
Deborah Lipson
Debra Lipson, MHSA, is a health policy analyst and consultant and Senior Fellow at Mathematica Policy Research, specializing in Medicaid financing and delivery system reform.
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Sep 9, 2026
Medicaid Funding Fight: $52 Billion on the Chopping Block
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Deborah LipsonGUEST
... which, exactly, typically lower than what it costs to serve Medicaid patients.

Deborah LipsonGUEST
So the state designs an SDP that requires all the plans to pay a standard fee increase to that class of hospitals that bring total reimbursement above Medicaid fee-for-service, maybe up to the Medicare rate, or maybe even close to what private insurers pay those hospitals, what is known as average commercial rate.

Deborah LipsonGUEST
But in exchange for the additional reimbursement, these hospitals have to give something back, and in this case, they have to serve, let's say, a minimum number of Medicaid patients, or maybe even increase the number of patients they serve.

Deborah LipsonGUEST
And that helps to ensure availability of care equal to the general population, a principle that's really been enshrined in Medicaid law for over 40 years.

Deborah LipsonGUEST
Um, the state could also require the hospitals to demonstrate certain quality improvements, like lower emergency room or hospital readmission rates, or maybe fewer healthcare-associated infections.

Deborah LipsonGUEST
The increased provider fees are then incorporated into managed care capitation rates or paid separately on top of the capitation rate.
