Of all the moving parts in the Iowa GEMT program, the intergovernmental transfer (IGT) agreement is the one most often misunderstood. It sounds like a tax, looks like a wash, and ends up generating real revenue for a participating service. Here’s what’s actually happening.
What an IGT is
An intergovernmental transfer is a transfer of funds from one unit of government to another. In Medicaid, IGTs are one of the federally-permitted mechanisms a state can use to fund the non-federal share of a Medicaid payment — the portion that isn’t covered by federal Medicaid matching dollars.
The non-federal share has to come from a permitted source. State general fund dollars qualify. Money from local units of government, transferred to the state, also qualifies. That’s the IGT.
Why Iowa GEMT requires one
The GEMT supplemental payment is a Medicaid payment. Like every Medicaid payment, it has a federal share (matched by Medicaid) and a non-federal share (provided by the state). Iowa funds the non-federal share of the GEMT supplemental payment through IGTs from the participating publicly operated ambulance services (or their parent jurisdictions).
Without the IGT in place, the federal match cannot attach, and the supplemental payment cannot be made. The IGT is a precondition for payment, not an option.
How the money actually moves
The IGT mechanism follows a specific sequence:
- The participating service (or its parent jurisdiction) transfers funds to the state in an amount equal to the non-federal share of the supplemental payment.
- The state draws federal Medicaid matching funds on top of the transferred amount.
- The state pays the combined amount back to the service as a Medicaid supplemental payment.
Because the federal match adds substantial dollars between steps 1 and 3, the service ends up with more revenue than it transferred. The exact net is determined by the federal medical assistance percentage (FMAP) applicable to Iowa for the relevant year.
What the IGT agreement actually contains
The IGT agreement is a written contract between the state and the participating governmental entity. It typically covers:
- Identification of the governmental entity making the transfer
- The state fiscal year covered
- The mechanism for calculating the transfer amount (tied to the cost report)
- The schedule and form of transfer
- Representations about the source of funds (must not be federal funds; must be permissible under Medicaid rules)
- Reconciliation provisions if actual transport volume differs from projections
Common questions
Do private services need an IGT? No — and they can’t have one. IGTs are by definition transfers between units of government. Private services cannot make IGTs, which is structurally why they cannot participate in GEMT.
Who signs the IGT? An authorized official of the governmental entity — typically the same person with signing authority for the entity’s contracts and certifications. A city manager, county auditor, or designated department head.
Is the IGT a permanent commitment? No. The IGT is executed for a specific state fiscal year and must be renewed annually. A service can choose to stop participating in GEMT at any annual renewal.
Is the IGT a real transfer of money? Yes. Real dollars move from the local entity’s account to the state’s account. The federal match is then added, and the combined amount comes back as a supplemental payment. It is not a paper transaction.
How Roe Consulting handles the IGT
The IGT is coordinated with Iowa Medicaid as part of the annual cost report engagement. The mechanics — the form, the timing, the calculation — are standardized; the work is in making sure the parent jurisdiction’s authorized official has the information needed to sign without surprises.