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Alphabet Soup: Medicaid Terminology

S. Lincoln

(This is an encore episode.)

As Louisiana deals with chronic shortages in the state healthcare budget and works through accepting the federal Medicaid expansion, a whole lot of acronyms are being tossed around, like ACA, IGTs, CMS, IAT, DSH payments, FMAP rates.

What the heck is all this alphabet soup, you ask? Here’s a quick class on Medicaid terminology.

First is “ACA”, which stands for the Affordable Care Act, also known as Obamacare.

Then there’s “CMS”, the Centers for Medicaid and Medicare services. That’s the federal administrative and rule-making authority for Medicaid.

There’s “DSH”, which is the acronym for Disproportionate Hospital Share funding. DSH provides more money for hospitals that treat higher numbers of uninsured patients. Because the ACA presumes everyone will have health insurance, Louisiana is going to start receiving less DSH money from the feds.

Then there’s regular “FMAP” rates. That stands for Federal Medical Assistance Percentage —the match rate Louisiana pays to draw down federal Medicaid dollars. For the current year, the state pays 38 percent of Medicaid costs, while the feds pay 62 percent.

Louisiana covers its match rate in a number of creative ways, including “IGTs”, which are intergovernmental transfers, coming from local governmental entities. The state also uses IATs, which are interagency transfers, coming from a state governmental entity.

Many IATs and IGTs are legit, but in the past few years they’ve become a form of money-laundering. Louisiana takes funds that come from the feds for one purpose, then shifts the money through a couple of state agencies, and Voila! Now it’s state money that can be used to draw down more federal Medicaid dollars. CMS ultimately catches us, and makes the state pay the money back.

But back to FMAP…the 38 percent match Louisiana pays is what makes Medicaid expansion under the ACA so attractive. For the first year, the federal government foots the entire bill, and at most Louisiana will only have to pay 10 percent.