Medicaid Financing: Long-Standing Concerns About Inappropriate State Arrangements Support Need for Improved Federal Oversight

November 2007 In testimony before the U.S. House of Representatives, the Committee on Oversight and Government Reform, managing director of Health Care at the Government Accountability Office (GAO), Majorie Kanof, Ph.D., addressed the issue of inappropriate Medicaid financing arrangements used by states to increase federal funding. In light of these discoveries, the GAO recommends that the Centers for Medicare and Medicaid Services (CMS) issue guidance to clarify allowable financing arrangements to the states. CMS issued a new rule in May 2007 that would prevent inappropriate cost shifting. The new rule would take effect May 2008 . . .