Supplemental &
Directed Payments
We help states design, implement, and manage supplemental and directed payment programs that strengthen Medicaid provider reimbursement while ensuring full compliance with federal requirements. Our team supports the development of transparent, data-driven methodologies that maximize available federal financial participation, improve payment accuracy, and align with evolving CMS guidance and state program goals.
Strengthening Medicaid Financing Through Supplemental & Directed Payments
Supplemental and directed payment programs are a key part of Medicaid financing, helping states strengthen provider reimbursement, support safety-net providers, and improve access to care for vulnerable populations. They address gaps in base payment methodologies while aligning funding with state policy and delivery system goals.
Programs such as Disproportionate Share Hospital (DSH) payments, Upper Payment Limit (UPL) demonstrations, Medicaid directed payments, and Ground Emergency Medical Transportation (GEMT) programs require complex financial modeling, detailed provider data, and strict compliance with federal requirements. Recent regulatory updates, including Centers for Medicare & Medicaid Services (CMS) final rule CMS-2439-F, have also increased expectations for transparency, documentation, and oversight.
We help state Medicaid agencies design, evaluate, and manage these programs to ensure they are compliant, financially sound, and aligned with long-term program goals, while supporting consistency across fee-for-service and managed care delivery systems.
What We Do
We provide end-to-end support across the spectrum of supplemental and directed payment programs, combining deep policy expertise, advanced financial modeling, and practical implementation experience. Our services include:
Where We Support Supplemental & Directed Payments
DSH programs are a foundational component of Medicaid financing, supporting hospitals that serve a disproportionate share of low-income and uninsured patients. These programs require precise eligibility determinations, accurate calculation of hospital-specific limits, and alignment with complex federal requirements.
We support state Medicaid agencies across the continuum of DSH programs, including eligibility assessment, payment calculation, methodology design, and compliance with federal audit requirements. Our work reflects unmatched experience in both DSH payment development and federally mandated DSH audits, thus providing a comprehensive perspective that strengthens program integrity and defensibility.
Our DSH services include:
Because we perform DSH audits for a large number of states, we bring a practical understanding of how payment methodologies are evaluated under federal audit rules, helping agencies design programs that are accurate, compliant, and defensible.
UPL programs allow states to make supplemental payments up to the Medicare equivalent of what providers would receive for similar services. These programs require detailed cost and utilization data, as well as careful alignment with federal requirements.
We assist states with:
Our approach ensures UPL programs are defensible, transparent, and aligned with broader Medicaid financing strategies.
Directed payment programs allow states to require managed care plans to implement specific payment arrangements that advance delivery system and policy goals. These programs have become increasingly important in supporting provider participation and advancing value-based care. Directed payments are a primary mechanism for aligning reimbursement within managed care delivery systems with broader Medicaid financing and policy goals.
Recent changes under CMS-2439-F have introduced additional requirements related to:
We help states navigate these evolving requirements by supporting the development, evaluation, and ongoing management of directed payment arrangements that meet federal expectations and achieve program objectives.
GEMT programs provide supplemental reimbursement to eligible providers for the cost of delivering emergency medical transportation services. These programs require detailed cost reporting, certification of public expenditures, and compliance with federal financing rules.
We support GEMT programs through:
Supplemental and directed payment programs are closely connected to broader Medicaid financing strategies, including base rate setting, cost reporting, and federal financial participation (FFP).
Our team brings an integrated perspective that helps states align these components to:
Supplemental payment programs are subject to increasing federal scrutiny and evolving regulatory expectations. States must ensure that programs are:
We help agencies proactively address these challenges through rigorous analysis, clear documentation, and practical implementation strategies.
Managed Care Program Integrity Considerations
Directed payment arrangements within managed care require careful oversight to ensure compliance with federal requirements and alignment between payment methodologies and services delivered.
Strategic Medicaid Financing Expertise
We bring deep, practical experience supporting complex Medicaid financing structures across state programs. Our team helps agencies design, evaluate, and strengthen financing systems that are transparent, compliant, and built to withstand federal scrutiny while supporting long-term program stability.
Our work is grounded in decades of experience supporting Medicaid financing programs across the country. We bring:
We tailor our approach to each state’s goals, program structure, and regulatory environment, delivering solutions that are both effective and sustainable.
Our supplemental and directed payment services are designed to support:
Supplemental and directed payments are among the most complex and impactful components of Medicaid financing. We help states navigate this complexity with confidence, designing and managing programs that support providers, comply with evolving requirements, and align with broader health care policy goals.
Connect With Our Team
Partner with experts who understand the complexities of health and human services programs. Let us guide your organization through the industry’s unique challenges and opportunities.
Tara Clark, CPA
Member
Email: tclark@mslc.com
Phone Number: 888-749-5799
Judy Hatfield, CPA
Member
Email:jhatfield@mslc.com
Phone Number: 816-957-6310
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