What Is Medicaid


Medicaid is a joint federal – state health insurance program that assists those persons with low income and limited resources. In New York State, the State government requires county governments to administer and provide Medicaid services and to pay a portion of the cost of Medicaid. Until 2006, counties generally paid 25% of the total cost of Medicaid, the State paid 25%, and the federal government paid 50%. This was not an exact ratio of county share expense, as certain adjustments to the funding formula, including in long term care and nursing home expense starting in 2004 reduced county share expense.

For example, long term care expenses, a very large portion of Erie County’s Medicaid costs, began moving out of the county share in 2004, thus lowering Erie County’s overall share of the expense. The Nursing Home category and Home Health services category made up 41% of the total Medicaid program expenses for Erie County in 2011. As the expense for these services was moved from the county share, the percentage of the county share correspondingly reduced over time. There are also populations for which Erie County is responsible for a lower share of the cost of Medicaid, such as Native Americans.

Presently, due to these various funding adjustments and also due to the State’s “Medicaid Cap” process, the Erie County share of Medicaid expense is approximately 15%. That said, the County’s annual expense for Medicaid-MMIS is still the single-largest appropriation account in our operating budget. . These statistics and data do not include any intergovernmental transfer (“IGT”) payments required under federal law and regulations to be made by the County for the benefit of Erie County Medical Center Corporation.

Medicaid became law in 1965. It is often confused with Medicare. Medicare is a federal health insurance program that helps the elderly and disabled. It is possible to qualify for both programs. In that case, Medicaid typically pays the Medicare coinsurance and deductibles. Medicaid has a core of services mandated by the Federal government and optional services the states can cover or provide if they so choose. New York State covers nearly all the optional services for Medicaid.

Medicaid services can be provided in one of three ways – Fee for Service, Rate, and Managed Care. Fee for Service is a process where Medicaid providers are paid a fee for the service provided. The fee is based upon a set maximum price for units of service. Rate providers are paid a threshold rate based upon cost report data submitted annually to the New York State Department of Health. There are other reimbursement formulas for Rate providers and the rate can vary daily, monthly or annually. In Managed Care, Managed Care Organizations (“MCO”) are paid a monthly capitation payment for each enrolled member to coordinate the provision, quality and cost of care for these enrolled members.

New York plans to move to a system where all Medicaid patients are served by a MCO within the next four years. New York State has the most expensive Medicaid program in the nation. In 2012, New York State covered over 5.4 million beneficiaries, costing more than $53 billion.

In 2011, Governor Andrew Cuomo established a Medicaid Redesign Team (“MRT”) with the goal of reducing New York State costs for Medicaid and increasing quality and efficiency for Medicaid beneficiaries. According to MRT reports, these actions resulted in the first ever year to year reduction in statewide Medicaid spending.

Below are some key Medicaid data points for selected years begining with 2008 and ending with 2017.  More detail on Medicaid, Medicaid expenditures within Erie County and Erie County Medicaid recipients can be found in the 2017 Medicaid Report generated by this office.   See the section maked "Latest News".





Phone: (716) 858-4639
Fax: (716) 858-4629

Erie County Medicaid Inspector General
Edward A Rath County Office Building
95 Franklin Street, Room 802
Buffalo, New York 14202