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Out for Blood? For Routine Lab Work, the Hospital Billed Her $2,400

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Rachana Pradhan
Tue, 21 Nov 2023 10:00:00 +0000

Reesha Ahmed was on cloud nine.

It was January and Ahmed was at an OB-GYN’s office near her home in Venus, Texas, for her first prenatal checkup. After an ultrasound, getting anti-nausea medication, and discussing her pregnancy care plan, she said, a nurse made a convenient suggestion: Head to the lab just down the hall for a standard panel of tests.

The lab was inside Texas Health Hospital Mansfield, which opened in December 2020 in a Dallas-Fort Worth suburb. Ahmed, just eight weeks pregnant, said the doctor told her everything about the visit was routine. “Nothing really stood out,” Ahmed said. “And, of course, there’s just a lot of excitement, and so I really didn’t think twice about anything.”

Her blood tests checked for multiple sexually transmitted infections, her blood type, and various hormones. Within days, Ahmed began bleeding and her excitement turned to fear. A repeat ultrasound in early February showed no fetus.

“My heart kind of fell apart at that moment because I knew exactly what that meant,” she said. She would have a miscarriage.

Then the bills came.

The Patient: Reesha Ahmed, 32, has an Anthem Blue Cross and Blue Shield policy through her employer.

Medical Services: An analysis of Pap smear results and several blood tests in tandem with Ahmed’s initial prenatal visit, including complete blood count, blood type, and testing for STIs such as hepatitis B, syphilis, and HIV.

Service Provider: Ahmed got her tests at Texas Health Mansfield, a tax-exempt hospital jointly operated by Texas Health Resources, a faith-based nonprofit health system, and AdventHealth, another religious nonprofit.

Total Bill: The hospital charged $9,520.02 for the blood tests and pathology services. The insurer negotiated that down to $6,700.50 and then paid $4,310.38, leaving Ahmed with a lab bill of $2,390.12.

What Gives: Ahmed’s situation reveals how hospital-based labs often charge high prices for tests. Even when providers are in network, a patient can be on the hook for thousands of dollars for common blood tests that are far cheaper in other settings. Research shows hospitals typically charge much more than physicians’ offices or independent commercial labs for the same tests.

The situation was particularly difficult for Ahmed because she had lost the pregnancy.

“To come to terms with it mentally, emotionally, physically — dealing with the ramifications of the miscarriage — and then having to muster up the fighting strength to then start calling your insurance, and the billing department, the provider’s office, trying to fight back a bill that you don’t feel like you were correctly sent? It’s just, it’s a lot,” she said.

In Texas, the same lab tests were at least six times as expensive in a hospital as in a doctor’s office, according to research from the Health Care Cost Institute, a nonprofit that examines health spending.

The markup can be even higher depending on the test. HCCI data, based on 2019 prices, shows the median price for a complete blood count in Texas was $6.34 at an independent lab and $58.22 at a hospital. Texas Health charged Ahmed $206.69 for that test alone.

“It is convenient to get your lab done right in the same building,” said Jessica Chang, a senior researcher at HCCI, but “many patients are not thinking about how highly marked up these lab tests are.” Chang said she suspects many hospitals tack on their overhead costs when they bill insurance.

Anthem also charged Ahmed for at least four tests that most insurance plans would consider preventive care and therefore covered at no cost to patients under the Affordable Care Act’s requirements for covering preventive care, which includes aspects of prenatal care. Her EOBs, or “explanation of benefits” notices, show she paid out-of-pocket for a test identifying her Rh factor — which detects a protein on the surface of red blood cells — as well as for tests for hepatitis B, hepatitis C, and syphilis.

Asked to review Ahmed’s tests, Anthem spokesperson Emily Snooks wrote in an email to KFF Health News that the claims “were submitted as diagnostic — not preventive — and were paid according to the benefits in the member’s health plan.”

There “definitely shouldn’t be” out-of-pocket costs for those screenings, said Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms.

The Centers for Disease Control and Prevention recommends screening pregnant patients for several infectious diseases that pose major risks during pregnancy. Ina Park, a professor of family community medicine at the University of California-San Francisco and an expert on STIs, said the tests Ahmed received didn’t raise red flags from a clinical perspective. “It’s really more what the actual lab charged based on what the tests actually cost,” Park said. “This is a really exorbitant price.”

For example, Ahmed paid $71.86 in coinsurance for a hepatitis B test for which the hospital charged $418.55. The hospital charged $295.52 to screen for syphilis; her out-of-pocket cost was $50.74.

“You just wonder, is the insurance company really negotiating with this provider as aggressively as they should to keep the reimbursement to a reasonable amount?” Corlette said.

The Resolution: Ahmed refused to pay the bills and Texas Health sent the debt to collections. When she tried to get answers about the costs, she said she was bounced between the doctor’s office and the hospital billing department. Ahmed submitted a complaint to the Texas attorney general’s office, which passed it to the Texas Health and Human Services Commission. She never heard back.

According to Ahmed, a hospital representative suggested her bloodwork might have been coded incorrectly and agreed the charges “were really unusually high,” Ahmed said, but she was told there was nothing the hospital could do to change it. The hospital did not comment on the reason behind the high charge. And in a March 7 email, an AdventHealth employee told Ahmed the doctor’s office had “no control” over the hospital’s billing.

Ahmed filed an appeal with Anthem, but it was denied. The insurance company stated the claims were processed correctly under her benefits, which cover 80% of what the insurer agrees to pay for in-network lab services after she meets her deductible. Ahmed has a $1,400 deductible and a $4,600 out-of-pocket maximum for in-network providers.

“We depend on health care providers to submit accurate billing information regarding what medical care was needed and delivered,” Snooks said. Asked about reimbursements to the Texas Health lab, she added, “The claim was reimbursed based on the laboratory’s contract with the health plan.”

After a KFF Health News reporter contacted Texas Health on Oct. 9, the hospital called Ahmed on Oct. 10 and said it would zero out her bills and remove the charges from collections. Ahmed was relieved, “like a giant burden’s just been lifted off my shoulders.”

“It’s just been fighting this for 10 months now, and it’s finally gone,” she said.

Texas Health Resources and AdventHealth declined to respond to detailed questions about Ahmed’s charges and the tests she was directed to obtain.

“We are sorry Ms. Ahmed did not get clarity on her care with us. Our top priority is to provide our patients with safe, effective and medically appropriate care,” Laura Shea, a spokesperson for the hospital, said in an emailed statement.

The Takeaway: Ahmed’s problem demonstrates the pitfalls of using a hospital lab for routine testing.

For standard bloodwork “it’s really hard to argue that there’s a quality difference” between independent labs and hospitals that would warrant higher prices, Chang said. That holds true for other services, too, like imaging. “There’s nothing special about the machines that hospitals use for a CT or MRI scan. It’s the same machine.”

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Broadly, state and federal lawmakers are paying attention to this issue. Congress is considering legislation that would equalize payments for certain services regardless of whether they are provided in a hospital outpatient department or a doctor’s office, although not lab services. Hospitals have tried to fend off such a policy, known as “site-neutral payments.”

For example, the Lower Costs, More Transparency Act would require the same prices under Medicare for physician-administered drugs regardless of whether they’re given in a doctor’s office or an off-campus hospital outpatient department. That bill also would require labs to make public the prices they charge Medicare for tests. Another bill, the Bipartisan Primary Care and Health Workforce Act, would ban hospitals from charging commercial health plans some facility fees — which they use to cover operating or administrative expenses.

According to the National Conference of State Legislatures, Colorado, Connecticut, Ohio, New York, and Texas have limited providers’ ability to charge privately insured patients facility fees for certain services. Colorado, Connecticut, Maryland, and New York require health facilities to disclose facility fees to patients before providing care; Florida instituted similar requirements for free-standing emergency departments.

Patients should keep copies of itemized bills and insurance statements. While not the only evidence, those documents can help patients avoid out-of-pocket costs for recommended preventive screenings.

For now, patients can proactively avoid such extreme bills: When your doctor says you need blood tests, ask that the requisition be sent to a commercial lab like Labcorp or Quest Diagnostics that is in your network and have the tests done there. If they can’t do it electronically, ask for a paper requisition.

“Don’t always just go to the lab that your doctor recommends to you,” Corlette said.

Stephanie O’Neill reported the audio story.

Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

——————————
By: Rachana Pradhan
Title: Out for Blood? For Routine Lab Work, the Hospital Billed Her $2,400
Sourced From: kffhealthnews.org/news/article/routine-bloodwork-lab-work-tests-surprise-bill/
Published Date: Tue, 21 Nov 2023 10:00:00 +0000

Kaiser Health News

Trump Health Care Proposal Billed as Consumer Protection but Adds Enrollment Hoops

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kffhealthnews.org – Julie Appleby, KFF Health News – 2025-03-10 19:15:00

The Trump administration issued its first major set of proposed changes to the Affordable Care Act on Monday that federal officials said are intended to crack down on fraud in the program. Policy experts said they will make it harder for consumers to sign up for coverage, potentially reducing enrollment.

Details were released Monday after a draft press release was inadvertently posted earlier.

About 24 million Americans signed up for insurance plans sold under the ACA, known popularly as Obamacare, for 2025. The Biden administration achieved record enrollment levels after increasing premium subsidies for many lower-income people, which resulted in reducing the monthly cost of some plans to $0. It also made it easier for some very low-income people to sign up at any time of year, instead of waiting for an enrollment period each fall. But the program became plagued by fraudulent enrollment last year, generating about 274,000 consumer complaints through August, most focused on rogue insurance agents and other bad actors, to the Centers for Medicare & Medicaid Services.

The Trump administration said in a statement Monday that the new regulations include “critical and necessary steps to protect people from being enrolled in Marketplace coverage without their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial assistance only for the people the ACA set out to support.”

Policy experts said the changes, though, will impose new paperwork burdens likely to hamper enrollment.

“Under this banner of trying to crack down on the bad actions of some insurance brokers, they are penalizing consumers, particularly low-income consumers, with more burdensome requirements and more limits on their access to coverage,” said Sabrina Corlette, a research professor and the co-director of the Center on Health Insurance Reforms at Georgetown University.

Among other new requirements, consumers would have to provide more information proving their eligibility for special enrollment periods and for premium subsidies when they enroll. The regulation would also shorten the annual enrollment period by a month. And it touches on social issues, limiting eligibility for “Dreamers” — a nickname for immigrants in the country illegally who were brought here as children, based on never-passed proposals in Congress called the DREAM Act.

The proposal would eliminate the year-round opportunity for a special enrollment period for people with very low incomes. But it would also set new requirements for the remaining special enrollment periods, which allow people to sign up after major life events, such as when their income changes, they lose their job-based coverage, or they get divorced, marry, or move. They would now have to provide evidence of their eligibility when applying under those special situations.

People auto-reenrolled into zero-premium plans during the regular enrollment period would be charged a small monthly payment until they confirm or update their information.

The ACA marketplaces, according to the proposal, would have to seek additional data from consumers, including the self-employed or gig workers, who estimate their income for the coming year but don’t have tax return data filed with the IRS for previous years.

The Biden administration made changes to reduce fraudulent enrollment last year including requiring three-way calls among insurance brokers, their clients, and the federal insurance marketplace, healthcare.gov, when certain sign-ups or coverage changes were made.

Some of the Trump administration’s proposed changes could help warn certain consumers that they’ve been unknowingly enrolled in an ACA plan, such as a requirement that some customers on even the least expensive plans receive a small, monthly premium bill.

However, the additional paperwork and other eligibility requirements “will probably have a downward effect on enrollment,” said Cynthia Cox, a vice president and the director of the Program on the ACA at KFF, a health information nonprofit that includes KFF Health News. “Some of that could be protecting enrollees who were fraudulently signed up or don’t realize they’re still signed up.”

Still, it could prove difficult for some people if they’re not able to document an expected change in income. “They might have a legitimate claim but have a hard time demonstrating it,” Cox said.

The annual open enrollment period would end Dec. 15, a month earlier than this year. The designated period is when most people sign up and is intended to prevent people from waiting until they get sick to enroll, a move that helps slow premium growth.

The Trump proposal also touches on social issues.

It would reverse the Biden administration policy that allows Dreamers to qualify for subsidized ACA coverage. That decision is already the subject of a court challenge brought by 19 states seeking to overturn it.

Also under the Trump proposal, gender-affirming care would not be considered part of the “essential health benefits” that all plans must cover.

According to an FAQ that accompanied the initial press release of the proposed regulations, the provision could “lead to increased out-of-pocket costs for individuals requiring sex-trait modification services, as they may need to seek plans that offer this coverage as a non-EHB or pay for services out-of-pocket.”

As a proposed rule, the measures now face a public comment period and potential revision before being finalized.

“None of it will go into effect right away,” said Katie Keith, director of the Center for Health Policy and the Law at Georgetown University. “The question is how much will apply in 2025 versus 2026.”

The FAQ acknowledged that some of the proposed changes, including ending year-round enrollment for very low-income people, “may increase the administrative burden for consumers associated with enrollment and verification processes or could deter some eligible low-income individuals from enrolling.”

But, it continued, “we believe that enhancing program integrity and reducing improper enrollments outweighs these potential impacts on access to coverage.”

Some lawmakers and conservative groups have pointed to the concerns about unauthorized enrollment and the role, if any, that ACA subsidies or enrollment periods have in fueling the problem.

The right-leaning Paragon Health Institute, for example, released a report in June that, among other things, called for the Biden administration’s expansion of the special enrollment period for low-income people to be reversed.

“There is substantial amounts of fraud and waste in the ACA exchanges and the Biden administration pursued the enrollment-at-all costs strategy, and was tolerant of the waste, fraud and abuse,” said Brian Blase, a former health aide during Trump’s first presidency who is president of the Paragon Health Institute and influential within the current Trump administration. “Clearly a different approach to protect legitimate enrollees and taxpayers is needed.”

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She Co-Founded the Office That Became DOGE. Now, She Sees ‘Irresponsible Transformation.’

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kffhealthnews.org – Sarah Kwon – 2025-03-10 04:00:00

Jennifer Pahlka is perhaps best known as the founder of Code for America, a widely respected nonprofit that helped formalize the principles of civic tech, a movement leveraging design and technology expertise to improve public access to government services and data. Notably, the organization reimagined the online application for California’s food assistance program, which once had one of the country’s lowest participation rates, transforming it from a 45-minute endeavor requiring a computer to a mobile-friendly process that can be completed in under 10 minutes.

Pahlka’s 2023 book, “Recoding America,” outlines her views on why the government so often fails to achieve its policy goals in the digital age. In it, she argues that “archaeological” layers of policies, regulations, and processes center the bureaucracy, not the public.

As a deputy chief technology officer under President Barack Obama, Pahlka helped launch the United States Digital Service, a unit within the White House that paired top technology talent with federal agencies to make government services more efficient and user-friendly. It was the predecessor to Elon Musk’s “Department of Government Efficiency,” or DOGE. On Feb. 25, 21 employees resigned from the renamed service, saying they would not “carry out or legitimize DOGE’s actions.”

Pahlka believes bolstering the government’s tech chops and relying less on contractors could save taxpayer dollars. However, as the administration looks to slash spending, she worries that DOGE’s “very indiscriminate” approach to date could wind up harming people who rely on public benefits such as Medicaid.

KFF Health News spoke to Pahlka, now a senior fellow at the nonpartisan Niskanen Center, about what she sees as “irresponsible transformation” and how best to fast-track government reform. This interview, conducted in mid-February, has been edited for length and clarity.

Q: You’ve made a career of bringing Silicon Valley talent into the public sector to improve the delivery of government services. What have you learned from mixing tech with government?

A: It’s really easy to look from the outside of government and say, “That’s crazy it works that way. I’m going to go in and fix it.” And when you get in, it’s that way for a reason, and you gain so much more empathy and sympathy for people in public service. You realize that people who you thought were obstructionists actually are just trying to do their jobs.

Civil servants deserve respect. We’re just not transforming government fast enough.

Q: What are the key changes you think would speed things up?

A: One, you have to be able to hire the right people and fire the wrong ones.

You also have to be able to reduce procedural bloat. When the unemployment insurance crisis hit, every state’s labor commissioner got called in front of the legislature and yelled at for the backlog. Rob Asaro-Angelo in New Jersey brought boxes and boxes of paper — 7,119 pages of active regs. And when they kept yelling, he kept pointing them to them and saying, “You can’t be scalable with 7,119 pages of regulations.”

The third pillar is investment in digital and data infrastructure.

And the fourth is closing the loop between policy and implementation. In California, you get thousands of bills introduced every year in the legislature. We don’t need that many. We need legislators to follow up on bills that have already been passed, see if they’re working, tweak them if they’re not. They need to go into agencies and say, “If this is hard for you to do, what mandates and constraints can we remove so you can make this a priority?”

Q: Civic technologists pushed through layers of bureaucracy in California to boost participation in the Supplemental Nutrition Assistance Program. How did that process unfold?

A: When we started working on California’s SNAP application, it was 212 questions. It started from, “What are all the policies that we need to comply with?” Instead of, “How would this be easy for someone to use?”

I think it can always be helpful to have fresh eyes on something. If those eyes have experience in consumer technology, they’re going to see through that lens of, “How do we deliver something that is easy for people to use?”

Q: House Republicans are considering deep financial cuts to safety net programs such as SNAP and Medicaid, and restricting eligibility. In recent years, organizations including Code for America have received hundreds of millions in private funding to modernize social safety net programs and make them more accessible. How optimistic do you feel that these efforts will progress over the next four years?

A: Let me say what I hope for: I hope that the states now get that when we don’t transform fast enough in a responsible way, you are inviting irresponsible transformation. I hope this gives governors and mayors all over the country a kick in the butt to say, “Whatever we have done so far, it has been insufficient. We really need to work on the capacity of our state to deliver in a modern era.”

Q: What do you mean by irresponsible transformation?

A: Maybe there is good stuff that DOGE is doing now that I don’t know about or good stuff that they will do in the future. I don’t have a crystal ball. But I do see that there is a huge difference between illegally stopping payments without Congress’ permission and making an IT system work better.

Q: To that point, DOGE’s purview seems to have shifted from modernizing government systems to, ostensibly, rooting out fraud, waste, and abuse. What do you make of that change?

A: I think the thesis that better technology could reduce waste, fraud, and abuse is sound, but you want to see both better use of technology to ensure that taxpayer dollars aren’t wasted, and that people who need their benefits are going to get them. You need a North Star that includes both of those things.

Q: And you’re not seeing that in DOGE?

A: They have not expressed great care for what damage can happen to people who rely on benefits. I’m just seeing large, very indiscriminate cuts.

They have signaled that government needs its own internal tech capacity and that it’s shocking how reliant on contractors our government is. I would agree with that.

We have a very dysfunctional government technology contracting ecosystem. There’s this set of big firms that we’ve outsourced our technology to that get to charge taxpayers a shocking amount of money to implement changes.

Q: Thousands of federal workers are now being pushed out. In light of your view that we outsource too much, what are your feelings on that?

A: We’ve overrelied on the idea that we should bring people in from the outside and underinvested in helping career civil servants to do transformation work themselves.

When I wrote my book, the biggest hero was Yadira Sánchez, who I think now has been at the Centers for Medicare & Medicaid Services for 25 years. She’s a leader who really pushes for the kinds of decisions that are going to make a service for doctors that’s going to be usable. She gets pushback and comes back and says, “If you make that decision, we are going to alienate doctors. They’re going to stop taking Medicare patients. And we’ve got to do it this different way.”

We need more of her, and we need to empower lots of people like that.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

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Medicaid Advocates Say Critics Use Loaded Terms To Gain Edge in Congressional Debate

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kffhealthnews.org – Phil Galewitz, KFF Health News – 2025-03-07 04:00:00

In Washington’s debate over enacting steep funding cuts to Medicaid, words are a central battleground.

Many Republican lawmakers and conservative policy officials who want to scale back the joint state-federal health program are using charged language to describe it. Language experts and advocates for Medicaid enrollees say their word choice is misleading and aims to sway public opinion against the popular, 60-year-old government program in a bid to persuade Congress to cut funding.

Republicans such as Sen. Bill Cassidy of Louisiana, chair of the Senate Health, Education, Labor and Pensions Committee, are deploying provocative terms such as “money laundering,” rebranding a decades-old — and legal — practice known as provider taxes, which most states use to gain additional federal Medicaid funds.

They say it’s “discrimination” that the federal government matches state funding at a higher rate for adults covered by the Affordable Care Act’s Medicaid expansion than it does for other enrollees, including children, pregnant women, and disabled people.

And many Republicans, including House Speaker Mike Johnson and the director of the Office of Management and Budget, Russell Vought, have described adults who gained Medicaid coverage through the ACA expansion as “able-bodied” as they push for federal work requirements.

The term implies they have less need for government assistance than other Medicaid recipients — even though some have health conditions or caregiving responsibilities that make holding full-time jobs difficult.

“Able-bodied adults without dependents are better off with jobs than with hand-outs, and so are their communities and American taxpayers,” Sen. John Kennedy (R-La.) said in a press release in February.

To be sure, political spin is a practice older than Washington, and Democrats are no spectators in the war of words. But what’s striking about the latest GOP effort is that it is focused on cutting a health program for the nation’s poorest residents to pay, in part, for tax cuts for wealthier Americans.

A KFF poll conducted last month and released Friday found that support for proposed changes to Medicaid can wax or wane depending on what individuals are told about the program.

For example, the poll found about 6 in 10 adults support work requirements, with the same portion of respondents believing incorrectly that most working-age adults on Medicaid are unemployed. In fact, about two-thirds work.

KFF’s poll also showed that support for work requirements drops to about 3 in 10 adults when those who initially supported them hear that most Medicaid enrollees are already working and that, if the requirements were implemented, many would risk losing coverage because of the burden of proving eligibility.

When respondents initially opposed to work requirements were told they could allow Medicaid to be reserved for groups like the elderly, people with disabilities, and low-income children, support for them increased to 77%.

Steven Mintz, a history professor at the University of Texas, said the Medicaid debate likely will be won not on the facts, but instead on which party can describe it in terms that gain the most public support. “Words are wielded as weapons,” he said.

Republicans’ word choices are designed to appeal to people’s prejudices about Medicaid, he said, adding that “loaded” terms help divert attention from a detailed policy discussion.

“Words help reinforce a position that people already lean toward,” he said.

Sara Rosenbaum, professor emerita of health law and policy at George Washington University, said conservatives who have long tried to shrink Medicaid have an obvious motivation.

“These people spend their lives trying to ruin the program by searching for the newest slogans, the newest quips, and the newest nonsensical monikers that they think somehow will persuade Congress to completely upend the program and take benefits away from tens of millions of people,” she said.

Medicaid and the closely related Children’s Health Insurance Program cover nearly 80 million low-income and disabled people — roughly 1 in 5 Americans. Enrollment and spending soared in the past decade due largely to the covid pandemic and the decision by more states to expand Medicaid under the ACA. Polling shows the program is nearly as popular as Medicare, the health program primarily for those 65 or older — with about 3 in 4 Americans holding a favorable opinion of Medicaid.

The House of Representatives’ budget resolution, a blueprint that narrowly passed Feb. 25 with no Democratic support, calls for cuts of at least $880 billion over a decade largely from federal health and energy programs. A separate Senate resolution with no such cuts — so far — is also in play. Any proposal would need to pass both chambers.

Democrats fear most of those cuts will come from Medicaid. Trump has vowed not to touch Medicare, leaving few if any alternatives. He has said he would “cherish” Medicaid and go after only waste, fraud, and abuse in the program without offering details on how those would be interpreted — and he endorsed the House’s blueprint calling for cuts.

States and the federal government share in the financing of Medicaid, with the federal government paying from 50% to 77% of the cost of providing services to most beneficiaries. The rate is 90% for beneficiaries receiving coverage through their state’s Medicaid expansion program.

The federal matching rate varies based on a state’s per capita income relative to the national average; states with lower per capita incomes have higher matching rates. The remaining share of program funding comes from state and local sources.

The words “discrimination” and “money laundering” have been used in reports from the Paragon Health Institute, a conservative think tank led by a former Trump adviser, Brian Blase. Two former Paragon executives now advise Trump, and a former Paragon analyst advises Johnson.

Blase said there’s no ulterior motive in the group’s word choices. “This is us trying to describe the issue in a way that makes the most sense to members of Congress and policymakers,” he said.

Paragon analysts have argued for ending the federal government’s “discrimination” in matching state dollars for those covered under the ACA’s Medicaid expansion at a higher rate than for other enrollees. They also propose giving states a set amount of federal money per year for the program, rather than the open-ended federal funds that always have been a hallmark of Medicaid.

One way states raise funds for their share of Medicaid spending is through provider taxes that hospitals or nursing homes pay. States often reimburse the providers through the extra federal money.

Blase acknowledges that provider taxes used by states to draw down more federal money — which Paragon has referred to as “money laundering” — are legal. He said calling the practice a “tax” is misleading because the providers financially benefit from it.

“Money laundering is the best term we can think of for the schemes providers and states come up with to get federal reimbursement for artificial expenditures that benefits states and providers,” he said.

Joan Alker, executive director of the Center for Children and Families at Georgetown University, defended provider taxes as a legal way states raise money to cover low-income people. She noted most states with provider taxes are controlled at least partly by Republicans.

Alker rejected the notion that enhanced funding to expand enrollment is “discrimination.” The ACA included the higher rates for covering more low-income enrollees because that was the only way states could afford it, she said.

Without providing a specific example, Blase said advocates have said cuts would “leave people dying in the streets.”

During a brief funding freeze to Medicaid providers in January, Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said, “This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.”

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