Federal officials are trying to clamp down on private arrangements among some hospitals to pay themselves back for the Medicaid taxes they’ve paid.
by the Government Accountability Office, which called for more transparency in how the money is collected and spent.since 2009. Here’s how it works: Hospitals with a significant share of low-income patients get more Medicaid funding back than they pay in the tax, so they donate a small portion of their Medicaid funding to a charity run by the leadership of the California Hospital Association, a statewide lobbying organization.
For instance, Cedars-Sinai in Los Angeles, one of the country’s richest hospitals, paid nearly $172 million in provider taxes in 2022, eclipsing the $151 million it got back in Medicaid dollars. Then, it received nearly $28 million from the hospital association’s charity — earning about $6.
“We believe providers with relatively higher Medicaid volume agree to redistribute some of their Medicaid payments to ensure broad support for the tax program,” they wrote in their proposal.It’s unclear how widespread such agreements are because hospitals don’t make them public. CMS said it has identified “instances” of Medicaid redistribution payments, but spokesperson Greg Myers declined to elaborate.
Missouri’s hospital association also runs a “pooling arrangement,” in which hospitals that get more Medicaid money than they paid in taxes can donate funds to the hospitals that didn’t.
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