This is the accessible text file for GAO report number GAO-13-47
entitled 'Medicaid: Data Sets Provide Inconsistent Picture of 
Expenditures' which was released on November 29, 2012. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as 
part of a longer term project to improve GAO products' accessibility. 
Every attempt has been made to maintain the structural and data 
integrity of the original printed product. Accessibility features, 
such as text descriptions of tables, consecutively numbered footnotes 
placed at the end of the file, and the text of agency comment letters, 
are provided but may not exactly duplicate the presentation or format 
of the printed version. The portable document format (PDF) file is an 
exact electronic replica of the printed version. We welcome your 
feedback. Please E-mail your comments regarding the contents or 
accessibility features of this document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Committee on Finance, U.S. Senate: 

October 2012: 

Medicaid: 

Data Sets Provide Inconsistent Picture of Expenditures: 

GAO-13-47: 

GAO Highlights: 

Highlights of GAO-13-47, a report to the Ranking Member, Committee on 
Finance, U.S. Senate: 

Why GAO Did This Study: 

CMS, within the Department of Health and Human Services, and state 
Medicaid agencies jointly administer the multibillion-dollar Medicaid 
program, which finances health care for certain low-income 
individuals. Medicaid is on GAO’s high-risk list because of 
vulnerabilities to waste, fraud, abuse, and mismanagement. CMS has two 
data sets that report state Medicaid expenditures. The MSIS data set 
is designed to report individual beneficiary claims data. The CMS-64 
data set aggregates states’ expenditures, which are used to reimburse 
the states for their Medicaid expenditures. However, neither data set 
provides a complete picture of Medicaid expenditures. 

GAO was asked to compare MSIS and CMS-64 data. This report (1) 
examines the extent to which MSIS and CMS-64 expenditure data differ 
and (2) where possible, quantifies the identified differences between 
the two data sets. GAO reviewed documents, compared Medicaid 
expenditure data, and interviewed CMS and state officials. GAO used 
fiscal years 2007 through 2009 data—the most-recent and most-complete 
data available. 

What GAO Found: 

Medicaid expenditures in the Medicaid Statistical Information System 
(MSIS) were generally less than CMS-64 amounts. National expenditures 
in MSIS were 86, 87, and 88 percent of the amounts in CMS-64 in fiscal 
years 2007 through 2009, respectively. In fiscal year 2009, MSIS 
expenditures for states ranged from 59 to 119 percent of CMS-64. 
Specifically, 40 states reported lower expenditures in MSIS than CMS-
64; 5 states and the District of Columbia reported higher 
expenditures; and 5 states reported similar levels of expenditures. 

Table: Total Medicaid Expenditures in MSIS and CMS-64, Fiscal Years 
2007-2009: 

Fiscal year: 2007; 
MSIS baseline: $273.9 billion; 
CMS-64 baseline: $320.1 billion; 
Difference between MSIS baseline and CMS-64 baseline: $46.1 billion; 
MSIS baseline as a percentage of CMS-64: 86%. 

Fiscal year: 2008; 
MSIS baseline: $294.2 billion; 
CMS-64 baseline: $338.6 billion; 
Difference between MSIS baseline and CMS-64 baseline: $44.4 billion; 
MSIS baseline as a percentage of CMS-64: 87%. 

Fiscal year: 2009; 
MSIS baseline: $323.1 billion; 
CMS-64 baseline: $366.5 billion; 
Difference between MSIS baseline and CMS-64 baseline: $43.4 billion; 
MSIS baseline as a percentage of CMS-64: 88%. 

Note: MSIS and CMS-64 expenditures were rounded. 

[End of table] 

GAO was able to quantify some, but not all, of the identified 
differences in expenditures between MSIS and the CMS-64. 

* GAO adjusted MSIS for expenditures that were not attributed to 
individual beneficiaries—such as prescription drug rebates. These 
adjustments increased MSIS to 92, 93, and 94 percent of the amounts in 
CMS-64 in fiscal years 2007 through 2009, respectively. 

* GAO could not account for the remaining differences in part because 
of inconsistencies in the Centers for Medicare & Medicaid (CMS) 
guidance between the two data sets. For example, CMS officials 
explained that expenditures for inpatient services as reported by a 
state in MSIS and as reported in CMS-64 are not necessarily for the 
same services. 

GAO also found that states do not submit timely MSIS information. CMS 
requires states to submit MSIS data within 45 days and CMS-64 data 
within 30 days of the end of the quarter. However, states’ reporting 
of MSIS data can be up to 3 years late, whereas CMS-64 data are 
consistently reported on time. Also, MSIS expenditure data are 
considered less reliable when compared with CMS-64. 

GAO has reported that CMS will need more reliable data for assessing 
expenditures and measuring performance in the Medicaid program. MSIS 
and CMS-64 have the potential to offer a robust view of the Medicaid 
program, enhancing CMS oversight of aggregate spending trends, per 
beneficiary spending growth, and cross-state comparisons, all of which 
could be useful in improving the financial integrity of this high-risk 
program. However, delays in reporting MSIS data and inconsistencies 
between the two data sets limit their usefulness as oversight tools. 
CMS has recently completed a pilot study aimed in part at improving 
the timeliness and consistency of both systems data. 

HHS provided technical comments on a draft of this report, which were 
incorporated as appropriate. 

View [hyperlink, http://www.gao.gov/products/GAO-13-47]. For more 
information, contact Carolyn L. Yocom at (202) 512-7114 or 
yocomc@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

MSIS Medicaid Expenditures Amounts Are Generally Less than 
CMS-64 Expenditure Amounts: 

Some Factors Could Be Quantified and Accounted for Approximately Half 
of the Expenditure Difference between the Data Sets: 

Concluding Observations: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Total Baseline Medicaid Expenditures in MSIS and CMS-64, 
by State, Fiscal Year 2009: 

Appendix III: Total Adjusted Medicaid Expenditures in MSIS and CMS-64, 
by State, Fiscal Year 2009: 

Appendix IV: Adjusted MSIS Expenditures as a Percentage of CMS-64, 
by State, Fiscal Year 2009: 

Appendix V: Adjusted MSIS Expenditures as a Percentage of CMS-64, 
by State and Expenditure Category, Fiscal Year 2009: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Total Medicaid Expenditures in the Medicaid Statistical 
Information System (MSIS) and CMS-64, Fiscal Years 2007-2009: 

Table 2: Total Medicaid Expenditures Adjusted in the Medicaid 
Statistical Information System (MSIS) and CMS-64, Fiscal Years 2007–
2009: 

Table 3: Medicaid Statistical Information System (MSIS) and CMS-64 
Service Types, Fiscal Years 2007–2009: 

Table 4: Combined Expenditure Categories and Corresponding MSIS and 
CMS-64 Service Types: 

Figures: 

Figure 1: Medicaid Statistical Information System (MSIS) Medicaid 
Expenditures as a Percentage of CMS-64 Expenditures, by State, Fiscal 
Year 2009: 

Figure 2: MSIS Medicaid Expenditures as a Percentage of CMS-64 
Expenditures, by Expenditure Category, Fiscal Years 2007–2009: 

Figure 3: MSIS Medicaid Expenditures as a Percentage of CMS-64 
Expenditures, by Expenditure Category, Fiscal Year 2009: 

Figure 4: Comparison of MSIS Baseline to Adjusted Expenditures, 
by Expenditure Category, as a Percentage of CMS-64, 
Fiscal Year 2009: 

Figure 5: Comparison of MSIS Baseline to MSIS Adjusted Expenditures, 
as a Percentage of CMS-64, Fiscal Year 2009: 

Figure 6: Comparison of MSIS Baseline to Adjusted Medicaid 
Expenditures, as a Percentage of CMS-64, by State, Fiscal Year 2009: 

Figure 7: Adjusted Medicaid Expenditures in MSIS as a Percentage of 
CMS-64, by Expenditure Category, Fiscal Years 2007–2009: 

Abbreviations: 

CHIP: Children’s Health Insurance Program: 

CMS: Centers for Medicare & Medicaid Services: 

DSH: Disproportionate Share Hospital: 

FPL: federal poverty level: 

HCERA: Health Care and Education Reconciliation Act of 2010: 

HHS: Department of Health and Human Services: 

LTSS: long-term support services: 

M-CHIP: Medicaid Expansion Children’s Health Insurance Program: 

MSIS: Medicaid Statistical Information System: 

PPACA: Patient Protection and Affordable Care Act: 

S-CHIP:Separate Children’s Health Insurance Program: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

October 29, 2012: 

The Honorable Orrin Hatch: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

Dear Senator Hatch: 

The Centers for Medicare & Medicaid Services (CMS), within the 
Department of Health and Human Services (HHS), and state Medicaid 
agencies jointly administer the multibillion-dollar Medicaid program, 
which finances health care for approximately 67 million low-income 
individuals who meet specific eligibility criteria. In recent years, 
the Medicaid program has undergone steady growth and is expected to 
continue to expand in light of the Patient Protection and Affordable 
Care Act of 2010 (PPACA).[Footnote 1] PPACA expands eligibility for 
Medicaid to nonelderly individuals whose income does not exceed 133 
percent of the federal poverty level (FPL),[Footnote 2] or $30,700 for 
a family of four in 2012.[Footnote 3] However, because states may 
choose not to participate in the PPACA expansion, it is unclear how 
much the Medicaid program will grow.[Footnote 4] 

Medicaid is on our high-risk list in part because of concerns about the 
adequacy of fiscal oversight, which is necessary to prevent 
inappropriate spending.[Footnote 5] We have previously reported that 
Medicaid has among the highest estimated improper payments of any 
federal program reporting such data. Consequently, we have reported 
that, particularly as PPACA is implemented, CMS will need new tools 
and resources, including more reliable data for assessing expenditures 
and measuring performance.[Footnote 6] 

CMS has two data sets that report state Medicaid expenditures, but the 
data sets have different purposes and limitations. Consequently, 
neither data set provides a complete picture of Medicaid expenditures. 

* The Medicaid Statistical Information System (MSIS) was established 
as a national eligibility and claims data set, and can provide CMS a 
summary of expenditures linked to specific beneficiaries on the basis 
of their medical claims for care.[Footnote 7] CMS reviews these data 
for reliability, and uses these data for policy analysis, program 
utilization, and forecasting expenditures. However, these data exclude 
other aspects of the Medicaid program that are not tied to specific 
beneficiaries. For example, the MSIS data set does not contain 
supplemental payments to providers that are separate from standard 
Medicaid payments for services. 

* The CMS-64 data set aggregates states’ expenditures, which are 
used to reimburse the states for their federal shares of Medicaid 
expenditures.[Footnote 8] CMS reviews these submissions, and the data 
are the most-reliable accounting of total Medicaid expenditures. 
However, these data exclude beneficiary-specific data and thus have 
limited use in examining program spending. For example, CMS cannot use 
CMS-64 data to conduct a beneficiary-level analysis to identify 
program spending abuses in particular service areas, such as 
prescription drugs.[Footnote 9] 

Total Medicaid expenditure data, nationally and by state, often differ 
widely between MSIS and CMS-64, even after accounting for differences 
between the two in the purpose of the database and the type of 
information provided. Members of Congress, industry experts, and 
researchers have noted that these two sets of expenditure data cannot 
be easily reconciled, thus limiting CMS oversight. For example, 
differences in expenditure data between the two data sets limit CMS’s 
ability to conduct cross-state comparisons of Medicaid spending. Such 
comparisons could be used to analyze Medicaid spending patterns by 
eligibility group and other enrollee characteristics that could be 
useful in improving the financial integrity of this high-risk program. 
To better understand the strengths and limitations of federal data on 
Medicaid expenditures, you requested that we study the similarities 
and differences between MSIS and CMS-64. In this report, we (1) 
examine the extent to which MSIS and CMS-64 data on Medicaid 
expenditures differ nationally, by state, and by expenditure category 
for fiscal years 2007 through 2009; and (2) where possible, quantify 
identified differences between these two data sets. 

To determine the extent to which data on Medicaid expenditures differ, 
we examined CMS data on total Medicaid expenditures, as reported by 
states in MSIS and CMS-64, nationally, by state, and by expenditure 
category for fiscal years 2007 through 2009.[Footnote 10] 

We provide results for fiscal years 2007 through 2009, and provide 
additional detail for the most recent year available, fiscal year 
2009. We also combined the individual service types in MSIS and CMS-64 
into six combined expenditure categories.[Footnote 11] This was 
necessary because, in many instances, there is not a one-to-one match 
of service types in MSIS and CMS-64. As a result, we were able to 
report on expenditures by combined expenditure categories, and thereby 
better identify the factors that account for the differences between 
MSIS and CMS-64. We compared expenditures by combined expenditure 
categories nationally and by state. 

To examine and, where possible, quantify the identified differences 
between MSIS and CMS-64 data, we identified and analyzed differences 
in the types of expenditures included in each data set. Where possible, 
we adjusted the MSIS expenditures on the basis of the differences we 
identified, adding expenditures reported in CMS-64 that were not 
reported in MSIS to obtain total adjusted expenditures for MSIS. We 
then took the total adjusted expenditures nationally, and by state, 
and calculated the expenditures reported in MSIS as a percentage of 
those reported in CMS-64. We also compared adjusted expenditures by 
combining expenditure categories, nationally and by state. We 
identified additional factors that accounted for differences between 
the two data sets, but could not be quantified. 

For both objectives, we reviewed relevant guidance and documentation, 
including CMS forms and data dictionaries, and also interviewed CMS 
officials and other experts familiar with Medicaid expenditure data. We 
reviewed the data for reasonableness and consistency, including 
screening for missing data, outliers, and obvious errors. We also 
interviewed CMS officials about steps they take to ensure data 
reliability. We determined that these data were sufficiently reliable 
for our purposes. We also interviewed a judgmental sample of state 
Medicaid agencies to help illustrate specific factors that account for 
the differences in reported Medicaid expenditures. We chose the 
judgmental sample on the basis of a variety of criteria using the most-
recent and most-complete data available, including the size of their 
total adjusted Medicaid expenditures, adjusted MSIS expenditures as a 
percentage of CMS-64 expenditures, and geographic variation. A 
detailed discussion of our scope and methodology is presented in 
appendix I. 

We conducted this performance audit from March 2012 through 
September 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. 

Background: 

Medicaid is a health care program jointly funded by the federal 
government and states to provide care for certain low-income 
individuals. The federal government oversees states’ Medicaid 
programs, and typically pays from 50 to 83 percent of each state’s 
allowable Medicaid costs.[Footnote 12] Medicaid enrollees are entitled 
to receive a range of medical services, including hospital care, 
physician services, laboratory and other diagnostic tests, 
prescription drugs, dental care, and long-term care services. In 
addition, Medicaid provides assistance to low-income elderly 
individuals who are also eligible for Medicare, called “dual eligibles.”
[Footnote 13] This assistance can include covering Medicare premiums 
and cost sharing. 

Medicaid Expenditure Data: 

MSIS is a national Medicaid eligibility and claims data set, and is the 
federal source of Medicaid expenditure data that can be linked to a 
specific enrollee. State Medicaid agencies are required to provide CMS, 
through MSIS, quarterly electronic files approximately 45 days after a 
quarter has ended. These files contain: (1) persons covered by 
Medicaid, known as “eligible files”; and (2) adjudicated claims, known 
as the “paid claims file,” for medical services reimbursed by the 
Medicaid program. Each state’s eligible file contains one record for 
each person covered by Medicaid for at least 1 day during the 
reporting quarter. Individual eligible files consist of demographic 
and monthly enrollment data. Paid claims files contain information on 
medical service-related claims and capitation payments.[Footnotes 14] 

MSIS data include enrollees’ eligibility status for Medicaid and the 
Children’s Health Insurance Program (CHIP), types of services received 
by enrollees, and expenditure data. MSIS data are used for policy 
analysis, program utilization, and forecasting expenditures. However, 
MSIS data are not used to determine the federal share of Medicaid 
expenditures, and are not used by the states to manage the daily 
operations of their Medicaid programs. 

The CMS-64 data set contains program-benefit costs and administrative 
expenses that are not linked to individual enrollees. State Medicaid 
agencies submit this information 30 days after a quarter has ended by 
means of the Quarterly Medicaid Statement of Expenditures for the 
Medical Assistance Program—also known as the form CMS-64—within 
the Medicaid Budget and Expenditure System. CMS-64 data are reported 
at a state aggregate level, such as a state’s total expenditures for 
such categories as inpatient hospital services and prescription drugs. 
Therefore, unlike MSIS, these data do not include individual 
expenditure data on the state’s enrollees or the services they 
received under Medicaid. Also unlike MSIS, CMS-64 contains 
expenditures that are not linked to specific enrollees, such as 
supplemental payments including Disproportionate Share Hospital (DSH) 
payments.[Footnote 15] CMS-64 data are the most-reliable and most-
comprehensive information on Medicaid spending. Agency officials 
review expenditures submitted through CMS-64, and use the data to 
compute the federal financial participation for each state’s Medicaid 
program costs. 

Medicaid: A High-Risk Program: 

Our reports have demonstrated the need for CMS to improve its oversight 
of this growing, complex program. In particular, federal internal-
control standards, as documented in GAO’s Standards for Internal 
Control in the Federal Government, state that program managers need 
both operational and financial data to determine whether they are 
meeting their goals for accountability and efficient use of resources 
in order to make operating decisions, monitor performance, and 
allocate resources. Pertinent information should be identified, 
captured, and distributed in a form and time frame that permits people 
to perform their duties efficiently.[Footnote 16] These reports have 
also identified shortcomings with the MSIS and CMS-64 data sets, 
particularly in two areas: Medicaid program integrity and supplemental 
payments.[Footnote 17] 

We recently issued a report that found that the majority of CMS’s 
Medicaid Integrity Group audits through February 2012 relied on MSIS 
data, although CMS officials told us that they recently reduced their 
reliance on MSIS data for these audits.[Footnote 18] We noted that 
MSIS is an extract of states’ claims data and is missing key elements, 
such as provider names, that are necessary for auditing. Furthermore, 
we found that the median amount of the potential overpayment 
identified in MSIS was relatively small compared with other types of 
audits that used state-based data sets. We recommended, and HHS 
partially concurred, that the CMS Administrator ensure that the 
program-integrity group’s update of its comprehensive plan provide key 
details about the audit program, including its expenditures and audit 
outcomes, program improvements, and plans for effectively monitoring 
the program. 

We also recently reported that the accountability and transparency of 
supplemental payments have been lacking using CMS-64.[Footnote 19] 
Specifically, our work found that states reported $32 billion in DSH 
and non-DSH Medicaid supplemental payments during fiscal year 2010. 
However, the exact amount of supplemental payments is unknown using 
CMS-64 because not all states reported their non-DSH supplemental 
payments separately from their regular payments. In an earlier report, 
we also found that information on non-DSH supplemental payments was 
incomplete because states did not provide full information to CMS 
regarding these payments. We noted that until reliable and complete 
information on states’ supplemental payments is available, federal 
officials overseeing the program and others will lack the information 
they need to review payments and ensure that they are appropriately 
spent for Medicaid purposes. 

MSIS Medicaid Expenditures Amounts Are Generally Less than CMS-64 
Expenditure Amounts: 

MSIS Medicaid expenditure amounts nationwide were generally less than 
CMS-64 amounts. For fiscal years 2007, 2008, and 2009, total 
expenditures based on MSIS data for the nation were 86, 87, and 
88 percent, respectively, of the amounts shown in CMS-64. In fiscal 
years 2007 through 2009, the difference in Medicaid expenditures 
between the two data sets decreased from about $46 billion in fiscal 
year 2007 to $43 billion in fiscal year 2009. For fiscal year 2009, 
the most-recent and most-complete data available, MSIS showed $323 
billion in total expenditures compared with the $366 billion in CMS-
64, a difference of $43 billion. (See table 1.) 

Table 1: Total Medicaid Expenditures in the Medicaid 
Statistical Information System (MSIS) and CMS-64, Fiscal Years 2007-
2009: 

Fiscal year: 2007; 
MSIS baseline: $273,925,484,790; 
CMS-64 baseline: $320,052,492,375; 
Difference between MSIS baseline and CMS-64 baseline: $46,127,007,585; 
MSIS baseline as a percentage of CMS-64: 86%. 

Fiscal year: 2008; 
MSIS baseline: $294,167,348,289; 
CMS-64 baseline: $338,552,036,761; 
Difference between MSIS baseline and CMS-64 baseline: $44,384,688,472; 
MSIS baseline as a percentage of CMS-64: 87%. 

Fiscal year: 2009; 
MSIS baseline: $323,120,029,363; 
CMS-64 baseline: $366,486,147,093; 
Difference between MSIS baseline and CMS-64 baseline: $43,366,117,730; 
MSIS baseline as a percentage of CMS-64: 88%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

[End of table] 

MSIS Medicaid expenditures for individual states were generally less 
than CMS-64 amounts. In fiscal years 2007 through 2009, states’ MSIS 
Medicaid expenditures ranged from 59 percent to 120 percent compared 
with CMS-64. In fiscal year 2009 alone, states’ MSIS Medicaid 
expenditures ranged from 59 to 119 percent of those in CMS-64. (See 
figure 1.) Specifically, MSIS Medicaid expenditures were less than CMS-
64 amounts in 40 states. These expenditures were greater than CMS-64 
expenditures in 6 states, and were similar to CMS-64 expenditures in 
5 states.[Footnote 20] See appendix II for a table of total baseline 
state expenditures reported in MSIS and CMS-64 by dollar amount in 
fiscal year 2009. 

Figure 1: Medicaid Statistical Information System (MSIS) Medicaid 
Expenditures as a Percentage of CMS-64 Expenditures, by State, 
Fiscal Year 2009: 

[Refer to PDF for image: horizontal bar graph] 

National percentage: 87%; 

State: District of Columbia; 
MSIS expenditures as a percentage of CMS-64 expenditures: 119%. 

State: Utah; 
MSIS expenditures as a percentage of CMS-64 expenditures: 115%. 

State: West Virginia; 
MSIS expenditures as a percentage of CMS-64 expenditures: 106%. 

State: Wyoming; 
MSIS expenditures as a percentage of CMS-64 expenditures: 105%. 

State: Delaware; 
MSIS expenditures as a percentage of CMS-64 expenditures: 104%. 

State: Idaho; 
MSIS expenditures as a percentage of CMS-64 expenditures: 104%. 

State: North Dakota; 
MSIS expenditures as a percentage of CMS-64 expenditures: 102%. 

State: Arkansas; 
MSIS expenditures as a percentage of CMS-64 expenditures: 101%. 

State: South Dakota; 
MSIS expenditures as a percentage of CMS-64 expenditures: 100%. 

State: Arizona; 
MSIS expenditures as a percentage of CMS-64 expenditures: 100%. 

State: Tennessee; 
MSIS expenditures as a percentage of CMS-64 expenditures: 99%. 

State: Alaska; 
MSIS expenditures as a percentage of CMS-64 expenditures: 97%. 

State: Iowa; 
MSIS expenditures as a percentage of CMS-64 expenditures: 97%. 

State: Ohio; 
MSIS expenditures as a percentage of CMS-64 expenditures: 97%. 

State: Georgia; 
MSIS expenditures as a percentage of CMS-64 expenditures: 96%. 

State: Michigan; 
MSIS expenditures as a percentage of CMS-64 expenditures: 96%. 

State: Virginia; 
MSIS expenditures as a percentage of CMS-64 expenditures: 96%. 

State: Nebraska; 
MSIS expenditures as a percentage of CMS-64 expenditures: 95%. 

State: Minnesota; 
MSIS expenditures as a percentage of CMS-64 expenditures: 95%. 

State: Kansas; 
MSIS expenditures as a percentage of CMS-64 expenditures: 95%. 

State: Maryland; 
MSIS expenditures as a percentage of CMS-64 expenditures: 94%. 

State: Florida; 
MSIS expenditures as a percentage of CMS-64 expenditures: 93%. 

State: Colorado; 
MSIS expenditures as a percentage of CMS-64 expenditures: 92%. 

State: Kentucky; 
MSIS expenditures as a percentage of CMS-64 expenditures: 91%. 

State: South Carolina; 
MSIS expenditures as a percentage of CMS-64 expenditures: 91%. 

State: New York; 
MSIS expenditures as a percentage of CMS-64 expenditures: 91%. 

State: Indiana; 
MSIS expenditures as a percentage of CMS-64 expenditures: 90%. 

State: Hawaii; 
MSIS expenditures as a percentage of CMS-64 expenditures: 90%. 

State: Illinois; 
MSIS expenditures as a percentage of CMS-64 expenditures: 89%. 

State: Connecticut; 
MSIS expenditures as a percentage of CMS-64 expenditures: 88%. 

State: Oklahoma; 
MSIS expenditures as a percentage of CMS-64 expenditures: 87%. 

State: Washington; 
MSIS expenditures as a percentage of CMS-64 expenditures: 87%. 

State: Nevada; 
MSIS expenditures as a percentage of CMS-64 expenditures: 86%. 

State: Wisconsin; 
MSIS expenditures as a percentage of CMS-64 expenditures: 86%. 

State: California; 
MSIS expenditures as a percentage of CMS-64 expenditures: 85%. 

State: North Carolina; 
MSIS expenditures as a percentage of CMS-64 expenditures: 83%. 

State: Pennsylvania; 
MSIS expenditures as a percentage of CMS-64 expenditures: 82%. 

State: Alabama; 
MSIS expenditures as a percentage of CMS-64 expenditures: 82%. 

State: New Jersey; 
MSIS expenditures as a percentage of CMS-64 expenditures: 82%. 

State: Montana; 
MSIS expenditures as a percentage of CMS-64 expenditures: 82%. 

State: Vermont; 
MSIS expenditures as a percentage of CMS-64 expenditures: 81%. 

State: Mississippi; 
MSIS expenditures as a percentage of CMS-64 expenditures: 81%. 

State: Louisiana; 
MSIS expenditures as a percentage of CMS-64 expenditures: 80%. 

State: New Mexico; 
MSIS expenditures as a percentage of CMS-64 expenditures: 80%. 

State: Massachusetts; 
MSIS expenditures as a percentage of CMS-64 expenditures: 80%. 

State: Rhode Island; 
MSIS expenditures as a percentage of CMS-64 expenditures: 79%. 

State: Texas; 
MSIS expenditures as a percentage of CMS-64 expenditures: 78%. 

State: Oregon; 
MSIS expenditures as a percentage of CMS-64 expenditures: 76%. 

State: New Hampshire; 
MSIS expenditures as a percentage of CMS-64 expenditures: 75%. 

State: Missouri; 
MSIS expenditures as a percentage of CMS-64 expenditures: 73%. 

State: Maine; 
MSIS expenditures as a percentage of CMS-64 expenditures: 59%. 

Source: GAO analysis of Centers for Medicare and Medicaid Services' 
data. 

[End of figure] 

We found differences in Medicaid expenditures between the two data sets 
when we combined MSIS and CMS-64 services types into our six 
combined expenditure categories: (1) hospital, (2) acute or long-term 
support services (LTSS)-noninstitutional, (3) prescription drugs, 
(4) managed care and Medicaid premium assistance, (5) LTSS-
institutional, and (6) Medicare.[Footnote 21] For example, MSIS 
Medicaid expenditure data in the hospital expenditure category were 
less than the amounts shown in CMS-64, at 61, 62, and 60 percent, 
respectively, for fiscal years 2007, 2008, and 2009. Conversely, MSIS 
Medicaid expenditures related to the prescription-drug category were 
greater than the amounts shown in CMS-64 data, at 147, 154, and 161 
percent for the same period. During this time, states did not report 
expenditures for Medicare premiums in MSIS. However, expenditures 
associated with Medicare coinsurance and deductibles were reported 
under individual services throughout MSIS and therefore not identified 
as Medicare expenditures. As a result, MSIS expenditures as a percent 
of CMS-64 in the Medicare category are reported as 0 percent. (See 
figure 2.) 

Figure 2: MSIS Medicaid Expenditures as a Percentage of CMS-64 
Expenditures, by Expenditure Category, Fiscal Years 2007–2009: 
 
[Refer to PDF for image: horizontal bar graph] 

MSIS expenditures as a percentage of CMS-64 expenditures: 

Expenditure Category:  

Expenditure Category: Hospital; 
2009 Percent Match: 60%; 
2008 Percent Match: 62%; 
2007 Percent Match: 61%. 

Expenditure Category: Acute and LTSS, Non-Institutional 
2009 Percent Match: 96%; 
2008 Percent Match: 95%; 
2007 Percent Match: 95%. 

Expenditure Category: Prescription Drugs   
2009 Percent Match: 161%; 
2008 Percent Match: 154%; 
2007 Percent Match: 147%. 

Expenditure Category: Managed Care and Premium Assistance 
2009 Percent Match: 100%; 
2008 Percent Match: 94%; 
2007 Percent Match: 93%. 

Expenditure Category: LTSS, Institutional   
2009 Percent Match: 97%; 
2008 Percent Match: 99%; 
2007 Percent Match: 98%. 

Expenditure Category: Medicare[A]; 
2009 Percent Match: 0%; 
2008 Percent Match: 0%; 
2007 Percent Match: 0%. 

Source: GAO analysis of Centers for Medicare and Medicaid Services' 
data. 

Note: LTSS stands for long-term support services. 

[A] The Medicare expenditure category is reported at $0 in the Medicaid 
Statistical Information System (MSIS). During this period, states did 
not report expenditures for Medicare premiums in MSIS. However, 
expenditures associated with coinsurance and deductibles were reported 
under individual services throughout MSIS and therefore not identified 
as a Medicare expenditure. 

[End of figure] 

For fiscal year 2009, Medicaid expenditures in MSIS were lower than 
CMS-64 for four of the six expenditure categories: hospital, acute and 
LTSS-noninstitutional, LTSS-institutional, and Medicare. The hospital, 
prescription drugs, and Medicare categories showed the largest 
difference between what was reported in MSIS compared with CMS-64, 
for fiscal year 2009. In particular, Medicaid hospital expenditures in 
MSIS were 60 percent of those reported in CMS-64, in fiscal year 2009. 
Medicare expenditures were reported as $0 in MSIS, compared with 
$12 billion in CMS-64. For the remaining two categories, prescription 
drug expenditures in MSIS were 61 percent larger in MSIS than in CMS-
64, while managed care and Medicaid premium assistance MSIS 
expenditures were similar to those in CMS-64. (See figure 3.) 

Figure 3: MSIS Medicaid Expenditures as a Percentage of CMS-64 
Expenditures, by Expenditure Category, Fiscal Year 2009: 

[Refer to PDF for image: horizontal bar graph] 

MSIS expenditures as a percentage of CMS-64 expenditures: 

Expenditure Category: Hospital: 60%; 
Expenditure Category: Acute and LTSS Non-Institutional: 96%; 
Expenditure Category: Prescription Drugs: 161%; 
Expenditure Category: Managed Care and Medicaid Premium Assistance: 
100%; 
LTSS Institutional: 97%; 
Expenditure Category: Medicare[A]: 0%. 

Source: GAO analysis of Centers for Medicare and Medicaid Services' 
data. 

Note: LTSS stands for long-term support services. 

[A] The Medicare expenditure category is reported at $0 in the Medicaid 
Statistical Information System (MSIS). During this period, states did 
not report expenditures for Medicare premiums in MSIS. However, 
expenditures associated with coinsurance and deductibles were reported 
under individual services throughout MSIS and therefore not identified 
as a Medicare expenditure. 

[End of figure] 

Some Factors Could Be Quantified and Accounted for Approximately Half 
of the Expenditure Difference between the Data Sets: 

Some—-but not all—-factors could be quantified to narrow the difference 
between MSIS and CMS-64 expenditures. In particular, we adjusted for 
expenditures that could not be attributed to individual beneficiaries—
one of the key differences in the design of the data sets. However, we 
could not quantify the effect of other factors, such as inconsistent 
CMS guidance across the two data sets. 

Differences Attributable to the Design of the Data Sets Could Be 
Quantified and Adjusted: 

MSIS is designed to report claims data, and CMS-64 is designed to 
reimburse states for their federal share of Medicaid expenditures. As 
we have noted, some expenditures that are required to be reported in 
CMS-64 do not appear in MSIS, such as when the expenditure is not tied 
to an individual enrollee’s claim. After adjusting the MSIS data to 
include expenditures for factors not related to individual enrollees’ 
claims, Medicaid expenditures for the nation based on MSIS data were 
92, 93, and 94 percent of amounts shown in CMS-64 data, respectively, 
for fiscal years 2007, 2008, and 2009. (See table 2.) 

Table 2: Total Medicaid Expenditures Adjusted in the Medicaid 
Statistical Information System (MSIS) and CMS-64, Fiscal Years 2007–
2009: 

Fiscal year: 2007; 
MSIS adjusted: $294,595,771,198; 
CMS-64 baseline: $320,052,492,375; 
Difference between MSIS adjusted and CMS-64 baseline: $25,456,721,177; 
MSIS baseline as a percentage of CMS-64: 92%. 

Fiscal year: 2008; 
MSIS adjusted: $315,779,358,947; 
CMS-64 baseline: $338,552,036,761; 
Difference between MSIS adjusted and CMS-64 baseline: $22,772,677,814; 
MSIS baseline as a percentage of CMS-64: 93%. 

Fiscal year: 2009; 
MSIS adjusted: $345,172,184,969; 
CMS-64 baseline: $366,486,147,093; 
Difference between MSIS adjusted and CMS-64 baseline: $21,313,962,124; 
MSIS baseline as a percentage of CMS-64: 94%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

[End of table] 

For fiscal year 2009, we were able to adjust MSIS data for four 
factors: DSH payments, Medicare premiums, national and state rebates 
for prescription drugs, and Medicaid health insurance payments. None of 
these factors were reported in MSIS because CMS officials indicated 
they were not attributed to an individual enrollee. 

* DSH payments were included under the hospital expenditure category 
in CMS-64, but not in MSIS.[Footnote 22] We adjusted MSIS expenditure 
data to account for DSH payments to hospitals. For example, in fiscal 
year 2009, states reported approximately $88 billion in total hospital 
expenditures on CMS-64, which included approximately $18 billion for 
DSH payments. Total hospital expenditures in MSIS were at about 
$53 billion. Adding the $18 billion in DSH payments to total hospital 
expenditures in MSIS increased the percentage of MSIS expenditures 
from 60 percent of CMS-64 expenditures to 81 percent. Even after 
this adjustment, MSIS hospital expenditures are $17 billion lower than 
those on CMS-64, indicating that there are additional factors that 
account for the difference in hospital-related expenditures between 
the two data sets.[Footnote 23] 

* Medicare premiums were included in CMS-64, but CMS did not 
require states to report them in MSIS.[Footnote 24] In addition, 
Medicaid payments for enrollees with Medicare coinsurance and 
deductibles are included in MSIS, but within the various service 
types, and cannot be distinguished from other expenditures.[Footnote 
25] In fiscal year 2009, total expenditures for Medicare as reported 
on CMS-64 were approximately $11 billion, whereas MSIS expenditures 
for the Medicare category were $0. Adjusting for the approximately $11 
billion reported in fiscal year 2009 for Medicare premiums in CMS-64 
increased the percentage of total Medicare expenditures in MSIS from 0 
percent of CMS-64 expenditures to 92 percent, or a difference of $908 
million. Thus, the primary factor that accounted for the difference in 
Medicare expenditures between the two data sets can be attributed to 
the absence of Medicare premium expenditures in MSIS. 

* Prescription drug rebates were included in CMS-64, but CMS did not 
require states to report them in MSIS.[Footnote 26] Prescription drug 
rebates are made by drug manufacturers to states in a lump sum payment 
for Medicaid enrollees who use specific drugs, and therefore are not 
connected to individual claims. In fiscal year 2009, total expenditures 
for the prescription drugs category, as reported on CMS-64, were 
initially about $25 billion. However, there was a reduction to $16 
billion when $10 billion dollars in national and state prescription 
drug rebates were included.[Footnote 27] Total prescription drug 
expenditures in MSIS were approximately $25 billion. Adjusting for the 
$10 billion reported for prescription drug rebates in CMS-64 decreased 
the percentage of MSIS expenditures from 161 percent of CMS-64 
expenditures to 99 percent of CMS-64 expenditures. Thus, the 
difference in reported prescription drug expenditures can be almost 
entirely attributed to the rebates.[Footnote 28] 

* Some Medicaid health insurance payments were included in CMS-64 
that CMS did not require states to report in MSIS.[Footnote 29] In 
fiscal year 2009, total expenditures for the managed care and Medicaid 
premium assistance expenditure category, as reported on CMS-64, were 
approximately $82 billion, of which $3 billion were for Medicaid health 
insurance payments not reported in MSIS. Total managed care and 
Medicaid premium assistance expenditures, as reported in MSIS, 
were approximately $85 billion. Adjusting for the roughly $3 billion 
for Medicaid health insurance payments increased the percentage of 
MSIS expenditures from 100 percent of CMS-64 expenditures to more 
than 103 percent. Therefore, total managed care and Medicaid 
premium assistance expenditures in MSIS were greater than those 
reported in CMS-64. (Figure 4 compares the MSIS baseline to the MSIS 
adjusted expenditures as a percentage of CMS-64, by expenditure 
category, for fiscal year 2009.) 

Figure 4: Comparison of MSIS Baseline to Adjusted Expenditures, by 
Expenditure Category, as a Percentage of CMS-64, 
Fiscal Year 2009 
[Refer to PDF for image: horizontal bar graph] 

MSIS expenditures as a percentage of CMS-64 expenditures: 

Expenditure categories: 

Hospital: MSIS baseline; 
Unadjusted MSIS baseline: 60%. 

Hospital: MSIS adjusted; 
Unadjusted MSIS baseline: 60%; 
Adjustment resulted in an increase: 20; 
Total: 81% ($18 billion results in a 20% increase from Disproportion 
payments[A]). 

Medicare: MSIS baseline: 0%. 

Medicare: MSIS adjusted; 
Adjustment resulted in an increase: 92% ($11 billion results in a 92% 
increase from Medicare premiums). 

Prescription drugs: MSIS baseline; 
Unadjusted MSIS baseline: 161%. 

Prescription drugs: MSIS adjusted 
Remaining percent after adjustment: 99%; 
Adjustment resulted in a decrease: 62% ($10 billion results in a 62% 
decrease from national and state prescription drug rebates). 
Total: 

Managed Care and Premium Assistance: MSIS baseline;  
Unadjusted MSIS baseline: 100%. 

Managed Care and Premium Assistance: MSIS adjusted;  
Unadjusted MSIS baseline: 100%; 
Adjustment resulted in an increase: 3%; 
Total: 103% ($3 billion results in a 3% increase from Medicaid health 
insurance payments). 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

[A] Adjustments were made by including reported CMS-64 dollars in the 
Medicaid Statistical Information System (MSIS). 

[End of figure] 

Overall, for fiscal year 2009, the difference in Medicaid 
expenditures, after adjustments, decreased from $43 billion to $21 
billion nationally. As a result, MSIS expenditures as a percentage of 
CMS-64 for the nation increased 6 percentage points from 88 percent to 
94 percent-—thereby reducing the difference in reported expenditures 
by half. (See figure 5.) 

Figure 5: Comparison of MSIS Baseline to MSIS Adjusted Expenditures, 
as a Percentage of CMS-64, Fiscal Year 2009: 

[Refer to PDF for image: horizontal bar graph] 

MSIS expenditures as a percentage of CMS-64 expenditures: 

MSIS baseline: 88%. 

MSIS adjusted: 
Unadjusted MSIS baseline: 88%; 
Adjustment resulted in an increase: 6%; (The 6% increase consisted of 
the following adjustments[A]: $18 billion from Disproportionate State 
Hospital (DHS) payments; $11 billion form Medicare premiums; negative 
$10 billion from national and state prescription drug rebates; $3 
billion from Medicaid health insurance payments); 
Total: 94%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

[A] Adjustments were made by including reported CMS-64 dollars in the 
Medicaid Statistical Information Systems (MSIS). 

[End of figure] 
 
After adjustments, MSIS Medicaid expenditures for individual states 
increased slightly, but generally remained less than CMS-64 amounts. 
For individual states, Medicaid expenditures in MSIS ranged from 
55 percent to 131 percent of CMS-64 in fiscal years 2007 through 2009 
after adjustments were made. For fiscal year 2009, 29 states reported 
lower expenditures in MSIS than in CMS-64, 9 states reported higher 
expenditures in MSIS than in CMS-64, and 13 states reported similar 
Medicaid expenditures in MSIS when compared with CMS-64. (See 
figure 6.) See appendix III for a table of adjusted state expenditures 
reported in MSIS and CMS-64, by dollar amount, for fiscal year 2009. 
See appendix IV for a map showing the percentages of adjusted Medicaid 
expenditures in MSIS compared with CMS-64, by state, for fiscal year 
2009. 

Figure 6: Comparison of MSIS Baseline to Adjusted Medicaid 
Expenditures, as a Percentage of CMS-64, by State, Fiscal Year 2009: 

[Refer to PDF for image: horizontal bar graph] 

MSIS expenditures as a percentage of CMS-64 expenditures: 

MSIS=CMS-64: 100%. 
National percentage: 94%. 

State: Minnesota; 
Unadjusted MSIS Baseline: 95.15%; 
Adjustment resulted in an increase: 131%. 

State: District of Columbia; 
Unadjusted MSIS Baseline: 118.59%; 
Adjustment resulted in an increase: 123%. 

State: Utah; 
Unadjusted MSIS Baseline: 114.67%; 
Adjustment resulted in an increase: 116%. 

State: West Virginia; 
Unadjusted MSIS Baseline: 106.36%; 
Adjustment resulted in an increase: 106%. 

State: Wyoming; 
Unadjusted MSIS Baseline: 104.86%; 
Adjustment resulted in an increase: 105%. 

State: Idaho; 
Unadjusted MSIS Baseline: 104.26%; 
Adjustment resulted in a decrease: 103%. 

State: Arkansas; 
Unadjusted MSIS Baseline: 101.01%; 
Adjustment resulted in an increase: 103%. 

State: Arizona; 
Unadjusted MSIS Baseline: 99.57%; 
Adjustment resulted in an increase: 103%. 

State: Delaware; 
Unadjusted MSIS Baseline: 104.31%; 
Adjustment resulted in a decrease: 103%. 

State: Ohio; 
Unadjusted MSIS Baseline: 96.5%; 
Adjustment resulted in an increase: 102%. 

State: Georgia; 
Unadjusted MSIS Baseline: 95.88%; 
Adjustment resulted in an increase: 102%. 

State: North Dakota; 
Unadjusted MSIS Baseline: 101.58%; 
Adjustment resulted in a decrease: 101%. 

State: South Dakota; 
Unadjusted MSIS Baseline: 100.44%; 
Adjustment resulted in an increase: 101%. 

State: Tennessee; 
Unadjusted MSIS Baseline: 98.73%; 
Adjustment resulted in an increase: 101%. 

State: Michigan; 
Unadjusted MSIS Baseline: 95.87%; 
Adjustment resulted in an increase: 101%. 

State: South Carolina; 
Unadjusted MSIS Baseline: 91.01%; 
Adjustment resulted in an increase: 100%. 

State: Virginia; 
Unadjusted MSIS Baseline: 95.56%; 
Adjustment resulted in an increase: 100%. 

State: Kansas; 
Unadjusted MSIS Baseline: 94.77%; 
Adjustment resulted in an increase: 98%. 

State: Iowa; 
Unadjusted MSIS Baseline: 96.96%; 
Adjustment resulted in an increase: 98%. 

State: Florida; 
Unadjusted MSIS Baseline: 93.13%; 
Adjustment resulted in an increase: 98%. 

State: Alaska; 
Unadjusted MSIS Baseline: 97.26%; 
Adjustment resulted in an increase: 98%. 

State: Colorado; 
Unadjusted MSIS Baseline: 92.49%; 
Adjustment resulted in an increase: 98%. 

State: Maryland; 
Unadjusted MSIS Baseline: 93.88%; 
Adjustment resulted in an increase: 97%. 

State: Nebraska; 
Unadjusted MSIS Baseline: 95.41%; 
Adjustment resulted in an increase: 97%. 

State: New York; 
Unadjusted MSIS Baseline: 90.91%; 
Adjustment resulted in an increase: 96%. 

State: Kentucky; 
Unadjusted MSIS Baseline: 91.23%; 
Adjustment resulted in an increase: 96%. 

State: New Jersey; 
Unadjusted MSIS Baseline: 81.97%; 
Adjustment resulted in an increase: 96%. 

State: Nevada; 
Unadjusted MSIS Baseline: 86.5%; 
Adjustment resulted in an increase: 94%. 

State: Alabama; 
Unadjusted MSIS Baseline: 82.1%; 
Adjustment resulted in an increase: 94%. 

State: Louisiana; 
Unadjusted MSIS Baseline: 80.31%; 
Adjustment resulted in an increase: 94%. 

State: Washington; 
Unadjusted MSIS Baseline: 86.84%; 
Adjustment resulted in an increase: 93%. 

State: Indiana; 
Unadjusted MSIS Baseline: 89.94%; 
Adjustment resulted in an increase: 93%. 

State: Hawaii; 
Unadjusted MSIS Baseline: 89.63%; 
Adjustment resulted in an increase: 92%. 

State: Connecticut; 
Unadjusted MSIS Baseline: 87.64%; 
Adjustment resulted in an increase: 92%. 

State: Illinois; 
Unadjusted MSIS Baseline: 88.73%; 
Adjustment resulted in an increase: 92%. 

State: California; 
Unadjusted MSIS Baseline: 84.57%; 
Adjustment resulted in an increase: 91%. 

State: New Hampshire; 
Unadjusted MSIS Baseline: 74.92%; 
Adjustment resulted in an increase: 91%. 

State: Oklahoma; 
Unadjusted MSIS Baseline: 87.4%; 
Adjustment resulted in an increase: 90%. 

State: Pennsylvania; 
Unadjusted MSIS Baseline: 82.45%; 
Adjustment resulted in an increase: 88%. 

State: Mississippi; 
Unadjusted MSIS Baseline: 81.05%; 
Adjustment resulted in an increase: 88%. 

State: North Carolina; 
Unadjusted MSIS Baseline: 83.34%; 
Adjustment resulted in an increase: 87%. 

State: Rhode Island; 
Unadjusted MSIS Baseline: 78.81%; 
Adjustment resulted in an increase: 86%. 

State: Texas; 
Unadjusted MSIS Baseline: 78.22%; 
Adjustment resulted in an increase: 86%. 

State: Wisconsin; 
Unadjusted MSIS Baseline: 86.1%; 
Adjustment resulted in a decrease: 85%. 

State: Vermont 
Unadjusted MSIS Baseline: 81.45%; 
Adjustment resulted in an increase: 84%. 

State: Montana; 
Unadjusted MSIS Baseline: 81.56%; 
Adjustment resulted in an increase: 83%. 

State: New Mexico; 
Unadjusted MSIS Baseline: 80.05%; 
Adjustment resulted in an increase: 83%. 

State: Missouri; 
Unadjusted MSIS Baseline: 73.3%; 
Adjustment resulted in an increase: 82%. 

State: Massachusetts; 
Unadjusted MSIS Baseline: 79.55%; 
Adjustment resulted in an increase: 82%. 

State: Oregon; 
Unadjusted MSIS Baseline: 76.05%; 
Adjustment resulted in an increase: 80%. 

State: Maine; 
Unadjusted MSIS Baseline: 58.8%; 
Adjustment resulted in an increase: 61%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

Note: Adjustments were made by including reported CMS-64 dollars in the 
Medicaid Statistical Information System (MSIS). 

[End of figure] 

Differences between MSIS and CMS-64 Medicaid expenditures in six 
expenditure categories were also reduced after we adjusted the data in 
fiscal years 2007 through 2009. Two of the six expenditure categories—
hospital and Medicare—continued to show the largest percentage 
difference in Medicaid expenditures between MSIS and CMS-64 data. 
After adjustments were made, MSIS Medicaid expenditures in the 
hospital category were 80, 83, and 81 percent of the amounts shown in 
CMS-64, respectively for fiscal years 2007, 2008, and 2009, compared 
with 61, 62, and 60 percent before the adjustments were made. 
Expenditures for Medicare increased from 0 percent to more than 
90 percent for all 3 fiscal years when adjustments were made for 
Medicare premiums. (See figure 7.) 

Figure 7: Adjusted Medicaid Expenditures in MSIS as a Percentage of 
CMS-64, by Expenditure Category, Fiscal Years 2007–2009: 

[Refer to PDF for image: horizontal bar graph] 

MSIS expenditures as a percentage of CMS-64 expenditures: 

Expenditure category: Hospital; 
2007 Adjusted MSIS: 80%; 
2008 Adjusted MSIS: 83%; 
2009 Adjusted MSIS: 81%. 

Expenditure category: Acute and LTSS Non-Institutional; 
2007 Adjusted MSIS: 95%; 
2008 Adjusted MSIS: 95%; 
2009 Adjusted MSIS: 96%. 

Expenditure category: Prescription Drugs; 
2007 Adjusted MSIS: 98%; 
2008 Adjusted MSIS: 98%; 
2009 Adjusted MSIS: 99%. 

Expenditure category: Managed Care and Medicaid Premium Assistance; 
2007 Adjusted MSIS: 96%; 
2008 Adjusted MSIS: 97%; 
2009 Adjusted MSIS: 103%. 

Expenditure category: LTSS Institutional; 
2007 Adjusted MSIS: 98%; 
2008 Adjusted MSIS: 99%; 
2009 Adjusted MSIS: 97%. 

Expenditure category: Medicare; 
2007 Adjusted MSIS: 93%; 
2008 Adjusted MSIS: 93%; 
2009 Adjusted MSIS: 92%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

Note: Adjustments were made by including reported CMS-64 dollars in the 
Medicaid Statistical Information System (MSIS). No adjustments were 
made for acute and long-term support services (LTSS)-noninstitutional 
and LTSS-institutional. 

[End of figure] 

Inconsistent Guidance and States’ Practices Result in Differences That 
Could Not Be Quantified: 
 
Inconsistent CMS guidance and states’ practices resulted in differences 
between MSIS and CMS-64 data. However, we could not adjust for these 
factors because we could not quantify the extent to which these factors 
resulted in differences. 

Three of the factors that account for the differences in expenditures 
result from inconsistent CMS guidance regarding expenditure 
definitions, reporting dates, and reporting supplemental payments 
during fiscal years 2007 through 2009. 

* Inconsistent MSIS and CMS-64 Definitions: CMS guidance to states 
for reporting expenditures in MSIS and CMS-64 contained inconsistent 
definitions of services, making it impossible to do a one-for-one 
match of similar expenditures.[Footnote 30] CMS officials indicated 
that the definitions used in guidance to states on completing the CMS-
64 are based on definitions included in federal regulations,[Footnote 
31] while MSIS definitions are based on separate CMS guidance that was 
not derived from the regulations. These definitions are sometimes 
inconsistent. CMS officials explained that, for example, expenditures 
for inpatient services, as reported by a state in CMS-64, cannot be 
assumed to be the same services reported by the state in MSIS, despite 
the service having the same name in both data sets. Therefore, 
expenditures can be measured and reported by a state inconsistently 
across the data sets, making comparisons problematic. Specifically, 
even after adjustments were made, 13 states reported hospital-related 
expenditures in MSIS that were 75 percent or less of what they 
reported in their CMS-64 data. 

Additionally, inconsistent definitions across the two data sets make it 
difficult to examine Medicaid spending. For example, states may vary 
in their interpretation of the definitions in MSIS and CMS-64 guidance, 
and this inconsistency creates a challenge for examining total 
expenditures by service nationally and across states. (See appendix V 
for reported expenditures by service, for all 50 states and the 
District of Columbia in fiscal year 2009.) 

* Reporting Dates Differed: CMS officials recognized that CMS 
guidance to states for reporting the date of expenditures and adjusting 
payments made in prior years is different between MSIS and CMS-64. 
MSIS expenditures were based on each claim’s date of adjudication—-
the date the payment was approved-—while CMS-64 expenditures were 
reported as of the date of payment. The two data sets also differ in 
how they adjust payments made in prior years, according to CMS 
officials. Adjustments in MSIS allow the state to show changes to net 
totals for the year, no matter when the adjustment was reported into 
the data. In contrast, adjustments to CMS-64 were entered for the 
fiscal year in which they were identified and the original year was not 
modified. MSIS and CMS-64 expenditures, therefore, may vary by 
quarter and by fiscal year if the dates associated with an expenditure 
differ. Since MSIS and CMS-64 report expenditures using different 
dates, we cannot adjust for this difference in the data. CMS officials 
indicated their concerns with this inconsistency and noted that it 
makes comparing expenditure data between the two data sets 
difficult. 

* Supplemental Payments: For CMS-64 data, CMS officials required 
states to report supplemental payments within the corresponding 
expenditure categories, because states were not required to report 
these expenditures separately.[Footnote 32] However, CMS officials 
indicated states reported supplemental payments in MSIS as a lump sum, 
and therefore they were excluded from the MSIS annual person summary 
file used in our analysis.[Footnote 33] Therefore, supplemental 
payments, excluding DSH payments, were reported inconsistently between 
the two data sets during fiscal years 2007 through 2009.[Footnote 34] 
As such, MSIS expenditure data are likely to show a lower amount than 
CMS-64 for several Medicaid expenditure categories. GAO and others have 
reported concerns about supplemental payments over the last decade, 
including the use of supplemental payment arrangements to increase 
federal funding without a commensurate increase in state funding. 
[Footnote 35] Absent improved reporting, CMS cannot adequately 
oversee states’ use of supplemental payments. 

Three additional factors that accounted for the differences in 
expenditures result from inconsistent practices among states. 
Specifically, states are inconsistent in MSIS compared with CMS-64 
regarding the timeliness of MSIS data, the quality of MSIS data 
reported, and payments for local government providers during fiscal 
years 2007 through 2009. 

* Timeliness of MSIS data: States often delay reporting MSIS data, but 
report CMS-64 expenditure data on time. CMS guidance requires 
states to report data in CMS-64 within 30 days of the end of the 
quarter and within 45 days for MSIS. However, states have often been 
late reporting MSIS data, with some states delaying reporting of MSIS 
data for as long as 3 years. For example, as of July 2012, 37 states 
had submitted their fiscal year 2010 MSIS data, even though CMS 
requirements would indicate that MSIS data for 2010, 2011, and the 
first two quarters of 2012 should have already been provided. 
Alternatively, states submit their expenditures by means of CMS-64 
on time and have a strong incentive to do so promptly because CMS 
uses this information to reimburse states for the federal share of 
Medicaid expenses. In contrast, states have less incentive to submit 
MSIS data promptly because the data are not tied to their federal 
reimbursement, and MSIS data are not used in the daily operations of 
their Medicaid programs. CMS officials told us that states that delay 
reporting can have issues with both the timeliness and quality of their 
submissions. If states submit poor quality data, CMS may reject the 
submission, resulting in further delays.[Footnote 36] 

* MSIS Data Quality: MSIS expenditure data are considered less 
reliable when compared with CMS-64. CMS-64 is reviewed regularly 
by CMS officials and considered the most-reliable and most-
comprehensive data on Medicaid expenditures. Alternatively, while 
CMS conducts routine quality checks on MSIS data, problems still 
remain. CMS publishes a report of anomalous MSIS claims-—those 
that are not consistent with what is expected to be reported by the 
state.[Footnote 37] On the basis of our interviews with state Medicaid 
officials, the quality of MSIS data, as indicated by an anomalous 
claim, may be an additional factor that accounts for the difference 
between MSIS and CMS-64 reported expenditures. For example, Medicaid 
officials in one state we interviewed told us that the state 
incorrectly reported Home & Community-Based 1915(c) waivers payments 
in MSIS in fiscal year 2009, and therefore CMS noted this in the 
anomalies report.[Footnote 38] As a result of this error, the state 
underreported its MSIS expenditures for Home & Community-Based 
services compared with those reported on CMS-64. Having more timely 
data could be a mechanism for helping identify anomalies between the 
two systems and correcting discrepancies earlier. 

* Local Government Provider Payments: CMS officials indicated that 
states may report in MSIS the amount paid to the local government for 
the medical service reported on the claim. However, the local 
government provider may also receive payment from the local government 
through prior alternative arrangements, and thus would not link these 
expenditures to a specific service provided or even report them at all 
in MSIS. These expenditures arise when states and localities finance 
Medicaid services through certified public expenditures.[Footnote 39] 
In contrast, these additional expenditures would be captured in the 
total expenditures reported by states in CMS-64. Consequently, states 
may report a smaller amount in MSIS associated with the claim than 
reported by the state in total Medicaid expenditures on CMS-64. CMS 
officials indicated that neither CMS-64 nor MSIS provides a link to 
expenditures from government providers; as a result, we were unable to 
adjust for this difference. 

CMS has indicated plans to improve MSIS through a pilot program called 
Transformed-MSIS. There are a number of goals for this pilot, including 
plans to establish MSIS as a robust, flexible, and repeatable data-
collection process, to collect valid, timely information for decision 
making, and to integrate data between management information systems. 
These goals include a link between states’ reporting of MSIS with 
reporting of CMS-64 data. However, CMS officials have indicated that 
there is no timeline for implementing this goal, whereas other aspects 
of the initiative are expected to be implemented in all states by 
fiscal year 2014. Moreover, such integration will only be of value if 
improvements are made in the timeliness and quality of MSIS data. One 
state in the pilot indicated that data-quality issues remain 
prevalent. Additionally, this state noted that the size and complexity 
of MSIS creates challenges with submissions’ timeliness and 
availability. As of June 2012, CMS officials indicated that the 
initial results for the pilot program are being considered by 
management, yet until these plans have been fully implemented it is 
unclear what the outcome of these efforts will be. 

Concluding Observations: 

In fiscal year 2009, the difference between MSIS and CMS-64 was 
$43 billion. Much of the difference was primarily the result of the 
different designs of each data set. CMS uses MSIS data for beneficiary-
specific expenditures, while CMS-64 data are used to compute the 
federal financial participation for each state’s Medicaid program 
costs. However, even after adjusting for DSH payments, Medicare 
premiums, prescription drug rebates, and Medicaid health insurance 
payments, differences remain. In fiscal year 2009, total MSIS 
expenditure data, after adjustments, showed MSIS at 94 percent of CMS-
64 expenditures, which left billions of dollars unexplained. 

The remaining differences between the two data sets are potentially 
explained by inconsistencies in CMS guidance and states’ reporting 
practices, neither of which can be quantified. In fiscal years 2007 
through 2009, CMS provided states with inconsistent MSIS and CMS-64 
guidance regarding expenditure definitions, reporting dates, and 
reporting of supplemental payments. Additionally, when compared with 
CMS-64, state MSIS data were often delayed beyond the time frames 
established by CMS, inconsistent in reporting payments for local 
government providers, and were of poor quality. 

Taken together, these two data sets have the potential to offer a 
robust view of the Medicaid program, enhancing CMS oversight of 
aggregate spending trends, per beneficiary spending growth, and cross-
state comparisons, all of which could be useful in improving the 
financial integrity of this high-risk program. This is critical given 
that Medicaid, a program that GAO identified on our high-risk list, 
has among the highest estimated improper payments of any federal 
program reporting such data. However, the usefulness of these data 
sets as oversight tools is limited because of delays in reporting and 
unnecessary inconsistencies between the two data sets, both of which 
are inconsistent with federal internal control standards. The 3-year 
lag in states’ reporting of MSIS data prevents its use for timely 
oversight of beneficiary-related utilization and other spending 
trends. For example, identifying a difference in hospital expenditures 
between MSIS and CMS-64 is of limited use when detected 3 years later. 
If states were meeting the current requirement of providing MSIS data 
45 days after each quarter, then such comparisons could provide more 
useful and timely information. 

CMS has recently completed a pilot study aimed in part on improving 
MSIS data. CMS has indicated that it will begin implementing aspects of 
this initiative in all states by fiscal year 2014. One goal of this 
initiative is to integrate state reporting of MSIS with the reporting 
of CMS-64 data. However, CMS officials have indicated they have yet to 
determine a timeline for this goal. While the initial results of this 
pilot have not been finalized, improving the timeliness and 
consistency of MSIS and CMS-64 data through this effort could aid 
CMS’s understanding and oversight of this high-risk program. 

Agency Comments: 

HHS reviewed a draft of this report and provided technical comments, 
which we incorporated as appropriate. 

As agreed with your office, 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 of this report 
to the Secretary of Health and Human Services, the Administrator of 
CMS, and other interested parties. In addition, the report will be 
available at no charge on the GAO website at [hyperlink, 
http://www.gao.gov]. 
 
If you or your staff have any questions about this report, please 
contact me at (202) 512-7114 or yocomc@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix VI. 

Sincerely yours, 

Signed by: 

Carolyn L. Yocom: 
Director, Health Care: 

[End of section] 

Appendix I: Scope and Methodology: 

We conducted two types of analysis of Medicaid expenditures for this 
report to compare the Medicaid Statistical Information System (MSIS) 
and CMS-64 data. First, we conducted a baseline analysis to compare 
total expenditures reported to MSIS and CMS-64 nationally and by 
state. We also compared reported expenditures by expenditure category. 
Secondly, we conducted an adjustment analysis. Specifically, we 
attempted to reconcile the expenditures by making adjustments to MSIS 
on the basis of the differences we identified in the MSIS and CMS-64 
data sets. To the extent possible, we added expenditures reported in 
CMS-64, but not reported in MSIS, to total expenditures in MSIS. 

I. Baseline Analysis: 

To determine the extent to which MSIS and CMS-64 data sets on 
Medicaid expenditures differ, nationally and by state,[Footnote 40] 
for fiscal years 2007 through 2009, we conducted a multistep 
analysis.[Footnote 41] With total expenditures from both data sets, we 
calculated the expenditures reported in MSIS as a percentage of those 
reported in CMS-64. We also determined the percentage difference in 
total expenditures between the two data sets, by expenditure category. 

Step 1: Obtain MSIS and CMS-64 Data: 

In order to identify the baseline of total Medicaid expenditures for 
fiscal years 2007 through 2009, we obtained from the Center for 
Medicare & Medicaid Services (CMS) MSIS and CMS-64 data for each of 
the 50 states and the District of Columbia.[Footnote 42] 

* MSIS data: We obtained the MSIS Annual Person Summary File data, 
which CMS officials confirmed were appropriate for our analysis. The 
summary file includes monthly enrollment data, but only includes 
annual expenditure data by type of service.[Footnote 43] It is most 
comparable to CMS-64 because both data sets provide total expenditures 
for the fiscal year. The summary file also includes some enrollment and 
expenditure information on the Children’s Health Insurance Program 
(CHIP).[Footnote 44] 

* CMS-64 data: We used the CMS-64 net expenditures financial 
management report within the Medicaid Budget and Expenditure 
System. The financial management report is an annual account of 
states’ program and administrative Medicaid expenditures, including 
federal and state expenditures by expenditure category. The financial 
management report also contains information solely related to 
Medicaid. 

Step 2: Determine Medicaid Expenditures in MSIS for the Fiscal Year on 
the Basis of the Number of Medicaid Enrollees: 

Because MSIS includes both Medicaid and CHIP expenditures, we 
separated these expenditures to the extent possible. To do this, we 
first determined whether a beneficiary was eligible for Medicaid or 
CHIP by using the monthly eligibility code in MSIS.[Footnote 45] The 
Annual Person Summary File ties an entire month’s expenditures to an 
individual on the basis of his or her monthly eligibility code. The 
next step was to remove, to the extent possible, the CHIP expenditures 
in order to match MSIS expenditures with CMS-64. (CMS-64 does not 
include CHIP expenditures.) 

CMS officials indicated that states were able to report CHIP 
expenditures within MSIS if they had a Medicaid expansion-CHIP program 
(i.e., a CHIP program that operates as part of the Medicaid program), 
also known as M-CHIP.[Footnote 46] Consequently, we were able to 
distinguish between Medicaid and M-CHIP spending.[Footnote 47] We thus 
removed from all MSIS totals any M-CHIP expenditures to the extent 
possible. We determined the number of months in the fiscal year a 
beneficiary received benefits under Medicaid or M-CHIP. On the basis 
of this count, we prorated the enrollees’ total expenses for the 
fiscal year on the basis of the proportion of the year a person was 
enrolled in either M-CHIP or Medicaid. If a person was enrolled in the 
M-CHIP program for part of the year, then a portion of the annual 
spending was apportioned toward M-CHIP. For example, if a person was 
enrolled in M-CHIP for 3 months, then a quarter of the expenditures 
would be considered M-CHIP, and the remaining three-quarters of 
expenditures would be considered Medicaid. Consequently, the Medicaid 
expenditures include prorated amounts for Medicaid and M-CHIP 
enrollees. 

In contrast, CMS officials told us that until fiscal year 2010, states 
with a stand-alone CHIP program (i.e., one that is operated separately 
from a Medicaid program by the state; also known as S-CHIP) were not 
supposed to report these expenditures into MSIS despite the presence of 
the S-CHIP eligibility code. CMS officials indicated that any 
expenditures associated with S-CHIP should be assumed to be Medicaid 
expenditures despite the CHIP eligibility code. Therefore, we included 
any expenditures associated with the S-CHIP code as Medicaid 
expenditures.[Footnote 48] 

Lastly, we included as Medicaid expenditures any other expenditures 
associated with all other eligibility categories. These other 
eligibility variables included “unknown” and “ineligible,” as well as 
Medicaid.[Footnote 49] Consequently, for states with standalone S-CHIP 
programs and those that did not separate out M-CHIP expenditures, the 
total Medicaid expenditures may be inflated in MSIS. Similarly, any 
expenditures reported under the unknown and ineligible categories that 
were not Medicaid expenditures may also inflate Medicaid expenditures. 

Step 3: Matching Inconsistent Definitions of Services between MSIS and 
CMS-64: 

MSIS and CMS-64 data consist of expenditures broken down by service 
types.[Footnote 50] To compare MSIS and CMS-64 expenditures, we 
reviewed the definitions of Medicaid service types used in each data 
set. This is necessary because, in many instances, a one-to-one match 
of service types in MSIS to those in CMS-64 is not possible. For 
example, in fiscal years 2007 through 2009, the MSIS Annual Person 
Summary File had 29 service types, whereas CMS-64 had 43. (See table 3 
for a list of MSIS and CMS-64 service types used in fiscal years 2007 
through 2009.) 

Table 3: Medicaid Statistical Information System (MSIS) and CMS-64 
Service Types, Fiscal Years 2007–2009: 

MSIS service types: 

Inpatient hospital; 
Inpatient mental health-–aged; 
Inpatient mental health-–under 21; 
Intermediate care facility-–mentally retarded; 
Nursing facility; 
Physician; 
Dental; 
Other practitioner; 
Outpatient hospital; 
Clinic; 
Home health; 
Lab and x-ray; 
Drugs; 
Other services; 
HMO-capitation; 
Prepaid Health Plan (PHP)–capitation; 
Primary Care Case Management (PCCM)–capitation; 
Sterilization; 
Abortion; 
Transportation; 
Personal care; 
Targeted case management; 
Rehabilitative services; 
Physical, occupational, speech, and hearing therapy; 
Hospice; 
Nurse Midwife; 
Nurse Practitioner; 
Private duty nurse; 
Unknown. 

CMS-64 line numbers and service types: 

1A. Inpatient hospital; 
1B. Inpatient hospital-–DSH; 
2A. Mental health facility; 
2B. Mental health facility-–DSH; 
3. Nursing facility services; 
4A. Intermediate care facility–mentally retarded (public providers); 
4B. Intermediate care facility–mentally retarded (private providers); 
5. Physicians services; 
6. Outpatient hospital services; 
7. Prescribed drugs (gross spending); 
7A1. Drug rebates offset (national agreement); 
7A2. Drug rebates offset (state sidebar agreement); 
8. Dental; 
9. Other practitioner services; 
10. Clinic services; 
11. Laboratory and radiological services; 
12. Home health services; 
13. Sterilizations; 
14. Abortions; 
15. Early Periodic Screening, Diagnosis, and Treatment (EPSDT) 
services; 
16. Rural health clinic screenings; 
17A. Medicare health insurance payments-–Part A premiums; 
17B. Medicare health insurance payments–-Part B premiums; 
17C1. 120 percent–134 percent of the poverty level[A]; 
17C2. 135 percent–175 percent of the poverty level[B]; 
17D. Medicare–coinsurance and deductibles; 
18A. Medicaid health insurance payments–managed care organizations; 
18B1. Medicaid health insurance payments–prepaid ambulatory health 
plan; 
18B2. Medicaid health insurance payments–-prepaid inpatient health 
plan; 
18C. Medicaid health insurance payments–-group health plan payments; 
18D. Medicaid health insurance payments–-coinsurance and deductibles; 
18E. Medicaid health insurance payments-–other; 
19. Home and community based services; 
20. Home and community based care for functionally disabled elderly; 
21. Community supported living services; 
22. Programs of All-Inclusive Care for the Elderly (PACE); 
23. Personal care services; 
24. Targeted case management services; 
25. Primary Care Case Management (PCCM) Services; 
26. Hospice benefits; 
27. Emergency services for undocumented aliens; 
28. Federally-qualified health center; 
29. Other care services. 

Source: GAO analysis of Centers for Medicare & Medicaid Services data. 

[A] Medicaid expenditures reported on line 17C1 include premiums paid 
for Medicare Part B for individuals whose income is 120-134 percent of 
the poverty level. 

[B] Medicaid expenditures reported on line 17C2 include the percentage 
of the Medicare Part B premium attributable to the Home Health Benefit 
transferred from Part A to Part B for individuals whose income is 135-
175 percent of the poverty level. 

[End of table] 
 
Because of the lack of a one-to-one match between MSIS and CMS-64 
service types, we combined MSIS and CMS-64 service types into six 
combined expenditure categories. (See table 4 for the list of the 
combined expenditure categories, and MSIS and CMS-64 service types 
included in each.) As a result, we were able to report on total 
expenditures by combined expenditure categories. 

Table 4: Combined Expenditure Categories and Corresponding MSIS and 
CMS-64 Service Types: 

Combined expenditure category: Hospital
MSIS service types: 
Inpatient hospital; 
Outpatient hospital; 
Inpatient mental health facility for under age 21; 
Mental health facility for the aged;
CMS-64 line numbers and service types: 
1A. Inpatient hospital; 
1B. Inpatient hospital–-Disproportionate Share Hospitals (DSH); 
2A. Mental health facility; 
2B. Mental health facility-–DSH; 
6. Outpatient hospital services; 
27. Emergency services for undocumented aliens. 

Combined expenditure category: Acute and long term support services 
(LTSS)--noninstitutional; 
MSIS service types: 
Physician; 
Dental; 
Nurse midwife; 
Nurse practitioner; 
Other practitioner; 
Home health; 
Clinic; 
Lab and x-ray; 
Sterilizations; 
Abortions; 
Personal care; 
Private duty nursing; 
Targeted case management; 
Rehabilitative services; 
Hospice; 
Other services; 
Physical, occupational, speech, and hearing therapy; 
Transportation services;
CMS-64 line numbers and service types: 
5. Physicians services; 
8. Dental; 
9. Other practitioner services; 
10. Clinic services; 
11. Laboratory and radiological services; 
12. Home health services; 
13. Sterilizations; 
14. Abortions; 
15. Early Periodic Screening, Diagnosis, and Treatment (EPSDT) 
Services; 
16. Rural health clinic screenings; 
19. Home and community based services; 
20. Home and community based care for functionally disabled elderly; 
21. Community supported living services; 
23. Personal care services; 
24. Targeted case management services; 
26. Hospice benefits; 
28. Federally Qualified Health Center (FQHC); 
29. Other care services. 

Combined expenditure category: Drugs; 
MSIS service types: Drugs (gross spending); 
CMS-64 line numbers and service types: 
7. Prescribed drugs (gross spending); 
7A1. Drug rebates offset (national agreement); 
7A2. Drug rebates offset (state sidebar agreement). 

Combined expenditure category: Managed care and Medicaid premium 
assistance;
MSIS service types: 
HMO capitation; 
Prepaid Health Plan (PHP); 
Primary care case management; 
CMS-64 line numbers and service types: 
18A. Medicaid health insurance payments-–managed care organizations; 
18B1. Medicaid health insurance payments-–Prepaid Ambulatory Health 
Plan; 
18B2. Medicaid health insurance payments-–Prepaid Inpatient Health 
Plan; 
18C. Medicaid health insurance payments-–Group Health Plan Payments; 
18D. Medicaid health insurance payments-–Coinsurance and Deductibles; 
18E. Medicaid health insurance payments-–other; 
25. Primary Care Case Management (PCCM) Services; 
22. Program of All-Inclusive Care for the Elderly (PACE). 

Combined expenditure category: Long term support services--
institutional; 
MSIS service types: 
Nursing facility; 
Intermediate care facility-–mentally retarded; 
CMS-64 line numbers and service types: 
3. Nursing facility services; 
4A. Intermediate care facility--mentally retarded (public providers); 
4B. Intermediate care facility--mentally retarded (private providers). 

Combined expenditure category: Medicare; 
CMS-64 line numbers and service types: 
17A. Medicare health insurance payments-–Part A premiums; 
17B. Medicare health insurance payments-–Part B premiums; 
17C1. 120–134 percent of the poverty level; 
17C2. 135–175 percent of the poverty level; 
17D. Medicare coinsurance and deductibles. 

Source: GAO analysis of Centers for Medicare & Medicaid Services’ 
(CMS) data. 

Notes: The combined expenditure categories listed are based on 
analysis of the Medicaid Statistical Information System (MSIS) and CMS 
service types. We combined acute care and long term support services 
because CMS officials told us there was overlap between services in 
each type of care. 

The MSIS “unknown” service type was proportionally distributed across 
5 categories, excluding Medicare. 

While states could report expenditures under “Religious non-medical” 
in CMS-64 for fiscal years 2007 through 2009, no state did so. There 
is no corresponding category in MSIS. 

[End of table] 

Step 4: Excluded Expenditures 

For certain CMS-64 expenditures, instead of adding them to MSIS, we 
excluded them from CMS-64. Specifically, expenditures from Puerto Rico 
or the U.S. territories from CMS-64 were excluded because these are not 
in MSIS data. 

Additionally, we excluded all administrative expenses from CMS-64 
reported amounts, because these are not reported in MSIS data. We also 
excluded all state collections from CMS-64, because these are not in 
MSIS.[Footnote 51] 

Step 5: Comparison of MSIS and CMS-64 Expenditures 

We compared total Medicaid expenditures in MSIS and CMS-64 for fiscal 
years 2007 through 2009, nationally and for all 50 states and the 
District of Columbia, to determine the extent of the difference 
between these two data sets. With total expenditures from both data 
sets, we calculated the expenditures in MSIS as a percentage of those 
reported in CMS-64. We also compared total Medicaid expenditures by 
our six combined expenditure categories, as reported by MSIS and CMS-
64 for fiscal years 2007 through 2009. 

II. Adjustment Analysis 

To conduct our adjustment analysis, we determined the factors that 
account for the difference between MSIS and CMS-64 data on Medicaid 
expenditures. We identified and analyzed factors that account for the 
differences in each data set in fiscal years 2007 through 2009. We 
attempted to reconcile the expenditures by making adjustments to the 
MSIS expenditures on the basis of the differences we identified. In 
attempting to reconcile these differences, we made adjustments to the 
baseline analysis described above. Specifically, we added expenditures 
reported in CMS-64 that were not reported in MSIS to the MSIS amounts. 
We added expenditures to MSIS rather than subtracting them from CMS-
64, because CMS-64 contains total Medicaid spending, and the additions 
make MSIS a better approximation of this spending. For certain service 
types, MSIS and CMS-64 reported different amounts of Medicaid 
expenditures because of differences in the way they capture the 
expenditure information. We identified four factors that account for 
the differences that we were able to quantify. Therefore, we adjusted 
the MSIS baseline amount and reduced the gap between the two data sets. 
Specifically, MSIS does not include Disproportionate Share Hospital 
(DSH) payments, Medicare premiums, prescription drug rebates, and 
Medicaid health insurance payments. We then compared total adjusted 
expenditures nationally and by state. We did this by comparing the 
expenditures reported in MSIS as a percentage of those reported in 
CMS-64. We also compared adjusted expenditures by combined 
expenditure category, nationally and by state. 

Step 1: 

We added expenditures from DSH payments as reported on line 1B 
(Inpatient Hospital Service–DSH Adjustment Payments) in CMS-64 to the 
MSIS baseline amount within the Combined Hospital expenditure 
category. 

Step 2: 

We added expenditures related to Medicare premiums from lines 17A 
(Medicare Health Insurance Payments–Part A premiums), 17B (Medicare 
Health Insurance Payments–Part B premiums), 17C1 (120–134 percent 
of the poverty level), and 17C2 (135–175 percent of the poverty level) 
from CMS-64 to the MSIS baseline amount within the combined Medicare 
expenditure category.[Footnote 52] 

Step 3: 

We subtracted prescription drug rebate amounts reported on line 7A1 
(Drug Rebate Offset–National Agreement) and 7A2 (Drug Rebate Offset–
State Sidebar Agreement) in CMS-64 within the prescription drugs 
expenditure category from the MSIS baseline amount within the 
Combined Prescription Drug expenditure category.[Footnote 53] 

Step 4: 

We added expenditures related to Medicaid health insurance payments 
from lines 18C (Medicaid health insurance payments–Group Health Plan 
Payments), 18D (Medicaid health insurance payments–Coinsurance and 
Deductibles) and 18E (Medicaid health insurance payments–Other) in 
CMS 64 to the MSIS baseline amount within the combined managed care 
and Medicaid premium assistance category. 

Step 5: 

After making the adjustments in steps 1 through 4, we compared the 
total adjusted Medicaid expenditures as reported in MSIS and CMS-64 for 
fiscal years 2007 through 2009, nationally and for all 50 states and 
the District of Columbia. With total expenditures from both data sets, 
we calculated the expenditures reported in MSIS as a percentage of 
those reported in CMS-64. 

We also compared total adjusted Medicaid expenditures by our six 
expenditure categories, as reported by MSIS and CMS-64 for fiscal years 
2007 through 2009. 

After making the expenditure adjustments, we determined any remaining 
expenditure differences between MSIS and CMS-64. We then identified 
additional factors that help account for the difference between data 
sets. However, because these were not systematic quantitative 
differences, they could not be used to adjust the expenditures. 

We conducted this performance audit from March 2012 through 
September 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. 

[End of section] 

Appendix II: Total Baseline Medicaid Expenditures in MSIS and CMS-64, 
by State, Fiscal Year 2009: 

State: Alabama; 
MSIS baseline: $3,625,540,937; 
CMS-64 baseline: $4,415,801,712; 
MSIS baseline as a percent of CMS-64: 82%. 

State: Alaska; 
MSIS baseline: $1,040,288,855; 
CMS-64 baseline: $1,069,624,574; 
MSIS baseline as a percent of CMS-64: 97%. 

State: Arizona; 
MSIS baseline: $8,628,093,458; 
CMS-64 baseline: $8,665,269,493; 
MSIS baseline as a percent of CMS-64: 100%. 

State: Arkansas; 
MSIS baseline: $3,486,489,877; 
CMS-64 baseline: $3,451,516,646; 
MSIS baseline as a percent of CMS-64: 101%. 

State: California; 
MSIS baseline: $35,002,258,860; 
CMS-64 baseline: $41,389,559,881; 
MSIS baseline as a percent of CMS-64: 85%. 

State: Colorado; 
MSIS baseline: $3,288,276,426; 
CMS-64 baseline: $3,555,155,172; 
MSIS baseline as a percent of CMS-64: 92%. 

State: Connecticut; 
MSIS baseline: $5,289,134,290; 
CMS-64 baseline: $6,035,281,239; 
MSIS baseline as a percent of CMS-64: 88%. 

State: Delaware; 
MSIS baseline: $1,263,983,534; 
CMS-64 baseline: $1,211,814,329; 
MSIS baseline as a percent of CMS-64: 104%. 

State: District of Columbia; 
MSIS baseline: $1,928,483,265; 
CMS-64 baseline: $1,626,139,477; 
MSIS baseline as a percent of CMS-64: 119%. 

State: Florida; 
MSIS baseline: $14,051,386,231; 
CMS-64 baseline: $15,088,582,200; 
MSIS baseline as a percent of CMS-64: 93%. 

State: Georgia; 
MSIS baseline: $7,376,411,423; 
CMS-64 baseline: $7,693,345,212; 
MSIS baseline as a percent of CMS-64: 96%. 

State: Hawaii; 
MSIS baseline: $1,172,582,338; 
CMS-64 baseline: $1,308,211,194; 
MSIS baseline as a percent of CMS-64: 90%. 

State: Idaho; 
MSIS baseline: $1,330,846,516; 
CMS-64 baseline: $1,276,526,247; 
MSIS baseline as a percent of CMS-64: 104%. 

State: Illinois; 
MSIS baseline: $11,658,850,516; 
CMS-64 baseline: $13,140,383,274; 
MSIS baseline as a percent of CMS-64: 89%. 

State: Indiana; 
MSIS baseline: $5,312,111,931; 
CMS-64 baseline: $5,906,490,283; 
MSIS baseline as a percent of CMS-64: 90%. 

State: Iowa; 
MSIS baseline: $2,870,172,181; 
CMS-64 baseline: $2,960,114,156; 
MSIS baseline as a percent of CMS-64: 97%. 

State: Kansas; 
MSIS baseline: $2,315,819,323; 
CMS-64 baseline: $2,443,675,864; 
MSIS baseline as a percent of CMS-64: 95%. 

State: Kentucky; 
MSIS baseline: $4,927,054,393; 
CMS-64 baseline: $5,400,899,512; 
MSIS baseline as a percent of CMS-64: 91%. 

State: Louisiana; 
MSIS baseline: $5,230,654,120; 
CMS-64 baseline: $6,513,211,836; 
MSIS baseline as a percent of CMS-64: 80%. 

State: Maine; 
MSIS baseline: $1,480,509,448; 
CMS-64 baseline: $2,517,981,111; 
MSIS baseline as a percent of CMS-64: 59%. 

State: Maryland; 
MSIS baseline: $6,124,798,441; 
CMS-64 baseline: $6,523,939,093; 
MSIS baseline as a percent of CMS-64: 94%. 

State: Massachusetts; 
MSIS baseline: $9,928,887,946; 
CMS-64 baseline: $12,480,644,429; 
MSIS baseline as a percent of CMS-64: 80%. 

State: Michigan; 
MSIS baseline: $10,145,744,904; 
CMS-64 baseline: $10,583,215,243; 
MSIS baseline as a percent of CMS-64: 96%. 

State: Minnesota; 
MSIS baseline: $7,029,437,421; 
CMS-64 baseline: $7,387,421,506; 
MSIS baseline as a percent of CMS-64: 95%. 

State: Mississippi; 
MSIS baseline: $3,199,788,959; 
CMS-64 baseline: $3,947,805,053; 
MSIS baseline as a percent of CMS-64: 81%. 

State: Missouri; 
MSIS baseline: $5,679,022,531; 
CMS-64 baseline: $7,747,665,625; 
MSIS baseline as a percent of CMS-64: 73%. 

State: Montana; 
MSIS baseline: $714,263,803; 
CMS-64 baseline: $875,768,845; 
MSIS baseline as a percent of CMS-64: 82%. 

State: Nebraska; 
MSIS baseline: $1,542,139,671; 
CMS-64 baseline: $1,616,257,729; 
MSIS baseline as a percent of CMS-64: 95%. 

State: Nevada; 
MSIS baseline: $1,196,285,725; 
CMS-64 baseline: $1,383,003,611; 
MSIS baseline as a percent of CMS-64: 86%. 

State: New Hampshire; 
MSIS baseline: $994,261,996; 
CMS-64 baseline: $1,327,164,314; 
MSIS baseline as a percent of CMS-64: 75%. 

State: New Jersey; 
MSIS baseline: $7,924,068,702; 
CMS-64 baseline: $9,667,209,281; 
MSIS baseline as a percent of CMS-64: 82%. 

State: New Mexico; 
MSIS baseline: $2,633,955,686; 
CMS-64 baseline: $3,290,379,397; 
MSIS baseline as a percent of CMS-64: 80%. 

State: New York; 
MSIS baseline: $44,882,629,782; 
CMS-64 baseline: $49,368,510,253; 
MSIS baseline as a percent of CMS-64: 91%. 

State: North Carolina; 
MSIS baseline: $9,589,597,797; 
CMS-64 baseline: $11,506,119,180; 
MSIS baseline as a percent of CMS-64: 83%. 

State: North Dakota; 
MSIS baseline: $581,137,250; 
CMS-64 baseline: $572,101,389; 
MSIS baseline as a percent of CMS-64: 102%. 

State: Ohio; 
MSIS baseline: $13,655,184,427; 
CMS-64 baseline: $14,150,220,981; 
MSIS baseline as a percent of CMS-64: 97%. 

State: Oklahoma; 
MSIS baseline: $3,441,451,894; 
CMS-64 baseline: $3,937,604,747; 
MSIS baseline as a percent of CMS-64: 87%. 

State: Oregon; 
MSIS baseline: $2,797,080,333; 
CMS-64 baseline: $3,677,976,463; 
MSIS baseline as a percent of CMS-64: 76%. 

State: Pennsylvania; 
MSIS baseline: $14,206,934,568; 
CMS-64 baseline: $17,231,560,151; 
MSIS baseline as a percent of CMS-64: 82%. 

State: Rhode Island; 
MSIS baseline: $1,492,164,387; 
CMS-64 baseline: $1,893,290,969; 
MSIS baseline as a percent of CMS-64: 79%. 

State: South Carolina; 
MSIS baseline: $4,640,158,035; 
CMS-64 baseline: $5,098,527,910; 
MSIS baseline as a percent of CMS-64: 91%. 

State: South Dakota; 
MSIS baseline: $716,509,192; 
CMS-64 baseline: $713,353,957; 
MSIS baseline as a percent of CMS-64: 100%. 

State: Tennessee; 
MSIS baseline: $7,197,427,171; 
CMS-64 baseline: $7,290,231,215; 
MSIS baseline as a percent of CMS-64: 99%. 

State: Texas; 
MSIS baseline: $18,542,742,821; 
CMS-64 baseline: $23,704,821,993; 
MSIS baseline as a percent of CMS-64: 78%. 

State: Utah; 
MSIS baseline: $1,867,632,519; 
CMS-64 baseline: $1,628,633,714; 
MSIS baseline as a percent of CMS-64: 115%. 

State: Vermont; 
MSIS baseline: $969,805,347; 
CMS-64 baseline: $1,190,678,054; 
MSIS baseline as a percent of CMS-64: 81%. 

State: Virginia; 
MSIS baseline: $5,518,557,224; 
CMS-64 baseline: $5,774,994,043; 
MSIS baseline as a percent of CMS-64: 96%. 

State: Washington; 
MSIS baseline: $5,733,929,571; 
CMS-64 baseline: $6,603,087,308; 
MSIS baseline as a percent of CMS-64: 87%. 

State: West Virginia; 
MSIS baseline: $2,588,751,602; 
CMS-64 baseline: $2,434,058,051; 
MSIS baseline as a percent of CMS-64: 106%. 

State: Wisconsin; 
MSIS baseline: $5,754,921,788; 
CMS-64 baseline: $6,684,081,412; 
MSIS baseline as a percent of CMS-64: 86%. 

State: Wyoming; 
MSIS baseline: $551,809,947; 
CMS-64 baseline: $526,237,765; 
MSIS baseline as a percent of CMS-64: 105%. 

State: Total; 
MSIS baseline: $323,120,029,363; 
CMS-64 baseline: $366,486,147,093; 
MSIS baseline as a percent of CMS-64: 88%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services’ data. 

Note: MSIS = Medicaid Statistical Information System. 

[End of table] 

[End of section] 

Appendix III: Total Adjusted Medicaid Expenditures in MSIS and CMS-64, 
by State, Fiscal Year 2009: 

State: Alabama; 
MSIS adjusted: $4,149,081,465; 
CMS-64 baseline: $4,415,801,712; 
MSIS adjusted as a percent of CMS-64: 94%%. 

State: Alaska; 
MSIS adjusted: $1,044,650,976; 
CMS-64 baseline: $1,069,624,574; 
MSIS adjusted as a percent of CMS-64: 98%. 

State: Arizona; 
MSIS adjusted: $8,950,429,121; 
CMS-64 baseline: $8,665,269,493; 
MSIS adjusted as a percent of CMS-64: 103%. 

State: Arkansas; 
MSIS adjusted: $3,566,963,553; 
CMS-64 baseline: $3,451,516,646; 
MSIS adjusted as a percent of CMS-64: 103%. 

State: California; 
MSIS adjusted: $37,800,029,701; 
CMS-64 baseline: $41,389,559,881; 
MSIS adjusted as a percent of CMS-64: 91%. 

State: Colorado; 
MSIS adjusted: $3,469,734,861; 
CMS-64 baseline: $3,555,155,172; 
MSIS adjusted as a percent of CMS-64: 98%. 

State: Connecticut; 
MSIS adjusted: $5,565,391,332; 
CMS-64 baseline: $6,035,281,239; 
MSIS adjusted as a percent of CMS-64: 92%. 

State: Delaware; 
MSIS adjusted: $1,243,966,462; 
CMS-64 baseline: $1,211,814,329; 
MSIS adjusted as a percent of CMS-64: 103%. 

State: District of Columbia; 
MSIS adjusted: $1,998,599,795; 
CMS-64 baseline: $1,626,139,477; 
MSIS adjusted as a percent of CMS-64: 123%. 

State: Florida; 
MSIS adjusted: $14,754,686,816; 
CMS-64 baseline: $15,088,582,200; 
MSIS adjusted as a percent of CMS-64: 98%. 

State: Georgia; 
MSIS adjusted: $7,835,521,037; 
CMS-64 baseline: $7,693,345,212; 
MSIS adjusted as a percent of CMS-64: 102%. 

State: Hawaii; 
MSIS adjusted: $1,209,812,682; 
CMS-64 baseline: $1,308,211,194; 
MSIS adjusted as a percent of CMS-64: 92%. 

State: Idaho; 
MSIS adjusted: $1,320,590,808; 
CMS-64 baseline: $1,276,526,247; 
MSIS adjusted as a percent of CMS-64: 103%. 

State: Illinois; 
MSIS adjusted: $12,053,935,834; 
CMS-64 baseline: $13,140,383,274; 
MSIS adjusted as a percent of CMS-64: 92%. 

State: Indiana; 
MSIS adjusted: $5,488,175,214; 
CMS-64 baseline: $5,906,490,283; 
MSIS adjusted as a percent of CMS-64: 93%. 

State: Iowa; 
MSIS adjusted: $2,895,286,487; 
CMS-64 baseline: $2,960,114,156; 
MSIS adjusted as a percent of CMS-64: 98%. 

State: Kansas; 
MSIS adjusted: $2,391,474,252; 
CMS-64 baseline: $2,443,675,864; 
MSIS adjusted as a percent of CMS-64: 98%. 

State: Kentucky; 
MSIS adjusted: $5,170,171,436; 
CMS-64 baseline: $5,400,899,512; 
MSIS adjusted as a percent of CMS-64: 96%. 

State: Louisiana; 
MSIS adjusted: $6,117,964,332; 
CMS-64 baseline: $6,513,211,836; 
MSIS adjusted as a percent of CMS-64: 94%. 

State: Maine; 
MSIS adjusted: $1,530,105,787; 
CMS-64 baseline: $2,517,981,111; 
MSIS adjusted as a percent of CMS-64: 61%. 

State: Maryland; 
MSIS adjusted: $6,308,462,604; 
CMS-64 baseline: $6,523,939,093; 
MSIS adjusted as a percent of CMS-64: 97%. 

State: Massachusetts; 
MSIS adjusted: $10,223,698,086; 
CMS-64 baseline: $12,480,644,429; 
MSIS adjusted as a percent of CMS-64: 82%. 

State: Michigan; 
MSIS adjusted: $10,671,661,360; 
CMS-64 baseline: $10,583,215,243; 
MSIS adjusted as a percent of CMS-64: 101%. 

State: Minnesota; 
MSIS adjusted: $9,661,603,386; 
CMS-64 baseline: $7,387,421,506; 
MSIS adjusted as a percent of CMS-64: 131%. 

State: Mississippi; 
MSIS adjusted: $3,458,893,939; 
CMS-64 baseline: $3,947,805,053; 
MSIS adjusted as a percent of CMS-64: 88%. 

State: Missouri; 
MSIS adjusted: $6,348,322,455; 
CMS-64 baseline: $7,747,665,625; 
MSIS adjusted as a percent of CMS-64: 82%. 

State: Montana; 
MSIS adjusted: $730,414,065; 
CMS-64 baseline: $875,768,845; 
MSIS adjusted as a percent of CMS-64: 83%. 

State: Nebraska; 
MSIS adjusted: $1,559,900,885; 
CMS-64 baseline: $1,616,257,729; 
MSIS adjusted as a percent of CMS-64: 97%. 

State: Nevada; 
MSIS adjusted: $1,305,273,428; 
CMS-64 baseline: $1,383,003,611; 
MSIS adjusted as a percent of CMS-64: 94%. 

State: New Hampshire; 
MSIS adjusted: $1,210,132,665; 
CMS-64 baseline: $1,327,164,314; 
MSIS adjusted as a percent of CMS-64: 91%. 

State: New Jersey; 
MSIS adjusted: $9,240,294,628; 
CMS-64 baseline: $9,667,209,281; 
MSIS adjusted as a percent of CMS-64: 96%. 

State: New Mexico; 
MSIS adjusted: $2,720,776,943; 
CMS-64 baseline: $3,290,379,397; 
MSIS adjusted as a percent of CMS-64: 83%. 

State: New York; 
MSIS adjusted: $47,601,163,307; 
CMS-64 baseline: $49,368,510,253; 
MSIS adjusted as a percent of CMS-64: 96%. 

State: North Carolina; 
MSIS adjusted: $10,037,581,856; 
CMS-64 baseline: $11,506,119,180; 
MSIS adjusted as a percent of CMS-64: 87%. 

State: North Dakota; 
MSIS adjusted: $580,335,888; 
CMS-64 baseline: $572,101,389; 
MSIS adjusted as a percent of CMS-64: 101%. 

State: Ohio; 
MSIS adjusted: $14,470,087,279; 
CMS-64 baseline: $14,150,220,981; 
MSIS adjusted as a percent of CMS-64: 102%. 

State: Oklahoma; 
MSIS adjusted: $3,541,362,801; 
CMS-64 baseline: $3,937,604,747; 
MSIS adjusted as a percent of CMS-64: 90%. 

State: Oregon; 
MSIS adjusted: $2,950,571,584; 
CMS-64 baseline: $3,677,976,463; 
MSIS adjusted as a percent of CMS-64: 80%. 

State: Pennsylvania; 
MSIS adjusted: $15,215,057,372; 
CMS-64 baseline: $17,231,560,151; 
MSIS adjusted as a percent of CMS-64: 88%. 

State: Rhode Island; 
MSIS adjusted: $1,630,860,669; 
CMS-64 baseline: $1,893,290,969; 
MSIS adjusted as a percent of CMS-64: 86%. 

State: South Carolina; 
MSIS adjusted: $5,117,449,890; 
CMS-64 baseline: $5,098,527,910; 
MSIS adjusted as a percent of CMS-64: 100%. 

State: South Dakota; 
MSIS adjusted: $720,846,348; 
CMS-64 baseline: $713,353,957; 
MSIS adjusted as a percent of CMS-64: 101%. 

State: Tennessee; 
MSIS adjusted: $7,363,722,376; 
CMS-64 baseline: $7,290,231,215; 
MSIS adjusted as a percent of CMS-64: 101%. 

State: Texas; 
MSIS adjusted: $20,378,285,311; 
CMS-64 baseline: $23,704,821,993; 
MSIS adjusted as a percent of CMS-64: 86%. 

State: Utah; 
MSIS adjusted: $1,881,512,781; 
CMS-64 baseline: $1,628,633,714; 
MSIS adjusted as a percent of CMS-64: 116%. 

State: Vermont; 
MSIS adjusted: $1,000,491,043; 
CMS-64 baseline: $1,190,678,054; 
MSIS adjusted as a percent of CMS-64: 84%. 

State: Virginia; 
MSIS adjusted: $5,749,185,155; 
CMS-64 baseline: $5,774,994,043; 
MSIS adjusted as a percent of CMS-64: 100%. 

State: Washington; 
MSIS adjusted: $6,150,885,067; 
CMS-64 baseline: $6,603,087,308; 
MSIS adjusted as a percent of CMS-64: 93%. 

State: West Virginia; 
MSIS adjusted: $2,582,401,847; 
CMS-64 baseline: $2,434,058,051; 
MSIS adjusted as a percent of CMS-64: 106%. 

State: Wisconsin; 
MSIS adjusted: $5,653,921,737; 
CMS-64 baseline: $6,684,081,412; 
MSIS adjusted as a percent of CMS-64: 85%. 

State: Wyoming; 
MSIS adjusted: $550,456,264; 
CMS-64 baseline: $526,237,765; 
MSIS adjusted as a percent of CMS-64: 105%. 

State: Total; 
MSIS adjusted: $345,172,184,969; 
CMS-64 baseline: $366,486,147,093; 
MSIS adjusted as a percent of CMS-64: 94%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services’ data. 

Note: Adjustments were made by adding expenditures reported in CMS-64 
to those reported in the Medicaid Statistical Information System 
(MSIS). Specifically, we added Disproportionate Share Hospital 
payments, national and state rebates for prescription drugs, Medicaid 
health insurance payments, and Medicare premiums to the expenditures 
reported in MSIS. 

Appendix IV: Adjusted MSIS Expenditures as a Percentage of CMS-64, by 
State, Fiscal Year 2009: 

MSIS expenditures as a percentage of CMS-64 expenditures: 

87% and below: 
Maine; 
Massachusetts; 
Missouri; 
Montana; 
New Mexico; 
North Carolina; 
Oregon; 
Rhode Island; 
Texas; 
Vermont; 
Wisconsin. 

88%-92%: 
California; 
Hawaii; 
Illinois; 
Mississippi; 
New Hampshire; 
Oklahoma; 
Pennsylvania. 

93%-97%: 
Alabama; 
Delaware; 
Indiana; 
Kentucky; 
Louisiana; 
Maryland; 
Nebraska; 
Nevada; 
New Jersey; 
New York; 
Washington. 

98%-102%: 
Alaska; 
Colorado; 
Connecticut; 
Florida; 
Georgia; 
Iowa; 
Kansas; 
Michigan; 
North Dakota; 
Ohio; 
South Carolina; 
South Dakota; 
Tennessee; 
Virginia. 

103%-107%: 
Arkansas; 
Arizona; 
Idaho; 
West Virginia; 
Wyoming. 

108% and above: 
District of Columbia; 
Minnesota; 
Utah. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' 
data; MapArt (map). 

Note: Adjustments were made by adding expenditures reported in CMS-64 
to those reported in the Medicaid Statistical Information System 
(MSIS). Specifically, we added Disproportionate Share Hospital 
payments, national and state rebates for prescription drugs, Medicaid 
health insurance payments, and Medicare premiums to the expenditures 
reported in MSIS. 

[End of figure] 

Appendix V: Adjusted MSIS Expenditures as a Percentage of CMS-64, by 
State and Expenditure Category, Fiscal Year 2009: 

State: Alabama; 
Hospital expenditures: 79%; 
Acute and LTSS-Non-Institutional: 112%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 76%; 
LTSS Institutional: 93%; 
Medicare: 100%. 

State: Alaska; 
Hospital expenditures: 109%; 
Acute and LTSS-Non-Institutional: 98%; 
Prescription Drugs: 101%; 
Managed Care and Medicare premium assistance: 102%; 
LTSS Institutional: 67%; 
Medicare: 99%. 

State: Arizona; 
Hospital expenditures: 153%; 
Acute and LTSS-Non-Institutional: 44%; 
Prescription Drugs: 74%; 
Managed Care and Medicare premium assistance: 100%; 
LTSS Institutional: 97%; 
Medicare: 99%. 

State: Arkansas; 
Hospital expenditures: 114%; 
Acute and LTSS-Non-Institutional: 112%; 
Prescription Drugs: 103%; 
Managed Care and Medicare premium assistance: 278%; 
LTSS Institutional: 90%; 
Medicare: 50%. 

State: California; 
Hospital expenditures: 66%; 
Acute and LTSS-Non-Institutional: 97%; 
Prescription Drugs: 97%; 
Managed Care and Medicare premium assistance: 117%; 
LTSS Institutional: 96%; 
Medicare: 100%. 

State: Colorado; 
Hospital expenditures: 81%; 
Acute and LTSS-Non-Institutional: 99%; 
Prescription Drugs: 139%; 
Managed Care and Medicare premium assistance: 109%; 
LTSS Institutional: 100%; 
Medicare: 100%. 

State: Connecticut; 
Hospital expenditures: 89%; 
Acute and LTSS-Non-Institutional: 92%; 
Prescription Drugs: 103%; 
Managed Care and Medicare premium assistance: 77%; 
LTSS Institutional: 106%; 
Medicare: 42%. 

State: Delaware; 
Hospital expenditures: 103%; 
Acute and LTSS-Non-Institutional: 101%; 
Prescription Drugs: 108%; 
Managed Care and Medicare premium assistance: 103%; 
LTSS Institutional: 102%; 
Medicare: 100%. 

State: District of Columbia; 
Hospital expenditures: 97%; 
Acute and LTSS-Non-Institutional: 170%; 
Prescription Drugs: 108%; 
Managed Care and Medicare premium assistance: 115%; 
LTSS Institutional: 92%; 
Medicare: 100%. 

State: Florida; 
Hospital expenditures: 80%; 
Acute and LTSS-Non-Institutional: 89%; 
Prescription Drugs: 108%; 
Managed Care and Medicare premium assistance: 137%; 
LTSS Institutional: 106%; 
Medicare: 87%. 

State: Georgia; 
Hospital expenditures: 112%; 
Acute and LTSS-Non-Institutional: 92%; 
Prescription Drugs: 97%; 
Managed Care and Medicare premium assistance: 103%; 
LTSS Institutional: 96%; 
Medicare: 100%. 

State: Hawaii; 
Hospital expenditures: 54%; 
Acute and LTSS-Non-Institutional: 86%; 
Prescription Drugs: 29%; 
Managed Care and Medicare premium assistance: 99%; 
LTSS Institutional: 119%; 
Medicare: 100%. 

State: Idaho; 
Hospital expenditures: 106%; 
Acute and LTSS-Non-Institutional: 102%; 
Prescription Drugs: 107%; 
Managed Care and Medicare premium assistance: 100%; 
LTSS Institutional: 106%; 
Medicare: 100%. 

State: Illinois; 
Hospital expenditures: 72%; 
Acute and LTSS-Non-Institutional: 113%; 
Prescription Drugs: 127%; 
Managed Care and Medicare premium assistance: 110%; 
LTSS Institutional: 103%; 
Medicare: 100%. 

State: Indiana; 
Hospital expenditures: 59%; 
Acute and LTSS-Non-Institutional: 104%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 101%; 
LTSS Institutional: 97%; 
Medicare: 100%. 

State: Iowa; 
Hospital expenditures: 106%; 
Acute and LTSS-Non-Institutional: 100%; 
Prescription Drugs: 92%; 
Managed Care and Medicare premium assistance: 105%; 
LTSS Institutional: 100%; 
Medicare: 46%. 

State: Kansas; 
Hospital expenditures: 86%; 
Acute and LTSS-Non-Institutional: 99%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 104%; 
LTSS Institutional: 100%; 
Medicare: 96%. 

State: Kentucky; 
Hospital expenditures: 81%; 
Acute and LTSS-Non-Institutional: 103%; 
Prescription Drugs: 99%; 
Managed Care and Medicare premium assistance: 98%; 
LTSS Institutional: 103%; 
Medicare: 100%. 

State: Louisiana; 
Hospital expenditures: 92%; 
Acute and LTSS-Non-Institutional: 96%; 
Prescription Drugs: 79%; 
Managed Care and Medicare premium assistance: 441%; 
LTSS Institutional: 100%; 
Medicare: 100%. 

State: Maine; 
Hospital expenditures: 22%; 
Acute and LTSS-Non-Institutional: 70%; 
Prescription Drugs: 115%; 
Managed Care and Medicare premium assistance: 0%; 
LTSS Institutional: 89%; 
Medicare: 100%. 

State: Maryland; 
Hospital expenditures: 102%; 
Acute and LTSS-Non-Institutional: 94%; 
Prescription Drugs: 87%; 
Managed Care and Medicare premium assistance: 95%; 
LTSS Institutional: 99%; 
Medicare: 100%. 

State: Massachusetts; 
Hospital expenditures: 35%; 
Acute and LTSS-Non-Institutional: 85%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 103%; 
LTSS Institutional: 114%; 
Medicare: 100%. 

State: Michigan; 
Hospital expenditures: 90%; 
Acute and LTSS-Non-Institutional: 81%; 
Prescription Drugs: 95%; 
Managed Care and Medicare premium assistance: 113%; 
LTSS Institutional: 101%; 
Medicare: 90%. 

State: Minnesota; 
Hospital expenditures: 92%; 
Acute and LTSS-Non-Institutional: 98%; 
Prescription Drugs: 99%; 
Managed Care and Medicare premium assistance: 198%; 
LTSS Institutional: 100%; 
Medicare: 100%. 

State: Mississippi; 
Hospital expenditures: 72%; 
Acute and LTSS-Non-Institutional: 96%; 
Prescription Drugs: 93%; 
Managed Care and Medicare premium assistance: 0%; 
LTSS Institutional: 100%; 
Medicare: 100%. 

State: Missouri; 
Hospital expenditures: 59%; 
Acute and LTSS-Non-Institutional: 101%; 
Prescription Drugs: 101%; 
Managed Care and Medicare premium assistance: 93%; 
LTSS Institutional: 102%; 
Medicare: 50%. 

State: Montana; 
Hospital expenditures: 76%; 
Acute and LTSS-Non-Institutional: 82%; 
Prescription Drugs: 101%; 
Managed Care and Medicare premium assistance: 49%; 
LTSS Institutional: 100%; 
Medicare: 58%. 

State: Nebraska; 
Hospital expenditures: 102%; 
Acute and LTSS-Non-Institutional: 104%; 
Prescription Drugs: 94%; 
Managed Care and Medicare premium assistance: 95%; 
LTSS Institutional: 95%; 
Medicare: 35%. 

State: Nevada; 
Hospital expenditures: 78%; 
Acute and LTSS-Non-Institutional: 117%; 
Prescription Drugs: 101%; 
Managed Care and Medicare premium assistance: 84%; 
LTSS Institutional: 101%; 
Medicare: 65%. 

State: New Hampshire; 
Hospital expenditures: 98%; 
Acute and LTSS-Non-Institutional: 99%; 
Prescription Drugs: 103%; 
Managed Care and Medicare premium assistance: 1%; 
LTSS Institutional: 68%; 
Medicare: 100%. 

State: New Jersey; 
Hospital expenditures: 88%; 
Acute and LTSS-Non-Institutional: 98%; 
Prescription Drugs: 98%; 
Managed Care and Medicare premium assistance: 99%; 
LTSS Institutional: 97%; 
Medicare: 100%. 

State: New Mexico; 
Hospital expenditures: 100%; 
Acute and LTSS-Non-Institutional: 95%; 
Prescription Drugs: 47%; 
Managed Care and Medicare premium assistance: 73%; 
LTSS Institutional: 99%; 
Medicare: 100%. 

State: New York; 
Hospital expenditures: 97%; 
Acute and LTSS-Non-Institutional: 101%; 
Prescription Drugs: 90%; 
Managed Care and Medicare premium assistance: 99%; 
LTSS Institutional: 89%; 
Medicare: 100%. 

State: North Carolina; 
Hospital expenditures: 74%; 
Acute and LTSS-Non-Institutional: 90%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 160%; 
LTSS Institutional: 92%; 
Medicare: 100%. 

State: North Dakota; 
Hospital expenditures: 86%; 
Acute and LTSS-Non-Institutional: 108%; 
Prescription Drugs: 105%; 
Managed Care and Medicare premium assistance: 31%; 
LTSS Institutional: 103%; 
Medicare: 100%. 

State: Ohio; 
Hospital expenditures: 74%; 
Acute and LTSS-Non-Institutional: 124%; 
Prescription Drugs: 104%; 
Managed Care and Medicare premium assistance: 107%; 
LTSS Institutional: 99%; 
Medicare: 100%. 

State: Oklahoma; 
Hospital expenditures: 84%; 
Acute and LTSS-Non-Institutional: 94%; 
Prescription Drugs: 83%; 
Managed Care and Medicare premium assistance: 66%; 
LTSS Institutional: 98%; 
Medicare: 107%. 

State: Oregon; 
Hospital expenditures: 94%; 
Acute and LTSS-Non-Institutional: 52%; 
Prescription Drugs: 95%; 
Managed Care and Medicare premium assistance: 98%; 
LTSS Institutional: 93%; 
Medicare: 96%. 

State: Pennsylvania; 
Hospital expenditures: 86%; 
Acute and LTSS-Non-Institutional: 60%; 
Prescription Drugs: 107%; 
Managed Care and Medicare premium assistance: 98%; 
LTSS Institutional: 89%; 
Medicare: 100%. 

State: Rhode Island; 
Hospital expenditures: 68%; 
Acute and LTSS-Non-Institutional: 73%; 
Prescription Drugs: 101%; 
Managed Care and Medicare premium assistance: 65%; 
LTSS Institutional: 169%; 
Medicare: 100%. 

State: South Carolina; 
Hospital expenditures: 113%; 
Acute and LTSS-Non-Institutional: 89%; 
Prescription Drugs: 92%; 
Managed Care and Medicare premium assistance: 103%; 
LTSS Institutional: 91%; 
Medicare: 100%. 

State: South Dakota; 
Hospital expenditures: 117%; 
Acute and LTSS-Non-Institutional: 90%; 
Prescription Drugs: 105%; 
Managed Care and Medicare premium assistance: 678%; 
LTSS Institutional: 100%; 
Medicare: 100%. 

State: Tennessee; 
Hospital expenditures: 87%; 
Acute and LTSS-Non-Institutional: 121%; 
Prescription Drugs: 98%; 
Managed Care and Medicare premium assistance: 100%; 
LTSS Institutional: 94%; 
Medicare: 100%. 

State: Texas; 
Hospital expenditures: 63%; 
Acute and LTSS-Non-Institutional: 97%; 
Prescription Drugs: 93%; 
Managed Care and Medicare premium assistance: 93%; 
LTSS Institutional: 99%; 
Medicare: 100%. 

State: Utah; 
Hospital expenditures: 102%; 
Acute and LTSS-Non-Institutional: 133%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 126%; 
LTSS Institutional: 96%; 
Medicare: 99%. 

State: Vermont; 
Hospital expenditures: 461%; 
Acute and LTSS-Non-Institutional: 826%; 
Prescription Drugs: 64%; 
Managed Care and Medicare premium assistance: 93%; 
LTSS Institutional: 102%; 
Medicare: 100%. 

State: Virginia; 
Hospital expenditures: 74%; 
Acute and LTSS-Non-Institutional: 92%; 
Prescription Drugs: 98%; 
Managed Care and Medicare premium assistance: 130%; 
LTSS Institutional: 100%; 
Medicare: 100%. 

State: Washington; 
Hospital expenditures: 92%; 
Acute and LTSS-Non-Institutional: 99%; 
Prescription Drugs: 112%; 
Managed Care and Medicare premium assistance: 90%; 
LTSS Institutional: 75%; 
Medicare: 100%. 

State: West Virginia; 
Hospital expenditures: 104%; 
Acute and LTSS-Non-Institutional: 115%; 
Prescription Drugs: 100%; 
Managed Care and Medicare premium assistance: 101%; 
LTSS Institutional: 99%; 
Medicare: 100%. 

State: Wisconsin; 
Hospital expenditures: 140%; 
Acute and LTSS-Non-Institutional: 64%; 
Prescription Drugs: 104%; 
Managed Care and Medicare premium assistance: 79%; 
LTSS Institutional: 89%; 
Medicare: 55%. 

State: State: Wyoming; 
Hospital expenditures: 125%; 
Acute and LTSS-Non-Institutional: 99%; 
Prescription Drugs: 98%; 
LTSS Institutional: 90%; 
Medicare: 100%. 

Source: GAO analysis of Centers for Medicare & Medicaid Services' data. 

Note: Four states-—Maine, Mississippi, Vermont, and Wyoming—-reported 
$0 in expenditures related to the managed care and Medicaid premium 
assistance category. 

Adjustments were made by adding expenditures reported in CMS-64 to 
those reported in the Medicaid Statistical Information System (MSIS). 
Specifically, we added Disproportionate Share Hospital payments, 
national and state rebates for prescription drugs, Medicaid health 
insurance payments, and Medicare premiums to the expenditures reported 
in MSIS. No adjustments were made for acute and long-term support 
services (LTSS)-noninstitutional and LTSS-institutional. 

[End of figure] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Carolyn L. Yocom, (202) 512-7114 or yocomc@gao.gov. 

Staff Acknowledgments: 

In addition to the contact named above, Robert Copeland, Assistant 
Director; Muriel Brown; Shaunessye Curry; Greg Dybalski; Sandra 
George; Giselle Hicks; Drew Long; Jessica Morris; and Monica Perez 
Nelson made key contributions to this report. 

[End of section] 

Related GAO Products: 

Medicaid: States Reported Billions More in Supplemental Payments in 
Recent Years. [hyperlink, http://www.gao.gov/products/GAO-12-694]. 
Washington, D.C.: July 20, 2012. 

National Medicaid Audit Programs: CMS Should Improve Reporting and 
Focus on Audit Collaboration with States. [hyperlink, 
http://www.gao.gov/products/GAO-12-627]. Washington, D.C.: June 14, 
2012. 

High Risk Series: An Update. [hyperlink, 
http://www.gao.gov/products/GAO-11-278]. Washington, D.C.: February 
16, 2011. 

Medicaid: CMS Needs More Information on the Billions of Dollars Spent 
on Supplemental Payments. [hyperlink, 
http://www.gao.gov/products/GAO-08-614]. Washington, D.C.: May 30, 
2008. 

Medicaid Demonstration Waivers: Recent HHS Approvals Continue to 
Raise Cost and Oversight Concerns. [hyperlink, 
http://www.gao.gov/products/GAO-08-87]. Washington, D.C.: January 31, 
2008. 

Medicaid Financial Management: Steps Taken to Improve Federal 
Oversight but Other Actions Needed to Sustain Efforts. [hyperlink, 
http://www.gao.gov/products/GAO-06-705]. Washington, D.C.: June 22, 
2006. 

Major Management Challenges and Program Risks: Department of 
Health and Human Services. [hyperlink, 
http://www.gao.gov/products/GAO-03-101]. Washington, D.C.: January 1, 
2003. 

Medicaid Financial Management: Better Oversight of State Claims for 
Federal Reimbursement Needed. [hyperlink, 
http://www.gao.gov/products/GAO-02-300]. Washington, D.C.: February 
28, 2002. 

[End of section] 

Footnotes: 

1. Pub. L. No. 111-148, 124 Stat. 119, as amended by the Health Care 
and Education Reconciliation Act of 2010 (HCERA), Pub. L. No. 111-152, 
124 Stat. 1029. For purposes of this report, references to PPACA 
include the amendments made by HCERA. 

2. PPACA § 2001(a)(1), 124 Stat. 271. 

3. We use FPL to refer to federal poverty guidelines issued by HHS 
each year in the Federal Register. These guidelines provide income 
thresholds that vary by family size and for certain states, and which 
are updated using the Consumer Price Index. 

4. Under the Medicaid program, failure by a state to comply with 
federal requirements may result in a termination of federal Medicaid 
matching funds. However, the U.S. Supreme Court has ruled that states 
that choose not to expand Medicaid eligibility to these newly eligible 
individuals under PPACA will forgo only the matching funds associated 
with such expanded coverage. See National Federation of Independent 
Business, et al., vs. Sebelius, Sec. of Health and Human Services, et 
al., 567 U.S. __, 2012 WL 2427810 (U.S. June 28, 2012). Prior to the 
Supreme Court decision, the CMS Actuary estimated the PPACA Medicaid 
expansion would enroll an additional 15 million individuals in 2014. 
However, in July 2012 the Congressional Budget Office estimated that 
an additional 7 million individuals would enroll in Medicaid and the 
Children’s Health Insurance Program (CHIP) in 2014. 

5. Our list identifies areas that are at high risk because of their 
greater vulnerabilities to waste, fraud, abuse, and mismanagement or 
major challenges associated with their economy, efficiency, or 
effectiveness. 

6. See GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: February 
2011). 

7. States are required to have in operation a mechanized claims-
processing and information-retrieval system based on certain federal 
requirements. See 42 U.S.C. § 1396b(r). For all claims filed on or 
after January 1, 1999, states have been required to electronically 
transmit claims data, including detailed individual enrollee encounter 
data in a format consistent with MSIS. See 42 U.S.C. § 1396b(r)(1)(F). 

8. For purposes of this report, we refer to form CMS-64 as “CMS-64.” 
The form CMS-64 is titled the Quarterly Medicaid Statement of 
Expenditures for the Medical Assistance Program. The information is 
stored in a data set called the Medicaid Budget and Expenditure 
System. States are required to submit aggregate total quarterly 
Medicaid expenditures on the form CMS-64 no later than 30 days after 
the end of each quarter. 42 C.F.R. § 430.30 (2011). 

9. See GAO, Foster Children: HHS Guidance Could Help States Improve 
Oversight of Psychotropic Prescriptions, We used these fiscal years 
because they were the most-recent and most-complete data available at 
the time of our analysis. We examined total MSIS and CMS-64 
expenditures, nationally and by state, by comparing the expenditures 
reported by states in MSIS as a percentage of those reported in CMS-64. 
[hyperlink, http://www.gao.gov/products/GAO-12-201] (Washington, D.C.: 
Dec. 14, 2011). 

10. In this report, we use the term “state” to refer to the 50 states 
and the District of Columbia. We do not include Medicaid 
administrative expenditures, state collections, or expenditures from 
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 were not reported in MSIS during 
fiscal years 2007 through 2009. 

11. While we are matching services between these two data sets, some 
of the expenditures we describe here are not directly tied to a 
Medicaid service in MSIS, such as Medicaid payments for Medicare 
premiums. Other examples of individual service types are inpatient 
hospital, nursing facility, transportation, and rural health clinic 
screenings. Our six combined expenditure categories are (1) hospital, 
(2) acute and long-term support services—noninstitutional, (3) drugs, 
(4) managed care and Medicaid premium assistance, (5) long-term 
support services—institutional, and (6) Medicare. 

12. In general, state Medicaid spending is matched by the federal 
government at a rate that is based, in part, on each state’s per 
capita income according to a formula established by law. The federal 
share of Medicaid expenditures, known as the federal medical assistance 
program, typically ranges from 50 to 83 percent. The federal 
government pays a larger portion of Medicaid expenditures in states 
with low per-capita income relative to the national average, and a 
smaller portion for states with higher per-capita incomes. In fiscal 
year 2012, the largest federal portion was 74.18 percent. 

13. Medicare is the federal health insurance program that covers 
seniors aged 65 and older, and some disabled persons. 

14. Capitation payments are specified amounts of money paid to a 
health plan or doctor. These payments are used to cover the cost of a 
health plan member’s health care services for a certain length of time. 

15. DSH payments are required to be made to hospitals that serve a 
disproportionate share of low-income and Medicaid patients to help 
offset hospitals’ uncompensated costs for serving these individuals. 
See 42 U.S.C. §§ 1396a(a)(13)(A)(iv) and 1396r-4. 

16. GAO, Internal Control: Standards for Internal Control in the 
Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
November 1999). 

17. In addition to studies regarding Medicaid program integrity and 
supplemental payments, as discussed below, our high-risk report also 
indicated that Medicaid demonstration projects were an area of 
concern. See [hyperlink, http://www.gao.gov/products/GAO-11-278]. 

18. See GAO, National Medicaid Audit Programs: CMS Should Improve 
Reporting and Focus on Audit Collaboration with States, [hyperlink, 
http://www.gao.gov/products/GAO-12-627] (Washington, D.C.: June 14, 
2012). 

19. Supplemental payments are payments separate from and in addition 
to those made at a state’s standard Medicaid payment rate and include 
DSH payments. DSH payments are made to hospitals that treat large 
numbers of Medicaid and uninsured individuals. Other supplemental 
payments, or non-DSH payments, are made to providers above the 
standard Medicaid payment rates but within the Upper Payment Limit, 
which is the estimated amount that Medicare pays for comparable 
services. States have made non-DSH supplemental payments to hospitals, 
nursing homes, physician groups, and other Medicaid providers. See 
GAO, Medicaid: States Reported Billions More in Supplemental Payments 
in Recent Years, [hyperlink, http://www.gao.gov/products/GAO-12-694] 
(Washington, D.C.: July 20, 2012) and Medicaid: CMS Needs More 
Information on the Billions of Dollars Spent on Supplemental Payments, 
[hyperlink, http://www.gao.gov/products/GAO-08-614] (Washington, D.C.: 
May 30, 2008). 

20. For purposes of this report, we defined “similar” to include MSIS 
expenditures within 98 to 102 percent of CMS-64 expenditures. 

21. Medicaid provides assistance to low-income elderly individuals who 
are also eligible for Medicare, called “dual eligibles.” This 
assistance can include covering Medicare premiums and cost sharing. 

22. In fiscal years 2007 through 2009, the CMS-64 included 
expenditures for DSH payments on line 1B for Inpatient Hospitals and 
2B for Mental Health Facilities on the CMS-64, but these were not 
reported in MSIS. 

23. Totals do not add up due to rounding. 

24. In fiscal years 2007 through 2009, the CMS-64 included 
expenditures for Medicare on lines 17A–D of the CMS-64, including rows 
for Medicare premiums, but the expenditures were not reported in MSIS. 
See line 17A for Medicare Health Insurance Payments Part A premiums, 
line 17B for Medicare Health Insurance Payments Part B premiums, line 
17C1 for 120–134 percent of the poverty level, line 17C2 for 135–175 
percent of the poverty level. 

25. In fiscal years 2007 through 2009, while MSIS did not include 
Medicare premiums, both CMS-64 and MSIS did include Medicaid 
expenditures for Medicare coinsurance and deductibles. However, MSIS 
includes these expenditures within the various expenditure types. 
Therefore, these expenditures cannot be tracked as a Medicare 
coinsurance or deductible using the MSIS annual person summary file. 
As a result, since expenditures from Medicare coinsurance and 
deductibles exist in MSIS, but are not captured in the Medicare 
category, we did not adjust for this, as doing so would double count 
these expenditures. In fiscal year 2009, the amount for Medicare 
coinsurance and deductibles in CMS-64 was approximately $908 million. 

26. In fiscal years 2007 through 2009, the CMS-64 included 
expenditures for prescription drug rebate offsets on rows 7A1 for 
national agreements and 7A2 for state side bar agreements of the CMS-
64, but these were not reported in MSIS. 

27. Totals do not add up due to rounding. 

28. CMS officials told us that some states did include rebates in 
their MSIS totals. We were unable to adjust for these since MSIS is 
not set up to separate rebates from other reported data. 

29. In fiscal years 2007 through 2009, the CMS-64 included 
expenditures for Medicaid health insurance payments on rows 18C 
(Medicaid health insurance payments–Group Health Plan Payments), 18D 
(Medicaid health insurance payments–Coinsurance and Deductibles) and 
18E (Medicaid health insurance payments–Other), but these were not 
reported in MSIS. 

30. MSIS Guidance: The CMS MSIS File Specifications and Data 
Dictionary provides information, including definitions, for MSIS 
reporting. CMS-64 Guidance: The Category of Service Line Definitions 
for the 64.9 provides information, including definitions, for CMS-64 
reporting of net expenditures. 

31. In general, service type definitions used for reporting 
expenditures on the CMS-64 are derived from federal regulation. See 42 
C.F.R. part 440. (2011). 

32. CMS added several new lines to the form CMS-64 in fiscal year 
2010, including lines for states to report supplemental payments 
within each category of care for several expenditure types. 

33. CMS officials indicated that, on a rare occasion, states may 
report supplemental payments at the individual claims level. Overall, 
states report few supplemental payments in MSIS. 

34. See [hyperlink, http://www.gao.gov/products/GAO-12-694]. 

35. See [hyperlink, http://www.gao.gov/products/GAO-11-278]. 

36. CMS officials indicated that some states have also not reported 
their data in prior years. Additionally, the MSIS delay did not affect 
our ability to analyze the data because we used the most-recent and 
most-complete data available, fiscal years 2007 through 2009. 

37. The MSIS State Data Characteristics/Anomalies Report identifies 
MSIS data that are not reconciled after quality checks are completed 
between CMS and the state. 

38. The 1915(c) waivers are one of many options available to states to 
allow the provision of long-term care services in home and community-
based settings under the Medicaid program. States’ programs can offer 
a combination of standard medical services, and nonmedical services, 
including homemaker, home health aide, personal care, adult day health 
services, habilitation, and respite care. See Social Security Act 
§1915(c), codified at 42 U.S.C. § 1396n(c). 

39. Under a Certified Public Expenditure arrangement, a government 
provider, such as a county hospital, certifies to a state the amount 
of expenditures for a Medicaid-covered service provided to a Medicaid 
beneficiary. The state obtains federal Medicaid matching funds based 
on the amount of the expenditure. 

40. 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), Medicaid administrative expenses, or state collections in 
the CMS-64 because they were not reported in MSIS during fiscal years 
2007 through 2009. 

41. We used these fiscal years because they were the most-recent and 
most-complete data available at the time of our analysis. 

42. We define the baseline to be our initial calculations of total 
Medicaid expenditures as reported by CMS-64 and MSIS for all 50 states 
and the District of Columbia. Therefore, the baseline does not include 
any adjustments to the data. There is a baseline expenditure amount 
for CMS-64 and another for MSIS. Additionally, U.S. territories were 
excluded from our analysis because they do not report any Medicaid 
claims in MSIS. 

43. MSIS includes some lump sum expenditures that are not captured 
using the annual person summary file. 

44. MSIS data are available in several file formats, including (1) 
full files with detailed claims and enrollment data by individual, 
such as encounters, name of provider, and type of care as reported 
directly by the states; (2) annual person summary files of expenditure 
data, which summarize all the data for a person for the fiscal year, 
but exclude some encounter details included in the full file (for 
example, the summary file may not include details regarding the care 
encounter, such as individual cost per encounter; however, it does 
include monthly enrollment data); (3) Medicaid Analytic eXtract (MAX) 
files, which are considered to have the highest-quality data, but also 
have the greatest delay in availability-—up to 3 years; and (4) the 
State Summary DataMart, which is a public online data system that 
provides state aggregated Medicaid claims, but not by the individual 
person. 

45. The monthly eligibility categories include both Medicaid and CHIP. 
The eligibility categories and their MSIS coding are: 0=ineligible, 
1=Medicaid, 2=Medicaid Expansion CHIP (M-CHIP), 3=CHIP non-Medicaid 
(also known as S-CHIP), and 4=CHIP unknown (also interpreted to mean 
that the eligibility overall is unknown). 

46. Instead of a M-CHIP program, a state may elect to have a stand-
alone CHIP program that is operated separately from the Medicaid 
program. Stand-alone programs are referred to as S-CHIP. 

47. Although M-CHIP programs operate as expansions of Medicaid 
programs, expenditures are considered CHIP expenditures rather than 
Medicaid expenditures. 

48. Expenditures in MSIS for enrollees whose eligibility was listed as 
S-CHIP totaled $481 million in fiscal year 2009, or less than 1 
percent of total Medicaid expenditures reported in MSIS. 

49. Expenditures in MSIS for enrollees whose eligibility was listed as 
unknown or ineligible totaled approximately $28 billion and $6 
billion, respectively, in fiscal year 2009; or approximately 9 percent 
and 2 percent of total Medicaid expenditures reported in MSIS. 

50. While we are matching services between these two data sets, some 
of the expenditures we describe here are not directly tied to a 
Medicaid service in MSIS, such as Medicaid payments for Medicare 
premiums. 

51. State collections include offsetting collections from third-party 
liability, estate, and other recoveries. 

52. Medicaid expenditures reported on line 17C1 include premiums paid 
for Medicare Part B for individuals whose income is 120–134 percent of 
the poverty level. Medicaid expenditures reported on line 17C2 include 
the percentage of the Medicare Part B premium attributable to the Home 
Health Benefit transferred from Part A to Part B for individuals whose 
income is 135–175 percent of the poverty level. 

53. Unlike the other adjustments, the adjustment for prescription drug 
rebates decreases the spending reported in MSIS. Prescription drug 
spending is overreported in MSIS because rebates are not included in 
the data set. Consequently, for this category we subtracted the 
amounted reported in CMS-64 for prescription drug rebates from the 
amount in MSIS. 

[End of section] 

GAO’s Mission: 

The Government Accountability Office, the audit, evaluation, and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the 
performance and accountability of the federal government for the 
American people. GAO examines the use of public funds; evaluates 
federal programs and policies; and provides analyses, recommendations, 
and other assistance to help Congress make informed oversight, policy, 
and funding decisions. GAO’s commitment to good government is 
reflected in its core values of accountability, integrity, and 
reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO’s website [hyperlink, http://www.gao.gov]. Each 
weekday afternoon, GAO posts on its website newly released reports, 
testimony, and correspondence. To have GAO e-mail you a list of newly 
posted products, go to [hyperlink, http://www.gao.gov] and select 
“E-mail Updates.” 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of 
production and distribution and depends on the number of pages in the 
publication and whether the publication is printed in color or black 
and white. Pricing and ordering information is posted on GAO’s 
website, [hyperlink, http://www.gao.gov/ordering.htm]. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 
MasterCard, Visa, check, or money order. Call for additional 
information. 

Connect with GAO: 

Connect with GAO on facebook, flickr, twitter, and YouTube.
Subscribe to our RSS Feeds or E mail Updates. Listen to our Podcasts.
Visit GAO on the web at [hyperlink, http://www.gao.gov]. 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 
Website: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]; 
E-mail: fraudnet@gao.gov; 
Automated answering system: (800) 424-5454 or (202) 512-7470. 

Congressional Relations: 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-4400
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, DC 20548. 

Public Affairs: 
Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149 
Washington, DC 20548. 

[End of document]