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SYNTHETIC EXAMPLE · FOR DISCUSSION

Member A, explained: who pays for the care

Member A is on Medicaid the whole time, not private insurance and not a Marketplace plan. Only the Medicaid category changes, and that changes who pays what behind the scenes.

Member A Low-income adult covered by Medicaid Doctors and Hospital A treat Member A, bill Medicaid New York State Medicaid decides eligibility, pays bills Federal government (CMS) pays the state its share care pays bills share CMS-64 (quarterly) The state pays the doctors in full, then claims the federal share back each quarter. How big that share is depends on the member's Medicaid category.

The two categories: same care, different split

New adult group (ACA Medicaid expansion)

Federal 90%
10%

Low-income adults 19–64 who don't fit an older category. Congress pays 90%.

SSI-related disabled group

Federal 50%
State 50%

Traditional category for people with a disability. Paid at New York's regular rate (50%).

Federal shareNew York's share Bars are drawn to scale.

What happened, step by step

Synthetic member, real New York Medicaid prices. Not a real member, provider or state filing.

1
Jan 1, 2026
Member A qualifies as a low-income adult and joins the new adult group (90% federal).
2
May 20 – Aug 5
Six bills, including a 4-day heart-failure stay. New York pays $7,074.48 and claims 90% back.
3
Aug 14, 2026
Social Security approves SSI disability, backdated to June 1. New York moves Member A to the disabled group from June 1.
4
Next quarter
Bills from June 1 should have been 50% federal. New York re-funds them and returns the difference on the CMS-64.

The money on the five bills after June 1 ($6,952.52)

Before the change (new adult group)

Federal $6,257.26
$695

After the correction (disabled group)

Federal $3,476.27
State $3,476.25

FederalNew York Same total bill ($6,952.52) in both bars.

Moves from federal to New York
$2,780.99
most of it from the hospital stay ($2,584.23)
Change to the doctors' and hospital's pay
$0
they keep exactly what they were paid
May 20 visit (before June 1)
No change
Member A really was a new adult then
Member A
No change
still covered, same benefits, no bill

Amounts are summed claim by claim, matching the Member A worksheet.

Who gains or loses money?

Handled correctly, nobody loses; each side pays its proper share. Losses come from not fixing it, or fixing it badly.

Fee-for-service, corrected (the right outcome)

WhoResultWhy
Federal governmentPays $2,780.99 lessBack to the correct 50% share.
New York StatePays $2,780.99 moreNot a loss: this is its correct share for a disabled member.
Doctors / Hospital A$0Payment unchanged.
Member ANo changeCoverage and benefits unchanged.

Fee-for-service, never corrected (the trap)

WhoResultWhy
Federal governmentOverpays $2,780.99Keeps paying 90% for a member who should be at 50%. Federal taxpayers lose.
New York StateAudit riskKeeps the money for now, but an Inspector General or CMS review can find it and require repayment, sometimes with interest.
Doctors / Hospital A$0Payment unchanged.
Member ANo changeCoverage unchanged.

Why it gets missed

The doctors' pay doesn't change, so systems that only re-process a bill when the payment changes skip it. The eligibility record is fixed, but the federal money never follows.

Managed care: Member A stays in the same plan

The state pays the health plan a monthly premium per member ("capitation"); the plan pays the doctors. The disabled premium is usually much higher than the new-adult premium.

WhoResultWhy
Health planGainsOwed the higher disabled premium from June 1.
New York StatePays moreA higher premium, with only 50% federal match on it.
Federal governmentPays 50% of a bigger premiumInstead of 90% of a smaller one.
Doctors / Hospital A$0The plan's payments to them don't change.

Managed care: Member A must move to another plan or back to fee-for-service

WhoResultWhy
Health planLosesThe state takes back June–August premiums; the plan claws back the claims it paid.
Doctors / Hospital ACan loseMust refund the plan and rebill the right payer. If that payer's filing deadline has passed, they may never be paid.
New York StateRisk of paying twiceRe-pays the care through the correct route; if a clawback is missed, it pays a premium and the claims.
Federal governmentBack to 50%Once everything is re-routed correctly.

Bad data for next year

If bills stay coded as new adult, next year's premiums are set from the wrong data.

Wrong federal reports

CMS-64 totals by group are off; new-adult costs look higher than they are.

Work and friction

Staff time to rework old bills; clawbacks and rebilling for providers months later.

Synthetic example for discussion. Match rates: 90% for the ACA new adult group; 50% New York regular rate. Reporting split per CMS state plan approval letters (new adult share on the CMS-64.9VIII series, the rest on the CMS-64.9 series).