Medicaid Supplemental Payments: Do They Fit in a Value Strategy?

The latest available estimates indicate that anywhere from 10 percent to 25 percent of Medicaid spending occurs through supplemental payments not linked to performance on cost or quality. As currently designed, these payments may undercut state efforts to use payment policy to drive the delivery of transparent, accountable, and cost-effective care to Medicaid beneficiaries. Through extensive review of the regulatory guidance, published literature, and state Medicaid program documents, the project team will examine the proliferation of Medicaid supplemental payments, determine how these payment mechanisms affect states’ efforts to ensure the delivery of high-quality care to patients, and, in collaboration with an advisory group of federal and state officials, identify viable policy alternatives that promote value and efficiency in Medicaid.