Medicaid demonstrations often lack transparency, which can muddle the understanding of their impact, according to a critical report published Friday by the Government Accounting Agency Friday.

With Medicaid reimbursing about three-fifths of all nursing home care, virtually every step the program takes can have direct implications for providers.

The GAO found “significant gaps” in a review of 17 months worth of demonstrations. For example, lead researcher Carolyn Yocum found the federal government doesn’t always require states to share the projected effects of proposals, even when they could significantly affect beneficiary eligibility.

Yocum told McKnight’s Friday that the study examined several state applications for waivers that would determine which residents would be able to access Medicaid-supported services, including skilled nursing care.

As of November 2018, 43 states operated at least part of their Medicaid programs under demonstrations, which can vary in size and scope. Nationally, the GAO reported federal over 30% of all federal Medicaid spending went toward demonstrations in fiscal year 2016.

Yocum’s audit found that many of the problems occurred during applications for extensions or changes. In two of four applications that were approved during the study period, states submitted changes to their applications that could have triggered disenrollment or other penalties without first obtaining state-level public comment.

The Centers for Medicare & Medicaid Services does not require applicants to report on concerns raised in state public comments. Nor does it require mid-waiver applications to estimate expected changes in enrollment or cost.

Changes ranged from dental coverage for disabled adults to denying retroactive eligibility.

“States have proposed major changes … through amendments, raising concerns that major changes to states’ demonstrations are being approved without a complete understanding of their impact,” Yocum wrote. “These risks take on increased importance given that CMS is encouraging states to use the flexibility provided under demonstrations to test changes to their Medicaid programs that could have significant effects for beneficiaries and other stakeholders.”

The GAO recommended the Centers for Medicare & Medicaid Services develop policies for ensuring transparency when states submit major changes to pending demonstration applications and when they propose amendments to existing demonstrations.