Order Code RL34129
Medicaid and SCHIP Provisions in
H.R. 3162 and S. 1893/H.R. 976
August 15, 2007
Evelyne P. Baumrucker, Coordinator
Bernadette Fernandez, April Grady, Jean Hearne,
Elicia J. Herz, and Chris L. Peterson
Domestic Social Policy Division

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Medicaid and SCHIP Provisions in
H.R. 3162 and S. 1893/H.R. 976
Summary
Medicaid, authorized under Title XIX of the Social Security Act, is a federal-
state program providing medical assistance for low-income individuals who are aged,
blind, disabled, members of families with dependent children, or who have one of a
few specified medical conditions.
The Balanced Budget Act of 1997 (BBA 1997) established the State Children’s
Health Insurance Program (SCHIP) under a new Title XXI of the Social Security Act.
SCHIP builds on Medicaid by providing health insurance to uninsured children in
families with incomes above applicable Medicaid income standards. States provide
children with health insurance that meets specific standards for benefits and cost-
sharing through separate SCHIP programs, or through their Medicaid programs, or
through a combination of both. SCHIP has federal appropriations for the current
fiscal year, but none are slated for FY2008 and beyond.
Two bills under consideration in the House and the Senate would make
important changes to Medicaid and SCHIP. On August 1, 2007, the House passed
H.R. 3162, the Children’s Health and Medicare Protection (CHAMP) Act of 2007.
The bill would reauthorize and increase funding levels and state grant distributions
for SCHIP and make changes to the Medicare and Medicaid programs. The major
SCHIP provisions would enhance outreach and enrollment efforts to increase the
number of children covered by the program, modify the program’s citizenship
verification process, change minimum benefit requirements, establish a five-year
demonstration project for certain children (and their families) to buy into SCHIP
coverage, and make other changes.
On July 19, 2007, the Senate Finance Committee marked up the Children’s
Health Insurance Program Reauthorization Act of 2007 (S. 1893/H.R. 976). The
Senate struck the language in an unrelated House-passed tax measure (H.R. 976) and
replaced it with the language contained in S. 1893, as approved by the Senate Finance
Committee. A total of 92 amendments were offered, with 9 adopted. The bill passed
the Senate on August 2, 2007. The Senate bill provides authorized appropriations to
SCHIP through FY2012 and changes how federal SCHIP funds are allotted to states.
Other key provisions would enhance the program’s outreach and enrollment efforts,
extend coverage to pregnant women, and alter the citizenship verification process for
program eligibility.
The following side-by-side comparison provides a brief description of current
law and the changes that would be made to Medicaid and SCHIP under H.R. 3162
and S. 1893/H.R. 976. Medicare provisions in Titles II through VII of H.R. 3162 are
not described here. This report will be updated as legislative activity warrants.

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Key Policy Staff:
The Children’s Health and Medicare Protection Act of 2007 and
The Children’s Health Insurance Program Reauthorization Act of 2007
Area of Expertise
Name
Phone
E-mail
Coordinator
Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Funding/Financing
Chris L. Peterson
7-4681 cpeterson@crs.loc.gov
Funding for the Territories
Chris L. Peterson
7-4681 cpeterson@crs.loc.gov
Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Federal Matching Payments
April Grady
7-9578 agrady@crs.loc.gov
Eligibility
Elicia J. Herz
7-1377 eherz@crs.loc.gov
Optional Coverage of Older
Children
Elicia J. Herz
7-1377 eherz@crs.loc.gov
Optional Coverage of
Pregnant Women
Elicia J. Herz
7-1377 eherz@crs.loc.gov
Coverage of Non-pregnant
Childless Adults and Parents Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Legal Immigrants
Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Medicaid TMA
April Grady
7-9578 agrady@crs.loc.gov
Spousal Impoverishment and
Asset Verrification
Julie L. Stone
7-1386 jstone@crs.loc.gov
Enrollment/Access
Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Citizenship Documentation
April Grady
7-9578 agrady@crs.loc.gov
Premium Assistance/Employer
Buy-in
Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Benefits
Elicia J. Herz
7-1377 eherz@crs.loc.gov
Family Planning Services
Evelyne P. Baumrucker
7-8913 ebaumrucker@crs.loc.gov
Monitoring Quality
Elicia J. Herz
7-1377 eherz@crs.loc.gov
Payments
Elicia J. Herz
7-1377 eherz@crs.loc.gov
Medicaid Drug Rebate
Jean Hearne
7-7362 jhearne@crs.loc.gov
DSH
Jean Hearne
7-7362 jhearne@crs.loc.gov

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Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recent Legislative Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Medicaid and SCHIP Provisions in H.R. 3162 and S. 1893/H.R. 976 . . . . 2
Funding/Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Enrollment/Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Premium Assistance/Employer Buy-In . . . . . . . . . . . . . . . . . . . . . . . . . 5
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Monitoring Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
References to Title XXI; Elimination of Confusing Program References . . . 6
H§155. References to title XXI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
S§606. Elimination of confusing program references. . . . . . . . . . . . . . 6
Funding/Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CHIP appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
H§101. Establishment of new base CHIP allotments. . . . . . . . . . . . . . 6
S§101. Extension of CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
S§103. One-time appropriation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Allotment of federal CHIP funds to territories . . . . . . . . . . . . . . . . . . . . . . 12
H§101. Establishment of new base CHIP allotments. . . . . . . . . . . . . 12
S§104. Improving funding for the territories under CHIP
and Medicaid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Period of availability of CHIP allotments . . . . . . . . . . . . . . . . . . . . . . . . . . 12
H§102. 2-year initial availability of CHIP allotments. . . . . . . . . . . . . 12
S§109. Two-year availability of allotments; expenditures counted
against oldest allotments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
H§101. Establishment of new base CHIP allotments. . . . . . . . . . . . . 13
S§105. Incentive bonuses for states. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
H§103. Redistribution of unused allotments to address state funding
shortfalls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
H§104. Extension of option for qualifying states. . . . . . . . . . . . . . . . . 18
§111. Option for qualifying states to receive the enhanced portion
of the CHIP matching rate for Medicaid coverage of
certain children. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
No federal funding for illegal aliens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
H§135. No federal funding for illegal aliens. . . . . . . . . . . . . . . . . . . . 24
Medicaid funding for the territories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
H§811 Payments for Puerto Rico and territories. . . . . . . . . . . . . . . . . 25
Enhanced matching funds for certain data systems in the territories . . . . . . 26
H§811 Payments for Puerto Rico and territories. . . . . . . . . . . . . . . . . 26
S§104 Improving funding for the territories under CHIP
and Medicaid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Medicaid FMAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
H§813. Adjustment in computation of Medicaid FMAP to
disregard an extraordinary employer pension contribution. . . . . . 27
CHIP E-FMAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

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S§110. Limitation on matching rate for states that propose to
cover children with effective family income that exceeds
300 percent of the poverty line. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
H§123. Premium grace period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Optional coverage of older children under CHIP . . . . . . . . . . . . . . . . . . . . 30
H§131. Optional coverage of children up to age 21 under CHIP. . . . 30
Optional coverage of legal immigrants in Medicaid and CHIP . . . . . . . . . 31
H§132 Optional coverage of legal immigrants under the Medicaid
program and CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Optional coverage of pregnant women under CHIP . . . . . . . . . . . . . . . . . . 31
H§133. State option to expand or add coverage of certain pregnant
women under CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
S§107. State option to cover low-income pregnant women under
CHIP through a state plan amendment. . . . . . . . . . . . . . . . . . . . . 31
Nonpregnant childless adult coverage under CHIP . . . . . . . . . . . . . . . . . . . 33
H§134 Limitation on waiver authority to cover adults. . . . . . . . . . . . . 33
S§106 Phase-out coverage for nonpregnant childless adults
under CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Parent coverage under CHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
S§106 Conditions for coverage of parents. . . . . . . . . . . . . . . . . . . . . . 35
Medicaid TMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
H§801. Modernizing transitional Medicaid. . . . . . . . . . . . . . . . . . . . . 36
Spousal impoverishment rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
H§804. State option to protect community spouses of individuals
with disabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Medicaid asset verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
H§817. Extension of SSI web-based asset demonstration project
to the Medicaid program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Enrollment/Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
“Express lane” eligibility determinations . . . . . . . . . . . . . . . . . . . . . . . . . . 39
H§112 State option to rely on finding from an express lane
agency to conduct simplified eligibility determinations. . . . . . 39
S§203 Demonstration project to permit States to rely on findings
by an Express Lane agency to determine components of a
child’s eligibility for Medicaid or CHIP. . . . . . . . . . . . . . . . . . . 39
Out-Stationed Eligibility Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . 42
H§113 Application of Medicaid outreach procedures to all
children and pregnant women. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Funding for outreach and enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
H§114 Encouraging culturally appropriate enrollment and
retention practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
S§201 Grants for outreach and enrollment. . . . . . . . . . . . . . . . . . . . . . 43
Continuous eligibility under CHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
H§115 continuous eligibility under CHIP . . . . . . . . . . . . . . . . . . . . . . 44
Commission to monitor access and other matters . . . . . . . . . . . . . . . . . . . . 45
H§141. Children’s Access, Payment and Equality Commission. . . . . 45
Model enrollment practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
H§142 Model of interstate coordinated enrollment and coverage
process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

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Citizenship documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
H§143. Medicaid citizenship documentation requirements. . . . . . . . . 46
S§301. Verification of declaration of citizenship or
nationality for purposes of eligibility for Medicaid and CHIP. . . 46
Elimination of new Health Opportunity Accounts . . . . . . . . . . . . . . . . . . . 50
H§145 Prohibiting initiation of new health opportunity
account demonstration programs. . . . . . . . . . . . . . . . . . . . . . . . . 50
Outreach and enrollment of Indians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
S§202. Increased outreach and enrollment of Indians. . . . . . . . . . . . . 51
Eligibility information disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
S§204 Authorization of certain information disclosures to simplify
health coverage determinations. . . . . . . . . . . . . . . . . . . . . . . . . . 52
Reducing administrative barriers to enrollment . . . . . . . . . . . . . . . . . . . . . . 53
S§302 Reducing administrative barriers to enrollment. . . . . . . . . . . . 53
Premium Assistance/Employer Buy-In Programs . . . . . . . . . . . . . . . . . . . . . . . . 53
Employer Buy-in to CHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
H§821 Demonstration project for employer buy-in. . . . . . . . . . . . . . . 53
Premium assistance programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
S§401 Additional State option for providing premium assistance. . . . 55
Education and enrollment assistance in premium assistance programs . . . . 58
S§402 Outreach, education, and enrollment assistance. . . . . . . . . . . . 58
Special enrollment period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
S§411 Special enrollment period under group health plans in
case of termination of Medicaid or CHIP coverage or eligibility
for assistance in purchase of employment-based
coverage; coordination of care. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Dental services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
H§121. Ensuring child-centered coverage. . . . . . . . . . . . . . . . . . . . . . 60
H§144. Access to dental care for children. . . . . . . . . . . . . . . . . . . . . . 60
S§608. Dental health grants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Services provided by federally qualified health centers (FQHCs) and
rural health centers (RHCs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
H§121. Ensuring child-centered coverage. . . . . . . . . . . . . . . . . . . . . . 62
Mental health services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
H§121. Ensuring child-centered coverage. . . . . . . . . . . . . . . . . . . . . . 62
S§607. Mental health parity in CHIP plans. . . . . . . . . . . . . . . . . . . . . 62
Early and Periodic Screening, Diagnostic and Treatment (EPSDT)
services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
H§121. Ensuring child-centered coverage. . . . . . . . . . . . . . . . . . . . . . 63
S§605. Deficit Reduction Act technical corrections. . . . . . . . . . . . . . . 63
Services provided by school-based health centers . . . . . . . . . . . . . . . . . . . . 64
H§121. Ensuring child-centered coverage. . . . . . . . . . . . . . . . . . . . . . 64
Benchmark coverage options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
H§121. Ensuring child-centered coverage. . . . . . . . . . . . . . . . . . . . . . 64
H§122. Improving benchmark coverage options. . . . . . . . . . . . . . . . . 64
Extension of family planning services and supplies . . . . . . . . . . . . . . . . . . 65
H§802 Family planning services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
H§803. Authority to continue providing adult day health services
approved under a State Medicaid plan. . . . . . . . . . . . . . . . . . . . . 66

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Monitoring Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Quality measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
H§151. Pediatric health quality measurement program. . . . . . . . . . . . 67
S§501. Child health quality improvement activities for children
enrolled in Medicaid or CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
S§502. Improved information regarding access to coverage
under CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Federal evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
H§153. Updated federal evaluation of CHIP. . . . . . . . . . . . . . . . . . . . 70
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
H§812 Medicaid Drug Rebate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Moratorium on certain payment restrictions . . . . . . . . . . . . . . . . . . . . . . . . 72
H§814. Moratorium on certain payment restrictions. . . . . . . . . . . . . . 72
Tennessee DSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
H§ 815. Tennessee DSH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Monitoring erroneous payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
S§602. Payment error rate measurement (“PERM”). . . . . . . . . . . . . . 73
Payments for FQHCs and RHCs under CHIP . . . . . . . . . . . . . . . . . . . . . . . 75
S§609. Application of prospective payment system for services
provided by Federally-qualified health centers and rural
health clinics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
H§100. Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Citizenship auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
H§136. Auditing requirement to enforce citizenship restrictions
on eligibility for Medicaid and CHIP benefits. . . . . . . . . . . . . . . 77
Managed care safeguards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
H§152. Application of certain managed care quality safeguards
to CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
S§503. Application of certain managed care quality safeguards
to CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Access to records for CHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
H§154. Access to records for IG and GAO audits. . . . . . . . . . . . . . . . 78
Effective date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
H§156. Reliance on law; exception for state legislation. . . . . . . . . . . 79
S§801. Effective date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
County Medicaid health insuring organizations . . . . . . . . . . . . . . . . . . . . . 80
H§805. County Medicaid health insuring organizations. . . . . . . . . . . 80
Clarification of treatment of regional medical center . . . . . . . . . . . . . . . . . 81
H§816. Clarification treatment of regional medical center . . . . . . . . . 81
Diabetes grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
H§822. Diabetes grants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
S§613. Demonstration projects relating to diabetes prevention. . . . . . 82
S§501. Child health quality improvement activities for children
enrolled in Medicaid and CHIP. . . . . . . . . . . . . . . . . . . . . . . . . . 83
Collection of data used in providing CHIP funds . . . . . . . . . . . . . . . . . . . . 83
Technical correction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
H§823. Technical correction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

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S§605. Deficit Reduction Act technical corrections. . . . . . . . . . . . . . . 85
S§601. Technical corrections regarding current state
authority under Medicaid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Elimination of counting of Medicaid child presumptive eligibility costs
against CHIP allotments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
S§603. Elimination of counting medicaid child presumptive
eligibility costs against title XXI allotment. . . . . . . . . . . . . . . . . 86
Outreach to small businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
S§614. Outreach regarding health insurance options available
to children. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
List of Tables
Table 1. Medicaid and SCHIP Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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Medicaid and SCHIP Provisions in
H.R. 3162 and S. 1893/H.R. 976
Background
Medicaid, authorized under Title XIX of the Social Security Act, is a federal-
state program providing medical assistance for low-income individuals who are aged,
blind, disabled, members of families with dependent children, or who have one of a
few specified medical conditions.
The Balanced Budget Act of 1997 (BBA 1997) established SCHIP under a new
Title XXI of the Social Security Act. SCHIP builds on Medicaid by providing health
insurance to uninsured children in families with incomes above applicable Medicaid
income standards. States provide SCHIP children with health insurance that meets
specific standards for benefits and cost-sharing, or through their Medicaid programs,
or through a combination of both.
SCHIP has federal appropriations for the current fiscal year, but none are slated
for FY2008 and beyond.1
Recent Legislative Activity
Two bills under consideration in the House and the Senate would make
important changes to Medicaid and SCHIP. On August 1, 2007, the House passed
H.R. 3162, the Children’s Health and Medicare Protection (CHAMP) Act of 2007.
The bill would reauthorize and increase funding levels and state grant distributions
for the State Children’s Health Insurance Program (SCHIP) and make changes to the
Medicare and Medicaid programs.
An August 1 estimate from the Congressional Budget Office (CBO) indicates
that the SCHIP title of H.R. 3162 would increase outlays by $47.4 billion over 5
years and by $128.7 billion over 10 years, and that the Medicaid title of the bill
would increase outlays by $4.4 billion over 5 years and by $4.6 billion over 10 years.
Including Medicare and miscellaneous provisions, the CBO estimates that the entire
bill would increase outlays by $25.6 billion over 5 years and by $58.0 billion over 10
years. These costs would be offset by an increase in the federal tobacco tax and other
1 Although no SCHIP appropriations are currently slated for FY2008 forward, both OMB
and CBO assume that the program continues at the FY2007 appropriation level of $5.04
billion.

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CRS-2
changes, which the CBO estimates would increase revenue by $28.1 billion over 5
years and by $58.1 billion over 10 years.2
On July 19, 2007, the Senate Finance Committee marked up the Children’s
Health Insurance Program Reauthorization Act of 2007 (S. 1893/H.R. 976). The
Senate struck the language in an unrelated House-passed tax measure (H.R. 976) and
replaced it with the language contained in S. 1893, as approved by the Senate Finance
Committee. A total of 92 amendments were offered, with 9 adopted. The bill passed
the Senate on August 2, 2007.
The Senate bill contains eight titles, six dealing with SCHIP and Medicaid.
Recent CBO estimates indicate that the Senate bill would increase SCHIP outlays by
$28.6 billion over the five-year period of FY2008- FY2012. Additional outlay
increases would occur as a result of effects on Medicaid (e.g., changes in citizenship
documentation). In sum, the CBO estimates total spending increases of $35.2 billion
over the five-year window. The proposal also contains provisions that offset this
direct spending increase with changes in the excise taxes associated with tobacco
products.3
Medicaid and SCHIP Provisions in H.R. 3162 and
S. 1893/H.R. 976
Table 1 provides a brief description of current law and a side-by-side
comparison of the changes that would be made to Medicaid and SCHIP under H.R.
3162 and S. 1893/H.R. 976.4 A comparison of some of the key provisions across
both bills is described below.
Funding/Financing. Under current law, the SCHIP appropriation for
FY2007 (the last year for which there is an appropriation) was just over $5 billion,
with states’ allotments available for three years. Under the House bill, allotments
from FY2008 onward would be available for only two years. Appropriations for
FY2008 onward would be provided without a national amount specified. The annual
appropriation would be determined automatically as the sum total of the allotments
calculated for all the states and territories. For FY2009 onward, states’ allotments
would be based on either prior-year allotments or prior-year spending. States would
not be limited in the amount of prior-year balances they could carry forward.
Under the Senate legislation, allotments from FY2007 onward would be
available for only two years. The FY2008 appropriation would be $9.125 billion,
rising to $16.0 billion in FY2012, with no appropriations provided thereafter. As
2 CBO, Estimated Effect on Direct Spending and Revenues of H.R. 3162, the Children’s
Health and Medicare Protection Act, for the Rules Committee (August 1, 2007), available
at [http://www.cbo.gov/ftpdocs/85xx/doc8519/HR3162.pdf].
3 “Cost estimate for the legislative language (ERN07632) provided by the Committee on
Finance on July 26, 2007, Congressional Budget Office, available at [http://www.cbo.gov/
ftpdocs/84xx/doc8489/BaucusSCHIP7-26-07.pdf].
4 Medicare provisions in Titles II through VII of H.R. 3162 are not described here.

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CRS-3
long as those amounts were adequate, states would be allotted in FY2009-FY2011
what they project to spend for the year in federal SCHIP expenditures plus 10%, with
the funds not used for states’ allotments going into a bonus pool. States would be
limited in the amount of prior-year balances they could carry forward.
The House legislation calls for bonus payments to states that increase their
enrollment of children in Medicaid or SCHIP above certain levels. Qualifying states
would receive cash payments as a percentage of the state share of their
Medicaid/SCHIP expenditures, though setting a higher bar and paying a lower
percentage in SCHIP as compared to Medicaid. The Senate bill would also provide
bonus payments, but the payments would be for increasing child enrollment in
Medicaid, not in SCHIP. The payments would be based on fixed-dollar amounts
specified in the legislation.
Limitations on SCHIP Matching Rate. Under current law, states can set
their upper income eligibility level for SCHIP at the higher of 200% of the federal
poverty level (FPL) or 50 percentage points above their income eligibility level for
Medicaid children prior to SCHIP’s enactment. However, by using existing
flexibility to define what “counts” as income, any state can raise its effective SCHIP
income eligibility level above 200% FPL through the use of income disregards.
Neither the House nor the Senate bill would affect states’ ability to use income
disregards. However, the Senate bill would reduce the federal reimbursement rate
for costs associated with SCHIP enrollees whose income would exceed 300% FPL
without the use of certain disregards. An exception would be provided for states that,
on the date of enactment, have federal approval or have enacted a state law to cover
SCHIP enrollees above 300% FPL.
Eligibility. With respect to eligibility, the House bill (as amended) would
allow states to cover individuals up to age 21 (rather than age 19) in their SCHIP
programs. Although some differences apply, both the House and Senate bills would
allow broader coverage of pregnant women under SCHIP, in terms of eligibility and
benefits, when certain conditions are met. The House bill would allow states to cover
certain legal immigrants who meet applicable categorical and financial eligibility
requirements (i.e., pregnant women and/or children under age 21) before such
persons have been in the United States for a minimum of five years as required under
current law. The Senate bill does not include a comparable provision.
Section 1115 of the Social Security Act allows the Secretary of HHS to waive
certain statutory requirements to modify virtually all aspects of Medicaid and SCHIP
as long as such changes further the goals of Titles XIX (Medicaid) and/or XXI
(SCHIP). States and the federal government have used the Section 1115 waiver
authority to cover non-Medicaid and SCHIP services, limit benefit packages for
certain groups, cap program enrollment, cover groups such as non-pregnant childless
adults that are not otherwise eligible, among other purposes.
With respect to SCHIP coverage of adult populations (e.g., nonpregnant
childless adults and parents of Medicaid and SCHIP-eligible children), the House bill
(as amended) would allow for such coverage as long as states ensure that they have
not instituted a waiting list for their SCHIP program, and that they have an outreach
program to reach all targeted low-income children in families with annual incomes

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CRS-4
less than 200% FPL. By contrast, the Senate bill phases out SCHIP coverage of non-
pregnant childless adults after two years, and in FY2009, federal reimbursement for
such coverage would be reduced to the Medicaid federal medical assistance
percentage (FMAP) rate. Coverage of parents would still be allowed, but beginning
in FY2010, allowable spending under the waivers would be subject to a set aside
amount from a separate allotment and would be matched at the state’s regular
Medicaid FMAP rate unless the state is able to prove that it met certain coverage
benchmarks (related to performance in providing coverage to children). Finally, in
FY2011 and FY2012, the federal matching rate for costs associated with such parent
coverage would be reduced to a rate between the Medicaid and SCHIP rates for states
that meet certain coverage benchmarks, and to the state’s regular Medicaid FMAP
for all other states.
Enrollment/Access. Both bills include provisions to facilitate access and
enrollment in Medicaid and SCHIP. Among the major provisions, the House bill
would create a state option to rely on a finding from specified agencies to determine
whether a child under age 19 (or an age specified by the state not to exceed 21 years
of age) has met one or more of the eligibility requirements (e.g., income, assets or
resources, citizenship, or other criteria) necessary to determine an individual’s initial
eligibility, eligibility redetermination, or renewal of eligibility for medical assistance
under Medicaid. The Senate bill, by contrast, would allow up to 10 states to use
Express Lane5 eligibility determinations for Medicaid and SCHIP enrollment and
renewal through a three-year demonstration program. Like the House bill, the Senate
bill does not relieve states of their obligation to determine eligibility for Medicaid,
and would require the state to inform families that they may qualify for lower
premium payments or more comprehensive health coverage under Medicaid if the
family’s income were directly evaluated by the state Medicaid agency. Both bills
would drop the requirement for signatures on a Medicaid application form under
penalty of perjury.
Citizenship Documentation Rules. Both the House and Senate bills would
make some similar modifications of existing Medicaid citizenship documentation
rules (e.g., by requiring additional documentation options for federally recognized
Indian tribes, specifying the reasonable opportunity period for individuals who are
required to present documentation). However, the Senate bill would allow states to
meet Medicaid citizenship documentation requirements through name and Social
Security number validation, make citizenship documentation a requirement for
SCHIP, provide an enhanced match for certain administrative costs, and require
separate identification numbers for children born to women on emergency Medicaid.
In contrast, the House bill would make Medicaid citizenship documentation for
children under age 21 a state option, allow “Express Lane” agencies to determine
eligibility without citizenship documentation, and require eligibility audits to ensure
that federal funds are not spent on individuals who are not legal residents.
5 Express Lane eligibility refers to specified agencies that would be permitted to a streamline
the Medicaid and SCHIP eligibility determination and intake process to make it easier for
individuals to qualify for coverage.

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CRS-5
Premium Assistance/Employer Buy-In. The House bill would allow the
Secretary of Health and Human Services to establish a five-year demonstration
project under which up to 10 states would be permitted to provide SCHIP child
health assistance to children (and their families) to individuals who are beneficiaries
under a group health plan. The Senate bill would allow states to offer a premium
assistance subsidy for qualified employer sponsored coverage to all targeted low-
income children who are eligible for child health assistance and have access to such
coverage, or to parents of targeted low-income children.
Benefits. Both the House and Senate bills would make other changes to
covered benefits under SCHIP. Under the House bill, dental care and services
provided by federally qualified health centers (FQHCs) and rural health clinics
(RHCs) would become mandatory benefits. With respect to dental services, the
House bill would also require the Secretary of HHS to implement a program to
educate new parents about the importance of oral health care for infants, and would
require states to report data on the receipt of dental services for SCHIP children. In
the Senate bill, a new grant would be authorized to improve the availability of dental
services and strengthen dental coverage for children under SCHIP. GAO would be
required to evaluate access to dental care under both the House and Senate bills. In
addition, the Senate bill includes a new mental health parity provision for SCHIP,
while the House bill would broaden the scope of coverage for mental health services
under certain SCHIP benefit plans. Provisions to reduce diabetes in children are
included in both the House and Senate bills. The House bill would extend funding
for existing diabetes programs authorized under the Public Health Services Act,
while the Senate bill would create a new demonstration project to promote screening
and improvements in diet and physical activity. Finally, for the benchmark package
option under Medicaid, established in the Deficit Reduction Act of 2005 (P.L. 109-
171), both the House and Senate bills would require coverage of the Early and
Periodic Screening, Diagnostic and Treatment (EPSDT), benefit for individuals
under 21 (rather than under age 19).
Monitoring Quality. There are other new initiatives to improve access and
quality of care for children under Medicaid and SCHIP, including a new federal
commission (House bill only), child health care quality measurement programs (both
the House and Senate bills), and a second federal SCHIP evaluation (House bill
only).
Payments. With respect to payment policies, both the House and Senate bills
would require that payments for FQHCs and RHCs under SCHIP follow the
prospective payment system for such services under Medicaid. The House bill would
prohibit the Secretary of HHS from taking actions to further restrict Medicaid
coverage or payments for rehabilitation services or for certain school-based services
beyond policies in effect as of July 1, 2007. This prohibition would continue for one
year after the date of enactment of this provision. Finally, the federal and state
governments are required to monitor and take actions to reduce erroneous payments
under both Medicaid and SCHIP. The two systems for conducting these evaluations
are the Medicaid Eligibility Quality Control (MEQC) program and the newer
Payment Error Rate Measurement (PERM) program. The Senate bill stipulates
several requirements for a final rule on PERM and requires the Secretary of HHS to
coordinate these two systems and reduce redundancies.

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CRS-6
Table 1. Medicaid and SCHIP Provisions
Current Law
House: H.R. 3162
Senate: H.R. 976
References to Title XXI; A provision in P.L. 106-113 directed the H§155. References to title XXI. The S§606. Elimination of confusing program
Elimination of Confusing Secretary of HHS or any other federal officer or provision would repeal this section in references. Identical to the House bill.
Program References
employee, with respect to references to the P.L. 106-113. Thus, for official
program under Title XXI, in any publication or publication and communication
official communication to use the term purposes, the provision would reinstate
“SCHIP” instead of “CHIP” and to use the term “CHIP” and “children’s health insurance
“State children’s health insurance program” program,” as applicable, when
instead of “children’s health insurance referencing Title XXI.
program.”
Funding/Financing
CHIP appropriations
Section 2104(a) of the Social Security Act H§101. Establishment of new base S§101. Extension of CHIP. The following
specifies the following SCHIP appropriation CHIP allotments. Appropriations for national appropriation amounts would be
amounts (of which the territories receive FY2008 onward would be provided specified for CHIP in §2104(a): $9.125
0.25%): $4.3 billion annually from FY1998 to without a national amount specified. The billion in FY2008; $10.675 billion in
FY2001; $3.15 billion annually from FY2002 annual appropriation would be FY2009; $11.85 billion in FY2010; $13.75
to FY2004; $4.05 billion in FY2005 and determined automatically as the sum billion in FY2011; and two semiannual
FY2006; and $5.0 billion in FY2007. No total of the allotments calculated for all installments of $1.75 billion each in FY2012.
amounts are specified for FY2008 onward.
the states and territories. No end year S§103. One-time appropriation. A
would be specified; the program could separate appropriation of $12.5 billion would
receive annual appropriations in be provided for CHIP allotments in the first
perpetuity.
half of FY2012.

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CRS-7
Current Law
House: H.R. 3162
Senate: H.R. 976
Allotment of federal CHIP The national SCHIP amount available to states H§101. Establishment of new base S§102. Allotments for the 50 states and the
funds to states
is allotted primarily on the basis of estimates of CHIP allotments. FY2008. Generally, District of Columbia. FY2008. For
each state’s number of children who are low a state’s FY2008 allotment would be the FY2008, a state’s allotment would be
income (that is, with family income below greater of (1) its own projection of calculated as 110% of the greatest of the
200% of the federal poverty theshold) and the federal CHIP expenditures in FY2008, following four amounts: (1) the state’s
number of such children who are uninsured. based on the state’s May 2007 FY2007 federal CHIP spending multiplied by
The source of data is the average of the number submission to CMS, and (2) the state’s the annual adjustment (described below); (2)
of such children based on the three most recent FY2007 CHIP allotment multiplied by the state’s FY2007 federal CHIP allotment
Annual Social and Economic (ASEC) the allotment increase factor (described multiplied by the annual adjustment; (3) for
Supplements (formerly known as the March below). If the state enacted legislation states that receive federal CHIP funds in
supplements) to the Census Bureau’s Current during 2007 that would expand eligibility FY2007 because of their shortfalls, or states
Population Survey (CPS) before the beginning or improve benefits, the state may use its that were projected to be in shortfall based on
of the calendar year in which the applicable August 2007 submission of expenditure their November 2006 submission of projected
fiscal year begins. The estimates are adjusted projections instead.
expenditures, the state’s FY2007 projected
to account for geographic variations in health
federal spending as of November 2006 (or as
costs (calculated as 85% of each state’s
of May 2006, for a state whose May 2006
variation from the national average in its
projection was $95 million to $96 million
average wages in the health services industry).
higher than its November 2006 projection, a
A ceiling is in place to ensure that a state’s
provision that affects only North Carolina)
portion of the total available appropriation does
multiplied by the annual adjustment; and (4)
not exceed 145% of its share of funds in
the state’s FY 2008 federal CHIP projected
FY1999. In addition, there are three floors to
spending as of August 2007 and certified by
ensure a state’s share does not fall below
the state not later than September 30, 2007.
certain levels.

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CRS-8
Current Law
House: H.R. 3162
Senate: H.R. 976
Adjustment for cost and child population Adjustment for cost and child population
growth. The allotment increase factor growth. The annual adjustment for health
would be the product of (1) the per capita care cost growth and child population growth
health care growth factor, and (2) the is the product of (1) 1 plus the percentage
child population growth factor. The per increase (if any) in the nominal projected per
capita health care growth factor would be capita spending in National Health
1 plus the percentage increase in the Expenditures for the year over the prior year,
projected per capita amount of National and (2) 1.01 plus the percentage change in the
Health Expenditures over the prior child population (under age 19) in each state,
year’s. The child population growth based on the most timely and accurate
factor would be 1.01 plus the percentage published estimates from the Census Bureau.
increase (if any) in the population of
children under 19 years of age in the
state, based on the most recent published
estimates from the Census Bureau.
FY2009 onward. For FY2009 and every FY2009 onward. For FY2009 to FY2011, a
future odd-numbered fiscal year, a state’s state’s allotment would be calculated as
federal CHIP allotment would be equal to 110% of its projected spending for that year.
the prior year’s allotment multiplied by
the allotment increase factor.

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CRS-9
Current Law
House: H.R. 3162
Senate: H.R. 976
For FY2010 and every future The regular CHIP appropriations available to
even-numbered fiscal year, a state’s states in FY2012 (that is, the $1.75 billion
federal CHIP allotment would be provided semi-annually reduced by payments
“rebased.” In these years, the state’s to the territories) would be calculated using
allotment would be the prior year’s states’ projected federal CHIP spending
federal CHIP expenditures multiplied by allocable to each semi-annual period. The
the allotment increase factor.
one-time appropriation of $12.5 billion in
§103 of the legislation is to be treated in the
same manner as the $1.75 billion
appropriation for the first semi-annual
allotment. If the available national allotment
for a semi-annual period in FY2012 exceeds
the amount to be allotted in that period based
on states’ projected CHIP expenditures, the
remaining amount would be allotted
proportionally based on each state’s share of
the allotment calculated for that FY2012
period.
If national appropriation is inadequate. For
FY2008, if the state allotments as calculated
exceed the available national allotment,
states’ allotments would be reduced
proportionally.

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CRS-10
Current Law
House: H.R. 3162
Senate: H.R. 976
For FY2009 to FY2012, if the state
allotments as calculated exceed the available
national allotment, then the available national
allotment would be distributed among states
using a different formula. It would calculate
each state’s share (percentage) of the
available national allotment primarily based
on states’ own projected CHIP expenditures
for that fiscal year.
Additional provisions. If a state’s projected
CHIP expenditures for FY2009 to FY2012
are at least 10% more than the allotment
calculated for the preceding fiscal year
(regardless of the computation used if the
national appropriation was inadequate) and,
during the preceding fiscal year, the state did
not receive approval for a CHIP state plan
amendment or waiver to expand CHIP
coverage or did not receive a CHIP
Contingency Fund payment, then the state
would be required to submit to the Secretary
by August 31 of the preceding fiscal year
information relating to the factors that
contributed to the increase as well as any
additional information requested by the
Secretary. The Secretary would be required

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CRS-11
Current Law
House: H.R. 3162
Senate: H.R. 976
to review the information and provide a
response in writing within 60 days as to
whether the states’ projections of CHIP
expenditures are approved or disapproved
(and if disapproved, reasons for disapproval),
or specified additional information. If
disapproved or requested to provide
additional information, the state would be
provided with reasonable opportunity to
submit additional information. If the
Secretary has not determined by September
30 whether the state has demonstrated the
need for the increase in the succeeding fiscal
year’s allotment, a provisional allotment
would be provided based on 110% of the
allotment calculated for the preceding fiscal
year (regardless of the computation used if
the national appropriation was inadequate)
and may adjust the allotment by not later than
November 30.
For calculating the FY2008 allotments to
states and territories, the Secretary would be
required to use the most recent data available
before the start of the fiscal year but may
adjust the allotments as necessary on the
basis of actual expenditure data for FY2007

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CRS-12
Current Law
House: H.R. 3162
Senate: H.R. 976
submitted no later than November 30, 2007.
The Secretary could make no adjustments for
FY2008 after December 31, 2007.
Allotment of federal CHIP In addition to receiving 0.25% of the national H§101. Establishment of new base S§104. Improving funding for the
funds to territories
SCHIP appropriation in Section 2104(a) of the CHIP allotments. There would be no territories under CHIP and Medicaid.
Social Security Act, the following SCHIP separate CHIP appropriation for the There would be no separate CHIP
appropriation amounts were specified for the territories. Beginning with FY2008, the appropriation for the territories. For FY2008,
territories: The territories are also allotted the allotment to a territory or commonwealth each territory’s allotment would be its highest
following appropriation amounts in would be equal to its prior year federal annual federal CHIP spending between
§2104(c)(4)(B): $32 million in FY1999; $34.2 CHIP expenditures multiplied by the per FY1998 and FY2007, plus the annual
million in FY2000 and FY2001; $25.2 million capita health care growth factor adjustment for health care cost growth and
in FY2002 to FY2004; $32.4 million in (described above) and by 1.01 plus the national child population growth described
FY2005 and FY2006; and $40 million in percentage increase (if any) in the above. For FY2009 through FY2012, each
FY2007. The amounts set aside for the population of children under 19 years of territory’s allotment would be the prior year’s
territories are distributed according to the age in the United States.
allotment, plus the annual adjustment for
percentages specified in statute: Puerto Rico,
health care cost growth and national child
91.6%; Guam, 3.5%; the Virgin Islands, 2.6%;
population growth. In FY2012, 89% of the
American Samoa, 1.2%; and the Northern
amount to be allotted to the territories would
Mariana Islands, 1.1%.
be allotted in the first half of the fiscal year,
with the remaining 11% allotted in the
second half of the fiscal year.
Period of availability of SCHIP allotments are available for three years. H§102. 2-year initial availability of S§109. Two-year availability of allotments;
CHIP allotments
CHIP allotments. Beginning with the expenditures counted against oldest
FY2008 allotment, CHIP allotments allotments. Beginning with the FY2007
would be available for two years.
allotment, CHIP allotments would be
available for two years. Notwithstanding the

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CRS-13
Current Law
House: H.R. 3162
Senate: H.R. 976
period of availability, states would forgo
from their unspent FY2006 and FY2007
allotments the amount by which those
allotments not expended by September 30,
2007, exceeded 50% of the FY2008
allotment. On October 1 of fiscal years 2009
to 2012, states would also forgo the amount
by which the unspent funds from the prior
year’s allotment exceeded a particular
percentage of that allotment (that is, 20% in
FY2009, and 10% in FY2010, FY2011, and
FY2012).
CHIP funds for shortfall Allotments unspent after three years are H§101. Establishment of new base S§105. Incentive bonuses for states.
states
available for redistribution to states that had CHIP allotments. A state’s allotment FY2005 allotments unspent after their three-
exhausted that particular allotment by the end could be be increased through a year period of availability would be
of the three-year period of availability. The “ p e r f o r m a n c e - b a s e d s h o r t f a l l redistributed only to states that met the third
HHS Secretary determines how the funds are adjustment” if (1) its federal CHIP criteria used in calculating the base allotment
redistributed to those states. In the past couple expenditures in a fiscal year (beginning for FY2008 (that is, states that received
of years, redistributed funds have gone with FY2008) exceed the amount of federal CHIP funds in FY2007 because of
exclusively to shortfall states (i.e., states that federal CHIP allotments available to the their shortfalls, states that were projected to
were projected to exhaust all their available state in the previous fiscal year (not be in shortfall in FY2007 based on their
SCHIP allotments during the year) and including any available CHIP funds November 2006 submission of projected
sometimes the territories.
redistributed from other states), and (2) expenditures, or states whose May 2006
its average monthly enrollment of projection was $95 million to $96 million
children in CHIP exceeded the target higher than its November 2006 projection).
enrollment number for the year, which is For these states, the unspent FY2005 funds

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CRS-14
Current Law
House: H.R. 3162
Senate: H.R. 976
the prior year’s average monthly CHIP would be redistributed in proportion to their
enrollment increased by 1% and by the FY2007 allotment.
state’s child population growth.
For the states that qualify, the S§108. CHIP contingency fund. A CHIP
adjustment would be added to the state’s Contingency Fund would be established in
allotment at the start of the subsequent the U.S. Treasury. The Contingency Fund
fiscal year, except that the Secretary would receive deposits through a separate
would also be required to “develop a appropriation. For FY2009, its appropriation
p r o c e s s t o a d m i n i s t e r t h e would be 12.5% of the CHIP available
performance-based shortfall adjustment national allotment. For FY2010 through
in a manner so it is applied to (and before FY2012, the appropriation would be such
the end of) the fiscal year (rather than the sums as are necessary for making payments
subsequent fiscal year).” The adjustment to eligible states for the fiscal year, as long as
would be calculated as the product of (1) the annual payments did not exceed 12.5% of
the amount by which the actual average that fiscal year’s CHIP available national
monthly caseload exceeded the target allotment. Balances that are not immediately
number of enrollees, and (2) the state’s required for payments from the Fund would
projected per capita CHIP expenditures be invested in U.S. securities that provide
(state and federal) multiplied by the additional income to the Fund. Amounts in
enhanced FMAP for the state for the excess of the 12.5% limit shall be deposited
fiscal year involved. The adjustment into the Incentive Pool. For purposes of the
would only be available in the fiscal year CHIP Contingency Fund, amounts set aside
in which it was provided and would not for block grant payments for transitional
be available for redistribution if unspent. coverage of childless adults shall not count as
The Comptroller General would be part of the available national allotment.
required to periodically audit the

---

CRS-15
Current Law
House: H.R. 3162
Senate: H.R. 976
accuracy of the data used for the
allotment adjustment and make
recommendations to Congress and the
Secretary as the Comptroller General
deems appropriate.
H§102. 2-year initial availability of Payments from the Fund are to be used only
C H I P a l l o t m e n t s . H § 1 0 3 . to eliminate any eligible state’s shortfall (that
Redistribution of unused allotments to is, the amount by which a state’s available
address state funding shortfalls. Only federal CHIP allotments are not adequate to
a shortfall state (that is, a state that the cover the state’s federal CHIP expenditures).
Secretary estimates will have federal
CHIP expenditures that exceed its
available prior-year allotment balances,
its performance-based shortfall
adjustment, and its allotment for the
fiscal year) would be eligible to receive
redistributed funds. If the funds
redistributed to a state based on its
projected shortfall are not spent by the
end of the fiscal year, they would be
available for redistribution to other states
in the next fiscal year. If the total
amount available for redistribution
exceeds the projected shortfalls, the
remaining amounts would be available
for redistribution in the next fiscal year.

---

CRS-16
Current Law
House: H.R. 3162
Senate: H.R. 976
If the total amount available for
redistribution is less than the projected
shortfalls, the amounts provided to
shortfall states would be reduced
proportionally. The Secretary could
adjust the amounts redistributed based on
actual expenditure data as submitted not
later than November 30 of the succeeding
fiscal year.
The Secretary shall separately compute the
shortfalls attributable to children and
pregnant women, to childless adults, and to
parents of low-income children. No payment
from the Contingency Fund shall be made for
nonpregnant childless adults. Any payments
for shortfalls attributable to parents shall be
made from the Fund at the relevant matching
rate.
Eligible states, which cannot be territories,
for any month in FY2009 to FY2012 are
those that meet any of the following criteria:
(1) The state’s available federal CHIP
allotments are at least 95% but less than
100% of its projected federal CHIP
expenditures for the fiscal year (i.e., less than

---

CRS-17
Current Law
House: H.R. 3162
Senate: H.R. 976
5% shortfall in federal funds), without regard
to any payments provided from the Incentive
Pool; or
(2) The state’s available federal CHIP
allotments are less than 95% of its projected
federal CHIP expenditures for the fiscal year
(i.e., more than 5% shortfall in federal funds)
and that such shortfall is attributable to one or
more of the following: (a) One or more
parishes or counties has been declared a
major disaster and the President has
determined individual and public assistance
has been warranted from the federal
government pursuant to the Stafford Act, or
a public health emergency was declared by
the Secretary pursuant to the Public Health
Service Act; (b) the state unemployment rate
is at least 5.5% during any consecutive 13
week period during the fiscal year and such
rate is at least 120% of the state
unemployment rate for the same period as
averaged over the last three fiscal years; (c)
the state experienced a recent event that
resulted in an increase in the percentage of
low-income children in the state without
health insurance that was outside the control

---

CRS-18
Current Law
House: H.R. 3162
Senate: H.R. 976
of the state and warrants granting the state
access to the Fund, as determined by the
Secretary.
The Secretary shall make monthly payments
from the Fund to all states determined
eligible for a month. If the sum of the
payments from the Fund exceeds the amount
available, the Secretary shall reduce each
payment proportionally.
Extension of option for For qualifying states, federal SCHIP funds may H§104. Extension of option for S§111. Option for qualifying states to
qualifying states
be used to pay the difference between SCHIP’s qualifying states. In addition to the receive the enhanced portion of the CHIP
enhanced Federal Medical Assistance current-law provisions, qualifying states matching rate for Medicaid coverage of
Percentage (FMAP) and the Medicaid FMAP would also be able to use the entirety of certain children. Qualifying states under
that the state is already receiving for children any allotment from FY2008 onward for §2105(g) may also use available balances
above 150% of poverty who are enrolled in CHIP spending under §2105(g).
from their CHIP allotments from FY2008 to
Medicaid.
Qualifying states are limited in
FY2012 to pay the difference between the
the amount they can claim for this purpose to
regular Medicaid FMAP and the CHIP
the lesser of(1) 20% of the state’s original
enhanced FMAP for Medicaid enrollees
SCHIP allotment amounts (if available) from
under age 19 (or age 20 or 21, if the state has
FY1998-FY2001 and FY2004-FY2007; and (2)
so elected in its Medicaid plan) whose family
the state’s available balances of those
income exceeds 133% of poverty.
allotments. The statutory definitions for
qualifying states capture most of those that had
expanded their upper-income eligibility levels
for children in their Medicaid programs to
185% of poverty prior to the enactment of

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CRS-19
Current Law
House: H.R. 3162
Senate: H.R. 976
SCHIP. Based on statutory definitions, 11
states were determined to be qualifying states:
Connecticut, Hawaii, Maryland, Minnesota,
New Hampshire, New Mexico, Rhode Island,
Tennessee, Vermont, Washington and
Wisconsin.
Bonuses for increasing No provision.
H§111. CHIP performance bonus S§105. Incentive bonuses for states. A
enrollment of children
payment to offset additional CHIP Incentive Bonuses Pool would be
enrollment costs resulting from established in the U.S. Treasury, to be used
enrollment and retention efforts. for any purpose the state determines is likely
From FY2009 to FY2013, performance to reduce the percentage of low-income
bonus payments would be paid to states children in the state without health insurance.
implementing specified enrollment and
retention efforts and enrolling eligible
children above specified target levels.

---

CRS-20
Current Law
House: H.R. 3162
Senate: H.R. 976
Source of funds. No source of Source of funds. The Incentive Pool would
appropriations specified.
receive deposits from an initial appropriation
in FY2008 of $3 billion, along with transfers
from six different potential sources, with
currently available but not immediately
required funds invested in interest-bearing
U.S. securities that provide additional income
into the Incentive Pool.
The six additional sources for deposits would
be as follows: (1) On December 31, 2007, the
amount by which states’ FY2006 and
FY2007 allotments not expended by
September 30, 2007, exceed 50% of the
FY2008 allotment; (2) from 2008 to 2012,
any of the national CHIP appropriation not
allotted to the states; (3) on October 1 of
fiscal years 2009 to 2012, the amount by
which the unspent funds from the prior year’s
allotment exceeds a particular percentage of
that allotment (that is, 20% in FY2009, and
10% in FY2010, FY2011, and FY2012); (4)
any original allotment amounts not expended
by the end of their second year of availability
(beginning with the FY2007 allotment); (5)
on October 1, 2009, any amounts set aside for
transition off of CHIP coverage for childless

---

CRS-21
Current Law
House: H.R. 3162
Senate: H.R. 976
adults that are not expended by September
30, 2009; and (6) on October 1 of FY2009
through FY2012, any amounts in the CHIP
Contingency Fund in excess of the fund’s
aggregate cap, as well as any Contingency
Fund payments provided to a state that are
unspent at the end of the fiscal year following
the one in which the funds were provided.
Payments to states. States that Payments to states. Funds from the Incentive
implement at least 4 out of 7 specified Pool would be payable in FY2009 to FY2012
enrollment and retention efforts (that is, to states that have increased their average
continuous eligibility, liberalization of monthly Medicaid enrollment among
asset requirements, elimination of in- low-income children (with children defined
person interview requirement, use of as those under age 19 — or under age 20 or
joint application for Medicaid and CHIP, 21 if a state has so elected in its Medicaid
automatic renewal, presumptive program) during a coverage period above a
eligibility for children, and express lane) baseline monthly average for the state.
would be eligible to receive a bonus
payment not later than the last day of the
first calendar quarter of the following
fiscal year. The amount would be the
sum of payments calculated for the
number of child enrollees in each of two
“tiers” in Medicaid as well as in CHIP
(reflecting certain levels of enrollment
growth) multiplied by a percentage of the

---

CRS-22
Current Law
House: H.R. 3162
Senate: H.R. 976
state’s share of projected Medicaid and
CHIP per capita expenditures.
For such calculations, projected per The coverage period for FY2009 would be
capita state expenditures would be the first two quarters of FY2009. The
defined as projected average per capita baseline monthly average would be the
federal and state Medicaid and CHIP average monthly enrollment of low-income
expenditures for children for the most children in Medicaid in the first two quarters
recent fiscal year, increased by the of FY2007 multiplied by the sum of 1.02 and
annual percentage increase in per capita percentage population growth among low-
amounts of National Health Expenditures income children in the state from FY2007 to
for the respective subsequent fiscal year, FY2009.
and multiplied by the state’s share of
such expenditures required for the fiscal
year involved.
The baseline number of child enrollees For FY2010 to FY2012, the coverage period
for FY2008 would be equal to the would consist of the last two quarters of the
monthly average number of child preceding fiscal year and the first two
enrollees during FY2007 increased by quarters of the fiscal year. For FY2010 to
child population growth for the year FY2012, the baseline monthly average would
ending on June 30, 2006 (as estimated by be the baseline monthly average for the
the Census Bureau) plus one percentage preceding fiscal year multiplied by the sum
point. For a subsequent fiscal year, the of 1.01 and percentage population growth
baseline number would be equal to the among low-income children in the state over
prior year’s baseline number plus child the prior year.
population growth in that state plus one
percentage point.

---

CRS-23
Current Law
House: H.R. 3162
Senate: H.R. 976
The first tier of child enrollment would Average monthly enrollment and the baseline
be the amount by which the monthly averages would not include children who do
average of children enrolled during the not meet the income eligibility criteria in
fiscal year exceeded the baseline number, effect on July 19, 2007.
but by no more than 3% for Medicaid or
7.5% for CHIP.
The second tier of child enrollment A state eligible for a bonus would receive in
would be the amount by which the the last quarter of FY2009 the following
monthly average of children enrolled amounts, depending on the “excess” of the
during the fiscal year exceeded the state’s enrollment of children in Medicaid
baseline number by 3% for Medicaid or above the baseline monthly average during
7.5% for CHIP.
the coverage period: (i) If the excess does not
exceed 2%, the product of $75 and the
number of individuals in such excess; (ii) if
the excess is more than 2% but less than 5%,
the product of $300 and the number of
individuals in such excess, less the amount in
(i); and (iii) if the excess exceeds 5%, the
product of $625 and the number of
individuals in such excess, less the sum of the
amounts in (i) and (ii).
For the first tier above baseline child For FY2010 onward, these dollar amounts
Medicaid enrollment, the state would would be increased by the percentage
receive 35% of the state share of those increase (if any) in the projected per capita
projected expenditures. For the first tier spending in the National Health Expenditures
above baseline child CHIP enrollment, for the calendar year beginning on January 1

---

CRS-24
Current Law
House: H.R. 3162
Senate: H.R. 976
the state would receive 5% of the state of the coverage period over that of the
share of those projected expenditures.
preceding coverage period.
For the second tier above baseline child If the funds in the Incentive Pool were
Medicaid enrollment, the state would inadequate to cover the amounts calculated
receive 90% of the state share of those for all the eligible states, the amount would
projected expenditures. For the second be reduced proportionally.
tier above baseline child CHIP
enrollment, the state would receive 75%
of the state share of those projected
expenditures.
The Government Accountability Office
(GAO) would be required to submit a
report for Congress not later than January
1, 2013, regarding the effectiveness of
the performance bonus payment program
in enrolling and retaining uninsured
children in Medicaid and CHIP.
No federal funding for Under the Medicaid program, unauthorized H§135. No federal funding for illegal No provision.
illegal aliens
aliens who meet all other program criteria are aliens. The House bill would specify
only eligible for emergency coverage. Under that nothing in the bill allows federal
SCHIP, states may opt to cover unauthorized payment for individuals who are not
aliens who are pregnant, but covered services legal residents.
must be related to the pregnancy or to
conditions that could complicate the pregnancy

---

CRS-25
Current Law
House: H.R. 3162
Senate: H.R. 976
or threaten the health of the unborn child (who
will be a U.S. citizen if he or she is born in the
United States).
Medicaid funding for the Medicaid programs in the territories are subject H§811 Payments for Puerto Rico and No provision.
territories
to spending caps. For FY1999 and subsequent territories. Would increase the territory
fiscal years, these caps are increased by the Medicaid caps by the following amounts:
percentage change in the medical care
component of the Consumer Price Index (CPI-
U) for all Urban Consumers (as published by
the Bureau of Labor Statistics). The Deficit
Reduction Act of 2005 increased the federal
Medicaid caps in each of FY2006 and FY2007.
For FY2007 the Medicaid caps are equal to:
•
For Puerto Rico, $250,400,000.
•
For Puerto Rico, $250,000,000 for
FY2009; $350,000,000 for FY2010;
$500,000,000 for FY2011; and
$600,000,000 for FY2012.
•
For the Virgin Islands, $12,520,000.
•
For the Virgin Islands, $5,000,000
for each of fiscal years 2009 through
2012.
•
For Guam, $12,270,000.
•
For Guam, $5,000,000 for each of
fiscal years 2009 through 2012.

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CRS-26
Current Law
House: H.R. 3162
Senate: H.R. 976
•
For the Northern Mariana Islands, •
For the Northern Mariana Islands,
$4,580,000.
$4,000,000 for each of fiscal years
2009 through 2012.
•
For American Samoa $8,290,000.
•
For American Samoa, $4,000,000 for
each of fiscal years 2009 through
2012.
For FY2008 and subsequent fiscal years, the
total annual cap on federal funding for the
Medicaid programs in the insular areas is
calculated by increasing the FY2007 ceiling for
inflation.
Enhanced matching funds The federal Medicaid matching rate, which H§811 Payments for Puerto Rico and S§104 Improving funding for the
for certain data systems in determines the federal share of most Medicaid territories. Beginning with FY2008, if territories under CHIP and Medicaid.
the territories
expenditures, is statutorily set at 50 percent in a territory qualifies for the enhanced Identical to the House bill.
the territories (an enhanced match is also federal match (90% or 75%) that is
available for certain administrative costs). available under Medicaid for
Therefore, the federal government generally improvements in data reporting systems,
pays 50% of the cost of Medicaid items and such reimbursement would not count
services in the territories up to the spending towards its Medicaid spending cap.
caps.

---

CRS-27
Current Law
House: H.R. 3162
Senate: H.R. 976
Medicaid FMAP
The federal medical assistance percentage H§813. Adjustment in computation of No provision.
(FMAP) is the rate at which states are Medicaid FMAP to disregard an
reimbursed for most Medicaid service extraordinary employer pension
expenditures. It is based on a formula that contribution. For purposes of
provides higher reimbursement to states with computing Medicaid FMAPs beginning
lower per capita incomes relative to the with FY2006, any significantly
national average (and vice versa). When state disproportionate employer pension
FMAPs are calculated by HHS for the contribution would be disregarded in
upcoming fiscal year, the state and U.S. per computing state per capita income, but
capita income amounts used in the formula are not U.S. per capita income. A
equal to the average of the three most recent significantly disproportionate employer
calendar years of data on per capita personal pension contribution would be defined as
income available from the Department of an employer contribution towards
Commerce’s Bureau of Economic Analysis pensions that is allocated to a state for a
(BEA). BEA revises its most recent estimates period if the aggregate amount so
of state per capita personal income on an allocated exceeds 25 percent of the total
annual basis to incorporate revised and newly increase in personal income in that state
available source data on population and for the period involved.
income. It also undertakes a comprehensive
data revision every few years that may result in
upward and downward revisions to each of the
component parts of personal income, one of
which is employer contributions for employee
pension and insurance funds. In describing its
2003 comprehensive revision, BEA reported
that upward revisions to employer contributions
for pensions beginning with 1989 were the

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CRS-28
Current Law
House: H.R. 3162
Senate: H.R. 976
result of methodological improvements and
more complete source data.
CHIP E-FMAP
The federal medical assistance percentage No provision.
S§110. Limitation on matching rate for
(FMAP) is the rate at which states are
states that propose to cover children with
reimbursed for most Medicaid service
effective family income that exceeds 300
expenditures. It is based on a formula that
percent of the poverty line. For child health
provides higher reimbursement to states with
assistance or health benefits coverage
lower per capita incomes relative to the
furnished in any fiscal year beginning with
national average (and vice versa); it has a
FY2008 to targeted low-income children
statutory minimum of 50% and maximum of
whose effective family income would exceed
83%. The enhanced FMAP (E-FMAP) for
300% of the poverty line but for the
SCHIP equals a state’s Medicaid FMAP
application of a general exclusion of a block
increased by the number of percentage points
of income that is not determined by type of
that is equal to 30% of the difference between
expense or type of income, states would be
a state’s FMAP and 100%. For example, in
reimbursed using the FMAP instead of the
states with an FMAP of 60%, the E-FMAP
E-FMAP. An exception would be provided
equals the FMAP increased by 12 percentage
for states that, on the date of enactment, have
points (60% + [30% multiplied by 40
an approved state plan amendment or waiver,
percentage points] = 72%). E-FMAPs can range
or have enacted a state law to submit a state
from 65% to 85%.
plan amendment to cover targeted low-
income children above 300% of the poverty
line.
There are two types of income disregards used
by states. The first type is exclusions of
particular dollar amounts or types of income (or
certain expenses, such as child care expenses).

---

CRS-29
Current Law
House: H.R. 3162
Senate: H.R. 976
Nearly every state uses such disregards in
SCHIP. These disregards often mirror the
disregards in states’ Medicaid programs.
Although an individual’s gross family income
may be above the state’s income eligibility
level for SCHIP, the person may qualify
because his or her net family income (taking
into account the state’s disregards) falls below
the income threshold. The SCHIP statute
provides flexibility for states to use such
disregards. The second type of income
disregard is when a state excludes an entire
block of percent-of-poverty income. For
example, New Jersey’s SCHIP program covers
children with net family income up to 200% of
poverty. The state excludes all family income
between 200% and 350% of poverty. As a
result, children with gross family income up to
350% of poverty may be eligible for the state’s
SCHIP program.
Eligibility
Premium grace period
No statutory provision specifies a grace period H§123. Premium grace period. States No provision.
for payment of SCHIP premiums. The would have to provide CHIP enrollees
congressionally mandated evaluation of SCHIP with a grace period of at least 30 days
in 10 states (required not later than December from the beginning of a new coverage
31, 2001) was to include an “[e]valuation of period to make premium payments

---

CRS-30
Current Law
House: H.R. 3162
Senate: H.R. 976
disenrollment or other retention issues, such as before the individual’s coverage may be
… failure to pay premiums ….”
terminated. Within seven days after the
Federal regulations require states’ SCHIP first day of the grace period, the state
plans to describe the consequences for an would have to provide the individual
enrollee or applicant who does not pay required with notice that failure to make a
premiums and the disenrollment protections premium payment within the grace
adopted by the state. According to the federal period will result in termination of
regulations, the protections must include the coverage and that the individual has the
following: (1) The state must give enrollees right to challenge the proposed
reasonable notice of and an opportunity to pay termination pursuant to the applicable
past due premiums prior to disenrollment; (2) federal regulations. This provision
the disenrollment process must give the would be effective for new coverage
individual the opportunity to show a decline in periods beginning on or after January 1,
family income that may qualify the individual 2009.
for lower or no cost-sharing; and (3) the state
must provide the enrollee with an opportunity
for an impartial review to address
disenrollment from the program, during which
time the individual will continue being
enrolled.
Optional coverage of older Generally, eligibility for children under H§131. Optional coverage of children No provision.
children under CHIP
Medicaid is limited to persons under age 19 (or up to age 21 under CHIP. Would
in some cases, under age 18, 19, 20 or 21). expand the definition of child under
Under SCHIP, children are defined as persons CHIP to include persons under age 20 or
under age 19.
21, at state option. The effective date
would be January 1, 2008.

---

CRS-31
Current Law
House: H.R. 3162
Senate: H.R. 976
Optional coverage of legal States may provide full Medicaid coverage to H§132 Optional coverage of legal No provision.
immigrants in Medicaid legal immigrants who meet applicable immigrants under the Medicaid
and CHIP
categorical and financial eligibility program and CHIP. Would allow states
requirements after such persons have been in to cover legal immigrants who are
the United States for a minimum of five years. pregnant women and/or children under
Sponsors can be held liable for the costs of age 21 (or such higher age as the state
public benefits (such as Medicaid and SCHIP) has elected) under Medicaid or CHIP
provided to legal immigrants.
before the five-year bar is met effective
upon the date of enactment. Sponsors
would not be held liable for the costs
associated with providing benefits to
such legal immigrants, and the cost of
such assistance would not be considered
an unreimbursed cost.
Optional coverage of Under SCHIP, states can cover pregnant H§133. State option to expand or add S§107. State option to cover low-income
pregnant women under women ages 19 and older through waiver coverage of certain pregnant women pregnant women under CHIP through a
CHIP
authority or by providing coverage to unborn under CHIP. The provision would allow state plan amendment. Would allow states
children as permitted through regulation. In the states to cover pregnant women under to provide optional coverage under CHIP to
latter case, coverage includes prenatal and CHIP through a state plan amendment pregnant women when specific conditions are
delivery services only.
only if: (1) the Medicaid income met, including, for example (1) the upper
eligibility threshold for pregnant women income eligibility level for certain pregnant
is at least 185% FPL (but cannot be women under traditional Medicaid must be at
lower than the percentage in effect for least 185% FPL, (2) states must not apply
certain groups of pregnant women as of any pre-existing condition or waiting period
July 1, 2007), (2) the income eligibility restrictions under CHIP, and (3) states must
threshold is at least 200% FPL for provide the same cost-sharing protections

---

CRS-32
Current Law
House: H.R. 3162
Senate: H.R. 976
children under CHIP or Medicaid, and applicable to CHIP children, and all
(3) certain enrollment limitations for cost-sharing incurred by pregnant women
CHIP children are not imposed. For the must be capped at 5% of annual family
new group of CHIP pregnant women, the income. No cost-sharing would apply to
lower income limit would exceed 185% pregnancy-related services. States choosing
FPL (or the applicable Medicaid this new option would also be allowed to
threshold, if higher) and the upper temporarily enroll such women for up to two
income limit could be up to the level of months until a formal determination of
coverage for CHIP children in the state. eligibility is made. The upper income limit
Other limitations on eligibility for CHIP for this new coverage group would be the
children would also apply. No pre- upper income standard applicable to CHIP
existing condition exclusions or waiting children in the state. Other eligibility
periods would be permitted. All cost- restrictions for children under CHIP would
sharing would be capped at 5% of annual also apply to this new group of pregnant
income. States electing to cover women (i.e., must be uninsured, ineligible for
pregnant women would receive an s t a t e e m p l o y e e c o v e r a g e , e t c . ) .
adjustment to their annual CHIP Pregnancy-related assistance would include
allotments to cover these additional all services covered under CHIP for children
costs. Pregnancy-related assistance in a state as well as prenatal, delivery and
would include all services provided to postpartum care, including care provided to
CHIP children in the state (excluding pregnant women under the state’s Medicaid
EPSDT), and the period of coverage program. Also children born to these
would be during pregnancy through the pregnant women would be deemed eligible
end of the month in which the 60-day for Medicaid or CHIP, as appropriate, and
postpartum period ends. Additional would be covered up to age one year.
provisions would: (1) deem infants born
to CHIP pregnant women to be eligible

---

CRS-33
Current Law
House: H.R. 3162
Senate: H.R. 976
for Medicaid or CHIP (as applicable) up
to age one year (regardless of whether
the infant lives with the mother or the
mother remains eligible), (2) allow
presumptive eligibility for pregnant
women and children under CHIP, and (3)
allow entities that make presumptive
eligibility determinations for children
under Medicaid to make such
determinations for pregnant women
under CHIP.
Nonpregnant childless Under current law, Section 1115 of the Social H§134 Limitation on waiver authority S§106 Phase-out coverage for nonpregnant
adult coverage under Security Act gives the Secretary of Health and to cover adults. The provision would childless adults under CHIP. Would
CHIP
Human Services (HHS) broad authority to prohibit the Secretary from allowing prohibit the approval or renewal of Section
modify virtually all aspects of the Medicaid and federal CHIP allotments to be used to 1115 demonstration waivers that allow
SCHIP programs including expanding provide health care services (under the federal CHIP funds to be used to provide
eligibility to populations who are not otherwise Section 1115 waiver authority) to coverage to nonpregnant childless adults. The
eligible for Medicaid or SCHIP (e.g., childless individuals who are not targeted low- six states with CMS approval for such
adults). Approved SCHIP Section 1115 income children or pregnant women waivers would be permitted to use federal
waivers are deemed to be part of a state’s (e.g., non-pregnant childless adults or CHIP funds to continue such coverage
SCHIP state plan for purposes of federal parents of Medicaid or CHIP-eligible through FY2008, but in FY2009, such states
reimbursement. Costs associated with waiver children) unless the Secretary determines would receive an amount (as part of a
programs are subject to each state’s enhanced- that no CHIP-eligible child in the state separate allotment) equal to the federal share
FMAP. Under SCHIP Section 1115 waivers, would be denied CHIP coverage because of the State’s projected FY2008 waiver
states must meet an “allotment neutrality test” of such eligibility. To meet this expenditures increased by the annual
where combined federal expenditures for the requirement, states would have to assure adjustment for per capita health care growth,

---

CRS-34
Current Law
House: H.R. 3162
Senate: H.R. 976
state’s regular SCHIP program and for the that they have not instituted a waiting list and such waiver expenditures would be
state’s SCHIP demonstration program are for their CHIP program, and that they matched at the regular Medicaid FMAP rate.
capped at the state’s individual SCHIP have an outreach program to reach all
allotment. The Deficit Reduction Act of 2005 targeted low-income children in families
prohibited the approval of new demonstration with annual income less than 200% FPL
projects that allow federal SCHIP funds to be
used to provide coverage to nonpregnant
childless adults, but allowed for the
continuation of such existing Medicaid or
SCHIP waiver projects affecting federal SCHIP
funds that were approved before February 8,
2006.
States with nonpregnant childless adult CHIP
waivers in effect during FY2007 would be
permitted to seek approval for a Medicaid
nonpregnant childless adult waiver, but
allowable spending under the Medicaid
waiver would be limited to waiver spending
in the preceding fiscal year, increased by the
percentage increase (if any) in the projected
per capita spending in the National Health
Expenditures for the calendar year that begins
during the fiscal year involved over the prior
calendar year.

---

CRS-35
Current Law
House: H.R. 3162
Senate: H.R. 976
Parent coverage under Same as above.
Same as above.
S§106 Conditions for coverage of parents.
CHIP
Would prohibit the approval or renewal of
Section 1115 demonstration waivers that
allow federal CHIP funds to be used to
provide coverage to parent(s) of targeted
low-income child(ren). The 11 states with
CMS approval for such waivers would be
permitted to use federal CHIP funds to
continue such coverage during FY2008 and
FY2009 as long as such funds are not used to
cover individuals with annual income that
exceeds the income eligibility in place as of
the date of enactment. Beginning in FY2010,
allowable spending under the waivers would
be subject to a set aside amount from a
separate allotment.
In FY2010 only, costs associated with such
parent coverage would be subject to each
such state’s CHIP enhanced FMAP for
States that meet certain coverage benchmarks
(related to performance in providing
coverage to children) in FY2009, or each
such state’s Medicaid FMAP rate for all other
states.

---

CRS-36
Current Law
House: H.R. 3162
Senate: H.R. 976
For FY2011 or 2012, costs associated with
such parent coverage would be subject to: (1)
a state’s REMAP percentage (i.e., a
percentage which would be equal to the sum
of (a) the state’s FMAP percentage and (b)
the number of percentage points equal to one-
half of the difference between the state’s
FMAP rate and the state’s E-FMAP rate) if
the state meets certain coverage benchmarks
(related to performance in providing
coverage to children) for the preceding fiscal
year, or (2) the state’s regular Medicaid
FMAP rate if the state failed to meet the
specified coverage benchmarks for the
preceding fiscal year.
Would require a Government Accountability
Office study regarding effects of adult
coverage on the increase in child enrollment
or quality of care.
Medicaid
TMA
States are required to continue Medicaid H§801. Modernizing transitional No provision.
benefits for certain low-income families who Medicaid. The House bill would extend
would otherwise lose coverage because of work-related TMA under section 1925
changes in their income. This continuation is through September 30, 2011. States
called transitional medical assistance (TMA). could opt to treat any reference to a
Federal law permanently requires four months 6-month period (or 6 months) as a
of TMA for families who lose Medicaid reference to a 12-month period (or 12

---

CRS-37
Current Law
House: H.R. 3162
Senate: H.R. 976
eligibility due to increased child or spousal months) for purposes of the initial
support collections, as well as those who lose eligibility period for work-related TMA,
eligibility due to an increase in earned income in which case the additional 6-month
or hours of employment. Congress expanded extension would not apply. States could
work-related TMA under section 1925 of the opt to waive the requirement that a
Social Security Act in 1988, requiring states to family have received Medicaid in at least
provide TMA to families who lose Medicaid three of the last six months in order to
for work-related reasons for at least six, and up qualify. They would be required to
to 12, months. Since 2001, work-related TMA collect and submit to the Secretary of
requirements under section 1925 have been HHS (and make publicly available)
funded by a series of short-term extensions, information on average monthly
most recently through September 30, 2007.
enrollment and participation rates for
adults and children under work-related
TMA, and on the number and percentage
of children who become ineligible for
work-related TMA and whose eligibility
is continued under another Medicaid
eligibility category or who are enrolled in
CHIP. The Secretary would submit
annual reports to Congress concerning
these rates. Except for the four-year
extension of work-related TMA, which
would be effective October 1, 2007, the
provision would be effective upon
enactment.

---

CRS-38
Current Law
House: H.R. 3162
Senate: H.R. 976
Spousal impoverishment Medicaid law grants states the option to apply H§804. State option to protect No provision.
rules
spousal impoverishment rules to the counting community spouses of individuals with
of income and assets for a married person who disabilities. The provision would amend
applies to Medicaid as a medically needy Medicaid law to allow states to apply
individual under section 1915(c) and (d) home spousal impoverishment rules to
and community-based (HCBS) waivers. States medically needy applicants and their
may not, however , appl y spousal spouses during the eligibility and
impoverishment rules when determining post-eligibility determination of income
eligibility for medically needy individuals process for applicants of HCBS waivers
under 1915(e) waivers. In addition, states may authorized under sections 1915(c), (d), or
not apply spousal impoverishment rules to the (e) as well as section 1115 of the Social
post-eligibility treatment of income for Security Act. It would also apply to
medically needy persons enrolled in 1915(c), medically needy individuals who are
(d), and (e) waivers. Neither eligibility nor receiving benefits under sections 1915(I)
post-eligibility spousal impoverishment rules and (j).
are applied to persons receiving section 1915(I)
or 1915(j) benefits unless these persons qualify
for Medicaid through an eligibility group for
which spousal impoverishment rules apply.
Medicaid law allows states to apply spousal
impoverishment eligibility and post-eligibility
rules to medically needy individuals, subject to
the Secretary’s approval.

---

CRS-39
Current Law
House: H.R. 3162
Senate: H.R. 976
M e d i c a i d a s s e t The Social Security Administration (SSA) is H§817. Extension of SSI web-based No provision.
verification
piloting a financial account verification system asset demonstration project to the
(in field offices located in New York and New Medicaid program. Under the House
Jersey) that uses an electronic asset verification bill, the Secretary of HHS would be
system to help confirm that individuals who required to provide for application of the
apply for Supplemental Security Income (SSI) current law SSI pilot to asset eligibility
benefits are eligible. The process permits determinations under the Medicaid
automated paperless transmission of asset program. This application would only
verification requests between SSA field offices extend to states in which the SSI pilot is
and financial institutions. Part of this pilot operating and only for the period in
involved a comprehensive study to measure the which the pilot is otherwise provided.
value of such a system for SSI applicants as For purposes of applying the SSI pilot to
well as recipients already on the payment rolls. Medicaid, information obtained from a
This study identified a small percentage (about financial institution that is used for
5 percent) of applicants and recipients who purposes of SSI eligibility determinations
were overpaid based on this financial account could also be shared and used by states
verification system.
for purposes of Medicaid eligibility
determinations.
Enrollment/Access
“Express lane” eligibility Medicaid law and regulations contain H§112 State option to rely on finding S§203 Demonstration project to permit
determinations
requirements regarding determinations of from an express lane agency to States to rely on findings by an Express
eligibility and applications for assistance. In conduct simplif ied eligibility Lane agency to determine components of a
limited circumstances outside agencies
determinations. Beginning in January child’s eligibility for Medicaid or CHIP.
are permitted to determine eligibility for 2008, would allow States to rely on a Would create a three-year demonstration
Medicaid. For example, when a joint TANF- eligibility determination finding made program that would allow up to ten states to
Medicaid application is used the state TANF within a State-defined period from an use Express Lane eligibility determinations at

---

CRS-40
Current Law
House: H.R. 3162
Senate: H.R. 976
agency may make the Medicaid eligibility Express Lane Agency to determine Medicaid and CHIP enrollment and renewal.
determination. Medicaid applicants must attest whether a child under age 19 (or up to The demonstration would authorize and
to the accuracy of the information submitted on age 21 at state option) has met one or appropriate $44 million for the period of
their applications, and sign application forms more of the eligibility requirements (e.g., FY2008 through FY2012 for systems
under penalty of perjury.
income, assets or resources, citizenship, upgrades and implementation. Of this
or other criteria) necessary to determine amount, $5 million would be dedicated to an
an individual’s initial eligibility, independent evaluation of the demonstration
eligibility redetermination, or renewal of for the Congress. Under the demonstration,
eligibility for medical assistance under states would be permitted to rely on a finding
Medicaid or CHIP.
made by an Express Lane Agency within the
preceding 12 months to determine whether a
child has met one or more of the eligibility
requirements (e.g., income, assets, citizenship
or other criteria) necessary to determine an
individual’s eligibility for Medicaid or CHIP.
If a finding from an Express Lane Like the House provision the Senate’s
Agency results in a child not being found provision does not relieve states of their
eligible for Medicaid or CHIP, the States obligation to determine eligibility for
would be required to determine Medicaid Medicaid, and would require the state to
or CHIP eligibility using its regular inform families that they may qualify for
procedures and to inform the family that lower premium payments or more
they may qualify for lower premium comprehensive health coverage under
payments if the family’s income were Medicaid if the family’s income were directly
directly evaluated for an eligibility evaluated by the state Medicaid agency.
determination by the State using its
regular policies. States may initiate an

---

CRS-41
Current Law
House: H.R. 3162
Senate: H.R. 976
eligibility determination (and determine
program eligibility) without a program
application based on finding from an
Express Lane Agency and information
from sources other than the child only if
the family has affirmatively consented to
being enrolled in Medicaid or CHIP.
Express Lane agencies would include Express Lane agencies would include public
public agencies determined by the State agencies determined by the State as capable
as capable of making eligibility of making eligibility determinations and goes
determinations including public agencies beyond list of agencies included in the House
that determine eligibility under the Food provisions to include additional public
Stamp Act, the School Lunch Act, the agencies such as those that determine
Child Nutrition Act, or the Child Care eligibility under TANF, CHIP, Medicaid,
Development Block Grant Act.
Head Start, etc. Also included are state
specified governmental agencies that have
fiscal liability or legal responsibility for the
accuracy of eligibility determination findings,
and public agencies that are subject to an
interagency agreement limiting the disclosure
and use of such information for eligibility
determination purposes. The provision would
explicitly exclude programs run through title
XX (Social Services Block Grants) of the
Social Security Act, and private for-profit
organizations as agencies that would qualify

---

CRS-42
Current Law
House: H.R. 3162
Senate: H.R. 976
as an Express Lane agency.
Signatures under penalty of perjury Like the House provision, would drop the
would not be required on a Medicaid requirement for signatures under penalty of
application form attesting to any element perjury. The provision would permit
of the application for which eligibility is signature requirements for a Medicaid
based on information received from an application to be satisfied through an
Express Lane Agency or from another electronic signature and would monitor error
public agency. The provision would rates associated with incorrect eligibility
authorize federal or State agencies or determinations.
private entities in possession of
potentially pertinent data relevant for the
determination of eligibility under
Medicaid to share such information with
the Medicaid agency for the purposes of
child enrollment in Medicaid, and would
impose criminal penalties for entities
who engage in unauthorized activities
with such data.
Out-Stationed Eligibility Under current law, a Medicaid state plan must H§113 Application of Medicaid No provision.
Determinations
provide for the receipt and initial processing of outreach procedures to all children
applications for medical assistance for and pregnant women. Effective January
low-income pregnant women, infants, and 1, 2008, the House bill would provide for
children under age 19 at outstation locations the receipt and initial processing of
other than Temporary Funding for Needy applications for medical assistance for
Assistance (TANF) offices such as, children and pregnant women under any
disproportionate share hospitals, and provision of this title, and would allow

---

CRS-43
Current Law
House: H.R. 3162
Senate: H.R. 976
Federally-qualified health centers. State for such application forms to vary across
eligibility workers assigned to outstation outstation locations.
locations perform initial processing of
Medicaid applications including taking
applications, assisting applicants in completing
the application, providing information and
referrals, obtaining required documentation to
complete processing of the application,
assuring that the information contained on the
application form is complete, and conducting
any necessary interviews.
Funding for outreach and Under current law, title XXI specifies that H§114 Encouraging culturally S§201 Grants for outreach and enrollment.
enrollment
federal SCHIP funds can be used for SCHIP appropriate enrollment and retention The provision would set aside $100 million
health insurance coverage which meets certain practices. The provision would permit (during the period of fiscal years 2008
requirements. Apart from these benefit states to receive Medicaid federal through 2012) for a grant program under
payments, SCHIP payments for four other matching payments for translation or CHIP to finance outreach and enrollment
specific health care activities can be made, interpretation services in connection with efforts that increase participation of Medicaid
including (1) other child health assistance for the enrollment and use of services by and CHIP-eligible children. Such amounts
targeted low-income children; (2) health individuals for whom English is not their would not be subject to current law
services initiatives to improve the health of primary language. Payments for this restrictions on expenditures for outreach
SCHIP children and other low-income children; activity would be matched at 75% FMAP activities. For such period, 10% of the
(3) outreach activities; and (4) other reasonable rate.
funding would be dedicated to a national
administrative costs. For a given fiscal year,
enrollment campaign, and 10% would be set-
payments for other specific health care
side for grants for outreach to, and enrollment
activities cannot exceed 10% of the total
of, children who are Indians. Remaining
amount of expenditures for SCHIP benefits and
funds would be distributed to specified

---

CRS-44
Current Law
House: H.R. 3162
Senate: H.R. 976
other specific health care activities combined.
entities to conduct outreach campaigns that
The federal and state governments share in the
target geographic areas with high rates of
costs of both Medicaid and SCHIP, based on
eligible but not enrolled children who reside
formulas defining the federal contribution in
in rural areas, or racial and ethnic minorities
federal law. The federal match for
and health disparity populations. Grant funds
administrative expenditures does not vary by
would also be targeted at proposals that
state and is generally 50%, but certain
address cultural and linguistic barriers to
administrative functions have a higher federal
enrollment. Finally it would provide the
matching rate.
greater of 75%, or the sum of the enhanced
FMAP for the state plus five percentage
points for translation and interpretation
services under CHIP by individuals for whom
English is not their primary language.
Continuous eligibility States are required to redetermine Medicaid and H§115 continuous eligibility under No provision.
under CHIP
SCHIP eligibility at least every 12 months with CHIP The House bill would require
respect to circumstances that may change and separate CHIP programs (or CHIP
affect eligibility. Continuous eligibility allows programs operating under the Section
a child to remain enrolled for a set period of 1115 waiver authority) to implement 12
time regardless of whether the child’s months of continuous eligibility for
circumstances change (e.g., the family’s targeted low-income children whose
income rises above the eligibility threshold), annual family income is less than 200%
thus making it easier for a child to stay FPL.
enrolled. Not all states offer it, but among those
that do the period of continuous eligibility
ranges from 6 months to 12 months.

---

CRS-45
Current Law
House: H.R. 3162
Senate: H.R. 976
Commission to monitor In accordance with P.L. 92-263, in May of H§141. Children’s Access, Payment No provision.
access and other matters
2005, the Secretary of HHS established a and Equality Commission. Would
Medicaid Commission, to provide advice on establish a new federal commission.
ways to modernize Medicaid so that it could Among many tasks, this new
provide high quality health care to its Commission would review (1) factors
beneficiaries in a financially sustainable way. affecting expenditures for services in
The charter for this Commission included rules d i f f e r e n t s e c t o r s , p a y m e n t
regarding voting and non-voting members, methodologies, and their relationship to
meetings, compensation, estimated costs, and access and quality of care for Medicaid
two reports. The Commission terminated 30 and CHIP beneficiaries, (2) the impact of
days after submission of its final report to the Medicaid and CHIP policies on the
Secretary of HHS (dated December 29, 2006). overall financial stability of safety net
No ongoing Commission has ever existed for providers (e.g., FQHCs, school-based
the program.
clinics, disproportionate share hospitals),
and (3) the extent to which the operation
of Medicaid and CHIP ensures access
c o m p a r a b l e t o a c c e s s u n d e r
employer-sponsored or other private
health insurance. Commission
recommendations would be required to
consider budget consequences, be voted
on by all members, and the voting results
would be included in Commission
reports. Certain MEDPAC provisions
would apply to this new commission
(i.e., relating to membership with the
addition of Medicaid and CHIP

---

CRS-46
Current Law
House: H.R. 3162
Senate: H.R. 976
beneficiary representatives, staff and
consultants, and powers). The provision
would authorize to be appropriated such
sums as necessary to carry out the duties
of the new Commission.
M o d e l e n r o l l m e n t No provision.
H§142 Model of interstate coordinated No provision.
practices
enrollment and coverage process. The
House bill would require the Comptroller
General, in consultation with State
Medicaid, CHIP directors, and
organizations representing program
beneficiaries to develop a model process
(and report for Congress) for the
coordination of enrollment, retention,
and coverage of children who frequently
change their residency due to migration
of families, emergency evacuations,
educational needs, etc.
Citizenship documentation Under current law, noncitizens who apply for H§143. Medicaid citizenship S§301. Verification of declaration of
full Medicaid benefits have been required since documentation requirements. The citizenship or nationality for purposes of
1986 to present documentation that indicates a House bill would make Medicaid eligibility for Medicaid and CHIP. The
“satisfactory immigration status.” Due to citizenship documentation for children Senate bill would provide a new option for
recent changes, citizens and nationals also must under age 21 a state option, using criteria meeting citizenship documentation
present documentation that proves citizenship that are no more stringent than the requirements. As part of its Medicaid state
and documents personal identity in order for existing documentation specified in plan and with respect to individuals declaring
states to receive federal Medicaid section 1903(x)(3) of the Social Security to be U.S. citizens or nationals for purposes

---

CRS-47
Current Law
House: H.R. 3162
Senate: H.R. 976
reimbursement for services provided to them. Act. See H§136 (under Miscellaneous) of establishing Medicaid eligibility, a state
This citizenship documentation requirement for auditing requirements. See H§112(a) would be required to provide that it satisfies
was included in the Deficit Reduction Act of for ability of “Express Lane” agencies to existing Medicaid citizenship documentation
2005 (DRA, P.L. 109-171) and modified by the determine eligibility without citizenship rules under section 1903(x) of the Social
Tax Relief and Health Care Act of 2006 (P.L. documentation.
Security Act or new rules under section
109-432). Before the DRA, states could accept
1902(dd). Under section 1902(dd), a state
self-declaration of citizenship for Medicaid,
could meet its Medicaid state plan
although some chose to require additional
requirement for citizenship documentation
supporting evidence. The citizenship
by: (1) submitting the name and Social
documentation requirement is outlined under
Security number (SSN) of an individual to
section 1903(x) of the Social Security Act and
the Commissioner of Social Security as part
applies to Medicaid eligibility determinations
of a plan established under specified rules
and redeterminations made on or after July 1,
and (2) in the case of an individual whose
2006. The law specifies documents that are
name or SSN is invalid, notifying the
acceptable for this purpose and exempts certain
individual, providing him or her with a period
groups from the requirement. It does not apply
of 90 days to either present evidence of
to SCHIP. However, since some states use the
citizenship as defined in section 1903(x) or
same enrollment procedures for all Medicaid
cure the invalid determination with the
and SCHIP applicants, it is possible that some
Commissioner of Social Security, and
SCHIP enrollees would be asked to present
disenrolling the individual within 30 days
evidence of citizenship.
after the end of the 90-day period if evidence
is not provided. States would be required to
provide information to the Secretary on the
percentage of invalid names and SSNs
submitted each month, and could be subject
to a penalty if the average monthly
percentage for any fiscal year is greater than

---

CRS-48
Current Law
House: H.R. 3162
Senate: H.R. 976
7%. States would receive 90%
reimbursement for costs attributable to the
design, development, or installation of such
mechanized verification and information
retrieval systems as the Secretary determines
are necessary to implement name and SSN
validation, and 75% for the operation of such
systems.
Groups that are exempt from the The Senate provision would also clarify
citizenship documentation requirement requirements under the existing section
would remain the same as under current 1903(x). It is similar to the House provision
law, except for the inclusion of an regarding the inclusion of an additional
additional permanent exemption for permanent exemption for children who are
children who are deemed eligible for deemed eligible for Medicaid coverage by
Medicaid coverage by virtue of being virtue of being born to a woman on Medicaid,
born to a woman on Medicaid (note that additional documentation options for
H§131(b)(1) is also relevant because it federally recognized Indian tribes, and the
would explicitly allow one year of reasonable opportunity to present evidence.
deemed eligibility for all children born to However, the Senate provision would not
women on Medicaid, including include additional language to reiterate that
emergency Medicaid, by removing the states must not deny medical assistance on
requirement that a newborn remain in his the basis of failure to provide documentation
or her Medicaid-eligible mother’s until an individual has had a reasonable
household in order to qualify for deemed opportunity. In addition, although the Senate
eligibility under 1902(e)(4) of the Social provision would clarify that deemed
Security Act). The provision would eligibility applies to children born to

---

CRS-49
Current Law
House: H.R. 3162
Senate: H.R. 976
require additional documentation options noncitizen women on emergency Medicaid
for federally recognized Indian tribes. It and would require separate identification
would also specify that states must numbers for children born to these women,
provide citizens with the same reasonable the bill would not remove the requirement
opportunity to present evidence that is that a newborn remain in his or her
provided under section 1137(d)(4)(A) of Medicaid-eligible mother’s household in
the Social Security Act to noncitizens order to qualify for deemed eligibility under
who are required to present evidence of 1902(e)(4).
satisfactory immigration status and must
not deny medical assistance on the basis
of failure to provide such documentation
until the individual has had such an
opportunity.
The Senate provision would make citizenship
documentation a requirement for CHIP. In
order to receive reimbursement for an
individual who has, or is, declared to be a
U.S. citizen or national for purposes of
establishing CHIP eligibility, a state would
be required to meet the Medicaid state plan
requirement for citizenship documentation
described above. The 90% and 75%
reimbursement for name and SSN validation
would be available under CHIP, and would
not count towards a state’s CHIP
administrative expenditures cap.

---

CRS-50
Current Law
House: H.R. 3162
Senate: H.R. 976
These changes would be effective as if Except for clarifications made to the existing
included in the Deficit Reduction Act of citizenship documentation requirement,
2005. States would be allowed to which would be retroactive, the provision
provide retroactive eligibility for certain would be effective on October 1, 2008.
individuals who had been determined States would be allowed to provide
ineligible under previous citizenship retroactive eligibility for certain individuals
documentation rules.
who had been determined ineligible under
previous citizenship documentation rules.
Elimination of new Health The Deficit Reduction Act of 2005 allowed the H§145 Prohibiting initiation of new No provision.
Opportunity Accounts
Secretary of HHS to establish no more then 10 h e a l t h o p p o r t u n i t y a c c o u n t
demonstration programs within Medicaid for demonstration programs. The House
health opportunity accounts (HOAs). HOAs are bill would prohibit the Secretary of HHS
used to pay (via electronic funds transfers) from approving any new Health
health care expenses specified by the state. As Opportunity Account demonstrations as
of July 2007, South Carolina was the only state of the date of enactment of this Act.
to receive CMS approval for a Health
Opportunity Account Demonstration.

---

CRS-51
Current Law
House: H.R. 3162
Senate: H.R. 976
Outreach and enrollment State SCHIP plans must include a description No provision.
S§202. Increased outreach and enrollment
of Indians
of procedures used to ensure the provision of
of Indians. Would encourage states to take
child health assistance to American Indian and
steps to enroll Indians residing in or near
Alaskan Native children. Certain non-benefit
reservations in Medicaid and CHIP. These
payments under SCHIP (e.g., for other child
steps may include outstationing of eligibility
health assistance, health service initiatives,
workers [at certain hospitals and Federally
outreach, and program administration) cannot
Qualified Health Centers]; entering into
exceed 10% of the total amount of expenditures
agreements with Indian entities (i.e., the IHS,
for benefits and these non-benefit payments
tribes, tribal organizations) to provide
combined.
outreach; education regarding eligibility,
benefits, and enrollment; and translation
services. The Secretary would be required to
facilitate cooperation between states and
Indian entities in providing benefits to
Indians under Medicaid and CHIP. This
provision would also exclude costs for
outreach to potentially eligible Indian
children and families from the 10% cap on
non-benefit expenditures under CHIP.

---

CRS-52
Current Law
House: H.R. 3162
Senate: H.R. 976
Eligibility information Under current law, each State must have an No provision.
S § 2 0 4 A u t h o r i z a t i o n
o f
c e r t a i n
disclosure
income and eligibility verification system under
information disclosures to simplify health
which (1) applicants for Medicaid and several
coverage determinations. The Senate bill
other specified government programs must
would authorize federal or State agencies or
furnish their Social Security numbers to the
private entities with data sources that are
state as a condition for eligibility, and (2) wage
directly relevant for the determination of
information from various specified government
eligibility under Medicaid to share such
agencies is used to verify eligibility and to
information with the Medicaid agency if: (1)
determine the amount of the available benefits.
there is no family objection to such
Subsequent to initial application, States must
disclosure, (2) the data would be used solely
request information from other federal and state
for the purpose of determining Medicaid
agencies, to verify applicants’ income,
eligibility, and (3) there is an interagency
resources, citizenship status, and validity of
agreement in place to prevent the
Social Security number, unearned income,
unauthorized use or disclosure of such
unemployment information, etc.
information. Individuals involved in such
unauthorized use would be subject to
criminal penalty. In addition, for the purposes
of the Express Lane Demonstration states
only, the provision would allow the Medicaid
and CHIP programs to receive such data from
(1) the National New Hires Database, (2) the
National Income Data collected by the
Commissioner of Social Security, or (3) data
about enrollment in insurance that may help
to facilitate outreach and enrollment under
Medicaid, CHIP, and certain other
programs.

---

CRS-53
Current Law
House: H.R. 3162
Senate: H.R. 976
Reducing administrative During the implementation of SCHIP states No provision.
S§302 Reducing administrative barriers to
barriers to enrollment
instituted a variety of enrollment facilitation
enrollment. The Senate bill would require
and outreach strategies to bring eligible
the State plan to describe the procedures used
children into Medicaid and SCHIP. As a result,
to reduce the administrative barriers to the
substantial progress was made at the state level
enrollment of children and pregnant women
to simplify the application and enrollment
in Medicaid and CHIP, and to ensure that
processes to find, enroll, and maintain
such procedures are revised as often as the
eligibility among those eligible for the
State determines is appropriate to reduce
program.
newly identified barriers to enrollment.
Premium Assistance/Employer Buy-In Programs
Employer Buy-in to CHIP An enrollee buy-in program is a program under H§821 Demonstration project for No provision.
which the family of a child that does not employer buy-in. The House bill would
qualify for the SCHIP program (usually due to allow the Secretary of Health and Human
excess income) can enroll their children into Services to establish a five-year
the SCHIP program by paying for most or all of demonstration project under which up to
the cost of coverage. Under current law, states 10 states would be permitted to provide
may not receive federal matching funds for the CHIP child health assistance to children
services provided to these children, or for the (and their families) who would be
costs of administering the buy-in program.
targeted low-income children except for
the fact that they have group health
coverage as allowed under this provision.
To qualify, states must have a CHIP
income eligibility that is at least 200%
FPL. Under the demonstrations, CHIP
federal financial participation would be
permitted only for such costs attributable

---

CRS-54
Current Law
House: H.R. 3162
Senate: H.R. 976
to eligible children.
The House bill would require coverage
and benefits under a demonstration
project to be the same as the coverage
and benefits provided under the state’s
CHIP plan for targeted low-income
children with the highest family income
level provided.
Families would be responsible for
payments towards the premium for such
assistance in an amount specified by the
state as long as no cost sharing is
imposed on benefits for preventive
services, and CHIP rules related to
income-related limitations on cost
sharing are applied.
Qualifying providers would be
responsible for providing payment in an
amount that is equal to at least 50% of
the portion of the cost of the family
coverage that exceeds the amount of the
family’s cost sharing contribution.
Qualifying employers would be defined
as an employer with a majority of its
workforce that is composed of full time

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CRS-55
Current Law
House: H.R. 3162
Senate: H.R. 976
workers (where two, part-time workers
are treated as a single full-time worker)
with family incomes reasonably
estimated by the employer (based on
wage information) at or below 200%
FPL.
P r e mi u m a s s i s t a n c e Under Medicaid, states may pay a Medicaid No provision.
S§401 Additional State
option
for
programs
beneficiary’s share of costs for group
providing premium assistance. The Senate
(employer-based) health coverage for any
bill would allow states to offer a premium
Medicaid enrollee for whom coverage is
assistance subsidy for qualified
available, comprehensive, and cost-effective for
employer sponsored coverage to all targeted
the state. An individual’s enrollment in an
low-income children who are eligible for
employer plan is considered cost effective if
child health assistance and have access to
paying the premiums, deductibles, coinsurance
such coverage, or to parents of targeted low-
and other cost-sharing obligations of the
income children. Qualified employer
employer plan is less expensive than the state’s
sponsored coverage would be defined as a
expected cost of directly providing Medicaid-
group health plan or health insurance
covered services. States were also to provide
coverage offered through an employer that
coverage for those Medicaid covered services
(1) qualifies as credible health coverage as a
that are not included in the private plans.
group health plan under the Public Health
Service Act, (2) for which the employer
contributes at least 40% toward the cost of
the premium, and (3) is nondiscriminatory in
a manner similar to section 105(h)of the
Internal Revenue Code but would not allow
employers to exclude workers who had less

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CRS-56
Current Law
House: H.R. 3162
Senate: H.R. 976
than three years of service. The Bill explicitly
excludes (1) benefits provided under a health
flexible spending arrangement, (2) a high
deductible health plan purchased in
conjunction with a health savings account as
defined in the Internal Revenue Code of 1986
as qualified coverage.
Under SCHIP, the Secretary has the authority
The Senate bill would establish a new cost
to approve funding for the purchase of “family
effectiveness test for employer sponsored
coverage”under an employer-sponsored health
insurance (ESI) programs. The state would be
insurance plan if it is cost effective relative to
required to establish that (1) the cost of such
the amount paid to cover only the targeted low-
coverage is less than state expenditures to
income children and does not substitute for
enroll the child or the family (as applicable)
coverage under group health plans otherwise
in CHIP, or (2) the aggregate amount of State
being provided to the children. In addition,
expenditures for the purchase of all such
states using SCHIP funds for employer-based
coverage for targeted low-income children
plan premiums must ensure that SCHIP
under CHIP (including administrative
minimum benefits are provided and SCHIP
expenses) does not exceed the aggregate
cost-sharing ceilings are met. Because of these
amount of expenditures that the State would
requirements, implementation of premium
have made for providing coverage under the
assistance programs under Medicaid and
CHIP state plan for all such children.
SCHIP are not widespread.
Under the Bush Administration’s Health
States would be required to provide
Insurance Flexibility and Accountability
supplemental coverage for a targeted low-
(HIFA) Initiative, states were encouraged to
income child enrolled in the ESI plan
seek approval for Section 1115 waiver
consisting of items or services that are not

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CRS-57
Current Law
House: H.R. 3162
Senate: H.R. 976
programs to direct unspent SCHIP funds to
covered, or are only partially covered, and
extend coverage to uninsured populations with
cost-sharing protections consistent with the
annual income less than 200% FPL and to use
requirements of CHIP. Plans that meet the
Medicaid and SCHIP funds to pay premium
CHIP benefit coverage requirements would
costs for waiver enrollees who have access to
not be required to provide supplemental
Employer Sponsored Insurance (ESI). ESI
coverage for benefits and cost-sharing
programs approved under the Section 1115
protections as required under CHIP.
waiver authority are not subject to the same
current law constraints required under
Medicaid’s Health Insurance Premium Payment
(HIPP) program or SCHIP’s family coverage
variance option (i.e., the comprehensiveness
and cost-effectiveness tests).

States would be permitted to directly pay out-
of-pocket expenditures for cost-sharing
imposed under the qualified ESI coverage
and collect all (or any) portion for cost-
sharing imposed on the family. Parents would
be permitted to disenroll their child(ren) from
ESI coverage and enroll them in CHIP
coverage effective on the first day of any
month for which the child is eligible for such
coverage.
States would be permitted to establish an
employer-family premium assistance
purchasing pool for employers with less than

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CRS-58
Current Law
House: H.R. 3162
Senate: H.R. 976
250 employees who have at least one
employee who is a CHIP-eligible pregnant
woman or at least one member of the family
is a CHIP-eligible child. Eligible families
would have access to not less than 2 private
health plans where the health benefits
coverage is equivalent to the benefits
coverage available through a CHIP
benchmark benefit package or CHIP
benchmark equivalent coverage benefits
package.
Finally the Senate bill would require the
Government Accountability Office to submit
a report to Congress not later than January 1,
2009 regarding cost and coverage issues
under State premium assistance programs.
Education and enrollment SCHIP state plans are required to include a No provision.
S § 4 0 2 O u t r e a c h , e d u c a t i o n , a n d
assistance in premium description of the procedures in place to
enrollment assistance. The Senate bill
assistance programs
provide outreach to children eligible for SCHIP
would require states to include a description
child health assistance, or other public or
of the procedures in place to provide
private health programs to (1) inform these
outreach, education, and enrollment
families of the availability of public and private
assistance for families of children likely to be
health coverage and (2) to assist them in
eligible for premium assistance subsidies
enrolling such children in SCHIP. There is a
under CHIP or a waiver approved under
limit on federal spending for SCHIP
§1115. For employers likely to provide
administrative expenses (i.e., 10% of a state’s
qualified employer-sponsored coverage, the

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CRS-59
Current Law
House: H.R. 3162
Senate: H.R. 976
spending on benefit coverage in a given fiscal
state is required to include the specific
year). Administrative expenses include
resources the State intends to use to educate
activities such as data collection and reporting,
employers about the availability of premium
as well as outreach and education. In addition,
assistance subsidies under the CHIP state
states are required to provide a description of
plan. Expenditures for such outreach
the state’s efforts to ensure coordination
activities would not be subject to the 10%
between SCHIP and other health insurance
limit on spending for administrative costs
coverage applies to State administrative
associated with the CHIP program.
expenses.
Special enrollment period Under the Internal Revenue Code, the No provision.
S§411 Special enrollment period under
Employee Retirement Income Security Act, and
group health plans in case of termination
the Public Health Service Act, a group health
of Medicaid or CHIP coverage or
plan is required to provide special enrollment
eligibility for assistance in purchase of
opportunities to qualified individuals. Such
employment-based coverage; coordination
individuals must have lost eligibility for other
of care. The bill would amend applicable
group coverage, or lost employer contributions
federal laws to streamline coordination
towards health coverage, or added a dependent
between public and private coverage,
due to marriage, birth, adoption, or placement
including making the loss of Medicaid/CHIP
for adoption, in order to enroll in a group health
eligibility a “qualifying event” for the
plan without having to wait until a late
purpose of purchasing employer-sponsored
enrollment opportunity or open season. The
coverage. The bill would also require
individual still must meet the plan’s substantive
employers to: share information about their
eligibility requirements, such as being a full-
benefit packages with states so states can
time worker or satisfying a waiting period.
evaluate the need to provide “wraparound”
Health plans must give qualified individuals at
coverage, and notify families of their
least 30 days after the qualifying event (e.g.,
potential eligibility for premium assistance.

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CRS-60
Current Law
House: H.R. 3162
Senate: H.R. 976
loss of eligibility) to make a request for special
enrollment.
Benefits
Dental services
Under SCHIP, states may provide coverage H§121. Ensuring child-centered S§608. Dental health grants. As amended,
under their Medicaid programs, create a new coverage. The provision would make would provide authority for new dental health
separate SCHIP program, or both. Under dental services a required benefit under grants to improve the availability of dental
separate SCHIP programs, states may elect any CHIP. States would also be required to services and strengthen dental coverage for
of three benefit options: (1) a benchmark plan, assure access to these services. The children under CHIP. To be awarded such a
(2) a benchmark-equivalent plan, or (3) any effective date would be October 1, 2008. grant, states would describe quality and
other plan that the Secretary of HHS deems
outcomes performance measures to be used
would provide appropriate coverage for the H§144. Access to dental care for to evaluate the effectiveness of grant
target population (called Secretary-approved children. The provision would require activities, and must assure that they will
coverage). Benchmark plans include (1) the the Secretary of HHS to develop and cooperate with the collection and reporting of
standard Blue Cross/Blue Shield preferred implement a program to deliver oral data to the Secretary of HHS, among several
provider option under FEHBP, (2) the coverage health education materials that inform requirements. Grantees would be required to
generally available to state employees, and (3) new parents about risks for, and maintain state funding of dental services
the coverage offered by the largest commercial prevention of, early childhood caries and under CHIP at the level of expenditures in the
HMO in the state. Benchmark-equivalent plans the need for a dental visit within a fiscal year preceding the first fiscal year for
must cover basic benefits (i.e., inpatient and newborn’s first year of life. States could which the new grant is awarded. Such states
outpatient hospital services, physician services, not prevent an FQHC from entering into would not be required to provide any state
lab/x-ray, and well-child care including contractual relationships with private matching funds for the new dental grant
immunizations), and must include at least 75% practice dental providers under both program. The Secretary would be required to
of the actuarial value of coverage under the Medicaid and CHIP (effective January 1, submit to Congress an annual report on state
selected benchmark plan for specific additional 2008). The data that states submit to the activities and performances assessments
benefits (i.e., prescription drugs, mental health federal government documenting receipt under the new dental grant program. For the
services, vision care and hearing services). of EPSDT services each fiscal year period FY2008 through FY2012, $200

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CRS-61
Current Law
House: H.R. 3162
Senate: H.R. 976
Among other items, a state SCHIP plan must would be required to include parallel million would be appropriated for this grant
include a description of the methods (including information on receipt of dental services program, to remain available until expended.
monitoring) used to (1) assure the quality and among CHIP children. This reporting The provision would also require the
appropriateness of care, particularly with requirement would also apply to annual Secretary of HHS to include on the Insure
respect to well-baby care, well-child care, and state CHIP reports. Such reporting Kids Now website and hotline a current and
immunizations provided under the plan, and (2) would be required to include information accurate list of all dentists and other dental
assure access to covered services, including on children enrolled in managed care providers in each state that provide such
emergency services. Under the Early and plans, other private health plans, and services to Medicaid and CHIP children, and
Periodic Screening, Diagnostic and Treatment contracts with such plans under CHIP must update this listing at least on a quarterly
(EPSDT) benefit under Medicaid, most (effective for annual state CHIP reports basis. The Secretary would also be required
children under age 21 receive comprehensive submitted for years beginning after the to work with states to include a description of
basic screening services (i.e., well-child visits date of enactment of this Act). In covered dental services for children under
including age-appropriate immunizations) as addition, GAO would be required to both programs (including under applicable
well as dental, vision and hearing services. In conduct a study examining access to waivers) for each state, and must post this
addition, EPSDT guarantees access to all dental services by children in under- information on the Insure Kids Now website.
federally coverable services necessary to treat served areas, and the feasibility and The provision would require GAO to conduct
a problem or condition among eligible appropriateness of using qualified mid- a study on children’s access to oral health
individuals. The EPSDT provision in Medicaid level dental providers to improve access. care, including preventive and restorative
law also includes annual reporting requirements A report on this GAO study would be services under Medicaid and CHIP. The
for states. The tool used to capture these due not later than one year after the date report on this study must include
EPSDT data is called the CMS-416 form. of enactment of this Act.
recommendations for such federal and state
Three separate measures capture the
legislative and administrative changes
unduplicated number of EPSDT eligibles
necessary to address barriers to access to
receiving any dental services, preventive dental
dental care under Medicaid and CHIP (and
services and dental treatment services.
would be due not later than two years after
the date of enactment of this Act). Also the
provision would add an assessment of the

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CRS-62
Current Law
House: H.R. 3162
Senate: H.R. 976
quality of dental care provided to Medicaid
and CHIP children to the Secretary’s annual
reports to Congress under the new child
health quality improvement activities
authorized in the Senate-passed bill.
Services provided by In SCHIP statute, a number of coverable H§121. Ensuring child-centered No provision.
federally qualified health benefits are listed such as “clinic services coverage. The provision would make
centers (FQHCs) and rural (including health center services) and other the services provided by FQHCs and
health centers (RHCs)
ambulatory health care services.” Services RHCs required benefits under CHIP.
provided by FQHCs and RHCs are a mandatory States would also be required to assure
benefit for most beneficiaries under Medicaid. access to these services. The effective
date would be October 1, 2008.
Mental health services
For an explanation of the benchmark coverage H§121. Ensuring child-centered S§607. Mental health parity in CHIP
options under SCHIP, see the current law coverage. The provision would increase plans. The provision would ensure that the
description in the “dental services” row above. the minimum actuarial value for mental financial requirements (e.g., such as annual
health services from 75% to 100% for and lifetime dollar limits) and treatment
Under the Mental Health Parity Act (MHPA), benchmark-equivalent coverage under limitations applicable to mental health or
Medicaid and SCHIP plans may define what CHIP. The effective date would be substance abuse benefits (when such benefits
constitutes mental health benefits (if any). The October 1, 2008.
are covered) are no more restrictive than the
MHPA prohibits group plans from imposing
financial requirements and treatment
annual and lifetime dollar limits on mental
limitations applicable to substantially all
health coverage that are more restrictive than
medical and surgical benefits covered under
those applicable to medical and surgical
the state CHIP plan. State CHIP plans that
coverage. Full parity is not required, that is,
include coverage of EPSDT services (as
group plans may still impose more restrictive
defined in Medicaid statute) would be
treatment limits (e.g., with respect to total
deemed to satisfy this mental health parity

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CRS-63
Current Law
House: H.R. 3162
Senate: H.R. 976
number of outpatient visits or inpatient days) or
requirement.
cost-sharing requirements on mental health
coverage compared to their medical and
surgical services.
Early and Periodic The Deficit Reduction Act of 2005 (DRA; P.L. H§121. Ensuring child-centered S§605. Deficit Reduction Act technical
Screening, Diagnostic and 109-171) gave states the option to provide coverage. The provision would require corrections. The provision would require
T r e a t me n t ( E P S D T ) Medicaid to state-specified groups through coverage of the EPSDT benefit for that EPSDT be covered for any individual
services
e n r o l l m e n t i n b e n c h m a r k a n d individuals under age 21, whether such under age 21 who is eligible for Medicaid
benchmark-equivalent coverage that is nearly persons are enrolled in benchmark plans, through the state Medicaid plan under one of
identical to plans available under SCHIP benchmark-equivalent plans or otherwise the major mandatory and optional coverage
(described above in the “dental services” row). under Medicaid. The effective date groups and is enrolled in benchmark or
For any child under age 19 in one of the major would be the same as the original DRA benchmark-equivalent plans authorized under
mandatory and optional eligibility groups in provision (i.e., March 31, 2006).
DRA. The provision would also give states
Medicaid, wrap-around benefits to the DRA
flexibility in providing coverage of EPSDT
benchmark and benchmark-equivalent coverage
services through the issuer of benchmark or
includes EPSDT. In traditional Medicaid,
benchmark-equivalent coverage or otherwise.
EPSDT is available to most individuals under
In addition, the Secretary would be required
age 21.
to publish in the Federal Register and on the
internet website of CMS, a list of the
provisions in Title XIX that the Secretary has
determined do not apply in order to enable a
state to carry out a state plan amendment to
provide benchmark or benchmark-equivalent
coverage under Medicaid. In such
publications, the Secretary must also provide
the reason for each such determination. The

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CRS-64
Current Law
House: H.R. 3162
Senate: H.R. 976
effective date would be the same as the
original DRA provision (i.e., March 31,
2006).
Services provided by A number of coverable benefits are listed in the H§121. Ensuring child-centered No provision.
s c h o o l -b a s e d h e a l t h SCHIP statute, such as “clinic services coverage. The provision would add
centers
(including health center services) and other “school-based health center services” to
ambulatory health care services.”
the “clinic services” benefit category in
CHIP statute. The effective date would
be on or after the date of enactment of
this Act.
Benchmark coverage Under SCHIP, states may provide coverage H§121. Ensuring child-centered No provision.
options
under their Medicaid programs, create a new coverage. The provision would require
separate SCHIP program, or both. Under that benchmark coverage under CHIP be
separate SCHIP programs, states may elect any at least equivalent to the benchmark
of three benefit options: (1) a benchmark plan, benefit packages specified in statute.
(2) a benchmark-equivalent plan, or (3) any The effective date would be October 1,
other plan that the Secretary of HHS deems 2008.
would provide appropriate coverage for the
target population (called Secretary-approved H§122. Improving benchmark
coverage). Benchmark plans include (1) the coverage options. The provision would
standard Blue Cross/Blue Shield preferred continue to allow Secretary-approved
provider option under FEHBP, (2) the coverage coverage under both CHIP and the DRA
generally available to state employees, and (3) option under Medicaid, but only if such
the coverage offered by the largest commercial coverage is at least equivalent to a
HMO in the state. Benchmark-equivalent plans benchmark benefit package. The
must cover basic benefits (i.e., inpatient and provision would also more explicitly

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CRS-65
Current Law
House: H.R. 3162
Senate: H.R. 976
outpatient hospital services, physician services, define state employees benchmark
lab/x-ray, and well-child care including coverage for both CHIP and the DRA
immunizations), and must include at least 75% option for Medicaid to include the state
of the actuarial value of coverage under the employee plan that has been selected the
selected benchmark plan for specific additional most frequently, by employees seeking
benefits (i.e., prescription drugs, mental health dependent coverage, among such plans
services, vision care and hearing services). The that provide dependent coverage, in
DRA also allowed similar benchmark coverage either of the previous two years. The
options under Medicaid.
effective date would be October 1, 2008.
Extension of family State Medicaid programs must offer family H§802 Family planning services. The No provision.
planning services and planning services and supplies to categorically House bill would create a state option to
supplies
needy individuals of childbearing age, extend family planning services and
including minors considered to be sexually supplies (at the 90% federal Medicaid
active. Family planning services must be match rate) to women who are not
available to eligible pregnant women through pregnant and whose annual income does
the 60th day following the end of the not exceed the highest income eligibility
pregnancy. Coverage of the medically needy level established under the Medicaid
other than pregnant women may include family State plan (or under title XXI) for
planning. States receive a 90% federal pregnant women. States would be
matching rate for expenditures attributable to permitted to include individuals eligible
the offering, arranging, and furnishing of for Medicaid §1115 family planning
family planning services and supplies.
waivers that were approved as of January
1, 2007.
Federal financial participation for
medical assistance made available to
such individuals would be limited to

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CRS-66
Current Law
House: H.R. 3162
Senate: H.R. 976
family planning services and supplies
including medical diagnosis or treatment
services, and only for the duration of the
woman’s eligibility under this state
option or during a period of presumptive
eligibility.
Finally, the House bill would prohibit the
enrollment of such individuals in a
Medicaid benchmark and benchmark-
equivalent state plan option, unless such
coverage includes medical assistance for
family planning services and supplies.
Adult day health services Adult day care programs provide health and H§803. Authority to continue No provision.
social services in a group setting on a part-time providing adult day health services
basis to certain frail older persons and other approved under a State Medicaid plan.
persons with physical, emotional, or mental The provision would require the
impairments. Generally, states that cover adult Secretary to provide for federal financial
day care under Medicaid do so under home and participation for adult day health care
community-based waivers, the Program for services, as defined under a state
All-Inclusive Care for the Elderly (PACE) or Medicaid plan, approved during or before
section 1115 waiver authority. Some states 1994. The provision would be effective
cover adult day care under their Medicaid state beginning November 3, 2005 and ending
plans even though Medicaid law does not list on March 1, 2009.
adult day care as a mandatory or optional
benefit. There have been concerns that CMS
may not continue to allow adult day care to be

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CRS-67
Current Law
House: H.R. 3162
Senate: H.R. 976
offered under a state’s Medicaid plan without
the use of a waiver.
Monitoring Quality
Quality
measurement
The Centers for Medicare and
Medicaid H§151. Pediatric health quality S§501. Child health quality improvement
Services (CMS) and the Agency for Healthcare measurement program. The provision activities for children enrolled in Medicaid
Research and Quality (AHRQ) are both would require the Secretary to establish or CHIP. The provision would direct the
actively involved in funding and implementing a child health care quality measurement Secretary of HHS to develop (1) child health
an array of quality improvement initiatives, program. The purpose would be to quality measures for children enrolled in
though only AHRQ has engaged in activities develop and implement pediatric quality Medicaid and CHIP, and (2) a standardized
specific to children.
measures, a system for reporting such format for reporting information, and
measures, and measures of overall procedures that encourage states to
The federal share of states’ Medicaid costs program performance that may be used voluntarily report on the quality of pediatric
varies by type of expenditure. For benefits, the by public and private health care care in these programs. The Secretary would
federal medical assistance percentage (FMAP) purchasers. By September 30, 2009, the be required to disseminate information to
is based on a formula that provides higher Secretary would be required to publish states regarding best practices in measuring
reimbursement to states with lower per capita the recommended measures for years and reporting such data. A total of $45
incomes (and vise versa); it has a statutory beginning with 2010. In developing and million would be appropriated for these
minimum of 50% and a maximum of 83%. All implementing this program, the Secretary provisions, of which specific amounts would
states receive a 90% match for family planning would be required to consult with a be earmarked for certain activities (identified
services. The federal matching rates for number of entities. The Secretary could below). (The childhood obesity
administrative expenses does not vary by state award grants and contracts to develop, demonstration described below would have
and is generally 50%, but certain administrative validate and disseminate these measures, its own separate appropriation.) The
functions have a higher federal match. For and would be required to provide Secretary would be required to award grants
example, a 75% match rate applies to the technical assistance to states to establish and contracts to develop, test and update (as
operation of an approved Medicaid such reporting under Medicaid and needed) evidence-based measures, and to
management information system (MMIS) for CHIP. By January 1, 2009, and annually disseminate such measures. Each state would

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CRS-68
Current Law
House: H.R. 3162
Senate: H.R. 976
claims and information processing. Start-up thereafter, the Secretary would be be required to report annually to the
expenses for MMISs are matched at 90%.
required to make available in an on-line Secretary on a variety of measures. In
format a complete list of all measures in addition, the Secretary would be required to
use by states to measure the quality of award up to 10 grants to states and child
medical and dental services provided to health providers to conduct demonstrations to
Medicaid and CHIP children. By evaluate promising ideas for improving the
January 1, 2010, and every two years quality of children’s health care under
thereafter, the Secretary would be Medicaid and CHIP, for which $20 million
required to report to Congress on the would be appropriated. The Secretary would
quality of care for children enrolled in also be required to conduct a demonstration
CHIP and Medicaid, and patterns of to develop a comprehensive and systematic
utilization by pediatric characteristics.
model for reducing childhood obesity through
grants to eligible entities (e.g., local
government agencies, Indian tribes,
community based organizations). This
demonstration would be authorized at $25
million over five years ($5 per year). The
Secretary would be required to submit a
report to Congress on this demonstration.
The Secretary would also be required to
establish a program to encourage the creation
and dissemination of a model electronic
health record format for children enrolled in
Medicaid and CHIP. A total of $5 million
would be appropriated for this purpose. The
Institute of Medicine would be required to
study and report to Congress on the extent

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CRS-69
Current Law
House: H.R. 3162
Senate: H.R. 976
and quality of efforts to measure child health
status and quality of care for children. Up to
$1 million would be appropriated for this
activity. Finally, the federal share of costs
incurred by states for the development or
modification of existing claims processing
and retrieval systems as is necessary for the
efficient collection and reporting on child
health measures would be based on the
FMAP rate for benefits used under Medicaid.
Information on access to Annually, states submit reports to the Secretary No provision.
S§502. Improved information regarding
coverage under CHIP
of HHS assessing the operation of their SCHIP
access to coverage under CHIP. The
programs, including for example, progress
provision would add several reporting
made in reducing the number of uninsured low-
requirements to states’ annual CHIP reports
income children, progress made in meeting
that are submitted to the Secretary of HHS.
other strategic objectives and performance
Examples of these new reporting
goals identified in the state plan, effectiveness
requirements include (1) data on eligibility
of discouraging substitution of public coverage
criteria, enrollment and continuity of
for private coverage, identification of
coverage, (2) use of self-declaration of
expenditures by type of beneficiary (e.g.,
income for applications and renewals, and
children versus adults), and current income
presumptive eligibility, (3) data on denials of
standards and methodologies.
eligibility and redeterminations of eligibility,
(4) data regarding access to primary and
specialty care, networks of care and care
coordination, and (5) if the state provides
premium assistance for employer-based

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CRS-70
Current Law
House: H.R. 3162
Senate: H.R. 976
insurance, data regarding the extent to which
such coverage is available to CHIP children,
the range of monthly premium amounts, the
number of children/families receiving such
assistance on a monthly basis, the income
level of the children/families involved, the
benefits and cost-sharing protections for such
children/families, the strategies used to
reduce administrative barriers to such
coverage, and the effects of such premium
assistance on preventing substitution of CHIP
coverage for employer-based coverage. The
provision would also require GAO to conduct
a study on access to primary and speciality
care under Medicaid and CHIP, and report to
Congress its findings and recommendations
for addressing existing barriers to children’s
access to care under these programs.
Federal evaluation
The Secretary was required to conduct an H§153. Updated federal evaluation of No provision.
independent evaluation of 10 states with CHIP. The provision would require the
approved SCHIP plans, and to submit a report Secretary to conduct an independent
on that study to Congress by December 31, evaluation of 10 states with approved
2001. Ten million dollars was appropriated for CHIP plans, directly or through contracts
this purpose in FY2000 and was available for or interagency agreements, as before.
expenditure through FY2002. The 10 states The new evaluation would be submitted
chosen for the evaluation were to be ones that to Congress by December 31, 2010. Ten

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CRS-71
Current Law
House: H.R. 3162
Senate: H.R. 976
utilized diverse approaches to providing SCHIP million dollars would be appropriated for
coverage, represented various geographic areas this purpose in FY2009 and made
(including a mix of rural and urban areas), and available for expenditure through
contained a significant portion of uninsured FY2011. The current-law language for
children. A number of matters were included the types of states to be chosen and the
in this evaluation, including (1) surveys of the matters included in the evaluation would
target populations, (2) an evaluation of also apply to this new evaluation.
effective and ineffective outreach and
enrollment strategies, and identification of
enrollment barriers, (3) the extent to which
coordination between Medicaid and SCHIP
affected enrollment, (4) an assessment of the
effects of cost-sharing on utilization,
enrollment and retention, and (5) an evaluation
of disenrollment or other retention issues.
Payments
Medicaid Drug Rebate
Pharmaceutical manufacturers that wish to have H§812 Medicaid Drug Rebate. The No provision.
their products available to Medicaid provision would increase the rebate
beneficiaries must enter into “rebate percentage for the basic rebate for single
agreements” under which they agree to provide source and innovator multiple source
state Medicaid programs with rebates for drugs drugs to 22.1% of the AMP or the
provided to Medicaid beneficiaries. Basic difference between the AMP and the best
rebates for single source drugs (generally, those price. The higher rebate percentage
still under patent) and “innovator” multiple would become effective after December
source drugs (drugs originally marketed under 31, 2007.
a patent or original new drug application

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CRS-72
Current Law
House: H.R. 3162
Senate: H.R. 976
(NDA) but for which generic competition now
exists) are calculated to be equal to the greater
of 15.1% of the average manufacturer’s price
(AMP) or the difference between the AMP and
the best price. Additional rebates are required if
the weighted average prices for all of a given
manufacturer’s single source and innovator
multiple source drugs rise faster than inflation.
For non-innovator multiple source drugs,
rebates are equal to 11% of the AMP.
Moratorium on certain No provision in current law. In the President’s H§814. Moratorium on certain No provision.
payment restrictions
FY2008 Budget, some proposals affecting payment restrictions. The provision
Medicaid and SCHIP would be implemented would prohibit the Secretary of HHS
administratively (e.g., via regulatory change, from taking any action through
issuance of program guidance, or other possible regulation, official guidance, use of
methods) rather than through legislation. Two federal payment audit procedures, or
such administrative proposals were to phase out other administrative action, policy or
Medicaid reimbursement for certain school- practice to restrict Medicaid coverage or
based transportation and administrative payments for rehabilitation services, or
claiming, and to clarify through regulation the s c h o o l - b a s e d a d m i n i s t r a t i o n ,
types of service that may be claimed as transportation, or medical services if
Medicaid rehabilitation services.
such actions are more restrictive in any
aspect than those applied to such
coverage or payment as of July 1, 2007.
This prohibition would be in effect for
one year after the date of enactment of

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CRS-73
Current Law
House: H.R. 3162
Senate: H.R. 976
this Act.
Tennessee DSH
When establishing hospital payment rates, state H§ 815. Tennessee DSH. The provision No provision.
Medicaid programs are required to recognize would set a DSH allotment for the state
the situation of hospitals that provide a of Tennessee for fiscal years beginning
disproportionate share of care to low-income with 2008 to be equal to $30 million for
patients with special needs. Such each year. In addition, the provision
“disproportionate share (DSH) payments” are would allow the Secretary of HHS to
subject to statewide allotment caps. Allotments limit the total amount of payments made
for the state of Tennessee, however, are equal to hospitals under Tennessee’s research
to zero. This is because the state has, in the and demonstration waiver authorized
past, operated its state Medicaid program under under Section 1115 of the Social Security
the provisions of a research and demonstration Act only to the extent that such limitation
waiver. The requirement to make is necessary to ensure that a hospital does
disproportionate share payments is one of the not receive a payment in excess of
provisions that have been waived by the state Tennessee’s annual state DSH allotment
under the conditions of their research and or is necessary to ensure that the
demonstration waiver.
spending under the waiver remains
budget neutral.
Monitoring erroneous Federal agencies are required to annually No provision.
S§602. Payment error rate measurement
payments
review programs that are susceptible to
(“PERM”). The provision would apply a
significant erroneous payments, and to estimate
federal matching rate of 90% to expenditures
the amount of improper payments, to report
related to administration of PERM
those estimates to Congress, and to submit a
requirements applicable to CHIP. The
report on actions the agency is taking to reduce
provision also would exclude from the 10%
erroneous payments. A new regulation
cap on CHIP administrative costs all
regarding the Payment Error Rate Measurement
expenditures related to the administration of

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CRS-74
Current Law
House: H.R. 3162
Senate: H.R. 976
(PERM) for Medicaid and SCHIP was effective
PERM requirements applicable to CHIP. The
on October 1, 2006. With respect to these two
Secretary must not calculate or publish
programs, the subset of states selected for
national or state-specific error rates based on
review in a given year must conduct reviews of
PERM for CHIP until six months after the
a statistically valid random sample of
date on which a final PERM rule is in effect
beneficiary claims to determine if improper
for all states. Calculations of national- or
payments were made based on errors in the
state-specific error rates after such a final rule
state agency’s eligibility determinations. States
is in effect for all states could only be
must have a CMS-approved sampling plan. In
inclusive of errors, as defined in this rule or
addition to reporting error rates, states must
in guidance issued after the effective date that
also submit a corrective action plan based on
includes detailed instructions for the specific
the error rate analysis, and must return
methodology for error determinations. The
overpayments of federal funds. A predecessor
final PERM rule would be required to
to PERM, called the Medicaid Eligibility
include (1) clearly defined criteria for errors
Quality Control (MEQC) system, is operated by
for both states and providers, (2) a clearly
state Medicaid agencies for similar purposes.
defined process for appealing error
determinations by review contractors, and (3)
clearly defined responsibilities and deadlines
for states in implementing any corrective
action plans. Special provisions would apply
to states for which the PERM requirements
were first in effect under interim final rules
for FY2007 or FY2008 and their application
would depend on when the final PERM rule
is in effect for all states. The Senate bill
would also require the Secretary to review the
Medicaid Eligibility Quality Control

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CRS-75
Current Law
House: H.R. 3162
Senate: H.R. 976
(MEQC) requirements with the PERM
requirements and coordinate consistent
implementation of both sets of requirements,
while reducing redundancies. For purposes
of determining the erroneous excess
payments ratio applicable to the state under
MEQC, a state may elect to substitute data
resulting from the application of PERM after
the final PERM rule is in effect for all states,
for the data used for the MEQC requirements.
The Secretary would also be required to
establish state-specific sample sizes for
application of the PERM requirements to
CHIP for FY2009 forward. In establishing
such sample sizes, the Secretary must
minimize the administrative cost burden on
states under Medicaid and CHIP, and must
maintain state flexibility to manage these
programs.
Payments for FQHCs and Under current Medicaid law, payments to H§121. Ensuring child-centered S§609. Application of prospective payment
RHCs under CHIP
FQHCs and RHCs are based on a prospective coverage. The provision would require system for services provided by Federally-
payment system. Beginning in FY2001, per that payments for FQHC and RHC qualified health centers and rural health
visit payments were based on 100% of average services provided under CHIP follow the clinics. The provision would require states
costs during 1999 and 2000 adjusted for prospective payment system for such that operate separate and/or combination
changes in the scope of services furnished. services under Medicaid. The effective CHIP programs to reimburse FQHCs and
(Special rules applied to entities first date would be October 1, 2008.
RHCs based on the Medicaid prospective

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CRS-76
Current Law
House: H.R. 3162
Senate: H.R. 976
established after 2000). For subsequent years,
payment system. This provision would apply
the per visit payment for all FQHCs and RHCs
to services provided on or after October 1,
equals the amounts for the preceding fiscal year
2008. For FY2008, $5 million would be
increased by the percentage increase in the
appropriated (to remain available until
Medicare Economic Index applicable to
expended) to states with separate CHIP
primary care services, and adjusted for any
programs for expenditures related to
changes in the scope of services furnished
transitioning to a prospective payment system
during that fiscal year. In managed care
for FQHCs/RHCs under CHIP. Finally, the
contracts, states are required to make
Secretary would be required to report to
supplemental payments to the facility equal to
Congress on the effects (if any) of the new
the difference between the contracted amount
prospective payment system on access to
and the cost-based amounts.
benefits, provider payment rates or scope of
benefits.
Miscellaneous
Purpose
No provision.
H§100. Purpose. The provision states No provision.
that the purpose of the CHIP title of the
House bill is to provide dependable and
stable funding for children’s health
insurance under Titles XXI (CHIP) and
XIX (Medicaid) of the Social Security
Act in order to enroll all six million
children who are eligible, but not
enrolled, for coverage today.

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CRS-77
Current Law
House: H.R. 3162
Senate: H.R. 976
Citizenship auditing
Under current law, the Medicaid statute and H§136. Auditing requirement to See S§301 (under Enrollment/Access) for
associated Medicaid Eligibility Quality Control enforce citizenship restrictions on information on monitoring of invalid names
(MEQC) regulations specify an allowable error eligibility for Medicaid and CHIP and SSNs submitted for citizenship
rate (3%) for erroneous excess payments that benefits. Under the House bill, each documentation purposes.
are due to eligibility errors, as well as a state would be required to audit a
methodology for determining a state’s error statistically based sample of individuals
rate. Because state error rates discovered whose Medicaid or CHIP eligibility is
through MEQC programs were consistently determined under: (1) optional
below 3% as of the mid-1990s, CMS offered citizenship documentation rules for
states the option to develop alternative ways to children (specified in H§143 of the bill)
identify and reduce erroneous payments. Under or (2) optional coverage rules for legal
the Improper Payments Information Act of immigrant pregnant women and children
2002 (P.L. 107-300), federal agencies are also (specified in H§132 of the bill) to
required to identify programs that are demonstrate to the satisfaction of the
susceptible to significant improper payments, Secretary that federal Medicaid and
estimate the amount of overpayments, and CHIP funds are not unlawfully spent on
report annually to Congress on those figures individuals who are not legal residents.
and on the steps being taken to reduce such In conducting such audits, a state may
payments. A new regulation regarding rely on MEQC or PERM eligibility
Payment Error Rate Measurement (PERM) for reviews. States would be required to
Medicaid and SCHIP was effective on October remit the federal share of any unlawful
1, 2006. With respect to these two programs, expenditures which are identified under
the subset of states selected for review in a the required audit.
given year are reviewed using a statistically
valid random sample of claims and eligibility
determinations to determine error rates. States
must submit a corrective action plan based on

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CRS-78
Current Law
House: H.R. 3162
Senate: H.R. 976
the error rate analysis, and must return
overpayments of federal funds.
Managed care safeguards
A number of sections of the Social Security Act H§152. Application of certain S§503. Application of certain managed
apply to states under Title XXI (SCHIP) in the managed care quality safeguards to care quality safeguards to CHIP. Same as
same manner as they apply to a state under CHIP. The House bill would add the House provision, but with no effective
Title XIX (Medicaid). These include section subsections (a)(4), (a)(5), (b), (c), (d), date specified.
1902(a)(4)(C) (relating to conflict of interest and (e) of section 1932, which relate to
standards); paragraphs (2), (16), and (17) of requirements for managed care, to the list
section 1903(i) (relating to limitations on of Title XIX provisions that apply under
payment); section 1903(w) (relating to Title XXI. It would apply to contract
limitations on provider taxes and donations); years for health plans beginning on or
and section 1920A (relating to presumptive after July 1, 2008.
eligibility for children).
Access to records for Every third fiscal year (beginning with H§154. Access to records for IG and No provision.
CHIP
FY2000), the Secretary (through the Inspector GAO audits. Under the House bill, for
General of the Department of Health and the purpose of evaluating and auditing
Human Services) must audit a sample from the CHIP program, the Secretary, the
among the states with an approved SCHIP state Office of Inspector General, and the
plan that does not, as part of such plan, provide Comptroller General would have access
health benefits coverage under Medicaid. The to any books, accounts, records,
Comptroller General of the United States must correspondence, and other documents
monitor these audits and, not later than March that are related to the expenditure of
1 of each fiscal year after a fiscal year in which federal CHIP funds and that are in the
an audit is conducted, submit a report to possession, custody, or control of states,
Congress on the results of the audit conducted political subdivisions of states, or their
during the prior fiscal year.
grantees or contractors.

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CRS-79
Current Law
House: H.R. 3162
Senate: H.R. 976
Effective date
No provision.
H§156. Reliance on law; exception for S§801. Effective date. The effective date of
state legislation. The House bill does the Senate bill (unless otherwise provided)
not specify an effective date for the bill would be October 1, 2007, whether or not
in its entirety, however it states that with final regulations to carry out provisions in the
respect to amendments made by Title I bill have been promulgated by that date.
(CHIP) or Title VIII (Medicaid) of the
bill that become effective as of a date: (1)
such amendments would be effective as
of such date whether or not regulations
implementing such amendments have
been issued, and (2) federal financial
participation for medical or child health
assistance furnished under Medicaid or
CHIP on or after such date by a state in
good faith reliance on such amendments
before the date of promulgation of final
regulations (if any) to carry out such
amendments, or the date of guidance (if
any) regarding the implementation of
such amendments shall not be denied on
the basis of the state’s failure to comply
with such regulations or guidance.
In the case of CHIP and Medicaid state Same as the House bill in the case of a state
plans, if the Secretary of HHS determines that requires legislation.
that a state must pass new state
legislation to implement the requirements

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CRS-80
Current Law
House: H.R. 3162
Senate: H.R. 976
of the CHIP and Medicaid titles of the
bill, the state plan, if applicable, would
not be regarded as failing to comply
solely on the basis of its failure to meet
such requirements before the first day of
the first calendar quarter beginning after
the close of the first regular session of
the state legislature that begins after the
date of enactment of the House bill. In
the case of a state that has a two-year
legislative session, each year of such
session would be considered a separate
regular session of the state legislature.
County Medicaid health In general, Medicaid managed care H§805. County Medicaid health No provision.
insuring organizations
organizations are subject to contracting insuring organizations. The House bill
r e q u i r e ments described in secti o n would add an exemption for HIOs
1903(m)(2)(A) of the Social Security Act. operated by Ventura County and Merced
However, certain county-operated managed County, and would raise the allowable
care plans in California that serve Medicaid percentage of beneficiaries to 16%. The
beneficiaries, which are referred to as “county provision would be effective upon
organized health systems” or “health insuring enactment.
organizations” (HIOs), are exempt from these
contracting requirements. The Consolidated
Omnibus Budget Reconciliation Act of 1985
(P.L. 99-272) grandfathered the 1903(m)(2)(A)
exemption for HIOs operating before January 1,

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CRS-81
Current Law
House: H.R. 3162
Senate: H.R. 976
1986. In addition, the Omnibus Budget
Reconciliation Act of 1990 (P.L. 101-508)
provided an exemption for up to three
county-operated HIOs in California that
became operational on or after January 1, 1986,
provided that certain requirements were met.
For example, the three entities could enroll no
more than 10% of all Medicaid beneficiaries in
California, later raised to 14% by the Medicare,
Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (incorporated by
reference in P.L. 106-554).
Clarification of treatment The states and federal government share in the H§816. Clarification treatment of No provision.
of regional medical center cost of the Medicaid program. Sometimes regional medical center. The provision
states fund their share of program costs by would establish that funds transferred
using funds transferred from certain health care from the Regional Medical Center of
institutional providers that are publicly-owned Memphis, a hospital in a tri-state region
or are governmental providers. Such that provides a significant amount of
“inter-governmental transfers” of certified uncompensated care to individuals in all
public expenditures made by those types of three states, can be used to fund a state
health care providers to fund the non-federal other than Tennessee’s share of Medicaid
share of a state’s Medicaid expenditures are costs if the Secretary determines that the
allowable but only when transferred to the state use of such funds is proper and in the
in which the facility is located.
interest of the Medicaid program.

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CRS-82
Current Law
House: H.R. 3162
Senate: H.R. 976
Diabetes grants
Section 330B of the Public Health Service Act H§822. Diabetes grants. The provision S§613. Demonstration projects relating to
specifies that the Secretary, directly or through would provide $150 million for FY2009 diabetes prevention. The Senate bill, as
grants, must provide for research into the for each of these two diabetes grant amended, would create a new demonstration
prevention and cure of Type I diabetes. programs under the Public Health project to fund up to 10 states over three
Appropriations are set at $150 million per year Service Act, as part of the appropriation years to promote children’s receipt of
during the period FY2004 through FY2008. for CHIP under this bill.
screenings and improvements in healthy
Section 330C of the Public Health Service Act
eating and physical activity to reduce the
specifies the Secretary must make grants for
incidence of type 2 diabetes. Activities could
providing services for the prevention and
include reductions in cost-sharing or
treatment of diabetes among American Indian
premiums when children receive regular
and Alaska Natives. Appropriations are set at
screenings and reach certain benchmarks in
$150 million per year during the period
healthy eating and physical activity. States
FY2004 through FY2008.
would be permitted to provide (1) financial
bonuses for partnerships with entities (e.g.,
schools) that increase education and other
activities to reduce the incidence of type 2
diabetes, and (2) incentives to providers
serving Medicaid and CHIP children to
perform screening and counseling regarding
healthy eating and exercise. The Secretary of
HHS would be required to provide a report to
Congress on the degree to which funded
activities improve health outcomes related to
type 2 diabetes among children in
participating states. The provision would
authorize to be appropriated a total of $15
million during FY2008 through FY2012 to

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CRS-83
Current Law
House: H.R. 3162
Senate: H.R. 976
fund this demonstration.
S§501. Child health quality improvement
activities for children enrolled in Medicaid
and CHIP. Would include a childhood
obesity demonstration project that would also
include activities designed to improve health
eating and physical activity among children.
Collection of data used in The Secretary of Commerce was required to No provision.
S§604. Improving data collection. Besides
providing CHIP funds
make appropriate adjustments to the Current
the $10 million provided annually for the
Population Survey (CPS), which is the primary
CPS since FY2000, an additional $10
current-law data source for determining states’
million (for a total of $20 million
SCHIP allotments, (1) to produce statistically
additionally) would be appropriated from
reliable annual state data on the number of
FY2008 onward. In addition to the
low-income children who do not have health
c u r r e n t -l a w r eq u i r e me n t s o f t h e
insurance coverage, so that real changes in the
appropriation, for data collection beginning
uninsurance rates of children can reasonably be
in FY2008, in appropriate consultation with
detected; (2) to produce data that categorizes
the HHS Secretary, the Secretary of
such children by family income, age, and race
Commerce would be required to make
or ethnicity; and (3) where appropriate, to
adjustments to the CPS to develop more
expand the sample size used in the state
accurate state-specific estimates of the
sampling units, to expand the number of
number of children enrolled in CHIP or
sampling units in a state, and to include an
Medicaid, or who are without coverage and
appropriate verification element. For this
to assess whether estimates from the
purpose, $10 million was appropriated
American Community Survey (ACS) produce
annually, beginning in FY2000.
more reliable estimates than the CPS for

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CRS-84
Current Law
House: H.R. 3162
Senate: H.R. 976
CHIP allotments and payments. On the basis
of that assessment, the Commerce Secretary
would recommend to the HHS Secretary
whether ACS estimates should be used in lieu
of, or in some combination with, CPS
estimates for CHIP purposes.
If the Commerce Secretary recommends to
the HHS Secretary that ACS estimates should
be used instead of, or in combination with,
CPS estimates for CHIP purposes, the HHS
Secretary may provide a transition period for
using ACS estimates, provided that the
transition is implemented in a way that
avoids adverse impacts on states.
S§105. Incentive bonuses for states. An
appropriation of $5 million would be
provided to the Secretary for FY2008 for
improving the timeliness of data reported
from the Medicaid Statistical Information
System (MSIS) and to provide guidance to
states with respect to any new reporting
requirements related to such improvements.
Amounts appropriated are available until
expended. The resulting improvements are to
be designed and implemented so that, no later
than October 1, 2008, Medicaid and CHIP

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CRS-85
Current Law
House: H.R. 3162
Senate: H.R. 976
enrollment data could be collected and
analyzed by the Secretary within six months
of submission.
Technical correction
P.L. 109-171 gave states the option to provide H§823. Technical correction. The S§605. Deficit Reduction Act technical
Medicaid to state-specified groups through provision would make a correction to the corrections. Same as House bill.
e n r o l l m e n t i n b e n c h m a r k a n d reference to children in foster care
benchmark-equivalent coverage which is nearly receiving child welfare services in P.L
identical to plans available under CHIP. This 109-171; this change would be effective
law identifies a number of groups as exempt as if included in this law (i.e., March 31,
from mandatory enrollment in benchmark or 2006).
benchmark equivalent plans. These exempted
groups may be enrolled in such plans on a
voluntary basis. One such exempted group is
children in foster care receiving child welfare
services under Part B of title IV of the Social
Security Act and children receiving foster care
or adoption assistance under Part E of such
title.
Technical corrections The federal medical assistance percentage No provision.
S§601. Technical corrections regarding
regarding current state (FMAP) is the rate at which states are
current state authority under Medicaid.
authority under Medicaid reimbursed for most Medicaid service
With respect to Medicaid expenditures for
expenditures. It is based on a formula that
FY2007 and FY2008 only, the provision
provides higher reimbursement to states with
would allow states to elect (1) to cover
lower per capita incomes relative to the
optional, poverty-related children and, may
national average (and visa versa); it has a
apply less restrictive income methodologies
statutory minimum of 50% and maximum of
to such individuals, for which the regular

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CRS-86
Current Law
House: H.R. 3162
Senate: H.R. 976
83%. The enhanced FMAP (E-FMAP) under
Medicaid matching rate, rather than the
SCHIP builds on top of the regular FMAP for
enhanced matching rate under CHIP, would
Medicaid. The E-FMAP can range from 65%
apply to determine the federal share of such
to 85%.
expenditures, or (2) to receive the regular
Medicaid matching rate, rather than the
enhanced CHIP matching rate, for CHIP
children under an expansion of the state’s
Medicaid program. This provision would be
repealed as of October 1, 2008 (i.e., the
beginning of FY2009). States electing these
options would be “held harmless” for related
expenditures in FY2007 and FY2008, once
this repeal takes effect.
Elimination of counting of CHIP statute sets the federal share of costs No provision.
S§603. Elimination of counting medicaid
M e d i c a i d c h i l d incurred during periods of presumptive
child presumptive eligibility costs against
presumptive eligibility eligibility for Medicaid children (i.e, up to two
title XXI allotment. The provision would
costs agai nst CHIP months of coverage while a final determination
strike these current law provisions.
allotments
of eligibility is made) at the Medicaid matching
rate. The law also allows payment out of CHIP
allotments for Medicaid benefits received by
Medicaid children during periods of
presumptive eligibility.

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CRS-87
Current Law
House: H.R. 3162
Senate: H.R. 976
O u t r e a c h t o s m a l l No provision.
No provision.
S§614. Outreach
regarding
health
businesses
insurance options available to children.
The Senate bill would establish a task force,
consisting of the Administrator of the Small
Business Administration (SBA) and the
Secretaries of HHS, Labor, and the Treasury,
to conduct a nationwide campaign of
education and outreach for small businesses
regarding the availability of coverage for
children through private insurance, Medicaid,
and CHIP. The campaign would include
information regarding options to make
insurance more affordable, including federal
and state tax deductions and credits and the
federal tax exclusion available under
employer-sponsored cafeteria plans; it would
also include efforts to educate small
businesses about the value of health
insurance coverage for children, assistance
available through public programs, and the
availability of the hotline operated as part of
the Insure Kids Now program at HHS. The
task force would be allowed to use any
business partner of the SBA, enter into a
memorandum of understanding with a
chamber of commerce and a partnership with
any appropriate small business or health

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CRS-88
Current Law
House: H.R. 3162
Senate: H.R. 976
advocacy group, and designate outreach
programs at HHS regional offices to work
with SBA district offices. It would require
the SBA website to prominently display links
to state eligibility and enrollment
requirements for Medicaid and CHIP, and
would require a report to Congress every two
years.

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