How Much Do States Spend Per Medicaid Enrollee?

Table 1. Per Capita Expenditure Estimates

1. The VIII group applies only to states that have used the authority of the Affordable Care Act to implement a Medicaid expansion for adults.

Source: CMS calculations using calendar year 2017 MBES expenditure data and T-MSIS data on enrollees and expenditures.

Notes

To conduct this analysis, CMS used two data sources: (1) MBES expenditure data and (2) T-MSIS data. MBES expenditure data (reported by states on CMS-64 forms) are at the state level and do not include expenditures at the enrollee or at the eligibility group levels; therefore CMS used T-MSIS data to classify enrollees, allocate expenditures into eligibility groups, and construct the denominator (number of enrollee years) for each eligibility group.

To compute the denominator, CMS first mapped the 75 eligibility categories in T-MSIS to the five eligibility groups and then determined the count of enrollee months by eligibility group in each state. As the last step, total months were converted to total years.

To compute the numerator (total spending for each eligibility group) for each state, the calculation used total state-level expenditure information from MBES. To distribute MBES expenditures across the five eligibility groups, the calculation used T-MSIS data to determine the percentage of total Medicaid expenditures accounted for by each eligibility group, then applied that percentage to the total net Medicaid expenditures for medical assistance services that each state reports to MBES. For each state, these total net expenditures excluded spending categories not linked to individual enrollees, such as administrative expenses and disproportionate share hospital payments. This methodology largely aligns with methods that CMS’s Office of the Actuary employs to estimate national-level Medicaid spending per enrollee.

Data usability assessment

To determine whether states’ T-MSIS data met minimum criteria for completeness and accuracy, CMS conducted four data usability assessments of key data elements for calculating per capita expenditures. States that met all four data usability requirements were included in the calculation of per capita expenditures. For some states that did not meet the data usability requirements, differences between their T-MSIS data and other CMS data sources may be due to a number of factors, including reporting issues that are not currently captured in the methodology. In addition to the methodology, there are a range of state-specific factors and external reasons why a state may not have met the usability assessment. Table 2 summarizes the results of the data usability assessment.

Table 2. Assessing state T-MSIS data usability

1. Enrollment. To ensure a reasonably accurate number of enrollees, we required the difference between T-MSIS Analytic Files (TAF)-based enrollment counts and Eligibility and Enrollment Performance Indicator (PI) enrollment counts to be 5 percent or less, averaged across the last 7 months of 2017. If the state’s PI data had known errors, or if we could not directly compare PI and TAF enrollment because a state’s TAF data did not have sufficient data to identify full-benefit beneficiaries, we required states to have a 5 percent or less difference between TAF and MBES/CMS-64 enrollment, averaged across all months of 2017.
2. Eligibility code. To assign expenditures to the appropriate eligibility category, we required states to have 5 percent or less of beneficiaries with missing eligibility information. This assessment also required states to have reported T-MSIS enrollment and expenditures in all applicable eligibility groups included in the per capita expenditures analysis.
3. Claims volume. To ensure CMS based spending estimates on a comparatively complete set of claims, claims volume must have been at least 20 percent of the national median of claims per 1,000 member months for each claim type.
4. Capitation payment. Because managed care capitation payments comprise a large share of spending in many states, we compared the total amount of capitation payments captured in T-MSIS to the amounts states reported in CMS-64 forms, and required states to have 5 percent or less difference between the two amounts, unless the state’s total capitated payments relative to total state Medicaid spending was less than 10 percent (that is, the state’s managed care program was small compared to its fee-for-service system).

For more detail on the per capita expenditure calculations, please see the detailed methodology document.