The Bush Administration’s Medicaid Reform Proposal: Using Data to Estimate Mandatory and Optional Beneficiaries and Expenditures

The Bush Administration’s Medicaid Reform Proposal: Using Data to Estimate Mandatory and Optional Beneficiaries and Expenditures

Order Code RL32020
CRS Report for Congress
Received through the CRS Web
The Bush Administration’s Medicaid Reform
Proposal: Using Data to Estimate Mandatory and
Optional Beneficiaries and Expenditures
July 31, 2003
Karen Tritz and Evelyne Baumrucker
Analysts in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

The Bush Administration’s Medicaid Reform Proposal:
Using Data to Estimate Mandatory and Optional
Beneficiaries and Expenditures
Summary
Medicaid, a health insurance program jointly funded by federal and state
governments, is facing a period of escalating costs and rising enrollment among the
population it serves — low-income individuals with disabilities, families and the
elderly. The downturn in the economy since 2000 coupled with rising Medicaid costs
and increasing enrollment and utilization are driving legislative attention both at the
state and federal levels. Medicaid expenditures are a significant portion of most
states’ budgets and are a contributor to the current fiscal crises. However, it is a
challenge for states to cut back Medicaid programs because some of the high cost
components (such as nursing facility care) are statutorily required for certain
beneficiaries, while other optional services (such as prescription drugs) may be
important for beneficiaries’ well-being.
In response to these fiscal pressures, on January 31, 2003, Secretary Tommy
Thompson of the Department of Health and Human Services (HHS) announced a
proposal to change the Medicaid program and provide additional flexibility to states.
The Administration’s proposal would give states the option to receive federal funds
that combine Medicaid and the State Children’s Health Insurance Program (SCHIP)
into two lump-sum annual allotments, one for acute care and one for long-term care.
While many details surrounding the proposal are still unknown, the Administration
has indicated that current mandatory eligibility groups would retain their entitlement
to mandatory benefits, and states would have considerably greater flexibility to
change coverage of currently optional eligibility groups and optional benefits.
The Administration’s Medicaid reform proposal is based on a policy design
principle that requires the ability to identify those individuals who would maintain
their entitlement to Medicaid. The primary federal data source to differentiate
between mandatory and optional expenditures is the Medicaid Statistical Information
System (MSIS). MSIS contains national enrollment and service use data on the
Medicaid population and are the most comprehensive federal data available. However,
overlapping Medicaid’s complex rules with MSIS data does not support a detailed
analysis of mandatory and optional people or spending. National estimates that
attempt to separate mandatory from optional individuals and expenditures using MSIS
must rely on a significant number of underlying assumptions. These assumptions are
important to understand as they influence the estimates. This report provides:
! A brief overview of the Administration’s proposal;
! Key features of the current Medicaid program and MSIS;
! An analysis of how Medicaid’s complex program structure and
MSIS data limitations create significant challenges in the ability to
distinguish between mandatory and optional Medicaid spending.
This report will be updated as new information becomes available.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Medicaid Reform Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Current Program Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Medicaid Statistical Information System (MSIS) . . . . . . . . . . . . . . . . . . . . . . 6
MSIS Eligibility Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
MSIS Service Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Medicaid Managed Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Available State-Level Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
A State-Specific Example of Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 16
Considerations for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
List of Figures
Figure 1. Medicaid Eligibility: Analysis of Mandatory vs. Optional
Beneficiaries Using State and Federal Data Systems . . . . . . . . . . . . . . . . . . . 9
Figure 2. Medicaid Services: Analysis of Mandatory vs. Optional
Service Expenditures Using State and Federal Data Systems . . . . . . . . . . . 10
Figure 3. Medicaid Managed Care: Analysis of Mandatory vs. Optional
Service Expenditures Using State, Federal and Managed Care Data . . . . . 13
Figure 4. State Medicaid Data: Analysis of Mandatory vs. Optional
Service Expenditures Under Fee-for-Service and Managed Care . . . . . . . . 15
List of Tables
Appendix 1. Selected Major Mandatory and Optional Eligibility Groups by
MSIS Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Appendix 2. Mandatory and Optional Services as Classified in MSIS by
Eligibility Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix 3. Excerpt from Oklahoma’s Analysis of Mandatory Versus
Optional Populations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

The Bush Administration’s Medicaid Reform
Proposal: Using Data to Estimate
Mandatory and Optional
Beneficiaries and Expenditures
Background
Medicaid is a program to finance health care services that is jointly funded by
the states and the federal government. Within broad federal guidelines, each state
designs and administers its own program.
The states establish eligibility requirements such as age, income, and resources
through a combination of federal requirements and state options. Generally,
eligibility is limited to certain categories or groups of low-income individuals;
namely, children, pregnant women, members of families with dependent children,
people with disabilities, and the elderly. In FY2000, there were 44.3 million
Medicaid enrollees including 21.8 million children, 10.7 million adults, 4.3 million
elderly, and 7.5 million individuals who were blind or had a disability.1
Within broad federal guidelines, states can also design the scope and availability
of Medicaid benefits. Medicaid law requires states to provide certain services
including, for example, hospital and physician services. Within federal guidelines,
states may opt to cover other services and limit the amount, duration or scope of any
Medicaid service. For example, a state may limit Medicaid coverage of a particular
service to a certain number of hours or days or make a service available only to those
with a particular condition.
The federal government shares in states’ Medicaid service costs by means of a
statutory formula designed to provide a higher federal matching rate to states with
lower per capita incomes. The federal share is referred to as the federal medical
assistance percentage (FMAP). Because Medicaid is an individual entitlement, there
is no annual ceiling on federal expenditures; however, in order to continue receiving
federal payments the state must contribute its share of the matching funds. In
FY2001, combined federal and state Medicaid expenditures grew 11.1% over
FY2000 spending to $228 billion.2
1 FY2000 MSIS. The basis of eligibility of 3.7 million of the 42.8 million Medicaid
enrollees was not available.
2 CRS analysis of Centers for Medicare and Medicaid Services (CMS), Form 64, FY2001.

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Preliminary FY2002 data show total Medicaid expenditures grew 13.2% over
FY2001 to $258.2 billion (spending for Medicaid benefits grew 15%).3 The federal
share was $146.6 billion; states spent $111.6 billion.4 This represents the fastest
annual rate of growth for Medicaid since 1992. CBO projects average annual growth
in federal expenditures for Medicaid to continue at a rate of 8% (9% for Medicaid
benefits) per year for the period between FY2002 and FY2013.5
The recent expenditure trends have been particularly burdensome for the states
because Medicaid enrollment and health care costs have been increasing while state
revenues have been decreasing.6 However, it is a challenge for states to cut back
Medicaid programs because some of the high cost components (such as nursing
facility care) are statutorily required for certain beneficiaries, while other optional
services (such as prescription drugs) are perceived to be necessary for the well-being
of the beneficiaries.7 Cutbacks may not always result in a dollar for dollar savings
in Medicaid because cutting or eliminating a service may result in increases in
spending for other remaining services. For example, if a state no longer offers
podiatry services, beneficiaries may seek the same care from their general
practitioner. Further, cutting the program when unemployment is increasing and the
number of uninsured is growing is often politically unpopular.
This is not the first time that Medicaid has been a major contributor to fiscal
hardship. Throughout most of the 1980s, the growth of the Medicaid program was
less than 10% per year. But starting in 1989, the growth in Medicaid expenditures
increased significantly and peaked at a 29.1% annual growth rate in FY1992. In
response, the Congress passed legislation (104th Congress, H.R.2491) to transform
the Medicaid program into a fixed grant program. President Clinton vetoed this
effort. The recent period of economic growth in the late 1990s temporarily relieved
some of the fiscal pressures, but with the current economic situation, they have
returned.
3 Total Medicaid expenditures include spending on health care services, administration, and
disproportionate share hospital payments for hospitals that serve a large number of low-
income and low-income uninsured individuals. Benefit spending is associated with
spending on health care services only.
4 CRS analysis of Centers for Medicare and Medicaid Services (CMS), Form 64, FY2002.
5 CBO projects that spending growth will drop from 13% (in FY2002) to an average of 8%
beginning in FY2003 (through 2008) as a result of: (1) slower growth in enrollment; (2)
smaller increases in provider payment rates; and (3) restrictions on upper payment limit
(UPL) spending. See Congressional Budget Office, The Budget and Economic Outlook:
Fiscal Years 2004-2013, Jan. 29, 2003.
6 For a more detailed analysis of expenditure growth in the Medicaid program and its impact
on state budgets, see CRS Report RL31773, Medicaid and the Current State Fiscal Crisis,
by Christine Scott.
7 MSIS 2000 shows the four largest spending categories as a percentage of all Medicaid
spending to be: (1) nursing home care (20%); (2) inpatient hospital (14%); (3) prescribed
drugs (12%); and (4) managed care payments (15%).

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The 108th Congress has provided some fiscal relief to the states. On May 28,
2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-027)
included a temporary increase in the FMAP for the last two quarters of FY2003 and
the first three quarters of FY2004. The Bush Administration has also proposed
various options to control Medicaid spending and increase state flexibility such as
encouraging states to apply for demonstration waivers through the Health Insurance
Flexibility and Accountability (HIFA) initiative,8 and through the Medicaid reform
proposal described below.
Medicaid Reform Proposal
On January 31, 2003, Secretary Tommy Thompson of the Department of Health
and Human Services (HHS) announced a Medicaid and State Children’s Health
Insurance Program (SCHIP)9 reform proposal that would significantly alter current
law. The Bush Administration’s proposal would give states the option to receive
federal funds combining Medicaid and SCHIP through two lump-sum annual
allotments, one for acute care and one for long term care. The President’s FY2004
Budget in Brief explains that the allotments would be based on a given state’s
spending in FY2002 that would be increased annually using a specified trend rate.
States would be able to transfer up to 10% of the funds between each allotment.
The Administration has indicated that current mandatory eligibility groups under
Medicaid would retain their entitlement to mandatory benefits under this new option.
Furthermore, the reform proposal would give states considerably greater flexibility
to change coverage of currently optional eligibility groups and optional benefits, and
to add health insurance options for uninsured populations. The Administration
would provide an estimated $3.25 billion in extra federal funding for Medicaid in
FY2004, with $12.7 billion in extra funding over the 7-year period from FY2004
through FY2010. This $12.7 billion would be “recouped” in the following 3 years,
FY2011 through FY2013, by limiting the federal matching payments to a rate of
growth lower than current Medicaid growth estimates, resulting in an overall reform
proposal that is budget neutral over 10 years.
The proposal would require states to maintain a level of spending based on
FY2002 expenditures that increased annually, although at a lower rate than that for
the federal allotments. This requirement is often referred to as a state “maintenance
of effort.” For example, if a state spent $100 million on Medicaid in FY2002 and the
8 The HIFA initiative is designed to encourage states to extend Medicaid and SCHIP to the
uninsured, with a particular emphasis on statewide approaches that maximize private health
insurance coverage options and target populations with income below 200% of the federal
poverty level (FPL). These demonstration waivers use the authority of Section 1115 of the
Social Security Act. For more information see CRS report RS21054, Medicaid and SCHIP
Section 1115 Research and Demonstration Waivers, by Evelyne Baumrucker.
9 The Balanced Budget Act of 1997 (BBA 97; P.L. 105-33) established the State Children’s
Health Insurance Program (SCHIP) under a new Title XXI of the Social Security Act. In
general, the program offers federal matching funds to states and territories to provide health
insurance to certain low-income children.

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annual trend rate was 5% of total expenditures, that state would be required to spend
$110.25 million in FY2004.
The National Governor’s Association (NGA) convened a bi-partisan Medicaid
Reform Task Force of 10 Governors to evaluate the Administration’s proposal and
generate recommendations for Medicaid reform. The Task Force was unable to reach
consensus on the principles for Medicaid reform. The Republican Governors on the
Task Force, among other recommendations, supported the idea of separate program
requirements based on mandatory and optional spending.10 The Democratic
Governors on the Task Force recommended several changes to the Medicaid
program, but did not specifically address modifying policies based on mandatory
versus optional spending.11
Any Medicaid reform proposal that differentiates mandatory and optional
groups and services presents a number of problems in terms of analyzing impact.
The limitations of the primary federal data source (MSIS) and the complex program
structure of Medicaid create significant difficulties in identifying individuals, benefits
and program spending as either mandatory or optional. These limitations are
described further in this report.
Current Program Structure
Eligibility
In general, the Medicaid statute limits the categories of individuals that can be
covered and establishes specific eligibility rules for groups within those broad
categories.12 Some eligibility groups must be covered by all states, while others may
be covered at the state’s option. Mandatory Medicaid eligibility categories generally
include the following low-income individuals: children, certain pregnant women,
members of families with dependent children, and persons with a disability and the
elderly who are eligible for the Supplemental Security Income (SSI) program.13
There are also optional eligibility groups including the “medically needy” who
generally have higher income and who face large costs for medical care.14 The
10 Letter to Secretary Tommy Thompson from the Republican Governors on the National
Governor’s Association bi-partisan, Medicaid Reform Task Force, June 10, 2003.
11 Joint Statement from the Democratic Governors on the NGA Medicaid Reform Task
Force, June 12, 2003.
12 The two broad categories describe in statute are categorically needy and medically needy.
Categorically needy refers to low-income families and children, aged, or individuals who
are blind or have a disability, and certain pregnant women who are eligible for Medicaid.
Medically needy individuals are persons who fall into one of the categorically needy groups
but whose income and resources are too high to qualify as categorically needy. (Medicaid
Regulations, 42 CFR §435.4).
13 SSI refers to the Supplemental Security Income program which is a monthly cash benefit
and, in most states, provides automatic Medicaid eligibility.
14 States with medically needy programs are required to include certain children under age
(continued...)

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Medicaid statute identifies over 50 separate mandatory and optional eligibility
groups.
Services
The Medicaid statute identifies the services states must cover as well as those
that may be covered at the state’s option. Services are grouped under broad
categories which may include several specific types of services. The statute also
requires states to provide specific services to certain eligibles. Specifically, federal
law distinguishes between individuals who are “categorically needy” versus
“medically needy.” Most eligibility groups (both mandatory and optional) qualify as
categorically needy. The medically needy group includes individuals who would be
a member of one of the broad Medicaid groups (i.e., are aged, have a disability or are
in families with children), but have higher income or resources. The distinction
between categorically needy and medically needy has become somewhat outdated,
but it continues to be important in identifying a mandatory versus optional service
because of the way in which the Medicaid statute is written. For example, inpatient
hospital services are a mandatory service for categorically needy individuals, but for
medically needy individuals they are only mandatory if they are pregnancy-related.
Within these broad federal guidelines, each state may define its own package of
covered medical services resulting in considerable variation in the types of services
covered and the amount of care provided across states. In addition to choosing
whether or not the service is covered, states may also limit the amount, duration, or
scope of services, meaning that they can limit the number of hours, days, or type of
coverage for a particular service. For example, a state may specify that payment for
inpatient hospital services cannot exceed 40 days of coverage in a 12-month period.
There are two primary systems for delivering Medicaid services — fee-for-
service and managed care. These systems differ in how the state pays for Medicaid
services. Under fee-for-service, an individual generally can receive a service from
any certified provider, and the provider is reimbursed by the state. Under managed
care, the state contracts with an organization(s) to provide an agreed upon set of
services. The organization receives the Medicaid funding from the state and pays the
individual providers associated with it. Most states use a combination of these
systems to deliver Medicaid services. These systems also differ in how data about
Medicaid service utilization is tracked.
14 (...continued)
18 and pregnant women who, except for income and resources, would be eligible as
categorically needy. They may choose to provide coverage to other medically needy
persons: aged, individuals with blindness or a disability; certain relatives of children
deprived of parental support and care; and certain other financially eligible children up to
age 21.

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The Medicaid Statistical Information System (MSIS)
The Medicaid Statistical Information System (MSIS) is one of the primary
federal data sources for the Medicaid program.15 MSIS is a national Medicaid
enrollment and claims repository and includes information on demographic
characteristics of beneficiaries, service utilization by enrollment group, and payments
for benefits. The MSIS consists of standardized, quarterly submittals of eligibility
and claims files from each state to the federal government.16 These submissions
contain data extracted from states’ claims processing systems, called the Medicaid
Management Information Systems (MMIS). Since 1999, all states have been
required to participate in MSIS.
The rich information contained in this data system allows for a more detailed
level of analysis than was available prior to 1999.17 However, the data have some
significant limitations in analyzing major components of the Administration’s
Medicaid reform proposal including:
! available data: FY2000 is the most recent MSIS data available for
the Medicaid program which may not accurately reflect the current
status of the program given a downturn in the economy since 2000
and state fiscal crises.18
! mandatory versus optional eligibility: MSIS does not provide
sufficient detail to categorize most beneficiaries as either mandatory
or optionally eligible.
! mandatory versus optional services: MSIS does not provide
sufficient detail to categorize many Medicaid services as either
mandatory or optional.
Cost estimates to break out mandatory versus optional spending can be prepared
using MSIS, but because of the above limitations those estimates must rely on a
number of assumptions about program trends, eligibility and services. CMS program
officials report that an estimate of mandatory versus optional spending is currently
under development. One important consideration for those evaluating CMS’ results
15 Another major source of Medicaid statistical data is the Centers for Medicare and
Medicaid Services (CMS) Form 64. The CMS Form 64 is an expenditure report that
includes aggregate state and federal spending on benefits and program administration by
type of service and administrative categories. This form does not provide any data on
beneficiaries.
16 To facilitate analysis by outside groups, such as CRS, CMS has made available person-
level MSIS files subject to a data use agreement. CMS retains a claims-level database which
has additional variables not available to external groups.
17 MSIS is an electronic reporting alternative to the CMS-2082. Data from Form 2082
includes state-level demographic, eligibility and enrollment information, utilization
information and spending by enrollment group and type of service. This data set does not
include person-level or claims-level details.
18 CMS has posted 2001 MSIS files to their web site, however data are not yet available for
all states.

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will be the explicit assumptions the Centers for Medicare and Medicaid Services
(CMS) uses, and the sensitivity of the overall estimate to their assumptions (i.e., how
the estimate changes based on one set of assumptions versus another). These data
limitations and the types of assumptions that would have to be made to evaluate the
impact of the Administration’s Medicaid reform proposal are described in more
detail below.
In 2001, the Urban Institute analyzed the FY1998 state-reported CMS-2082 data
to develop an estimate of mandatory versus optional spending. This estimate was
published in a 2001 report for the Kaiser Family Foundation.19 Key findings from
this analysis were that in FY1998 one-third of national Medicaid spending was for
mandatory services for mandatory groups, and the remaining two-thirds was for
optional spending. The authors provided a brief discussion of their methodology for
arriving at their estimates. Included in this discussion were some of the major
assumptions they relied on to separate out mandatory versus optional spending. The
Urban Institute intends to update their analysis of the break between mandatory and
optional groups and services based on FY2000 person-level MSIS data. As with
their previous CMS-2082 based analysis, assumptions will have to be made to
disaggregate mandatory and optional eligibility groups as well as mandatory and
optional spending.
MSIS Eligibility Categories
Individuals who meet state-specific eligibility criteria and who are enrolled in
the Medicaid program are each assigned an eligibility code. In many states,
somewhere between 70 and 150 different eligibility codes exist to categorize that
individual’s eligibility pathway into Medicaid. At the federal level, states are
required to report an enrollee’s Medicaid eligibility status to CMS based on 23 broad
MSIS eligibility categories (as shown in Appendix 1).
Specifically, Medicaid eligibility groups captured in MSIS are broken down
using two general criteria: (1) maintenance assistance status or MAS (i.e., cash,
poverty-related, medically needy, Section 1115, and other); and (2) basis of eligibility
or BOE (i.e., aged, blind/disabled, children, adult and foster care). Individuals are
grouped into a MAS/BOE category depending upon how they become eligible for
Medicaid.20,21 For example, an elderly individual receiving SSI would be categorized
19 J. Holahan, Restructuring Medicaid Financing: Implications of the NGA Proposal, Kaiser
Commission on Medicaid and the Uninsured, June 2001, at [http://www.kff.org/
content/2001/2257/2257.pdf]
20 Section 1902(a)(19) of the Social Security Act provides that eligibility determinations will
be made in a manner consistent with simplicity of administration and the best interest of the
recipients. Further, states cannot deny Medicaid coverage to individuals with completed
applications, or terminate existing coverage, until all avenues of eligibility have been
explored and evaluated. For individuals who would be eligible under more than one
category, Medicaid regulations specify that the individual will be determined eligible for the
category he (or she) selects (42 CFR §435.404).
21 For individuals who would be eligible under more than one category, the state may assign
(continued...)

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as “cash/aged,” whereas an elderly individual who is only Medicaid eligible because
she is in a nursing facility would be considered “other/aged.” Because there are
many more state-specific Medicaid eligibility groups than federal MAS/BOE
combinations, states are provided instructions on how to assign state-specific
eligibility groups to each MAS and BOE category.
Most of the MSIS MAS/BOE categories contain a combination of mandatory
and optional Medicaid eligibility groups. Appendix 1 illustrates this grouping by
identifying the major mandatory and optional eligibility groups included in each
MSIS MAS/BOE category. The combining of eligibility groups into these broad
MAS/BOE categories does not permit separation of individuals into their specific
mandatory or optional eligibility group (see Figure 1). For example, pregnant
women with family income below 133% of the federal poverty level (FPL) are
members of a mandatory Medicaid group.22 By contrast, pregnant women with
family income between 134% and 185% FPL are eligible at state option. Because
the person-level and claims-level MSIS data do not include a family income variable,
it is very difficult to accurately determine whether a pregnant woman enrolled in the
Medicaid program is a mandatory or optional beneficiary. Because the MSIS
eligibility classifications aggregate the mandatory and optional groups for pregnant
women into one MAS/BOE category, depending on the state such an individual may
be categorized in MSIS as a “poverty-related adult,” or if under age19 as a “poverty-
related child.”23 Without more detailed eligibility information (e.g., income,
pregnancy status), analysts must make assumptions regarding whether a given
individual in a specific MAS/BOE category is part of a mandatory or optional
Medicaid subcategory. The accuracy of these underlying assumptions will impact the
precision of any projections that attempt to analyze the impact of proposed changes
to Medicaid that rely on the ability to break out individuals belonging to mandatory
versus optional eligibility groups.
21 (...continued)
eligibility based on a pre-determined eligibility hierarchy. With regard to state reporting
systems, if no eligibility category is selected the system may be programed to default to a
specified eligibility category.
22 Under the pregnant women eligibility category, states are not required to provide the full
range of mandatory Medicaid services, but rather must provide pregnancy-related services
including: prenatal services, services associated with the birth of the child, and 60 days of
postpartum care.
23 Some states classify pregnant women under age 19 as adults, based on the notion that they
are considered the “head of household” for the purposes of determining Medicaid eligibility.
On the contrary, other states focus strictly on age to classify pregnant women in the
appropriate MAS/BOE category.

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Figure 1. Medicaid Eligibility: Analysis of Mandatory vs. Optional
Beneficiaries Using State and Federal Data Systems
State Data
Federal Data
Systems (MMIS)
System (MSIS)
Estimated 70-150
23 eligibility codes
eligibility codes
Individual
enrolls in
Medicaid and
Mandatory
Unable to
is assigned an
Groupsa
separate
eligibility
mandatory from
Optional
code.
optional groups.
Groupsa
Source: Congressional Research Service.
a Medicaid regulations specify that in each applicant’s case record the Medicaid agency must include
facts to support the agency’s decision on his (or her) application (42 CFR §435.913), and to verify the
applicant’s eligibility or amount of medical assistance payment (42 CFR 435.952). While states must
maintain the detailed eligibility information that would be necessary to distinguish between mandatory
and optional eligibility groups, some states may need to complete additional steps such as linking
MMIS with their eligibility determination system to categorize enrollees in this way.
MSIS Service Categories
Similar limitations apply to service spending in terms of the ability to use MSIS
to distinguish between mandatory and optional Medicaid spending. Because the
Administration’s proposal would impose separate requirements for mandatory and
optional services, the ability to accurately break out mandatory versus optional
service spending would be important for evaluating the impact of this proposal and/or
for implementing this (or other similar) proposal(s).
MSIS classifies medical care and services into 29 different service categories.
Like the MSIS eligibility groups, many of the 29 service categories contain several
specific services bundled together within one category. Appendix 2 lists each of the
MSIS service categories and identifies which are mandatory, optional, or a
combination of the two based on who is receiving the service, (i.e., a categorically
needy individual; or a medically needy individual).24 In cases where the service
category is a combination of both mandatory and optional elements, MSIS may not
24 Categorically needy groups include the following MAS categories listed in Appendix 1:
(1) cash; (2) poverty related; and (3) other. Individuals in each of these MAS groups can
be either mandatory or optional eligibles. Medically needy is a separate MAS category and
is always optional.

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provide sufficient detail including age or needed level of care to separate those
expenditures.25 (See Figure 2.)
Figure 2. Medicaid Services: Analysis of Mandatory vs. Optional
Service Expenditures Using State and Federal Data Systems
State Data
Federal Data
Systems (MMIS)
System (MSIS)
Detailed service
29 service codes
information from
billing record.
Medicaid
enrollee uses
Medicaid
Mandatory Service
Some of the service
services.
Expenditures
expenditures can be
categorized as mandatory
or optional. Others are a
Optional Service
combination of both.
Expenditures
Source: Congressional Research Service.
Certain groups of individuals are subject to special benefit rules which entitle
them to a different package of services than other groups. For individuals in these
groups (e.g., children, qualified aliens, and individuals who are eligible as medically
needy and reside in a institution for individuals with a mental disease or an
intermediate care facility for individuals with mental retardation), Medicaid statute
specifies mandatory services differently than for other Medicaid groups. The
examples provided below illustrate the difficulty in matching the current program
structure and MSIS to the framework of the Administration’s proposal which would
have separate requirements for mandatory and optional services.
! Medically Needy. If a state chooses to cover medically needy
populations, in general, Medicaid law specifies what services must
be covered. However, if the state covers medically needy persons in
institutions for mental disease or in intermediate care facilities for
persons with mental retardation, then Medicaid law gives states a
choice of covering either a subset of the mandatory services, or
alternatively, any seven services from a list of mandatory and
optional services identified in Medicaid statute.
MSIS does not separately identify which services the state has chosen as
mandatory and which would be optional for these two groups of individuals.
25 To receive some Medicaid services, individuals must require assistance of a certain type
and/or amount referred to as a “level of care.” These needs may include assistance with
activities of daily living (such as eating or bathing) or instrumental activities of daily living
(such as grocery shopping or laundry).

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! Early and Periodic Screening, Diagnosis and Treatment
(EPSDT). Special benefit rules apply to children under the age of
21 who are entitled to the program of preventive child care referred
to as EPSDT. Under EPSDT, if an optional service is determined to
be a necessary treatment to correct or ameliorate conditions
identified through screening, states are required to provide that
service, even if the service is not covered under the state Medicaid
plan.
MSIS includes a special code to identify services offered as part the EPSDT
program, but these codes do not separately identify mandatory versus optional
services. First, only the services received during the initial screening are
flagged; follow-up services for necessary treatment are not identified.
Second, the MSIS person-level file does not provide service-by-service
spending under EPSDT, although this type of analysis is possible using the
MSIS claims-level files.26
In each of these cases, assumptions would need to be made to separate service
expenditures identified on MSIS claims into mandatory versus optional categories.
MSIS does not provide enough detail to break out expenditures in this way as would
be required by the Administration’s policy proposal.
Medicaid Managed Care
As described earlier, many states have developed managed care programs to
deliver Medicaid services. Currently, all states except Alaska, Mississippi, and
Wyoming have implemented various types of managed care programs. Beneficiary
participation varies widely from state to state. For example, as of June 2002, South
Carolina enrolled only 6.5% of its Medicaid population in managed care, while
Michigan reported that 100% of its Medicaid population was enrolled in managed
care for at least some of their services.27
Under a managed care program, states pay an organization a fixed, monthly
payment to provide all the services specified under the managed care contract. Many
managed care enrollees fall into both mandatory and optional eligibility groups, and
many managed care contracts contain both mandatory and optional services. In
general, data reported to the federal government through MSIS show only the fixed,
monthly payment amount. MSIS does not identify person-specific service utilization
26 On the person-level files (as well as publicly-reported data), all spending associated with
the EPSDT program is combined and reported as EPSDT spending. It is not possible to
break out service-by-service spending offered as a part of an EPSDT program on the person-
level file. Conversations with program specialists at CMS confirmed that expenditures
associated with the program-type flags can be broken out across services on the claims-level
file; however, they cautioned that these breakouts were not particularly useful for
determining mandatory versus optional service spending on the FY2000 MSIS file as states
did not use the program-type flags accurately or consistently.
27 [http://www.cms.gov/medicaid/managedcare/mcsten02.pdf].

CRS-12
to determine whether or not the delivered service is mandatory or optional, and the
fixed monthly fee cannot be partitioned into mandatory versus optional spending.
In some cases states may have access to encounter data, (i.e., service-use data),
for their Medicaid managed care programs which identifies the specific services a
managed care enrollee is using. These data may help to identify whether that service
is mandatory or optional. In other cases, the state may have to assume what services
the managed care enrollee is using based on identifying individuals with similar
eligibility characteristics who are receiving care under the Medicaid fee-for-service
system. (See Figure 3.)

CRS-13
Figure 3. Medicaid Managed Care: Analysis of Mandatory vs. Optional Service Expenditures
Using State, Federal and Managed Care Data
State
Federal Data
State pays
Data Systems
System (MSIS)
managed care
(MMIS)
Data shows fixed, monthly
organization a
Data shows fixed
payment. No specific
fixed monthly
monthly payment.
service-use information.
Medicaid
payment.
No specific service-
beneficiary is
use information.
enrolled in
Unable to separate
managed care
mandatory from
to access
Unable to separate
optional service
some or all of
Managed Care
mandatory from optional
expenditures.
his or her
Organization
service expenditures.
services.
Provides Medicaid
services for fixed
payment. May collect
May send encounter
encounter data for
data (or a sample)
specific services.
to the state.
May be able to separate mandatory
service expenditures with
encounter data.
May be able to separate optional
service expenditures with
Source: Congressional Research Service.
encounter data.

CRS-14
Available State-Level Data
As described above, Medicaid’s complex program structure and current data
limitations create significant challenges in analyzing the Administration’s Medicaid
reform proposal or similar proposals based on reform principles that require the
ability to distinguish between mandatory and optional Medicaid spending. Given
that the MSIS person level files do not contain the level of detail required to easily
determine breaks between mandatory and optional eligibility groups or service
expenditures, we explored the availability and usefulness of state-level data that may
help to inform this issue. The following section provides background information
regarding the type of eligibility and expenditure detail that may be available at the
state-level.
States have access to some person-level eligibility information as well as claims-
level data through their Medicaid Management Information Systems (MMIS).28 Data
from these files are extracted and submitted to CMS for MSIS. In some cases, states
may provide CMS with additional eligibility code designations with more detail than
the MAS/BOE categories described earlier.29
In order to assess whether state-level data would inform analysis to break out
Medicaid mandatory versus optional spending, we completed a brief web search to
identify states that: (1) posted state-level analyses that break out mandatory versus
optional spending, or (2) states that may have access to eligibility detail that would
assist in breaking out mandatory versus optional spending and counts of
beneficiaries. While the search was not exhaustive, we identified several states that
meet at least one of these criteria.
For example, a manual from California identifies over 140 state-specific
eligibility codes (MSIS groups these into 23 categories).30 It also identifies which
persons in each eligibility category have access to the full set of Medicaid benefits,
or if restrictions are applied, how the benefit package is limited.31 In addition, some
states may also have access to managed care encounter data as described above. (See
Figure 4.)
28 The state may also have an eligibility information system that contains additional
individual level detail such as income, earnings, etc.
29 CMS program specialists caution against the usefulness of these eligibility codes to break
out mandatory versus optional eligibility populations. For FY2000, CMS estimated that
approximately half of the states provided a very limited set of codes to distinguish specific
eligibility groups, and in four states this data were not provided. CMS points to the
complexity of the programming required to extract this information from the state-reporting
systems as the main cause for the incomplete data.
3 0 [http://files.medi-cal.ca.gov/pubsdoco/publications/masters-MTP/Part1/
aidcodes_z01.doc].
31 California has created a tool that permits users to summarize and analyze the state’s data
interactively. Eligibility counts in this system are based on the state’s Medi-Cal Eligibility
File. Also included, is a sheet labeled “Aid Category Tree” which shows the relationships
between the federal Medicaid eligibility rules for the beneficiary and the state’s eligibility
categorization scheme. California’s data can be accessed at the following website:
[http://www.dhs.ca.gov/mcss/RequestedData/Special_Family/spec_fam.htm ].

CRS-15
Figure 4. State Medicaid Data: Analysis of Mandatory vs. Optional Service Expenditures Under
Fee-for-Service and Managed Care
State
Data Systems (MMIS)
State pays managed
care organization a
Fee-for-Service:
Managed Care: Data
fixed monthly
Detailed eligibility
shows fixed monthly
payment for managed
and service
payment. No specific
Medicaid
care services.
information.
service-use information.
beneficiary
may receive
services
Mandatory Groups
through both
fee-for-service
Unable to
Optional Groups
and managed
separate
care.
mandatory
Mandatory Service
from optional
Expenditures
service
expenditures.
Optional Service
Expenditures
Managed Care
Organization
May send encounter
data (or a sample)
Provides Medicaid
to the state.
services for fixed
payment. May
May be able to separate mandatory service
collect encounter data
expenditures with encounter data.
for specific services.
May be able to separate optional service
expenditures with encounter data.
Source: Congresssional Research Service.

CRS-16
A State-Specific Example of Analysis. In the CRS review of selected
states, Oklahoma, stood out as an example of having data available that could allow
the identification of mandatory versus optional eligibility and service use at a very
detailed level. Oklahoma has created a mapping system to cross person-level
eligibility criteria with claims-level service use data at a much more detailed level
than is possible in MSIS. To capture mandatory versus optional Medicaid spending,
the state generated a table where the rows (50 total) identify service categories broken
out by mandatory versus optional and the columns (73 total) identify state-specific
eligibility criteria such as income, age, and eligibility status with enough detail to
identify individuals as either mandatory or optional. Additional eligibility details
such as pregnancy status were also captured. Each Medicaid claim from the state’s
MMIS was then mapped into this cross tabulation. From there, data programmers
generated a table where each resulting cell (3,650 total) contains expenditures that
can be identified as either mandatory or optional based on the intersection of the
individual’s eligibility status and the service. (See Appendix 3 for an excerpt from
this table.)
The state did not have access to encounter data for its managed care program.
To determine a break out of mandatory versus optional spending for those receiving
services through managed care, the state identified individuals with similar eligibility
characteristics to those receiving care in their fee-for-service setting. The state then
assumed that service use between mandatory versus optional groups would break out
in a similar fashion for individuals in managed care.
The state then grouped each of the cells that identified mandatory spending for
mandatory groups ($944 million) and optional spending for mandatory groups ($452
million); as well as mandatory spending for optional groups ($339 million) and
optional spending for optional groups ($193 million).32 (Expenditure groupings not
shown in Appendix 3.)
In sum, an estimated 49% of Oklahoma’s Medicaid expenditures would be for
mandatory services for mandatory groups, and the remaining 51% would be for
services for optional populations or optional spending for mandatory populations.
Although spending patterns across states may not match these Oklahoma figures,
these estimates, based on the state’s Medicaid data, differ from the commonly-cited
national estimates that show that one-third of Medicaid spending is for mandatory
services for mandatory groups, and the remaining two-thirds is for optional
spending.33
32 CRS analysis of Oklahoma’s FY2003 state budget request for both federal and state
spending sent by Oklahoma Medicaid data specialists.
33 J. Holahan, Restructuring Medicaid Financing: Implications of the NGA Proposal, Kaiser
Commission on Medicaid and the Uninsured, June 2001, at [http://www.kff.org/content/
2001/2257/2257.pdf]

CRS-17
Considerations for Congress
If Congress chooses to create legislation that is consistent with the
Administration’s Medicaid reform proposal, then the following features would need
to be developed:
! Program Structure and Entitlement. An important feature in this
type of Medicaid reform proposal is identifying those individuals, if
any, who would maintain their entitlement to Medicaid. Using
current federal Medicaid data to identify the number of people in
mandatory versus optional groups and the expenditures associated
with these groups is not a straight forward task. MSIS allows for
access to far more program detail regarding beneficiary counts and
expenditures than was available previously. However, the unit of
analysis available on these files collapses eligibility groups and
benefit expenditure detail in ways that make it very difficult, if not
impossible, to accurately determine how many individuals might be
affected by different policy options or what the fiscal impact might
be.
! Allotment Formula. The Bush Administration’s proposal does not
provide information on whether spending for mandatory services for
mandatory beneficiaries would be reimbursed under the current
system (i.e., federal reimbursement based on the state’s actual
expenditures for services based on a specific matching rate) or be
combined with optional spending under the proposed, capped federal
allotments. If these allotments include only optional services,
determining the amount of the allotment for each state would be a
challenge. If mandatory spending is part of the capped allotments,
states might have to modify the amount of funding available for
optional beneficiaries and optional services if mandatory spending
changed.
! State Maintenance-of-Effort. As described earlier, the state
maintenance- of-effort provision would require a state to continue its
fiscal effort based on a particular point in time. The Bush
Administration proposes that state maintenance-of-effort be based
on state spending in FY2002, increased annually at a lower rate than
that for the federal capped allotments. Due to the limitations in
MSIS described above, if the maintenance-of-effort requires the
separation of mandatory from optional Medicaid spending, federal
oversight of this type of provision would be a significant challenge.
While MSIS allows for a more detailed level of analysis than was available prior
to 1999, Medicaid program data at the federal level have limited value in analyzing
the impact of the Administration’s proposal or related proposals because a key
feature of these proposals is to separate mandatory from optional spending. Medicaid
program data at the state level varies in their usefulness by state, and many
components are not collected across states. Given these limitations, drafting
legislative language to identify mandatory populations, distributing dollars for
beneficiaries across states, and understanding the effect of the Bush Administration’s
reform proposal on each state could be a challenging task.

CRS-18
Appendix 1. Selected Major Mandatory and Optional Eligibility Groups by MSIS Category
MSIS Eligibility Categories (23)
Specific Eligibility Groups as Classified in MSIS
Mandatory eligibility group
Optional eligibility groups
Maintenance
(total number of eligibility groups in each MSIS
(total number of eligibility groups in each MSIS
Basis of eligibility
assistance statusa
category)
category)
Aged
Individuals who receive Supplemental Security Income
Individuals who receive only state supplementation to
Cash (C)
(SSI). (Three groups)
SSI. (One group)
Poverty-related
Low-income Medicare beneficiaries in which Medicaid pays
Aged up to 100% of the federal poverty level. (One
(C)
part/all of the Medicare premium. (Three groups)
group)
Medically-needy
(O)
Aged medically needy groups. (Two groups)
Individuals deemed to be receiving SSI. Essential spouses.
Individuals receiving home and community-based waiver
Other (C)
(Seven groups)
services but eligible if in an institution. (Six groups)
Aged individuals made eligible under a Section 1115
waiver due to poverty-related eligibility expansions. (One
1115 (O)b
group)
Blind/ Disabled
Individuals who receive only state supplementation to
Cash (C)
Individuals who receive SSI. (Three groups)
SSI. (One group)
Poverty-related
Low-income Medicare beneficiaries in which Medicaid pays
Individuals up to 100% of the federal poverty level. (One
(C)
part/all of the Medicare premium. (Four groups)
group)
Medically-needy
(O)
Blind/Disabled medically needy groups. (Three groups)
Individuals who receive SSI and who would continue to be
Individuals receiving home and community-based waiver
eligible except for cost-of-living increases to cash benefits
services who would be eligible if in an institution. (Eight
Other (C)
under Title II of the Social Security Act. (12 groups)
groups)
Individuals who are blind or have a disability who were
made eligible under a Section 1115 waiver due to
1115 (O)b
poverty-related eligibility expansions. (One group)
Children
Low income children qualifying under the former AFDC
Cash (M)
program rules. (Three groups)
Infants and children up to age 6 with income at or below
Poverty-related
133% federal poverty level (FPL). Children under 19 with
Infants and children up to age 6 with income between
(C)
income at or below 100% FPL. (Two groups)
134% and 185% FPL. (Two groups)

CRS-19
MSIS Eligibility Categories (23)
Specific Eligibility Groups as Classified in MSIS
Mandatory eligibility group
Optional eligibility groups
Maintenance
(total number of eligibility groups in each MSIS
(total number of eligibility groups in each MSIS
Basis of eligibility
assistance statusa
category)
category)
Medically-needy
(O)
Child-medically needy groups. (Four groups)
Individuals who meet the income and resource
requirement for the former AFDC program. Children
Children in families receiving up to 12 months of extended
who would be eligible if work-related child care costs
benefits due to employment. Aliens receiving emergency
were paid from earnings. “Ribicoff kids.” Individuals
Other (C)
services. (Six groups)
covered through HCB waivers. (Eight groups)
Children made eligible under a Section 1115 waiver due
1115 (O)b
to poverty-related eligibility expansions. (One group)
Adult
Individuals eligible through Section 1931 of the Social
Security Act. Other eligible adults such as pregnant women
with no other eligible children and child-less adults. AFDC-
Cash (M)
related groups. (Three groups)
Women after the pregnancy with family income below
185% FPL. Caretaker relatives and pregnant women
Poverty-related
made eligible more liberal income and resource
(C)
Certain pregnant women. (One group)
requirements of Section 1902(r)(2). (Two groups)
Medically-needy
(O)
Adult medically needy groups. (Three groups)
Individuals who meet the income and resource
Families receiving up to 12 months of extended benefits due
requirement for the former AFDC program. Children
to employment. Women where eligible based on pregnancy
who would be eligible if work-related child care costs
Other (C)
status. Aliens receiving emergency services. (Six groups)
were paid from earnings. (Eight groups)
Caretaker relatives and pregnant woman made eligible
under a Section 1115 waiver due to poverty-level-related
1115 (O)b
eligibility expansions. (One group)
Unemployed parent- child
Categorically
needy-
cash/Section 1931
Adults in unemployed parent program. Certain children
(M)
regularly attending school. (Two groups)
Unemployed parent-adult
Categorically
needy-cash
Section 1931 (M)
Certain adults in adult-only units. (Three groups)

CRS-20
MSIS Eligibility Categories (23)
Specific Eligibility Groups as Classified in MSIS
Mandatory eligibility group
Optional eligibility groups
Maintenance
(total number of eligibility groups in each MSIS
(total number of eligibility groups in each MSIS
Basis of eligibility
assistance statusa
category)
category)
Foster children
Special needs children covered under adoption assistance
Children for whom the state makes adoption assistance or
or foster care which does not involve Title IV-E. (One
Other (C)
foster care payments under Title IV-E. (One group)
group)
Source: CRS analysis of Medicaid Statute and Regulations.
a In the parentheses, M= All mandatory groups, O=All optional groups, C= Combination of both mandatory and optional groups.
b The MSIS 1115 MAS category is defined as including counts of individuals participating in a demonstration waiver as a result of an eligibility expansion (i.e., to individuals that would
not otherwise be eligible for Medicaid), therefore all individuals in these groups would be considered optional eligibles.

CRS-21
Appendix 2. Mandatory and Optional Services as Classified in MSIS by Eligibility Group
Categorically Medically
MSIS service category (29)
needya,b,c
needy
Notes
Inpatient hospital
M
C
For medically needy group, hospital services are mandatory if pregnancy-related.
Mental health facility: Individuals under
O
Od
age 21
Mental health facility: Individuals over
O
Od
age 65
Nursing facility services
C
Od
For categorically needy groups, nursing facility services for individuals over the age of 21 are mandatory
unless the individual is a resident of an institution for mental disease (IMD); for individuals under age 21, this
service is optional. For all medically needy individuals, this service is optional subject to table note d.
Intermediate Care Facilities for Individuals
O
Od
with Mental Retardation (ICF/MR)
Physician’s services
M
Od
Outpatient hospital
M
Od
Prescribed drugs
O
Od
Dental
C
Od
For categorically needy groups, medical and surgical services of a dentist are mandatory; all other dental
services are optional.
Other licensed practitioners
O
Od
Clinic services
O
Od
Lab and X-ray
M
Od
Sterilizations
M
Od
Home health services
C
C
This service is mandatory for all individuals who are entitled to nursing facility services in that state and
optional for all others. Within home health services, nursing services, home health aide and medical equipment
are required. Therapies (physical, occupational, etc.) are optional.
Personal care services
O
O
Targeted case management
O
O
Rehabilitative services
O
Od
Therapies
O
Od

CRS-22
Categorically Medically
MSIS service category (29)
needya,b,c
needy
Notes
Hospice
O
O
Nurse midwife
M
Od
Nurse practitioner
C
O
For categorically needy groups, certified pediatric and family nurse practitioner services are mandatory.
Services of all other types of nurse practitioner are optional.
Private duty nursing
O
Od
Religious non-medical health care
O
O
institution
Transportation
O
O
Although coverage for transportation is an optional Medicaid service, states are required to pay for
transportation for medical appointments either through services or administration funds.
Abortions
M
Od
Considered as a physicians’ services so long as in accordance with federal payment restrictions.
Other services
C
Od
Services identified in the MSIS definition are optional, but it includes a clause that this category may also
include other services.
Health Maintenance Organization (HMO)
C
C
Covered services are specified in the state’s contract with the organization and may include both mandatory
or Health Insuring Organization (HIO)
and optional services.
Prepaid Health Plan
C
C
Covered services are specified in the state’s contract with the organization and may include both mandatory
and optional services.
Primary Care Case Management (PCCM)
O
O
Source: CRS analysis of Medicaid statute and regulations.
a M= Mandatory service; O= Optional service, C= Combination of both mandatory and optional features.
b Analysis of mandatory versus optional services does not apply to following eligibility groups who are entitled to a different set of services: (1) low-income Medicare beneficiaries
who are only entitled to Medicare cost-sharing; (2) Qualified aliens who receive only emergency care; (3) Low-income pregnant women (not otherwise eligible for Medicaid)
who receive just pregnancy-related services; (4) Children who are entitled to services under the EPSDT program; and (5) Individuals with tuberculosis (not otherwise eligible
for Medicaid) who receive only tuberculosis-related services.
c Categorically needy includes all cash, poverty-related and other categories identified under the MSIS Maintenance Assistance Status column on Appendix 1 and includes both
mandatory and optional Medicaid eligibility groups.
d If a state has chosen to provide coverage for medically needy persons in institutions for mental disease or an intermediate care facility for individuals with mental retardation, the state
is required to cover either most of the mandatory services, or alternatively, any seven of services listed in Medicaid law including both mandatory and optional services.

CRS-23
Appendix 3. Excerpt from Oklahoma’s Analysis of Mandatory Versus Optional Populations
Aged, blind,
Aged, blind,
Aged, blind,
Aged, blind,
Aged, blind,
Aged, blind,
Other eligibility
disabled
disabled
disabled
disabled
disabled
disabled
groups
and
and
and
and
and
and
categorically
categorically
categorically
categorically
categorically
categorically
needy and
needy and
needy and
needy and
needy and
needy and
public
public
public
public
public
public
assistance
assistance
assistance
assistance
assistance
assistance
< age 1
age 1 — 5
age 6 — 18
age 19 — 64
age 65+
Total
In addition to the
Service Description
< 58%FPL
< 58% FPL
< 58% FPL
< 58% FPL
< 58% FPL
six categories
displayed here,
Inpatient hospital general
$ 897,046
$1,916,956
$6,284,594
$29,074,272
$1,065,301
$39,238,169
Oklahoma used an
Inpatient hospital behavioral health
-
$ 311,835
2,782,815
27,510
159,025
3,281,185
additional 67
Inpatient hospital group practice
-
-
-
-
-
-
eligibility
Outpatient hospital
$ 33,425
282,429 1,215,351
5,403,036
190,548 7,124,788
categories in its
Skilled nursing
-
-
-
-
-
analysis.
ICF
-
-
-
-
-
-
ICF/MR
-
-
-
-
-
-
Home health
3,827
21,540
33,940
270,578
32,621
362,506
Physician
111,897
479,349
1,796,384
344,825
11,554,452
Clinic physician
-
-
-
-
-
Clinic rural health
(60)
728
5,156
29,911
2,740
38,475
Clinic
2,076
15,386
10,640
2,981
-
31,084
Clinic speech and hearing
54
2,976
1,799
-
-
4,830
Clinic free-standing ambulatory surgery center
267
5,601
8,759
115,459
4,930
135,016
Clinic free-standing dialysis center
-
-
52,152
925,176
39,455
1,016,783
Clinic early intervention services
58,782
241,345
-
-
-
300,128
Clinic federally qualified health centers
173
882
19,547
245,771
8,542
274,916
Clinic group practice
-
-
-
Lab and X-ray
875
12,637
40,588
190,236
10,604
254,940
Transportation
11,230
35,354
127,571
24,630
15,339
914,124
Rx
192,341
2,051,113
11,389,537
49,719,527
25,832,013
89,184,531
Other service categories. In addition to the 21 service categories shown here, Oklahoma used an additional 29 service categories in its analysis.
Source: Oklahoma Health Care Authority; Medicaid Program FY2003 Budget Request, Mandatory Versus Optional Programs, OCHA Medical Only.
Each cell from this excerpt of all Medicaid service spending contains expenditures that can be identified as either mandatory or optional based on the

CRS-24
intersection of the individual’s eligibility status and the service. The state then grouped each of the cells associated with mandatory spending for
mandatory groups and optional spending for mandatory groups; as well as mandatory spending for optional groups and optional spending for optional
groups to generate an analysis of mandatory versus optional spending for its FY2003 budget request.