Medicaid funding is supposed to be split between the states and Washington. State governments have found ways for federal taxpayers to pick up more of the tab. 

When Congress cracked down on states using provider taxes to finance Medicaid, it left a separate mechanism open. Intergovernmental transfers let states use federal Medicaid dollars while using less of their own.

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The Trump administration and Congress need to go a step further and restrict states’ use of IGTs to inflate federal Medicaid reimbursement payments.

California provides a striking example.

According to data released by Paragon Health Institute, the state’s payments to public ambulance providers exploded from $339 per transport in 2022 to $1,168 in 2024. This was after California created a new IGT for public ambulances. 

Those payments were supposed to increase to $1,597 for 2025 and $1,637 for 2026 but are currently in flux as CMS considers new rules on Medicaid spending. 

Meanwhile, private ambulance providers are still reimbursed at $339.

It’s no wonder Paragon Health Institute likened IGT use for Medicaid reimbursement to money........

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