Nearly $500 million in Utah Medicaid funds meant for patient care was used on administrative fees, The Salt Lake Tribune reported April 4.
The state auditor report highlighted gaps with a Skilled Nursing Facility Upper Payment Limit Medicaid program that allowed states to make supplemental payments to some nursing facilities up to the Medicare rate. Funding for the program is managed by non-state government entities, municipal programs affiliated with hospitals, that pledge money to the state while they await federal funds. The money is supposed to be passed to nursing facilities.
The report found that between 2016 and 2024, Beaver Valley Hospital in Beaver, Gunnison Valley Hospital in Gunnison and Kane County Hospital in Kanab — three of the state’s largest non-state government entities — managed more than $922 million in upper limit payments, but only about $450.5 million was used on patient care. The remaining 51% was kept by hospital groups.
The audit found that typical administrative expenses for Medicaid and Medicare was between 1% and 3% in Utah.
The funding issue stems from a lack of state Department of Health and Human Services oversight, the audit found. The report recommended increased oversight and setting percentages of funds allowed for administrative expenditures.
A law firm that represents the three hospital groups said in the report that “100% of all SNF UPL Program funds received from DHHS are actually and literally deposited directly by DHHS into nursing facility operating accounts via Medicaid remittances.” This process is “in compliance with state and federal law, with the State Medicaid Plan, and with the State UPL Contract that governs the program.”
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