MEDICAID AND SCHIP PROVISIONS IN H.R. 5291 AND S. 3165 (THE 2000 MEDICARE "REFINEMENT BILLS")

CRS Report for Congress
S. 3165 (the 2000 Medicare “Refinement Bills”)
Updated October 13, 2000
Jean Hearne
Elicia Herz
Specialists in Social Legislation
Evelyne Baumrucker
Analyst in Social Legislation
Domestic Social Policy Division

Congressional Research Service The Library of Congress

Medicaid and SCHIP Provisions in H.R. 5291 and S. 3165
(the 2000 Medicare “Refinement Bills”)
Summary
On September 27, 2000, the House Commerce Committee ordered reported a
bipartisan bill, the Beneficiary Improvement and Protection Act of 2000 (H.R. 5291).
On October 5, 2000 William V. Roth, Jr., the Chairman of the Senate Finance
Committee, introduced the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 2000 (S. 3165). While both bills are largely comprised of Medicare
provisions, they include a number of changes to the Medicaid and the State Children’s
Health Insurance Program (SCHIP).
Among the major changes included in the Medicaid provisions of both bills are
changes to the disproportionate share hospital allotments for states, changes to
reimbursement methods for Federally Qualified Health Centers (FQHCs) and Rural
Health Centers (RHCs), and new options for states to cover certain legal immigrants
who are pregnant women and children.
Major SCHIP provisions include extending the availability of unused funds from
FY1998 and FY1999 and redistributing these unused funds among both states that
spend and that do not spend their full original allotments, and giving states the option
to cover certain legal immigrant children.

Contents
Introduction ................................................... 1
Recent Legislative Activity.....................................3
Medicaid and SCHIP Provisions in H.R. 5291 and S. 3165 (the
2000 Medicare “Refinement Bills”)..............................5
Medicaid ...................................................... 5
Disproportionate Share Hospital Payments.........................5
New Prospective Payment System for FQHCs and RHCs..............8
Optional Coverage of Certain Legal Immigrants.....................9
Presumptive Eligibility for Pregnant Women and Children............10
Improving Welfare-To-Work Transition under Medicaid.............12
Medicaid County-Organized Health Systems......................13
Medicaid Recognition for Services of Physician Assistants............13
Extension of Payments for Certain Qualified Medicare Beneficiaries.....14
Streamlined Approval of Continued State-Wide 1115 Medicaid Waivers.15
Alaska Federal Matching Rate.................................16
State Children’s Health Insurance Program...........................17
Continued Availability and Redistribution of Unused SCHIP Allotments.17
Optional Coverage of Certain Legal Immigrants Under SCHIP........18
Authority to Pay for Medicaid Expansion SCHIP Costs From
Title XXI Appropriation..................................19
Other Provisions...............................................20
Juvenile Diabetes Research Program............................20
Indian Diabetes Grant Program................................21

Medicaid and SCHIP Provisions in H.R. 5291
and S. 3165 (the 2000 Medicare
“Refinement Bills”)
Introduction
Medicaid is a joint federal-state entitlement program that pays for medical
assistance primarily for low-income persons who are aged, blind, disabled, members
of families with dependent children, and certain other pregnant women and children.
Within broad federal guidelines, each state designs and administers its own program.
Total program outlays in FY1999 were $180.9 billion. Federal outlays were $102.5
billion and state outlays were approximately $78.4 billion. The federal government
shares in a state’s Medicaid costs by means of a statutory formula designed to provide
a higher federal matching rate to states with lower per capita incomes. In FY1999,
federal matching rates ranged from 50% to 76% of a state’s expenditures for
Medicaid items and services. Overall, the federal government finances about 57% of
all Medicaid costs.
The State Children’s Health Insurance Program (SCHIP), enacted in the
Balanced Budget Act of 1997 (BBA 97, P.L. 105-33) is targeted at uninsured
children who live in families with income below twice the federal poverty level and
who would not otherwise be eligible for Medicaid. States may use SCHIP funds to
provide coverage through health insurance that meets specific standards for benefits
and cost-sharing (known as separate state programs), or through expansions of
eligibility under Medicaid, or through a combination of both options. SCHIP entitles
states with approved SCHIP plans to pre-determined, annual federal allotments based
on a distribution formula set in law. Each state has flexibility to define the group of
targeted, low-income children who are eligible for its SCHIP. Eligibility criteria may
include, for example, geography, age, income and resources, residency, disability
status, access to other health insurance, and duration of eligibility for SCHIP.
As of October 4, 2000, all 50 states, the District of Columbia and all five
territories had approved SCHIP plans. Among these, 23 are Medicaid expansions,
15 are new or expanded separate state programs, and 18 will use both a Medicaid
expansion and a separate state program.
The 105^th Congress made important changes to the Medicaid program through¹
the BBA 97. That legislation included provisions to achieve net Medicaid savings
of about $13 billion between FY1998 and FY2002, largely from reductions in

¹ For a detailed description of the changes to Medicaid under BBA 97, see CRS Report 98-

132, Medicaid: 105^th Congress, by Melvina Ford and Richard Price.

supplemental payments to hospitals that serve a disproportionate share of Medicaid
and low-income patients. BBA 97 also significantly increased the flexibility that states
have to manage their Medicaid programs. In particular, it gave states the option of
requiring most beneficiaries to enroll in managed care plans without seeking a federal
waiver, and replaced federal reimbursement requirements imposed by the Boren
amendments with a public notice process for setting payment rates for institutional
services. The Act also required that the previously existing cost-based reimbursement
system for Federally Qualified Health Centers and Rural Health Clinics be phased out
over a 6-year period. Spending items in the Act included Medicaid coverage for
additional children, and increased assistance for low-income individuals to pay
Medicare Part B premiums.
BBA 97 also included the provisions establishing SCHIP under a new Title XXI
of the Social Security Act. SCHIP represents the largest federal effort to provide
health insurance coverage to uninsured, low-income children since the enactment of
Medicaid in 1965. The program began in October 1997 with total federal funding of
$39.7 billion for the period FY1998 through FY2007.
The 106^th Congress revisited Medicaid and SCHIP in 1999. On November 29
of that year, the President signed the Consolidated Appropriations Act for FY2000
(P.L. 106-113). Included in that bill by reference was the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999 (BBRA 99), a bill largely comprised
of Medicare provisions, but which also included a number of changes to the Medicaid
and the State Children’s Health Insurance Program (SCHIP).
In addition to technical amendments to BBA 97, BBRA 99 included provisions
allowing for increased Medicaid disproportionate share payments to hospitals for
certain states and the District of Columbia, and for extended access to a special $500
million fund to pay for Medicaid eligibility determinations resulting from welfare
reform for a longer period of time than allowed under previous law. BBRA 99 also
modified the schedule for phasing out cost-based reimbursement for Federally
Qualified Health Centers and Rural Health Clinics that had been included in the BBA

97.

Changes to SCHIP in BBRA 99 included provisions to improve state-level data
collection; to evaluate the SCHIP (and Medicaid) programs with respect to outreach
and enrollment practices; and to create a clearinghouse to coordinate and consolidate
federal databases and reports on children’s health. In addition, BBRA 99 included a
number of changes to the formula used to distribute federal SCHIP funds among the
states, increased the amounts available for U.S. territories, and minor technical
changes.²

² For a detailed description of changes to Medicaid and SCHIP under BBRA 99, see CRS
Report RL30400, Medicaid and the State Children’s Health Insurance Program (SCHIP):
Provisions in the Consolidated Appropriations Act for FY2000, by Jean Hearne and Elicia
Herz.

Recent Legislative Activity
Committees with jurisdiction over Medicaid and SCHIP, the House Committee
on Commerce and the Senate Committee on Finance, are considering legislation that
would affect these programs. On September 27, 2000, the House Commerce
Committee ordered reported a bipartisan bill, the Beneficiary Improvement and
Protection Act of 2000 (H.R. 5291). On October 5, 2000 William V. Roth Jr., the
Senate Finance Committee Chairman, introduced the Medicare, Medicaid and
SCHIP Balanced Budget Refinement Act of 2000 (S. 3165). While both the House
and Senate bills are largely comprised of Medicare provisions, they include a number
of changes to Medicaid and SCHIP.
Several such provisions appear in both the House and Senate bills. Both would
freeze Medicaid disproportionate share hospital (DSH) allotments, but for different
fiscal years. H.R. 5291 contains other changes to DSH, including setting a higher rate
of increase in such allotments for extremely low DSH states, making other
adjustments specific to the District of Columbia and Tennessee, and clarifying that
Medicaid beneficiaries enrolled in managed care arrangements must be included in
calculations related to DSH payments. In addition, both bills include provisions to
replace the current cost-based reimbursement arrangements for Federally Qualified
Health Centers and Rural Health Clinics with a new Medicaid prospective payment
system. Both bills also clarify states’ authority to conduct presumptive eligibility
determinations, as defined in Medicaid law, under separate (non-Medicaid) SCHIP
programs. Both the House and Senate bills have nearly identical provisions regarding
the availability and redistribution of unused FY1998 and FY1999 SCHIP allotments.
Following specific formulas, these unspent funds are redistributed to both states that
have and have not fully exhausted their original allotments within required time
frames. Finally, both bills increase appropriated amounts for diabetes grants under
SCHIP, but the amount of the increases differ.
Other Medicaid and SCHIP provisions in H.R. 5291 only include: (1) optional
coverage of certain legal immigrants who are pregnant women and children, (2)
addition of new entities to the list of those qualified to make presumptive eligibility
determinations for low-income pregnant women and children, (3) a 1-year extension
of transitional medical assistance (TMA) for low-income working families under
Medicaid, simplification of TMA reporting and notification requirements, and making
TMA optional for states meeting certain income eligibility requirements, (4)
continuation of the current exemption from Medicaid health maintenance organization
(HMO) reporting requirements for certain county-organized health systems, and (5)
addition of the services of physician assistants to the list of optional Medicaid benefits.
Other Medicaid and SCHIP provisions in S. 3165 only include: (1) permanent
extension of Medicaid payments for Medicare Part B premiums on behalf of qualified
Medicare beneficiaries with income up to 135% of the federal poverty level (FPL),
(2) streamlined approval of continued statewide 1115 Medicaid waivers, (3)
adjustment to the federal medical assistance percentage (FMAP) for Alaska, and (4)
authority to pay Medicaid expansion costs under SCHIP out of the SCHIP
appropriation, and codification of the Administration’s policy regarding the order of
payments for specified benefit and administrative costs from state-specific SCHIP
allotments.

The Congressional Budget Office has released a preliminary cost estimate for
H.R. 5291. Changes to Medicaid in the Beneficiary Health Improvement Act as
ordered reported on September 27, were estimated to increase federal outlays by $5.7
billion over the 5-year period 2001 to 2005 and $15.1 billion over 10 years (2001-
2010). Provisions affecting SCHIP are estimated to increase federal outlays by $0.2
billion for 2001 through 2005 and $0.3 billion for 2001 through 2010. Cost estimates
are not yet available for S. 3165.
The following side-by-side comparison provides a description of current law and
a more detailed explanation of the proposed changes to Medicaid and SCHIP included
in H.R. 5291 and in S. 3165.

CRS-5
Medicaid and SCHIP Provisions in H.R. 5291 and S. 3165 (the 2000 Medicare “Refinement Bills”)
Medicaid
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
of MedicaidThe federal share of MedicaidFreezes state-specific DSH allotments forFreezes Medicaid DSH payments for
disproportionate share hospital (DSH)FY2001 and FY2002 at the FY2000 levels.FY2001 at FY2000 levels.
payments, payments for hospitals that treat For FY2001 and beyond, each state’s DSH
ⁱ^{ki/CRS-RL30703}a disproportionate share of uninsured andallotment would be equal to its allotment forEffective October 1, 2000.

^g/wMedicaid enrollees, is capped at specifiedthe previous year increased by the
^s^.oramounts for each state for FY1998 throughpercentage change in the consumer price
^le^akFY2002. States’ allotments for years afterindex for the previous year, subject to a
2002 will be equal to its allotment for theceiling equal to 12% of that state’s total
^://wikiprevious year increased by the percentagemedical assistance payments in that year.
^h^ttpchange in the consumer price index for the
previous year. Each state’s DSH paymentsEffective January 1, 2001.
for FY2003 and beyond are limited to no
more than 12% of spending for medical
assistance for that year.

CRS-6
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
rate of increase inNo provision.Creates a higher rate of increase inNo provision.
DSH allotmentMedicaid DSH allotments for extremely low
extremely low DSHDSH states.
For states where total FY1999 federal and
state DSH spending is less than 1% of the
state’s total medical assistance expenditures
for that fiscal year, the DSH allotment for
FY2001 shall be increased to 1% of the
ⁱ^{ki/CRS-RL30703}state’s total amount of expenditures undertheir plan for such assistance during that
^g/wfiscal year.
^s^.or
^le^akEffective January 1, 2001.
^://wiki for the DistrictThe DSH allotment for the District ofFor the purpose of calculating the FY2001No provision.
^h^ttpColumbia is set at $32 million for FY2000allotment, the FY2000 DSH allotment for
and FY2001 .the District of Columbia is increased to $49
million.
Effective January 1, 2001.
allotment forRenewable waivers, authorized underIf Tennessee’s statewide section 1115No provision.

section 1915(b), 1915(c), or section 1115 ofMedicaid waiver program is revoked or
Medicaid law, allow states to waive certainterminated, Tennessee’s FY2001 DSH
federal requirements in order to operateallotment would be equal to $286,442,437.
special programs or projects.
Effective January 1, 2001.

CRS-7
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
identification ofStates are required to provideClarifies that Medicaid enrollees ofNo provision.

managed caredisproportionate share payments to thosemanaged care organizations and primary
hospitals whose Medicaid inpatientcare case management organizations are to
utilization rate is at least one standardbe included for the purposes of calculating
deviation above the mean Medicaidthe Medicaid inpatient utilization rate and
inpatient utilization rate for all hospitalsthe low-income utilization rate. The state
receiving Medicaid payments in the State,must include in their MCO contracts
and those with a low-income utilization rateinformation that allows the state to
above 25%. The Medicaid inpatientdetermine which hospital services are
ⁱ^{ki/CRS-RL30703}utilization rate includes the number ofinpatient days attributable to Medicaidprovided to Medicaid beneficiaries throughmanaged care. Also requires states to
^g/wbeneficiaries. The low-income utilizationinclude a sponsorship code for the managed
^s^.orrate includes the total revenues paid oncare entity on the Medicaid beneficiary’s
^le^akbehalf of Medicaid beneficiaries.identification card.
^://wikiEffective January 1, 2001.
^h^ttp

CRS-8
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
prospective paymentStates are required to pay FQHCs andCreates a prospective payment system forSame as House bill.

RHCs amounts that are at least aFQHCs and RHCs. Beginning in FY2001,
lified Health Centerspercentage of the facilities’ reasonable costsFQHCs and RHCs would be paid per visit
for providing services - 100% of costs forpayments equal to 100% of reasonable costs
services during FY1998 and FY1999; 95%incurred during 1999 and 2000 adjusted for
for FY2000, FY2001 and FY2002; 90% forany increase or decrease in the scope of
FY2003; 85% for FY2004. Cost-basedservices furnished. Per visit payments for
ⁱ^{ki/CRS-RL30703}reimbursement expires in 2005. In the caseentities first qualifying as FQHCs or RHCs
^g/wof a contract between an FQHC or RHCafter 2000 will begin in the first year that
^s^.orand a managed care organization (MCO),the center or clinic attains such qualification
^le^akthe MCO must pay the FQHC or RHC atand would be 100% of the costs incurred
least as much as it would pay any otherduring that year based on the rates
^://wikiprovider for similar services. States areestablished for similar centers or clinics.
^h^ttprequired to make supplemental payments toFor subsequent years payment for all clinics
the FQHCs and RHCs, equal to thewould be equal to amounts for the preceding
difference between the contracted amountsfiscal year increased by the percentage
and the cost-based amounts.increase in the Medicare Economic Index
for primary care services, adjusted for any
increase or decrease in the scope of services
furnished.

CRS-9
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
coverage forNon-qualified aliens are not eligible forAmends Title XIX to allow states the optionNo provision.

federal medical assistance under Title XIXof extending Medicaid coverage to certain
except in the case of medical emergency.subgroups of qualified aliens who have
lawfully resided in the United States for 2
States are required to cover certainyears. They include pregnant women
categories of qualified aliens provided they(during pregnancy and for 60 days
meet the state’s financial and otherfollowing birth) and children including
eligibility criteria. Other qualified aliensoptional targeted low-income children
ⁱ^{ki/CRS-RL30703}may become eligible for Medicaid at statecovered by Medicaid.
^g/woption, subject to their state’s financial and
^s^.orother criteria. For states that elect to provide medical
^le^akassistance to a sub-category of aliens,
Qualified aliens entering with sponsors afteraction may not be brought under an
^://wikiDecember 19, 1997 are subject to theaffidavit of support against the sponsor of
^h^ttp“deeming rule”, under which the sponsors’such an alien on the basis of the medical
income and resources are deemed to becare received.
available to the immigrant in determining
the immigrant’s financial eligibility forEffective October 1, 2000.
benefits until the immigrant becomes a
citizen or meets the 10-year work
requirement.

CRS-10
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
that qualify toPresumptive eligibility allows pregnantAdds several new entities to the list of thoseNo provision.

women and children in families with incomequalified to make Medicaid presumptive
for low-incomethat appears to be below a state’s Medicaideligibility determinations for children and
income standards to enroll temporarily inpregnant women. These include agencies
Medicaid, until a final formal determinationthat determine eligibility for Medicaid or the
of eligibility is made. For children, entitiesState Children’s Health Insurance Program
qualified to make presumptive eligibility(SCHIP); certain elementary and secondary
determinations include Medicaid providers,schools; state or tribal child support
ⁱ^{ki/CRS-RL30703}and agencies that determine eligibility forenforcement agencies; child care resource
^g/wHead Start, subsidized child care, or theand referral agencies; certain organizations
^s^.orSpecial Supplemental Food Program forproviding emergency food and shelter to the
^le^akWomen, Infants and Children (WIC). Forhomeless; entities involved in enrollment
pregnant women, qualified entities includeunder Medicaid, Temporary Assistance for
^://wikiMedicaid providers of outpatient hospitalNeedy Families (TANF), SCHIP, or that
^h^ttpand clinic services receiving certain federaldetermine eligibility for federally funded
grants, providers of certain food andhousing assistance; or any other entity
nutritional supplement services, statedeemed by a state, as approved by the
perinatal program providers, or providers ofSecretary of Health and Human Services
certain health services for Indians.(HHS).
Effective October 1, 2000.

CRS-11
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
There is no express provision forClarifies states’ authority to conductClarifies states’ authority to conduct
presumptive eligibility under separate (non-presumptive eligibility, as defined inpresumptive eligibility as defined in
Medicaid) SCHIP programs. However, theMedicaid law (and amended by the previousMedicaid law under separate (non-
Secretary of HHS permits states to develop,provision), under separate (non-Medicaid)Medicaid) SCHIP programs.
for separate (non-Medicaid) SCHIPSCHIP programs.
programs, procedures that are similar toEffective October 1, 2000 and applies to
those permitted under Medicaid .Effective October 1, 2000.SCHIP allotments for fiscal year 2001
forward.

ⁱ^{ki/CRS-RL30703}
^g/w
^s^.or
^le^ak
^://wiki
^h^ttp

CRS-12
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
In 1996, Temporary Assistance for NeedyExtends the sunset on TMA by one year toNo provision.

Families (TANF) replaced Aid to FamiliesFY2002.
with Dependent Children (AFDC).
Medicaid entitlement was retained forAllows states to waive reporting
individuals who meet the requirements ofrequirements for families qualifying for up
the former AFDC program in effect on Julyto 12 months of TMA (and the
16, 1996, even if they do not qualify forcorresponding obligation of states to notify
TANF. For Medicaid purposes, states mayfamilies of these reporting requirements).
ⁱ^{ki/CRS-RL30703}modify their former AFDC income and
^g/wresource standards within specifiedMakes TMA an option, rather than a
^s^.orparameters. States are required to continuerequirement, for the subset of states that:
^le^akMedicaid coverage for a period of 6 to 12(1) use income and resource methodologies
months for individuals described above whothat are less restrictive than those applicable
^://wikimeet specified prior enrollmentunder their former AFDC programs on July
^h^ttprequirements and who then lose Medicaid16, 1996 for individuals who meet the other
coverage because of employment orrequirements for this group, and (2) cover,
earnings rules applicable to this eligibilityat a minimum, such individuals in families
group. This transitional medical assistancewith gross income up to 185% FPL. States
(TMA) will sunset at the end of FY2001.in this subset are further deemed to meet
States must adhere to certain beneficiaryMedicaid state plan requirements specified
notification requirements for TMA.in other sections of current law.
Families who qualify for the full 12 months
of TMA must report gross earnings andEffective October 1, 2000.
employment-related child care costs for
each of months 1 through 9.

CRS-13
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
Health insuring organizations (HIOs) areAllows the current exemption fromNo provision.
county-sponsored health maintenanceMedicaid HMO contracting requirements to
organizations. Up to three HIOs designatedcontinue to apply as long as no more than
by the state of California are exempt from14% of all Medicaid beneficiaries in
certain federal statutory requirements forCalifornia are enrolled in those HIOs.
Medicaid HMO contracts. The exemption
only applies if the HIOs enroll no more thanEffective as if included in the Consolidated
10 percent of all Medicaid beneficiaries inOmnibus Budget Reconciliation Act of
ⁱ^{ki/CRS-RL30703}California (not counting qualified Medicare1985.
^g/wbeneficiaries.)
^s^.or
^le^ak
^://wikiS. 3165
^h^ttpH.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
Federal statute lists services that qualify asIncludes services provided by physicianNo provision.

of physicianMedicaid benefits. Federal matchingassistants as Medicaid recognized benefits
payments are available toward the cost ofas long as the services are provided under
items on the list, if covered by Statethe supervision of a physician and are
Medicaid programs. States are required toauthorized under State law. The services of
cover certain of those listed items and mayphysician assistants would be an optional
choose to cover other items on the list.Medicaid benefit.
Effective upon enactment.

CRS-14
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
of authorizationMedicaid covers the costs of certainNo provision.The Committee’s provision would remove
Medicare financial obligations for qualifiedthe sunset date of December 2002, but only
Medicare beneficiaries (QMBs), specifiedfor QI-1 eligibility status. It also would
low income Medicare beneficiariescreate an allotment for FY2003 and beyond
(SLMBs) and two groups of “qualifiedthat is equal to the allotment for the
individuals” referred to as QI-1s and QI-2s.previous fiscal year increased by the
QMBs are aged or disabled persons withpercentage increase in the medical care
incomes at or below the federal poverty linecomponent of the Consumer Price Index for
ⁱ^{ki/CRS-RL30703}and assets below twice the SSI level. Theurban consumers.
^g/weligibility pathways for QI-1 and QI-2 are
^s^.orauthorized only between January of 1998Effective as if included in BBA97.

^le^akand December 2002 when QI-1 and QI-2.
Federal amounts available for covering the
^://wikicosts of Medicaid benefits for QI-1s and
^h^ttpQI-2s are capped for each of the fiscal years
1998-2002. States are allocated a portion
of each year’s allotment based on a formula
that compares the number of individuals
estimated to be in the two groups in each
state relative to the national total of
individuals in the two groups.

CRS-15
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
Under Section 1115 of the Social SecurityNo provision.Creates a process for submitting requests
theAct, states may obtain waivers offor and receiving extensions of waiver
compliance with a broad range of Medicaidprojects that have already received an initial
requirements to conduct experimental, pilot,3-year extension. Requires states to submit
or demonstration projects. Waivers areapplications to extend those projects at least
approved for a period of 5 years. States120 days before the expiration date of the
wishing to obtain approval for periodsexisting waiver. The Secretary would be
beyond 5 years may submit, during the 6-required to notify the State if she intends to
ⁱ^{ki/CRS-RL30703}month period ending 1 year before the datereview the terms and conditions of the
^g/wthe waiver would otherwise expire, a writtenproject and inform the State of proposed
^s^.orrequest for an extension of up to 3 years.changes no later than 45 days after receipt.
^le^akIf the Secretary fails to provide such
notification, the request is deemed
^://wikiapproved. No more than 120 days after
^h^ttpsubmission (or a later date if agreed to by
the state), the request would be either
approved subject to new terms and
conditions or, in the absence of an
agreement on those terms, new terms and
conditions determined by the Secretary to be
reasonably consistent with the overall
objective of the waiver.

CRS-16
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
The federal share of the cost of MedicaidNo provision.Changes the formula for calculating the
services is equal to the federal medicalFMAP for Alaska for fiscal years 2001
assistance percentage (FMAP) of thosethrough 2005. The state percentage for
costs. It is determined annually accordingAlaska would be calculated by using an
to a statutory formula designed to pay aadjusted per capita income instead of the
higher federal matching percentage to statesper capita income generally used. The
with lower per capita incomes relative to theadjusted per capita income for Alaska
national average. would be calculated as the three year
ⁱ^{ki/CRS-RL30703}average per capita income for the state
^g/wBBA 97 included a provision that set thedivided by 1.05.
^s^.orFMAP for Alaska at 59.8% for FY1998
^le^akthrough FY2000. Applies to fiscal years 2001 through 2005.

^://wiki
^h^ttp

CRS-17
State Children’s Health Insurance Program
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
Funds for the SCHIP Program areEstablishes new methods for distributingIdentical to the House reported bill with two
authorized and appropriated for FY1998unspent FY1998 and FY1999 allotments.exceptions. First, specifies that reallocated
through FY2007. From each year’sStates that use all their SCHIP allotmentsfunds remain available through the end of
appropriation, a state is allotted an amount(for each of those years) would receive anFY2002 for both states that spend and those
as determined by a formula set in law.amount equal to estimated spending inthat do not spend all their original
Federal funds not drawn down from aexcess of their original exhausted allotment.allotments within the specified timeframes.
ⁱ^{ki/CRS-RL30703}state’s allotment by the end of each fiscalyear continue to be available to that stateSecond, the effective date of the Senateamendment is as if included in the
^g/wfor 2 additional fiscal years. Allotments notEach territory that spends its originalenactment of BBA 97 (August 5, 1997).

^s^.orspent at the end of 3 years will beallotment would receive an amount that
^le^akredistributed by the Secretary of Health andbears the same ratio to 1.05% of the total
^://wikiHuman Services (HHS) to states that havefully spent their original allotments for thatamount available for redistribution as theratio of its original allotment to the total
^h^ttpyear. Redistributed funds not spent by theallotment for all territories.
end of the fiscal year in which they are
reallocated officially expire. AllStates that do not use all their SCHIP
administrative expenses including outreachallotment would receive an amount equal to
activities are subject to an overall limit ofthe total amount of unspent funds, less
10% of total program spending per fiscalamounts distributed to states that fully
year.exhausted their original allotments,
multiplied by the ratio of a state’s unspent
original allotment to the total amount of
unspent funds. Redistributed funds would
remain available through the end of
FY2002. States may use up to 10% of the
retained FY1998 funds for outreach
activities. Effective upon enactment.

CRS-18
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
for state option ofFor states that provide SCHIP coverageAdds a new provision that gives states theNo provision.

through a Medicaid expansion, legaloption of expanding health insurance
immigrant children are subject to the samecoverage to permanent resident alien
Medicaid restrictions as other legalchildren who are otherwise eligible for
immigrants. States that operate a separateSCHIP and who have been lawfully residing
state SCHIP program must cover thosein the United States for 2 years. The
legal immigrant children who meet thecoverage expansion would only be available
Federal definition of qualified alien and whoto states that have expanded coverage to
ⁱ^{ki/CRS-RL30703}are otherwise eligible. These states maythis category of children under their
^g/walso cover battered immigrants.Medicaid state plan.
^s^.or
^le^akFor qualified alien children entering withEffective October 1, 2000.
sponsors after December 19, 1997, SCHIP
^://wikicoverage is subject to the “deeming rule.”
^h^ttp

CRS-19
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 2002000
to pay forStates’ allotments under SCHIP pay onlyNo provision.Authorizes the payment of the costs of
the federal share of costs associated withSCHIP Medicaid expansions from the
HIP costs from Titleseparate (non-Medicaid) SCHIP programs.SCHIP appropriation. As a conforming
The federal share of costs associated withamendment, eliminates the requirement that
SCHIP Medicaid expansions are paid forstate SCHIP allotments be reduced by
under Medicaid. State SCHIP allotmentsamounts paid under Medicaid for SCHIP
are reduced by the amounts paid underMedicaid expansion costs and presumptive
Medicaid for SCHIP Medicaid expansioneligibility costs. Also codifies proposed
ⁱ^{ki/CRS-RL30703}costs, and presumptive eligibility costs.rules regarding the order of payments for
^g/wbenefits and administrative costs from state-
^s^.orspecific SCHIP allotments. For fiscal years
^le^ak1998 through 2000 only, authorizes the
transfer of unexpended SCHIP
^://wikiappropriations to the Medicaid
^h^ttpappropriation account for the purpose of
reimbursing payments associated with
SCHIP Medicaid expansion programs.
Effective as if included in the enactment of
the Balanced Budget Act of 1997 (August

5, 1997).

CRS-20
Other Provisions
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
The Balanced Budget Act of 1997 amendedExtends the authority for grants to be madeIncreases the appropriated funds available
Title III of the Public Health Service Act tofor Juvenile Diabetes Research andfor diabetes grants, bringing the total to
create a grant program under which theincreases funding to $50 million each for$100 million each for FY2001 and FY2002.

Secretary could make grants to supportFY2003 and FY2007. The funds will
prevention and treatment services of, andremain available until expended. The funds
research relating to, type I diabetes inmay not be derived or deducted from the
ⁱ^{ki/CRS-RL30703}children. Congress committed $150 million,State Children’s Health Insurance Program.
^g/w($30 million each year over 5 years FY1998
^s^.orthrough FY2002), for this program, with
^le^akthe funds being transferred from Title XXI
of the Social Security Act (State Children’s
^://wikiHealth Insurance Program) for these grants.
^h^ttpThis commitment was in addition to the
annual appropriations for NIH.

CRS-21
S. 3165
H.R. 5291Medicare, Medicaid and SCHIP
Beneficiary Improvement andBalanced Budget Refinement Act of
Current LawProtection Act of 20002000
Diabetes GrantsThe Balanced Budget Act of 1997 amendedExtends the authority for grants to be madeIncreases the appropriated funds available
Title III of the Public Health Service Act tofor diabetes prevention and treatmentfor diabetes prevention and treatment
create a grant program under which theprograms for Indians, and increases fundingprograms for Indians, bringing the total to
Secretary could make grants to supportto $50 million each for FY2003 and$100 million each for FY2001 and FY2002.

prevention and treatment services ofFY2007. The funds will remain available
diabetes in Indians. These grants were tountil expended. The funds may not be
purchase services provided through one orderived or deducted from the State
more of the following entities: the IndianChildren’s Health Insurance Program.
ⁱ^{ki/CRS-RL30703}Health Service, a tribal Indian health
^g/wprogram, and an urban Indian health
^s^.orprogram. Congress committed $150 million,
^le^ak($30 million each year over 5 years FY1998
through FY2002), for this program, with
^://wikithe funds being transferred from Title XXI
^h^ttpof the Social Security Act (State Children’s
Health Insurance Program) for these grants.