Review of Medicaid Support for Graduate Medical Education in Minnesota During Fiscal Year 2000

EXECUTIVE SUMMARY:

Our objectives were to determine whether (1) Minnesota followed the approved State plan in administering the Medicaid graduate medical education program and (2) intergovernmental transfers included any funds for graduate medical education.  Minnesota used $150,000 ($77,220 Federal share) for administrative expenses, although the State plan earmarked these funds for medical education.  Also, contrary to Federal regulations, the State plan did not include a detailed description of the payment methodology used for the distribution of the funds to teaching hospitals.  Concerning our second objective, we found that while there were no intergovernmental transfers involved, six hospitals had reassigned funds, totaling $15 million, back to the State.  Although the reassignments were required by the State plan covering fiscal year 2000, we noted that this payment structure was changed (effective fiscal year 2006) to no longer allow for the reassignments.   

We recommended that Minnesota report a $77,220 financial adjustment and coordinate with CMS to include appropriate language in the State plan to explain how the distributions of Medicaid graduate medical education funds were computed and paid to eligible hospitals and training sites.