improved Federal Oversight of State Financing Schemes Is 

Needed. GAO-04-228. Washington, D.C.: February 13, 2004.

Major Management Challenges and Program Risks: Department of 

Health and Human Services. GAO-03-101. Washington, D.C.: January 

2003.

Medicaid: HCFA Reversed Its Position and Approved Additional State 

Financing Schemes. GAO-02-147. Washington, D.C.: October 30, 2001.

Medicaid: State Financing Schemes Again Drive Up Federal Payments. 

GAO/T-HEHS-00-193. Washington, D.C.: September 6, 2000.

Medicaid: Disproportionate Share Payments to State Psychiatric 

Hospitals. GAO/HEHS-98-52. Washington, D.C.: January 23, 1998.

Medicaid: Disproportionate Share Hospital Payments to Institutions for 

Mental Diseases. GAO/HEHS-97-181R. Washington, D.C.: July 15, 1997.

Medicaid: States Use Illusory Approaches to Shift Program Costs to 

Federal Government. GAO/HEHS-94-133. Washington, D.C.: August 1, 

1994.

(290975)
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