Order Code RL30703
CRS Report for Congress
Received through the CRS Web
Medicaid and SCHIP Provisions in H.R. 5291 and
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

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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.

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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

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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 105th Congress made important changes to the Medicaid program through
the BBA 97.1 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: 105th Congress, by Melvina Ford and Richard Price.

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CRS-2
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 106th 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.

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CRS-3
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.

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CRS-4
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.

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CRS-5
Medicaid and SCHIP Provisions in H.R. 5291 and S. 3165 (the 2000 Medicare “Refinement Bills”)
Medicaid
Disproportionate Share Hospital Payments
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Continuation of Medicaid
The federal share of Medicaid
Freezes state-specific DSH allotments for
Freezes Medicaid DSH payments for
DSH allotments
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
a disproportionate share of uninsured and
allotment would be equal to its allotment for
Effective October 1, 2000.
Medicaid enrollees, is capped at specified
the previous year increased by the
amounts for each state for FY1998 through
percentage change in the consumer price
FY2002. States’ allotments for years after
index for the previous year, subject to a
2002 will be equal to its allotment for the
ceiling equal to 12% of that state’s total
previous year increased by the percentage
medical assistance payments in that year.
change in the consumer price index for the
previous year. Each state’s DSH payments
Effective January 1, 2001.
for FY2003 and beyond are limited to no
more than 12% of spending for medical
assistance for that year.

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CRS-6
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Higher rate of increase in
No provision.
Creates a higher rate of increase in
No provision.
Medicaid DSH allotment
Medicaid DSH allotments for extremely low
for extremely low DSH
DSH states.
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
state’s total amount of expenditures under
their plan for such assistance during that
fiscal year.
Effective January 1, 2001.
Allotment for the District
The DSH allotment for the District of
For the purpose of calculating the FY2001
No provision.
of Columbia
Columbia is set at $32 million for FY2000
allotment, the FY2000 DSH allotment for
and FY2001 .
the District of Columbia is increased to $49
million.
Effective January 1, 2001.
Contingent allotment for
Renewable waivers, authorized under
If Tennessee’s statewide section 1115
No provision.
Tennessee
section 1915(b), 1915(c), or section 1115 of
Medicaid waiver program is revoked or
Medicaid law, allow states to waive certain
terminated, Tennessee’s FY2001 DSH
federal requirements in order to operate
allotment would be equal to $286,442,437.
special programs or projects.
Effective January 1, 2001.

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CRS-7
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Assuring identification of
States are required to provide
Clarifies that Medicaid enrollees of
No provision.
Medicaid managed care
disproportionate share payments to those
managed care organizations and primary
patients
hospitals whose Medicaid inpatient
care case management organizations are to
utilization rate is at least one standard
be included for the purposes of calculating
deviation above the mean Medicaid
the Medicaid inpatient utilization rate and
inpatient utilization rate for all hospitals
the 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 rate
information that allows the state to
above 25%. The Medicaid inpatient
determine which hospital services are
utilization rate includes the number of
provided to Medicaid beneficiaries through
inpatient days attributable to Medicaid
managed care. Also requires states to
beneficiaries. The low-income utilization
include a sponsorship code for the managed
rate includes the total revenues paid on
care entity on the Medicaid beneficiary’s
behalf of Medicaid beneficiaries.
identification card.
Effective January 1, 2001.

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CRS-8
New Prospective Payment System for FQHCs and RHCs
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
New prospective payment
States are required to pay FQHCs and
Creates a prospective payment system for
Same as House bill.
system for Federally
RHCs amounts that are at least a
FQHCs and RHCs. Beginning in FY2001,
Qualified Health Centers
percentage of the facilities’ reasonable costs
FQHCs and RHCs would be paid per visit
(FQHCs) and Rural
for providing services - 100% of costs for
payments equal to 100% of reasonable costs
Health Centers (RHCs)
services during FY1998 and FY1999; 95%
incurred during 1999 and 2000 adjusted for
for FY2000, FY2001 and FY2002; 90% for
any increase or decrease in the scope of
FY2003; 85% for FY2004. Cost-based
services furnished. Per visit payments for
reimbursement expires in 2005. In the case
entities first qualifying as FQHCs or RHCs
of a contract between an FQHC or RHC
after 2000 will begin in the first year that
and a managed care organization (MCO),
the center or clinic attains such qualification
the MCO must pay the FQHC or RHC at
and would be 100% of the costs incurred
least as much as it would pay any other
during that year based on the rates
provider for similar services. States are
established for similar centers or clinics.
required to make supplemental payments to
For subsequent years payment for all clinics
the FQHCs and RHCs, equal to the
would be equal to amounts for the preceding
difference between the contracted amounts
fiscal 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.

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CRS-9
Optional Coverage of Certain Legal Immigrants
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Optional coverage for
Non-qualified aliens are not eligible for
Amends Title XIX to allow states the option
No provision.
certain sub-groups of
federal medical assistance under Title XIX
of extending Medicaid coverage to certain
qualified aliens
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 certain
years. They include pregnant women
categories of qualified aliens provided they
(during pregnancy and for 60 days
meet the state’s financial and other
following birth) and children including
eligibility criteria. Other qualified aliens
optional targeted low-income children
may become eligible for Medicaid at state
covered by Medicaid.
option, subject to their state’s financial and
other criteria.
For states that elect to provide medical
assistance to a sub-category of aliens,
Qualified aliens entering with sponsors after
action may not be brought under an
December 19, 1997 are subject to the
affidavit of support against the sponsor of
“deeming rule”, under which the sponsors’
such an alien on the basis of the medical
income and resources are deemed to be
care received.
available to the immigrant in determining
the immigrant’s financial eligibility for
Effective October 1, 2000.
benefits until the immigrant becomes a
citizen or meets the 10-year work
requirement.

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CRS-10
Presumptive Eligibility for Pregnant Women and Children
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Entities that qualify to
Presumptive eligibility allows pregnant
Adds several new entities to the list of those
No provision.
determine presumptive
women and children in families with income
qualified to make Medicaid presumptive
eligibility for low-income
that appears to be below a state’s Medicaid
eligibility determinations for children and
pregnant women and
income standards to enroll temporarily in
pregnant women. These include agencies
children
Medicaid, until a final formal determination
that determine eligibility for Medicaid or the
of eligibility is made. For children, entities
State 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
and agencies that determine eligibility for
enforcement agencies; child care resource
Head Start, subsidized child care, or the
and referral agencies; certain organizations
Special Supplemental Food Program for
providing emergency food and shelter to the
Women, Infants and Children (WIC). For
homeless; entities involved in enrollment
pregnant women, qualified entities include
under Medicaid, Temporary Assistance for
Medicaid providers of outpatient hospital
Needy Families (TANF), SCHIP, or that
and clinic services receiving certain federal
determine eligibility for federally funded
grants, providers of certain food and
housing assistance; or any other entity
nutritional supplement services, state
deemed by a state, as approved by the
perinatal program providers, or providers of
Secretary of Health and Human Services
certain health services for Indians.
(HHS).
Effective October 1, 2000.

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CRS-11
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
A p p l i c a t i o n o f
There is no express provision for
Clarifies states’ authority to conduct
Clarifies states’ authority to conduct
presumptive eligibility
presumptive eligibility under separate (non-
presumptive eligibility, as defined in
presumptive eligibility as defined in
provisions to State
Medicaid) SCHIP programs. However, the
Medicaid law (and amended by the previous
Medicaid law under separate (non-
C h i l d r e n ’ s H e a l t h
Secretary of HHS permits states to develop,
provision), under separate (non-Medicaid)
Medicaid) SCHIP programs.
I n s u r a n c e P r o g r a m
for separate (non-Medicaid) SCHIP
SCHIP programs.
(SCHIP)
programs, procedures that are similar to
Effective October 1, 2000 and applies to
those permitted under Medicaid .
Effective October 1, 2000.
SCHIP allotments for fiscal year 2001
forward.

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CRS-12
Improving Welfare-To-Work Transition under Medicaid
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
E x t e n s i o n a n d
In 1996, Temporary Assistance for Needy
Extends the sunset on TMA by one year to
No provision.
simplification options
Families (TANF) replaced Aid to Families
FY2002.
with Dependent Children (AFDC).
Medicaid entitlement was retained for
Allows states to waive reporting
individuals who meet the requirements of
requirements for families qualifying for up
the former AFDC program in effect on July
to 12 months of TMA (and the
16, 1996, even if they do not qualify for
corresponding obligation of states to notify
TANF. For Medicaid purposes, states may
families of these reporting requirements).
modify their former AFDC income and
resource standards within specified
Makes TMA an option, rather than a
parameters. States are required to continue
requirement, for the subset of states that:
Medicaid coverage for a period of 6 to 12
(1) use income and resource methodologies
months for individuals described above who
that are less restrictive than those applicable
meet specified prior enrollment
under their former AFDC programs on July
requirements and who then lose Medicaid
16, 1996 for individuals who meet the other
coverage because of employment or
requirements for this group, and (2) cover,
earnings rules applicable to this eligibility
at a minimum, such individuals in families
group. This transitional medical assistance
with 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 beneficiary
Medicaid 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 and
Effective October 1, 2000.
employment-related child care costs for
each of months 1 through 9.

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CRS-13
Medicaid County-Organized Health Systems
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
M e d i c a i d c o u n t y -
Health insuring organizations (HIOs) are
Allows the current exemption from
No provision.
organized health systems
county-sponsored health maintenance
Medicaid HMO contracting requirements to
organizations. Up to three HIOs designated
continue to apply as long as no more than
by the state of California are exempt from
14% of all Medicaid beneficiaries in
certain federal statutory requirements for
California are enrolled in those HIOs.
Medicaid HMO contracts. The exemption
only applies if the HIOs enroll no more than
Effective as if included in the Consolidated
10 percent of all Medicaid beneficiaries in
Omnibus Budget Reconciliation Act of
California (not counting qualified Medicare
1985.
beneficiaries.)
Medicaid Recognition for Services of Physician Assistants
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
O p t i o n a l M e d i c a i d
Federal statute lists services that qualify as
Includes services provided by physician
No provision.
coverage of physician
Medicaid benefits. Federal matching
assistants as Medicaid recognized benefits
assistants
payments are available toward the cost of
as long as the services are provided under
items on the list, if covered by State
the supervision of a physician and are
Medicaid programs. States are required to
authorized under State law. The services of
cover certain of those listed items and may
physician assistants would be an optional
choose to cover other items on the list.
Medicaid benefit.
Effective upon enactment.

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CRS-14
Extension of Payments for Certain Qualified Medicare Beneficiaries
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Extension of authorization
Medicaid covers the costs of certain
No provision.
The Committee’s provision would remove
for certain Medicare
Medicare financial obligations for qualified
the sunset date of December 2002, but only
qualified individuals
Medicare beneficiaries (QMBs), specified
for QI-1 eligibility status. It also would
low income Medicare beneficiaries
create an allotment for FY2003 and beyond
(SLMBs) and two groups of “qualified
that 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 with
percentage increase in the medical care
incomes at or below the federal poverty line
component of the Consumer Price Index for
and assets below twice the SSI level. The
urban consumers.
eligibility pathways for QI-1 and QI-2 are
authorized only between January of 1998
Effective as if included in BBA97.
and December 2002 when QI-1 and QI-2.
Federal amounts available for covering the
costs of Medicaid benefits for QI-1s and
QI-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.

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CRS-15
Streamlined Approval of Continued State-Wide 1115 Medicaid Waivers
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Extension of waivers
Under Section 1115 of the Social Security
No provision.
Creates a process for submitting requests
under Section 1115 of the
Act, states may obtain waivers of
for and receiving extensions of waiver
Social Security Act
compliance with a broad range of Medicaid
projects that have already received an initial
requirements to conduct experimental, pilot,
3-year extension. Requires states to submit
or demonstration projects. Waivers are
applications to extend those projects at least
approved for a period of 5 years. States
120 days before the expiration date of the
wishing to obtain approval for periods
existing waiver. The Secretary would be
beyond 5 years may submit, during the 6-
required to notify the State if she intends to
month period ending 1 year before the date
review the terms and conditions of the
the waiver would otherwise expire, a written
project and inform the State of proposed
request for an extension of up to 3 years.
changes no later than 45 days after receipt.
If the Secretary fails to provide such
notification, the request is deemed
approved. No more than 120 days after
submission (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.

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CRS-16
Alaska Federal Matching Rate
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Alaska FMAP
The federal share of the cost of Medicaid
No provision.
Changes the formula for calculating the
services is equal to the federal medical
FMAP for Alaska for fiscal years 2001
assistance percentage (FMAP) of those
through 2005. The state percentage for
costs. It is determined annually according
Alaska would be calculated by using an
to a statutory formula designed to pay a
adjusted per capita income instead of the
higher federal matching percentage to states
per capita income generally used. The
with lower per capita incomes relative to the
adjusted per capita income for Alaska
national average.
would be calculated as the three year
average per capita income for the state
BBA 97 included a provision that set the
divided by 1.05.
FMAP for Alaska at 59.8% for FY1998
through FY2000.
Applies to fiscal years 2001 through 2005.

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CRS-17
State Children’s Health Insurance Program
Continued Availability and Redistribution of Unused SCHIP Allotments
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Continued availability
Funds for the SCHIP Program are
Establishes new methods for distributing
Identical to the House reported bill with two
and redistribution of
authorized and appropriated for FY1998
unspent FY1998 and FY1999 allotments.
exceptions. First, specifies that reallocated
unused FY1998 and
through FY2007. From each year’s
States that use all their SCHIP allotments
funds remain available through the end of
FY1999 SCHIP allotments
appropriation, a state is allotted an amount
(for each of those years) would receive an
FY2002 for both states that spend and those
as determined by a formula set in law.
amount equal to estimated spending in
that do not spend all their original
Federal funds not drawn down from a
excess of their original exhausted allotment.
allotments within the specified timeframes.
state’s allotment by the end of each fiscal
Second, the effective date of the Senate
year continue to be available to that state
amendment is as if included in the
for 2 additional fiscal years. Allotments not
Each territory that spends its original
enactment of BBA 97 (August 5, 1997).
spent at the end of 3 years will be
allotment would receive an amount that
redistributed by the Secretary of Health and
bears the same ratio to 1.05% of the total
Human Services (HHS) to states that have
amount available for redistribution as the
fully spent their original allotments for that
ratio of its original allotment to the total
year. Redistributed funds not spent by the
allotment for all territories.
end of the fiscal year in which they are
reallocated officially expire. All
States that do not use all their SCHIP
administrative expenses including outreach
allotment would receive an amount equal to
activities are subject to an overall limit of
the total amount of unspent funds, less
10% of total program spending per fiscal
amounts 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.

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CRS-18
Optional Coverage of Certain Legal Immigrants Under SCHIP
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Allows for state option of
For states that provide SCHIP coverage
Adds a new provision that gives states the
No provision.
SCHIP coverage to
through a Medicaid expansion, legal
option of expanding health insurance
certain subgroups of
immigrant children are subject to the same
coverage to permanent resident alien
qualified aliens
Medicaid restrictions as other legal
children who are otherwise eligible for
immigrants. States that operate a separate
SCHIP and who have been lawfully residing
state SCHIP program must cover those
in the United States for 2 years. The
legal immigrant children who meet the
coverage expansion would only be available
Federal definition of qualified alien and who
to states that have expanded coverage to
are otherwise eligible. These states may
this category of children under their
also cover battered immigrants.
Medicaid state plan.
For qualified alien children entering with
Effective October 1, 2000.
sponsors after December 19, 1997, SCHIP
coverage is subject to the “deeming rule.”

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CRS-19
Authority to Pay for Medicaid Expansion SCHIP Costs From Title XXI Appropriation
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 200
2000
Authority to pay for
States’ allotments under SCHIP pay only
No provision.
Authorizes the payment of the costs of
Medicaid expansion
the federal share of costs associated with
SCHIP Medicaid expansions from the
SCHIP costs from Title
separate (non-Medicaid) SCHIP programs.
SCHIP appropriation. As a conforming
XXI appropriation
The federal share of costs associated with
amendment, eliminates the requirement that
SCHIP Medicaid expansions are paid for
state SCHIP allotments be reduced by
under Medicaid. State SCHIP allotments
amounts paid under Medicaid for SCHIP
are reduced by the amounts paid under
Medicaid expansion costs and presumptive
Medicaid for SCHIP Medicaid expansion
eligibility costs. Also codifies proposed
costs, and presumptive eligibility costs.
rules regarding the order of payments for
benefits and administrative costs from state-
specific SCHIP allotments. For fiscal years
1998 through 2000 only, authorizes the
transfer of unexpended SCHIP
appropriations to the Medicaid
appropriation 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).

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CRS-20
Other Provisions
Juvenile Diabetes Research Program
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
J u v e n i l e D i a b e t e s
The Balanced Budget Act of 1997 amended
Extends the authority for grants to be made
Increases the appropriated funds available
Research
Title III of the Public Health Service Act to
for Juvenile Diabetes Research and
for diabetes grants, bringing the total to
create a grant program under which the
increases funding to $50 million each for
$100 million each for FY2001 and FY2002.
Secretary could make grants to support
FY2003 and FY2007. The funds will
prevention and treatment services of, and
remain available until expended. The funds
research relating to, type I diabetes in
may not be derived or deducted from the
children. Congress committed $150 million,
State Children’s Health Insurance Program.
($30 million each year over 5 years FY1998
through FY2002), for this program, with
the funds being transferred from Title XXI
of the Social Security Act (State Children’s
Health Insurance Program) for these grants.
This commitment was in addition to the
annual appropriations for NIH.

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CRS-21
Indian Diabetes Grant Program
S. 3165
H.R. 5291
Medicare, Medicaid and SCHIP
Beneficiary Improvement and
Balanced Budget Refinement Act of
Current Law
Protection Act of 2000
2000
Indian Diabetes Grants
The Balanced Budget Act of 1997 amended
Extends the authority for grants to be made
Increases the appropriated funds available
Title III of the Public Health Service Act to
for diabetes prevention and treatment
for diabetes prevention and treatment
create a grant program under which the
programs for Indians, and increases funding
programs for Indians, bringing the total to
Secretary could make grants to support
to $50 million each for FY2003 and
$100 million each for FY2001 and FY2002.
prevention and treatment services of
FY2007. The funds will remain available
diabetes in Indians. These grants were to
until expended. The funds may not be
purchase services provided through one or
derived or deducted from the State
more of the following entities: the Indian
Children’s Health Insurance Program.
Health Service, a tribal Indian health
program, and an urban Indian health
program. Congress committed $150 million,
($30 million each year over 5 years FY1998
through FY2002), for this program, with
the funds being transferred from Title XXI
of the Social Security Act (State Children’s
Health Insurance Program) for these grants.

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