Committee discusses Medicaid settlement payments, federal match and budget impacts; seeks transparent drawdown accounting

Senate Finance members pressed Department of Health and Human Services officials on Oct. 26 for clearer accounting of a multi-defendant settlement and the way directed Medicaid payments (referred to in committee as MET amounts) affect federal match and provider payments.

DHHS officials, including Medicaid Director Henry Littman, described the settlement as a combination of funds from multiple defendants (3M, DuPont, Tyco and others) and explained that some hospital-directed payments are moving among hospitals rather than becoming unrestricted state revenue. Committee members asked whether the settlement and directed-payment changes increase federal matching rates and whether the state can use those increased federal dollars to supplant general fund appropriations.

Officials said parts of the settlement shift federal share on some provider payments and move certain off-budget trust funds outside the operating budget; as a result, some federal increases do not appear in the operating-budget totals. Senators asked the department to provide a simple spreadsheet tracing the tax, federal match and distribution flows so committee members could see how money moves from the settlement through federal matching to provider payments and other recipients.

The committee also considered language to put purpose and authorization for a drinking-water/disbursement fund into statute so that when settlement funds are available, state agencies can act without further statutory delay. Committee members said they expect more defendants to sign settlements, which has delayed distributions.

Committee leadership said the language being added will allow timely use of funds for reimbursement to communities that have already paid for PFAS remediation once distributions start. The committee adopted language and the chair announced the ayes had it.