Medicaid, SCHIP, and Other Health Provisions in H.R. 4954: The Medicare Modernization and Prescriptions Drug Act of 2002, and S. 3018: The Beneficiary Access to Care and Medicare Equity Act of 2002

Report for Congress
Medicaid, SCHIP, and Other Health Provisions in
H.R. 4954: The Medicare Modernization and
Prescription Drug Act of 2002, and S. 3018: The
Beneficiary Access to Care and Medicare Equity
Act of 2002
October 9, 2002
Jean Hearne and Elicia Herz
Specialists in Social Legislation
Domestic Social Policy Division
Evelyne Baumrucker and Christine Devere
Analysts in Social Legislation
Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Medicaid, SCHIP, and Other Health Provisions in H.R.
4954: The Medicare Modernization and Prescription
Drug Act of 2002 , and S. 3018: The Beneficiary Access
to Care and Medicare Equity Act of 2002
Summary
Medicaid is a joint federal-state entitlement program that pays for medical
assistance primarily for low-income persons who are aged, blind, disabled, members
of families with dependent children, and certain other pregnant women and children.
Within broad federal guidelines, each state designs and administers its own program.
The federal government shares in a state’s Medicaid costs by means of a statutory
formula designed to provide a higher federal matching rate to states with lower per
capita incomes. The State Children’s Health Insurance Program (SCHIP) is another
joint federal-state program that allows states to extend coverage to children in
families with income that is too high to qualify for Medicaid coverage.
Two bills under consideration in the House and the Senate would make
important changes to Medicaid and SCHIP. The Medicare Modernization and
Prescription Drug Act of 2002 (H.R. 4954), passed the House on June 28, 2002. On
October 1, 2002, the Senate Committee on Finance introduced the Beneficiary Access
to Care and Medicare Equity Act of 2002 (S. 3018). While the bills are very
different from each other, both are largely comprised of provisions affecting the
Medicare program, and both include important changes to Medicaid, SCHIP and
other health programs. Among the Medicaid provisions, both bills would increase
annual disproportionate share hospital (DSH) allotments to states beginning in
FY2003, but use different methods to achieve those increases. S. 3018 would also
temporarily increase the federal Medicaid matching rate for certain states and would
provide additional funds to states for fiscal relief through the Social Services Block
Grant program, a program that funds a wide variety of social services programs.
With respect to SCHIP, S. 3018 would significantly change the method by which
unspent federal funds are redistributed among states. Finally, with respect to both
Medicaid and SCHIP, S. 3018 places on both states and the Secretary of HHS certain
public notice and hearing requirements, as well as requirements regarding receipt and
consideration of public comments in the waiver development, review and approval
process. It also clarifies other parameters of the Secretary’s waiver authority.
The following side-by-side comparison provides a brief description of current
law and the changes that would be made to Medicaid, SCHIP and other health
programs under H.R. 4954 and S. 3018. These provisions can be found in Title IX
of H.R. 4954, and Titles VII and VIII of S. 3018. The other titles of both bills are
devoted to major changes to the Medicare program (not described here). In addition,
Medicare provisions in Title VIII of S. 3018 are not described here.

Contents
In troduction ......................................................1
Disproportionate Share Hospital (DSH) Payments Under Medicaid...2
Redistribution Rules Under the State Children’s Health Insurance
Program (SCHIP)......................................3
Waivers under Medicaid and SCHIP...........................4
Medicaid’s Federal Medical Assistance Percentage (FMAP)........5
List of Tables
Medicaid and SCHIP Provisions......................................7
Other Provisions..................................................17

Medicaid, SCHIP, and Other Health
Provisions in H.R. 4954: The Medicare
Modernization and Prescription Drug Act of
2002 , and S. 3018: The Beneficiary Access
to Care and Medicare Equity Act of 2002
Introduction
Medicaid is a joint federal-state entitlement program that pays for medical
assistance primarily for low-income persons who are aged, blind, disabled, members
of families with dependent children, and certain other pregnant women and children.
Within broad federal guidelines, each state designs and administers its own program.
The federal government shares in a state’s Medicaid costs by means of a statutory
formula designed to provide a higher federal matching rate to states with lower per
capita incomes. In FY2001, federal matching rates ranged from 50% to 76.8% of a
state’s expenditures for Medicaid items and services. The State Children’s Health
Insurance Program (SCHIP) is another joint federal-state program that allows states
to extend coverage to children in families with income that is too high to qualify for
Medicaid coverage. As with Medicaid, each state designs and administers its own
program and the federal government shares in state’s costs by matching state
spending. The SCHIP matching formula is based on the Medicaid matching formula,
but results in higher matching rates that ranged from 65% to 83.8% in FY 2001.
Two bills under consideration in the House and the Senate would make
important changes to Medicaid and SCHIP. The Medicare Modernization and
Prescription Drug Act of 2002 (H.R. 4954), passed the House on June 28, 2002. On
October 1, 2002, the Senate Committee on Finance introduced the Beneficiary Access
to Care and Medicare Equity Act of 2002 (S. 3018). While the bills are very
different from each other, both are largely comprised of provisions affecting the
Medicare program, and both include important changes to Medicaid, SCHIP and
other health programs. Among the Medicaid provisions, both bills would increase
annual disproportionate share hospital (DSH) allotments to states beginning in
FY2003, but use different methods to achieve those increases. S. 3018 would also
temporarily increase the federal Medicaid matching rate for certain states and would
provide additional funds to states through the Social Services Block Grant program,
a program that funds a wide variety of social services programs. With respect to
SCHIP, S. 3018 would significantly change the method by which unspent federal
funds are redistributed among states. Finally, with respect to both Medicaid and
SCHIP, S. 3018 places on both states and the Secretary of HHS certain public notice
and hearing requirements, as well as requirements regarding receipt and

consideration of public comments in the waiver development, review and approval
process. It also clarifies other parameters of the Secretary’s waiver authority. The
following sections describe the recent legislative changes as well as the major
proposed amendments in H.R. 4954 and S. 3018.
Disproportionate Share Hospital (DSH) Payments Under Medicaid.
Since 1981, states have been required to recognize, in establishing their payment
rates, the situation of hospitals that serve a disproportionate number of Medicaid
beneficiaries and low-income patients. These payments are referred to as DSH
payments or DSH adjustments. The DSH adjustment was intended to offset the costs
to hospitals of treating uninsured, low-income patients, and to protect access to care
for vulnerable populations. Under broad federal guidelines, each state determines
which hospitals receive DSH payments and the payment amounts to each. States that
contract with health maintenance organizations (HMOs) or other prepaid managed
care providers may include DSH expenses in the payment rates to contractors.
DSH payments became a significant part of the program after 1989 when they
grew from just under $1 billion to almost $17 billion by 1992. During that time,
states’ Medicaid budgets were facing a number of upward pressures while states were
learning about financing techniques that made it easier to collect increased DSH
payments from the federal government.
In 1991, Congress intervened to control the growth of these expenditures by
limiting DSH payments by state and setting national limits. The new law was
successful. After 1992, DSH payments increases slowed considerably although the
level of national DSH payments remained high at just under $19 billion in 1995.
Significant reductions in DSH payments were included in the Balanced Budget
Act of 1997. BBA-97 lowered DSH payments by establishing “allotments” or
ceilings on DSH payments for each state. The allotments were specified for fiscal
years beginning in 1998 through 2002. For most states, those amounts declined over
the 5-year period. Thereafter, the DSH allotment for a state was to equal its
allotment for the preceding fiscal year increased by the percentage change in the
consumer price index for all urban consumers (CPI-U) as estimated by the Secretary
for the previous fiscal year, subject to a ceiling of 12% of the total amount of
expenditures for Medicaid benefits during the fiscal year.
Subsequently, the Medicare, Medicaid and SCHIP Balanced Budget
Refinements Act of 1999 (BBRA-99, P.L. 106-113) included provisions increasing
the Medicaid DSH allotments for certain states and the District of Columbia. Then
under Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of
2000 (BIPA-2000, P.L. 106-554), new rules governing federal DSH payments for
FY2001 and FY2002 were established. The “special rule” directed that DSH
allotments for the two years be based on FY2000 allotments increased by inflation -
instead of on the declining amounts specified in BBA-97. Allotments for FY2003
and thereafter were to revert to amounts calculated based on the methodology
specified in BBA-97. BIPA-2000 also extended a special hospital-specific DSH limit
that had previously applied only to certain public hospitals in California to such
hospitals in all states for a 2-year period. Finally, additional funds were provided for

certain state public hospitals not receiving DSH payments that have a low-income
utilization rate in excess of 65%.
Legislation. During economic downturns states’ Medicaid eligibility rolls
often expand at the same time as tax receipts, which help to fund those programs,
contract. Recognizing this increased fiscal pressure that states are under since the
economic slowing began over one year ago, both bills include provisions to increase
annual state DSH allotments for fiscal years beginning in 2003. Each bill, however,
uses different methods to achieve those increases. H.R. 4954 would raise DSH
allotments for FY2003 by setting those amounts equal to FY2001 allotments (as
specified in BBA-97), increased by the percentage change in the CPI-U for FY 2001.
Allotments for FY2004 and thereafter would be equal to the allotment for the
previous year, increased by 1.7% unless the Secretary determines that the allotment
under this provision would equal (or no longer exceed) the allotment for that state
that would have been in effect under prior law. For these states, beginning in the first
fiscal year that their allotment would equal or no longer exceed the prior law levels,
their allotment would be equal to the allotment for the previous year increased by the
percentage change in the CPI-U for the previous year.
S. 3018 would raise DSH allotments by specifying that 2003 allotments would
be calculated to be equal to FY2002 allotments under BIPA-2000 increased by the
percentage change in the CPI-U for FY2002; for 2004 they would be equal to
FY2003 allotments increased by the percentage change in the CPI-U for FY2003;
and for 2005, they would be equal to FY2004 allotments increased by the percentage
change in the CPI-U for FY2004. For FY2006, allotments would be based on the
amounts specified in BBA-97 for FY2002 increased by the percentage change in the
CPI-U for fiscal years 2002 through 2005. For FY2007 and thereafter, allotments
would be calculated based on the previous years’ amount increased by percentage
change in the CPI-U for the previous fiscal year. In addition, for FY2003 through
FY2005, S. 3018 would increase allotments for the District of Columbia and for
certain extremely low DSH states. The bill specifies special formulas for these
purposes.
Redistribution Rules Under the State Children’s Health Insurance
Program (SCHIP). SCHIP, created under BBA-97, is the largest publicly funded
effort to provide health insurance to children since Medicaid was enacted in 1965.
The program offers federal matching funds for states and territories to provide health
insurance coverage to uninsured, low-income children in families whose annual
incomes are higher than states’ Medicaid eligibility thresholds.
The original enactment appropriated federal matching grants totaling $39.7
billion for SCHIP for FY1998 through FY2007. Allotment of funds among the states
is determined by a formula set in law. Each annual allotment is available to states
for a period of 3 years. Under current law, allotments not spent at the end of the
applicable 3-year period will be redistributed by a method to be determined by the
Secretary of HHS to states that have fully exhausted their original allotments for that
year. Redistributed funds not spent by the end of the fiscal year in which they are
reallocated will expire.

BIPA-2000 created a special rule for the redistribution and availability of
unused FY1998 and FY1999 SCHIP allotments. The change decreased the amount
available for redistribution to states that had exhausted their original allotments for
those years by allowing states that had not spent their full allotments to retain a
portion of their unspent funds. Specifically, out of the total pool of unspent funds for
a given year, states that exhausted their allotments were given amounts equal to their
excess expenditures. Then states which had not exhausted their allotments received
an amount equal to their proportional contribution to the pool of unspent funds.
S. 3018 builds upon BIPA-2000 by establishing a method for redistributing
unspent allotments for FY2000 forward. For each of FY2000 through FY2003, states
that exhaust their original allotments would receive amounts equal to their excess
expenditures, subject to specific annual caps (60% - FY2000 and FY2001; 70% -
FY2002; 80% - FY2003) on unspent funds. The distribution method for such funds
among these states, should the pool of available funds be insufficient to cover all
excess expenditures, is left to the Secretary to determine. For FY2004 forward,
redistribution among such states would be the same as provided under BIPA-2000.
For each of FY2000 through FY2003, the remaining unspent funds would be
distributed among states that do not use their full allotments, subject to specific
annual floors (40% - FY2000 and FY2001; 30% - FY2002; 20% - FY2003) on
unspent funds. Each such state would receive an amount equal to the ratio of its
contribution to the total pool of unspent funds to the remaining available funds.
Again, for FY2004 forward, redistribution among such states would be the same as
provided under BIPA-2000. For FY2004 forward, S. 3018 also would establish a
caseload stabilization pool to provide certain states with additional SCHIP funding.
Any remaining unspent redistributed dollars beginning with the FY1998
appropriation would become part of this pool. In addition, the bill specifies that
unspent funds in the pool would remain in the pool (i.e., they do not expire). Eligible
states include those whose total cumulative spending through the end of the previous
fiscal year exceeds their cumulative original allotments for the same time period.
These states would receive an amount equal to the ratio of such state’s original
allotment (for the previous fiscal year) to the total original allotments of all eligible
states (for the same prior fiscal year).
Waivers under Medicaid and SCHIP. Section 1115 of the Social Security
Act provides the Secretary of HHS with broad authority to conduct research and
demonstration projects under Medicaid (and five other programs). Under this
authority, the Secretary may waive provisions in Section 1902 of Medicaid statute¹
(usually freedom of provider choice, comparability of benefits, and statewideness).
Most large-scale statewide waivers are approved for a 5-year period. The costs of
such waivers are allowable expenditures under the applicable program. SCHIP is
not identified in Section 1115. However, the SCHIP statute states that Section 1115,
pertaining to research and demonstration projects, applies to SCHIP but does not
specify which sections may be waived.

¹ Other sections in Medicaid statute allow waiver of other provisions under certain
circumstances.

Congress has twice changed Section 1115 authority as it applies to the Medicaid
waiver review and approval process. First, BBA-97 provided a process for a 3-year
extension of Medicaid statewide comprehensive Section 1115 waiver projects beyond
the initial 5-year term. Second, BIPA-2000 defined a process for approving
extensions beyond initial 3-year extensions.
Much of the detail surrounding the policies and procedures for reviewing and
approving Section 1115 waiver proposals has been issued by the Secretary of HHS
through written guidance. For example, in 1994, the Secretary published a notice in
the Federal Register outlining requirements with respect to public notification and
involvement during the development phase of proposed waiver projects under
Medicaid. (SCHIP did not yet exist at that time.) Since that time, the Secretary has
provided other waiver guidance. In a July 25, 2001 letter to the House Committee
on Energy and Commerce, HHS described its public notification requirements for the
3-year waiver extensions provided by BBA-97. In other letters to state Medicaid
directors and to state health officials, the Secretary has described policy with respect
to overall budget neutrality requirements, coverage of childless adults under SCHIP,
as well as further details on public notice and involvement requirements. Most
recently, under the current Bush Administration, a new Health Insurance Flexibility
and Accountability (HIFA)1115 Waiver Initiative for Medicaid and SCHIP was
established and guidance and technical information for this initiative was made
available to states through postings to the agency’s website. The initiative
encourages states to develop statewide projects that coordinate Medicaid and SCHIP
with private health insurance coverage and target uninsured individuals with income
below 200% of the federal poverty level.
S. 3018 responds to recent concerns that some approved waivers exceed the
statutory authority of the Secretary and that explicit statutory procedures would
improve the waiver approval process. The bill places on both states and the Secretary
of HHS certain public notice and hearing requirements, and requirements regarding
receipt and consideration of public comments in the waiver development, review and
approval process. It would clarify that: (1) the waiver of a specific section under a
given title must promote the objectives of that title, (2) the requirements under
Medicaid’s early and periodic screening, diagnostic and treatment program for
children may not be waived, and (3) the Secretary may not approve waivers that
would use SCHIP funds to cover childless adults (excluding caretaker relatives).
Medicaid’s Federal Medical Assistance Percentage (FMAP). The
federal share of the cost of Medicaid items and services (excluding administrative
expenses) is established by a formula set in statute. Determined annually, the FMAP
is designed so that the federal government pays a larger portion of Medicaid costs in
states with lower per capita income relative to the national average (and vice versa
for states with higher per capita income). FMAP must not fall below 50% and may
not exceed 83%. FMAP for the territories is statutorily set at 50%. In the territories,
Medicaid is also subject to spending caps. Thus, the federal government pays 50%
of the cost of Medicaid items and services up to those spending caps.
While the underlying FMAP formula for all states has not been changed,
Congress has modified FMAP in certain situations. In BBA-97, the FMAP for the
District of Columbia was permanently raised to 70%. It also increased Alaska’s

FMAP to 59.8% for FY1998 through FY2000. Under BIPA-2000, the formula for
calculating the state percentage and thus the federal share for Alaska for FY2001
through FY2005 was changed. The state percentage for Alaska is calculated using
an adjusted per capita income calculation instead of the statewide average per capita
income generally used. The adjusted per capita income for Alaska is calculated as
the 3-year average per capita income for the state divided by 1.05.
As with the DSH provisions, the Senate bill responds to states’ concerns that
recent fiscal pressure may result in Medicaid cuts. To ease states’ burden, S. 3018
would temporarily increase FMAPs for FY2003. Spending caps for the territories
would be increased. Only states and territories that maintain Medicaid eligibility
levels as of January 1, 2002 (or reinstate eligibility levels as of that date) would be
eligible for the FMAP increase. This bill would also appropriate $1 billion in
additional temporary grants under the Social Services Block Grant (Title XX of the
Social Security Act). The grant allotments for each state and territory are specified,
and these funds may be used for services directed at the goals set forth in Title XX.
The following side-by-side comparison provides a brief description of current
law and the changes made to Medicaid, SCHIP and other health programs under H.R.
4954 and S. 3018. These provisions can be found in Title IX of H.R. 4954, and
Titles VII and VIII of S. 3018. The other titles of both bills are devoted to major
changes to the Medicare program (not described here). In addition, Medicare
provisions in Title VIII of S. 3018 are not described here.
CRS has published three reports on the non-Medicare provisions of BBA-97,
BBRA-99, and BIPA-2000. These are: CRS Report 98-132 EPW, Medicaid: 105^th
Congress, CRS Report RL30400, Medicaid and the State Children’s Health
Insurance Program (SCHIP): Provisions in the Consolidated Appropriations Act for
FY2000, and CRS Report RL30718, Medicaid, SCHIP and Other Health Provisions
in H.R. 5661: Medicare, Medicaid, and SCHIP Benefits Improvement and Protection
Act of 2000.

Medicaid and SCHIP Provisions
ProvisionsCurrent LawH.R. 4954S. 3018
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ⁱⁿ^creas^{ed by}^th^{e percen}^tag^e^ch^an^{ge in}
^th^{e C}^P^I-^{U f}^o^{r th}^{e prev}^iou^s^fⁱ^s^{cal y}^ear.
^Dⁱ^s^p^r^opor^tⁱ^onat^{e s}^har^{e paym}^e^nt^s^f^o^r^B^B^A^-^{97 s}^p^ecifⁱ^{ed DS}^H^allotm^en^ts^f^o^r^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^701.^Su^bj^{ect to th}^e^cu^rren^t^law
^th^{e District o}^f^Co^lu^mb^ia^th^{e Dis}^t^{rict o}^f^C^o^lu^m^b^{ia are $23}^lⁱ^mⁱ^t^of^12%^of^s^p^en^diⁿ^g^f^o^{r m}^e^di^cal
^m^illion^f^o^{r each}^of^fⁱ^s^{cal y}^ears¹⁹⁹⁸^as^sⁱ^s^t^an^ce,^D^S^H^al^l^o^t^m^en^t^s^f^o^{r F}^Y²⁰⁰³
^t^h^r^o^ugh^{2002. BBR}^A^-^{99 i}ⁿ^creas^ed^f^o^r^th^{e Distr}ⁱ^ct^o^f^Co^lu^m^b^{ia w}^o^u^l^d^b^e

ProvisionsCurrent LawH.R. 4954S. 3018
^{DSH allo}^tm^en^{ts f}^o^r^th^{e Distr}ⁱ^c^t^o^f^calcu^{lated by}ⁱⁿ^creasⁱⁿ^g^{$49 m}^illion^by
^Co^lu^m^b^{ia t}^o^$³²^m^illioⁿ^f^o^{r each}^o^f^th^{e percen}^tag^e^ch^an^g^eⁱⁿ^th^e^C^P^I-^{U f}^o^r
^fⁱ^s^cal^y^ears^{2000 t}^h^rou^g^h²⁰^{02. D}^S^H^fⁱ^s^cal^y^ears^{2000, 2001 an}^d^2002.^F^o^r
^allotm^en^ts^f^o^{r each}^y^{ear af}^ter²⁰⁰²^w^ill^F^Y^2004,^t^h^{e al}^l^o^t^m^en^t^w^o^u^l^{d be equ}^a^l
^b^e^eq^u^a^{l to}ⁱ^t^s^sp^ecifⁱ^ed^allo^tm^en^{t f}^o^r^t^o^t^h^{e F}^Y^{2003 al}^l^o^t^m^en^t^a^s^cal^cu^l^a^t^e^d
^th^{e prev}^iou^s^y^{ear in}^creas^e^d^by^th^e^abov^{e, in}^c^r^eas^{ed by}^th^{e percen}^tag^e
^percen^tag^e^ch^an^g^eⁱⁿ^th^{e C}^P^I-^{U f}^o^{r th}^e^ch^an^g^eⁱⁿ^t^h^{e C}^P^I-^U^f^o^{r F}^Y^{2003. F}^o^r
^prev^iou^s^y^{ear s}^u^bj^{ect to a lim}^it^o^fⁿ^o^F^Y^{2005, t}^h^{e al}^l^o^t^m^en^t^w^o^u^l^{d be}^e^q^u^a^l
^m^o^{re t}^h^an^12%^of^s^p^en^diⁿ^g^f^o^{r m}^e^di^cal^t^o^t^h^{e F}^Y^{2004 al}^l^o^t^m^en^tⁱⁿ^creas^{ed by}
^as^sⁱ^s^t^an^{ce f}^o^{r th}^{at y}^ear.^th^{e percen}^tag^e^ch^an^g^eⁱⁿ^th^e^C^P^I-^{U f}^o^r
^F^Y^{2004. F}^o^{r F}^Y^{2006 an}^{d t}^h^ere^a^f^t^e^r,
^th^{e allo}^tm^en^{t w}^o^u^l^d^calcu^latedⁱⁿ^th^e
^m^aⁿⁿ^e^{r s}^p^ecifⁱ^{ed f}^o^{r all oth}^e^{r s}^t^ates^.
^Iⁿ^crea^{se in}^flo^o^r^fo^{r extremely}^l^o^w^{For ex}^trem^ely^low^{DSH s}^t^ates^{, i.e.,}^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^702.^W^o^ul^d^c^r^eate^a
^DS^{H sta}^t^es^s^t^at^es^w^h^os^{e F}^Y^{1999 f}^e^deral^an^{d s}^t^a^t^e^tem^p^o^r^ar^yⁱⁿ^cr^easeⁱⁿ^th^{e allo}^tm^en^{ts f}^o^r
^D^S^H^ex^pen^dⁱ^t^u^res^(as^report^e^{d t}^o^C^M^S^certain^ex^trem^ely^low^DSH^s^t^ates^f^o^r
^oⁿ^A^ugust³¹^,^{2000) are g}^r^eat^{er t}^h^an^F^Y^{2003 t}^h^ro^{ugh FY}^{2005. F}^o^{r s}^t^at^es
ⁱ^{ki/CRS-RL31602}^zer^o^b^u^{t less th}^an¹^%^o^f^th^e^state’^{s to}^tal^wⁱ^t^h^D^S^H^ex^pen^dⁱ^t^u^res^f^o^{r F}^Y^{2001 (as}
^g/w^m^e^{dical as}^sⁱ^s^t^an^{ce ex}^pen^d^itu^res^du^rin^g^r^e^p^o^r^t^e^d^t^o^CM^S^a^s^o^f^A^ugust³¹^,
^s^.or^th^{at f}ⁱ^s^{cal y}^{ear, th}^{e DSH}^allotm^en^ts^f^o^r^{2002) t}^h^at^{are g}^r^eat^{er t}^h^an^zero^bu^t^l^e^s^s
^le^ak^F^Y^{2001 w}^o^u^l^d^b^e^equ^a^l^t^o^1%^of^t^h^e^th^an^{3% of}^th^{e s}^t^ate’^s^total^m^e^dical
^state’^{s to}^{tal am}^o^uⁿ^t^o^f^ex^p^eⁿ^d^itu^r^e^s^as^sⁱ^s^t^an^{ce exp}^eⁿ^d^itu^res^du^rin^g^th^at
^://wiki^und^{er th}^{eir plan}^f^o^{r s}^u^ch^as^sⁱ^s^t^an^ce^du^rin^g^th^{at f}ⁱ^s^{cal y}^ear.^{For s}^u^bs^equ^eⁿ^t^fⁱ^{scal y}^ear^{, t}^h^e^b^{ill w}^o^u^l^d^r^a^{ise th}^e^D^S^H^al^l^o^t^m^en^t^s^f^o^{r F}^Y^{2003 t}^o^3%^of
^h^ttp^fⁱ^s^{cal y}^ears^,^th^{e all}^o^t^m^en^ts^f^o^r^th^{e state’}^{s to}^{tal am}^o^uⁿ^t^o^f^ex^p^eⁿ^d^itu^r^e^s
^ex^trem^ely^low^{DSH s}^t^ates^w^o^u^l^{d be}^f^o^{r s}^u^ch^as^sⁱ^s^t^an^c^e^du^rin^g^th^{at f}ⁱ^s^cal
^eq^u^a^l^to^th^eir^allo^tm^en^{t f}^o^r^th^e^p^r^ev^io^u^s^y^ear.^F^o^{r F}^Y^{2004, al}^l^o^t^m^en^t^s^w^o^u^l^d^be
^y^{ear, in}^creas^{ed b}^y^th^{e percen}^tag^e^cal^cu^l^a^t^e^{d by}ⁱⁿ^creasⁱⁿ^g^F^Y²⁰⁰³
^ch^an^g^eⁱⁿ^th^{e CP}^I^-^{U f}^o^r^th^e^p^r^ev^io^u^s^am^ouⁿ^t^s^b^y^th^{e percen}^tag^e^ch^an^g^eⁱⁿ
^y^{ear, s}^u^bj^{ect to a}^ceilin^g^of^{12% of}^th^at^t^h^{e C}^P^I-^U^f^o^{r F}^Y²⁰^03;^an^{d f}^o^r
^s^t^a^t^e^’^s^t^o^t^a^{l m}^e^{dical as}^sⁱ^s^t^an^ce^F^Y^{2005, by}ⁱⁿ^creasⁱⁿ^g^F^Y²⁰⁰⁴
^pay^m^en^tsⁱⁿ^th^{at y}^ear.^am^ouⁿ^t^s^by^{the percen}^tag^e^ch^an^g^eⁱⁿ
^t^h^{e C}^P^I-^U^f^o^{r F}^Y^2004.
^M^e^di^cai^d^Phar^m^a^{cy As}^sⁱ^s^t^an^c^e^N^o^provⁱ^sⁱ^oⁿ^.^{Section 903}^.^States^w^ith^app^r^o^v^e^d^N^o^provⁱ^sⁱ^oⁿ^.

^Pr^ogr^am^{Medicaid s}^t^{ate plan}^am^en^dm^en^ts
^cou^l^{d receiv}^e^g^r^aⁿ^t^s^t^o^a^s^sⁱ^s^t
^ph^arm^aciesⁱⁿ^im^plem^en^tin^g^th^{e n}^e^w
^pres^cri^p^tⁱ^on^dru^g^ben^e^fⁱ^t^propos^ed
^uⁿ^d^{er P}^a^{rt D of}^T^{itle XVIII.}^For^each
^of^fⁱ^s^cal^y^ears^{2004 t}^h^ro^ugh^{2007, t}^h^e
^provⁱ^sⁱ^oⁿ^w^o^u^l^{d au}^t^h^orⁱ^{ze $150}

ProvisionsCurrent LawH.R. 4954S. 3018
^m^illioⁿ^to^b^e^allo^tted^am^oⁿ^g^th^{e states}
^f^o^{r s}^u^ch^prog^ram^s^{. T}^h^{e Secretary}
^w^o^ul^{d be requ}ⁱ^r^{ed t}^o^dev^e^l^{op a}
^m^e^th^o^d^f^o^r^th^{e allo}^catioⁿ^o^f^th^o^s^e
^fund^{s a}^m^o^{ng st}^a^t^e^s^,^t^a^ki^{ng i}ⁿ^t^o
^accouⁿ^t^th^{e dis}^t^ribu^{tion am}^on^g^s^t^ates
^of^pri^o^ri^t^y^ph^arm^aci^e^s^;^s^m^a^l^l
^ph^arm^acies^an^{d th}^os^{e s}^e^rvⁱⁿ^gⁱⁿ^ru^ral
^{or u}ⁿ^d^ers^e^rv^{ed areas}^.
⁵^-^Year^ext^ensⁱ^{on of}^t^h^{e M}^e^di^car^e^{Federal law}^s^p^ecifⁱ^es^s^e^v^e^ral^Medicare^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^o^{n 703.}^Ex^ten^d^{s th}^{e QI}^-¹
^{qualified individual}⁽^Q^I-1)^pr^ogr^am^su^b^g^r^o^u^p^s^th^{at ar}^{e en}^titled^to^lim^ited^pr^o^g^ram^uⁿ^{til Decem}^{ber 2007. Each}
^under^M^e^di^cai^d^Medi^cai^{d pr}^o^t^ectⁱ^oⁿ^.^Oⁿ^{e g}^r^ou^{p of}^state’^{s allo}^catioⁿ^{is eq}^u^a^{l to}^th^e^r^a^tio^o^f
^qu^a^lⁱ^fⁱ^e^{d i}ⁿ^di^vⁱ^du^al^s^(Q^I-^1s^{) i}ⁿ^cl^u^d^es^tw^ice^{all its QI}^-¹ⁱⁿ^dⁱ^vⁱ^d^u^{als to}^th^{e su}^m
^Medⁱ^car^{e b}^eⁿ^e^fⁱ^ciar^{ies en}^titled^to^P^a^r^t^of^th^es^{e cou}ⁿ^t^s^acros^s^{all s}^t^ates^{. New}
^A^cov^e^ra^{ge w}ⁱ^t^hⁱⁿ^com^e^bet^w^een^120-^a^nnua^l^fe^d^e^r^a^l^a^l^l^o^c^a^tⁱ^o^{ns fo}^r^FY²⁰⁰³
^135%^of^t^h^{e f}^e^deral^pove^r^t^y^l^e^v^e^l^or^t^h^r^o^{ugh FY}^{2007 w}^o^u^l^{d be s}^e^t^at^$400
^FP^L^,^(an^d^w^h^o^als^o^m^{eet certain}^m^illioⁿ^f^o^{r each}^y^ear.

ⁱ^{ki/CRS-RL31602}^res^o^u^r^{ce s}^t^a^ndards⁾^w^h^{o are n}^o^t
^g/w^o^t^h^e^r^wⁱ^s^{e elig}^ib^{le f}^o^r^Medⁱ^caid^.^Fo^r
^s^.or^t^hⁱ^s^g^r^ou^{p, Medi}^cai^{d pay}^s^t^h^e^m^oⁿ^t^h^l^y
^le^ak^P^a^r^t^B^p^r^e^mⁱ^u^m^.^Ex^p^eⁿ^d^itu^r^e^{s f}^o^r^th^e
^Q^I^-¹^prog^ra^m^{are pai}^d^100%^by^t^h^e
^://wiki^f^e^d^e^r^a^l^go^ve^rⁿ^m^e^nt^up^t^o^t^h^e^st^a^t^e^’^s^allo^catioⁿ^b^a^sed^oⁿ^{a d}ⁱ^strⁱ^b^u^tioⁿ^a^l
^h^ttp^f^o^r^m^u^l^{a set in}^l^a^w^.^T^o^{tal f}^e^d^e^r^a^l
^allocation^s^{are $200}^m^illion^f^o^r
^{FY1998, $250 m}^illi^onⁱⁿ^{FY1999, $300}
^m^illionⁱⁿ^{FY2000, $350 m}^illionⁱⁿ
^{FY2001, an}^{d $400}^m^illionⁱⁿ^FY2002.
^T^h^{e QI-}¹^tem^p^o^r^ary^g^r^an^{t prog}^ram
^en^ds^as^of^Decem^{ber 31, 2002.}

ProvisionsCurrent LawH.R. 4954S. 3018
^Inpatⁱ^e^nt^dr^ug^prⁱ^ces^{and cer}^t^aⁱⁿ^{Medicaid dru}^g^reba^tes^{are calcu}^lated^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^o^{n 704.}^Th^e^provⁱ^sⁱ^oⁿ^w^o^u^l^d
^p^u^b^{lic h}^o^s^p^ita^ls^bas^e^{d on}^t^h^e^di^f^f^e^ren^{ce bet}^w^een^t^h^e^m^o^dⁱ^f^y^th^{e d}^e^fⁱⁿ^itioⁿ^o^f^“^b^{est p}^r^ice^”
^A^v^erag^{e Man}^u^f^actu^r^er’^s^P^r^{ice an}^{d th}^e^f^o^{r th}^{e pu}^rpos^{e of}^calcu^latin^g^Medicaid
^m^aⁿ^u^f^actu^r^er’^s^“^b^es^{t price”. In}^d^r^ug^rebates^,^{to als}^o^ex^clu^d^{e th}^e
^determⁱⁿⁱⁿ^g^th^{e “}^b^es^{t price” f}^o^{r a}^dru^g^dⁱ^sc^o^unt^e^dⁱⁿ^p^a^tⁱ^e^nt^d^r^{ug p}^rⁱ^c^e^s
^s^o^l^d^b^y^{a m}^aⁿ^u^f^actu^r^{er, certain}^ch^arg^e^d^t^o^c^e^r^t^aⁱⁿ^M^e^dⁱ^care
^dis^c^ouⁿ^t^ed^prices^an^{d f}^{ee s}^c^h^e^du^les^are^di^s^p^roportⁱ^oⁿ^a^t^e^s^h^{are h}^o^s^pⁱ^t^a^l^s^.

^ex^clu^d^{ed. T}^h^{e s}^p^{ecial dis}^c^ouⁿ^t^ed
^prices^f^o^r^out^p^a^tⁱ^e^nt^d^r^{ugs ne}^go^tⁱ^a^t^e^d
^by^th^{e Of}^fⁱ^{ce o}^f^P^h^arm^acy^A^f^f^a^irs^(of
^H^H^S⁾^wⁱ^t^h^d^r^{ug m}^a^nufa^c^t^ur^e^r^{s o}ⁿ
^b^e^h^a^lf^o^f^cer^tain^clin^{ics an}^d^saf^e^tyⁿ^e^t
^pro^v^iders^{are on}^{e ex}^am^{ple of}^prices
^ex^cl^u^d^{ed f}^r^om^Medi^cai^d’^s^bes^t^pri^c^e
^d^e^t^e^r^mⁱⁿ^a^tⁱ^oⁿ^.^B^ecau^s^e^o^f^t^hⁱ^s
^ex^cl^u^sⁱ^oⁿ^f^r^om^Medi^cai^d’^s^bes^t^p^rⁱ^c^e
^defⁱⁿⁱ^tⁱ^{on, t}^h^{e di}^s^c^ouⁿ^t^s^av^ai^l^a^bl^{e t}^o
ⁱ^{ki/CRS-RL31602}^sa^fe^t^y^ne^t^p^r^o^vⁱ^d^e^r^s^ha^ve^no^b^e^a^rⁱ^{ng o}ⁿ
^g/w^t^h^{e cal}^cu^l^a^tⁱ^{on of}^dru^g^rebat^e^s^uⁿ^d^er
^s^.or^t^h^{e Medi}^cai^{d prog}^ram^al^l^o^wⁱⁿ^g^t^h^ose
^le^ak^p^r^o^vⁱ^d^e^r^s^toⁿ^e^g^o^{tiate b}^e^tter^r^a^{tes w}^ith
^m^aⁿ^u^f^actu^r^ers^{– s}ⁱⁿ^{ce Medicaid rebates}
^://wiki^w^{ill n}^o^{t ch}^an^g^e^w^ith^th^{e size o}^f^th^eir
^h^ttp^ne^go^tⁱ^a^t^e^d^dⁱ^sc^o^unt^s.^Dⁱ^sc^o^unt^e^d^prices^f^o^rⁱ^npatⁱ^e^nt^d^r^{ugs fo}^r^m^a^ny
^sa^fe^t^y^ne^t^p^r^o^vⁱ^d^e^r^s,^ho^w^e^ve^r^,^a^r^e
ⁱⁿ^clu^d^{ed in}^th^{e Medicaid bes}^t^price.

ProvisionsCurrent LawH.R. 4954S. 3018
^S^C^HI^{P a}^l^l^o^tmen^ts^:^C^hanges^t^o^Rul^e^s^F^uⁿ^d^s^f^o^r^t^h^e^S^C^H^I^{P Pr}^og^r^a^m^a^r^e^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^oⁿ^705(a).^Estab^lish^e^{s a}^m^e^t^h^o^d
^f^o^r^Redi^s^t^rⁱ^butⁱ^{on and Ext}^eⁿ^d^e^d^a^u^t^h^o^rⁱ^z^e^d^an^{d appropri}^a^t^e^d^fo^r^f^o^r^r^e^dⁱ^strⁱ^b^u^tin^g^uⁿ^s^p^eⁿ^t^allo^tm^en^ts
^A^v^ai^l^ability^of^Fⁱ^s^c^al^Y^e^ar^{2000 and}^F^Y^{1998 t}^h^ro^{ugh FY}^{2007. F}^r^om^each^f^o^{r F}^Y^{2000 f}^o^rw^{ard. F}^o^{r j}^u^ri^s^dⁱ^c^tⁱ^oⁿ^s
^Subs^equent^Fi^s^c^al^Y^e^ar^Al^l^o^t^m^ent^s^y^e^a^r^’^s^ap^p^r^o^p^r^iatioⁿ^,^{a state is allo}^tted^th^{at ex}^h^a^u^s^ted^th^eir^o^r^igⁱⁿ^{al allo}^tm^en^t,
^aⁿ^am^ouⁿ^t^as^determⁱⁿ^{ed by}^{a f}^o^rm^u^l^a^f^o^{r each}^of^F^Y^{2000 th}^r^o^{ugh FY}^2003,
^{set in}^law^.^Fuⁿ^d^{s n}^o^{t d}^r^awⁿ^f^r^o^m^a^each^w^o^u^l^{d receiv}^e^an^am^ouⁿ^t^equ^a^l^to
^s^t^ate’^s^allotm^en^{t by}^th^{e en}^{d of}^each^th^{eir s}^p^en^din^gⁱⁿ^exc^e^s^s^of^th^eir
^fⁱ^s^{cal y}^{ear con}^tin^u^e^t^o^b^e^av^{ailable to}^o^r^igⁱⁿ^al^ex^h^a^u^s^ted^allo^tm^en^{t, su}^b^j^{ect to}
^th^{at s}^t^{ate f}^o^{r 2 additiona}^l^fⁱ^s^{cal y}^ears^.^c^a^p^s^oⁿ^a^v^aⁱ^l^a^b^l^e^unsp^e^nt^fund^s.^Fund^s
^F^o^{r F}^Y^{2000 f}^o^rw^{ard, al}^l^o^t^m^en^t^sⁿ^o^t^av^ailab^l^{e f}^o^r^r^e^dⁱ^strⁱ^b^u^tioⁿ^to^th^ese
^u^s^{ed at th}^{e en}^{d of}^{3 y}^ears^wⁱ^{ll be}^j^u^ri^sdi^c^tⁱ^oⁿ^s^w^o^u^l^{d be capped at}
^redi^s^t^ri^bu^t^e^{d by}^t^h^e^Secretary^of^Heath^s^p^eci^fⁱ^{ed percen}^t^a^g^e^s^–^60%^of^uⁿ^s^pen^t
^an^{d Hu}^m^aⁿ^Se^r^v^ices^{(HHS) to s}^t^ates^al^l^o^t^m^en^t^s^f^o^{r F}^Y^{2000 an}^{d F}^Y^2001,
^th^{at h}^a^v^e^f^u^lly^sp^en^t^t^h^eir^o^r^igⁱⁿ^al^70%^f^o^{r F}^Y^{2002, an}^{d 80%}^f^o^r
^allo^tm^en^{ts f}^o^r^th^{at y}^ear^.^F^Y^2003.^T^e^rritories^w^o^u^l^{d receiv}^e^an
^am^o^uⁿ^t^e^q^u^a^{l to}¹^.⁰⁵^%^o^f^th^{e to}^tal
^BIPA^-^{2000 creat}^ed^{a s}^p^eci^al^ru^l^e^am^ount^av^ai^l^a^bl^{e f}^o^{r redi}^s^t^ri^bu^tⁱ^oⁿ
ⁱ^{ki/CRS-RL31602}^f^o^r^th^{e r}^e^dⁱ^strⁱ^b^u^tioⁿ^an^d^av^ailab^ility^o^f^m^u^ltip^lied^b^y^each^t^e^r^rⁱ^t^o^r^y^’s
^g/w^unuse^d^FY^{1998 a}ⁿ^{d F}^Y^{1999 S}^C^H^I^P^proportⁱ^oⁿ^of^t^h^{e ori}^gⁱⁿ^al^al^l^o^t^m^en^t
^s^.or^allotm^en^ts^{. T}^h^is^s^p^{ecial ru}^{le decreas}^ed^av^ailab^l^{e f}^o^r^{all ter}^r^ito^rⁱ^{es. Fo}^r
^le^ak^th^e^am^o^uⁿ^t^av^ailab^l^{e f}^o^r^r^e^dⁱ^strⁱ^b^u^tioⁿ^F^Y^{2004 an}^{d s}^u^bs^equ^eⁿ^t^fⁱ^s^cal^y^e^a^r^s^,
^to^s^t^ates^th^{at h}^a^{d u}^s^{ed all of}^th^eir^th^{e redis}^t^ribu^tion^f^o^{r th}^os^{e s}^t^ates^an^d
^://wiki^o^r^igⁱⁿ^{al allo}^tm^en^{ts f}^o^r^th^{ese tw}^o^y^e^ar^s^ter^r^ito^rⁱ^e^s^w^o^u^l^d^b^e^th^{e sam}^e^{as u}ⁿ^d^er
^h^ttp^an^{d allow}^e^{d s}^t^ates^th^{at h}^a^dⁿ^o^{t s}^p^en^{t all}^o^f^th^eir^allo^tm^en^{ts to}^r^e^taⁱⁿ^so^m^e^o^f^BIPA^-^2000.
^t^h^eⁱ^r^unsp^e^nt^fund^s.^{For s}^t^ates^t^h^{at did n}^o^{t u}^s^{e all th}^eir
^origⁱⁿ^{al SC}^HIP^allotm^en^ts^,^f^o^{r each}^of
^F^Y²⁰⁰⁰^t^h^r^o^ug^h^F^Y^{2003, t}^o^t^a^l
^am^ouⁿ^t^s^av^{ailable f}^o^{r reten}^tion^(af^t^er
^th^{e redu}^ction^of^am^ouⁿ^t^s^f^o^r^s^t^ates^an^d
^t^e^rri^t^o^ri^es^as^des^c^ri^{bed abov}^{e) w}^o^u^l^{d be}
^s^u^bj^ect^t^o^{a f}^l^{oor– 40%}^f^o^r^F^Y^{2000 an}^d
^F^Y^{2001, 30%}^f^o^{r F}^Y²⁰⁰²^,^an^{d 20%}
^f^o^{r F}^Y^{2003. Of}^th^{at am}^ouⁿ^t^{, each}^s^t^ate
^w^o^u^l^{d receiv}^e^{a ratio}^of^its^con^t^ribu^tion
^t^o^t^h^e^t^o^t^a^l^pool^of^uⁿ^s^pen^t^f^uⁿ^d^s^t^o^t^h^e
^r^e^m^aⁱⁿⁱⁿ^g^av^ailab^l^{e f}^uⁿ^d^{s. Fo}^r
^F^Y^{2004 an}^{d s}^u^bs^equ^eⁿ^t^fⁱ^s^cal^y^ears^,
^am^ouⁿ^t^s^av^ailable^f^o^{r reten}^tion^by^s^u^ch
^s^t^at^es^,ⁱ^s^t^h^{e s}^a^m^e^as^uⁿ^d^{er BIPA}^-^2000.

ProvisionsCurrent LawH.R. 4954S. 3018
^S^C^H^I^{P a}^llo^tmen^ts^:^L^e^ngt^{h of}^t^h^e^T^h^{e orig}ⁱⁿ^{al en}^actm^eⁿ^t^of^S^C^HIP^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^705(a).^Ex^ten^d^{s av}^ailab^ilit^y
^{availability of r}^e^{allocated funds}^speci^fⁱ^es^t^h^at^redi^s^t^ri^bu^t^e^{d f}^uⁿ^d^s^no^t^of^t^h^{e F}^Y^{1998 a}ⁿ^d^F^Y¹⁹⁹⁹
^u^s^{ed by}^th^{e en}^{d of}^t^h^e^fis^{cal y}^{ear in}^r^e^dⁱ^st^rⁱ^b^u^t^e^d^fund^{s t}^h^r^o^{ugh t}^h^e^eⁿ^d^o^f
^w^h^ich^th^ey^{are rea}^{llocated of}^fⁱ^cially^F^Y^{2003. F}^o^{r F}^Y^{2000 an}^{d bey}^oⁿ^d^,
^ex^pire.^{reallocated f}^uⁿ^d^s^w^o^u^l^{d be av}^ailable
^f^o^{r 1 f}ⁱ^s^{cal y}^ear.
^R^e^di^s^t^ri^bu^t^e^{d an}^{d ret}^aⁱⁿ^{ed f}^uⁿ^d^s^f^r^om
^F^Y¹⁹⁹^{8 an}^{d F}^Y^{1999 are av}^ai^l^a^bl^e
^t^h^r^o^{ugh t}^h^e^eⁿ^d^o^f^FY^2002.
^S^C^HI^{P a}^llo^tmen^ts^:^Esta^b^lish^m^eⁿ^{t o}^f^a^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^705(b⁾^.^F^o^r^F^Y²⁰⁰⁴^an^d
^cas^e^{load s}^t^abiliz^{ation pool}^s^u^bs^equ^eⁿ^t^fⁱ^s^{cal y}^ears^,^es^tablis^h^e^s^a
^cas^el^{oad s}^t^abi^lⁱ^zatⁱ^oⁿ^pool^t^o^provⁱ^d^e
^cer^tain^s^t^{ates w}^ith^ad^d^itioⁿ^a^{l SCHI}^P
^fundⁱ^ng.^Aⁿ^y^r^e^m^aⁱⁿⁱ^{ng unuse}^d
^redi^s^t^ri^bu^t^e^d^dol^l^a^rs^begⁱⁿⁿⁱⁿ^g^wⁱ^t^h^t^h^e
^F^Y^{1998 appropri}^a^tⁱ^oⁿⁿ^o^t^s^p^en^t^by^t^h^e
ⁱ^{ki/CRS-RL31602}^{applicable deadlin}^es^w^o^u^l^{d becom}^e^a
^g/w^{part of}^th^is^pool.^In^addition^,^uⁿ^s^pen^t
^s^.or^m^oⁿ^e^yⁱⁿ^t^h^{e pool}^w^o^u^l^{d rem}^aⁱⁿⁱⁿ^t^h^e^pool^{. F}^o^{r a g}ⁱ^v^eⁿ^fⁱ^s^cal^y^{ear, st}^at^es
^le^ak^elig^ib^{le f}^o^r^th^ese^f^uⁿ^d^s^ar^{e th}^o^s^{e w}^h^o^s^e
^://wiki^t^o^t^a^l^c^u^mu^l^a^tⁱ^v^e^sp^eⁿ^dⁱ^{ng t}^h^r^o^{ugh t}^h^e^en^{d of}^th^{e prev}^iou^s^fⁱ^s^c^a^l^y^ear
^h^ttp^ex^{ceeded th}^{eir cu}^m^u^lativ^{e o}^r^igⁱⁿ^al
^allo^tm^en^{ts f}^o^r^th^{e sam}^e^tim^e^p^e^rⁱ^o^d^.
^Fo^r^th^{is p}^u^r^p^o^s^{e cu}^m^u^lativ^{e sp}^en^dⁱⁿ^g
^m^ean^s^all^SC^HIP^ex^pen^d^itu^res^sⁱⁿ^{ce th}^e
^begⁱⁿⁿⁱⁿ^g^of^th^{e prog}^ram^.^T^h^es^{e s}^t^ates
^w^o^u^l^{d receiv}^e^an^am^ouⁿ^t^fr^o^m^th^e
^cas^el^{oad s}^t^abi^lⁱ^zatⁱ^oⁿ^pool^equ^a^l^t^o^t^h^e
^r^a^tio^o^f^su^ch^state’^{s o}^r^igⁱⁿ^{al allo}^tm^en^t
^(f^{or th}^{e prev}^iou^s^fⁱ^s^{cal y}^{ear) to th}^{e total}
^o^r^igⁱⁿ^{al allo}^tm^en^{ts o}^f^{all elig}^ib^le^states
^(f^{or th}^{e s}^a^m^e^{prior f}ⁱ^s^{cal y}^ear),
^m^u^ltip^lied^b^y^th^{e to}^tal^d^o^llar^s^av^ailab^l^e
ⁱⁿ^t^hⁱ^s^pool^.

ProvisionsCurrent LawH.R. 4954S. 3018
^S^C^HI^{P a}^llo^tmen^ts^:^A^u^th^o^r^{ity fo}^r^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^Se^c^tⁱ^oⁿ^705(c).^Fo^r^FY2⁰⁰³^aⁿ^d
^q^u^a^lifyin^g^sta^t^es^t^o^u^s^{e a}^p^o^r^tioⁿ^o^f^b^e^y^o^nd^,^a^l^l^o^w^s^“q^ua^lⁱ^f^yⁱ^{ng st}^a^t^e^s^”^t^o
^SC^H^I^{P f}^unds^f^o^r^M^e^dⁱ^cai^d^u^s^{e u}^p^to²⁰^%^o^f^th^eⁱ^r^o^r^igⁱⁿ^{al SCHI}^P
^expenditur^e^s^allotm^en^{t (f}^or^t^h^a^t^fⁱ^s^{cal y}^{ear) f}^o^r
^certain^{Medicaid m}^e^dical^a^s^sⁱ^s^t^an^ce
^pay^m^en^ts^{. Qu}^alif^yⁱⁿ^g^s^t^ates^w^o^u^l^{d be}
^elig^ib^{le to}^u^s^{e, f}^r^o^m^th^eir^SCHI^P
^allo^tm^en^{t, an}^a^m^o^uⁿ^t^eq^u^a^{l to}^th^e
^dif^f^e^ren^{ce betw}^een^s^p^en^ding^{at th}^e
^e^nha^nc^e^d^SCH^I^P^m^a^t^c^hi^{ng r}^a^t^e^aⁿ^d^t^h^e
^FMA^P^f^o^{r ch}^ildren^u^p^{to ag}^{e 19 w}ⁱ^t^h
^f^a^mⁱ^l^yⁱⁿ^com^e^s^g^r^eat^e^r^t^h^an^150%^of
^th^{e FP}^L^.
^{For a g}ⁱ^v^eⁿ^fi^s^{cal y}^{ear, “}^q^u^a^lif^yⁱⁿ^g
^s^t^ates^”^w^o^u^l^dⁱⁿ^clu^d^{e th}^os^{e w}^h^{o: (1)}^as
^of^March^{31, 1997, h}^a^{d a Medi}^cai^d
ⁱ^{ki/CRS-RL31602}ⁱⁿ^co^m^e^elig^ib^ility^stan^d^a^r^d^f^o^r^{at least}
^g/w^on^{e categ}^ory^of^chi^l^dren^(ex^c^lu^din^g
^s^.orⁱⁿ^f^aⁿ^t^s⁾^of^at^l^eas^t^185%^F^P^L^;^{(2) as}^of
^le^ak^Jan^u^a^ry^{1, 2001, ha}^d^{a S}^C^H^I^P
^elⁱ^g^ibility^s^t^an^{dard of}^{at leas}^{t 200%}
^://wiki^FP^L^;⁽³⁾^dⁱ^dⁿ^o^{t im}^p^o^s^{e w}^a^itin^g^{lists o}^r
^h^ttp^en^rollm^en^{t caps}^f^o^{r ch}^ildren^w^h^os^e^f^a^m^ilyⁱⁿ^co^m^e^{is at least}²⁰⁰^{% FP}^L^;
^{(4) prov}^ide^s^t^atew^{ide SC}^HIP^cov^e^rag^e
^to^{all ch}^ild^r^eⁿ^w^h^o^m^{eet su}^ch^s^t^a^t^e^’^s
^elig^ib^ility^r^e^q^u^ir^em^en^{ts; an}^d⁽⁵⁾^h^a^v^e
^im^p^l^em^en^ted^{at least f}^o^u^r^ad^d^itioⁿ^a^l
^s^p^ecifⁱ^{ed procedu}^r^e^s^f^o^{r es}^tablis^hⁱⁿ^g
^ch^ild^r^eⁿ^’^{s elig}^ib^ility^f^o^r^th^eir^Medⁱ^caid
^an^{d S}^C^H^I^{P prog}^ram^s^.

ProvisionsCurrent LawH.R. 4954S. 3018
^S^C^HI^{P a}^llo^tmen^ts^:^G^A^O^s^t^{udy and}^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^705(d⁾^.^Re^q^u^ir^e^s^t^h^e^G^eⁿ^e^ra^l
^r^e^por^t^r^e^gar^di^{ng expendi}^t^u^r^e^of^SC^H^I^P^A^c^c^o^untⁱ^{ng O}^ffi^c^e⁽^G^A^O⁾^t^o^c^o^nd^uc^t^a
^a^llo^tmen^ts^st^ud^{y o}ⁿ^t^h^e^e^x^p^e^ndⁱ^t^u^r^e^o^f^st^a^t^e
^S^C^HI^P^allo^tm^en^{ts an}^d^to^su^b^m^{it to}
^Coⁿ^g^r^{ess an}ⁱⁿ^terⁱ^m^r^e^p^o^r^{t n}^o^later^th^an
^O^c^t^ober¹^,^{2004 w}ⁱ^t^h^t^h^{e f}ⁱⁿ^a^l^report
^du^{e n}^o^l^a^t^e^r^t^h^an^O^c^t^{ober 1, 2005. T}^h^e
^s^t^u^d^y^w^o^u^l^{d ex}^amⁱⁿ^e^w^h^y^certain^s^t^ates
^di^d^not^u^s^{e all}^t^h^eir^SCHI^P^allo^tm^en^ts
^(f^{or each}^of^fⁱ^sc^a^l^y^ears^{1998, 1999,}
^an^{d 2000) b}^y^t^h^{e appl}ⁱ^cabl^e^3-^y^ear
^deadlin^{e. GA}^{O w}^o^u^l^d^b^e^requ^{ired to}
^ev^alu^a^{te th}^{e m}^e^th^o^d^s^ap^p^lied^to
^r^e^a^l^l^o^c^a^t^e^unuse^d^o^rⁱ^gⁱⁿ^a^l^a^l^l^o^t^m^eⁿ^t^s^,
^t^h^{e cas}^el^oa^{d s}^t^abi^lⁱ^zatⁱ^oⁿ^pool^{, t}^h^e
^adequ^acy^of^SC^HIP^f^uⁿ^dⁱⁿ^g^an^d
^r^e^so^u^r^ces,^aⁿ^d^p^o^t^en^{tial b}^eⁿ^e^f^{its an}^d
ⁱ^{ki/CRS-RL31602}^problem^s^as^s^o^{ciated w}^ith^t^h^{e n}^e^w
^g/w^redi^s^t^ri^bu^tⁱ^oⁿ^m^e^t^h^{od es}^t^a^blⁱ^s^h^e^{d by}
^s^.or^t^h^{e cas}^el^{oad s}^t^a^bⁱ^lⁱ^zatⁱ^oⁿ^pool^{. In}
^le^ak^ad^dⁱ^tioⁿ^,^th^{e r}^e^p^o^r^{t w}^o^u^l^dⁱⁿ^clu^d^e
^r^e^c^o^m^m^en^dation^s^f^o^{r ch}^an^g^e^sⁱⁿ
^://wiki^legⁱ^slativ^e^a^c^tioⁿ^r^e^g^a^r^dⁱⁿ^g^ex^p^eⁿ^d^itu^r^e
^h^ttp^o^f^SCHI^P^allo^tm^en^{ts an}^d^m^e^th^o^d^s^f^o^r^real^l^o^catⁱ^o^{n o}^f^unuse^d^o^rⁱ^gⁱⁿ^al
^allo^tm^en^ts.

ProvisionsCurrent LawH.R. 4954S. 3018
^Im^pr^ove^m^ent^of^t^h^{e pr}^oces^s^f^o^r^t^h^e^S^ectⁱ^oⁿ^{1115 of}^t^h^e^S^o^ci^al^S^ecu^ri^t^y^A^c^t^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^706.^P^l^aces^on^both^s^t^ates^an^d
^developmeⁿ^{t and implementation of}^prov^ides^th^{e Secretary}^of^{HHS w}^ith^th^{e Secretary}^certain^pu^{blic n}^o^{tice an}^d
^M^e^di^cai^d^{and SC}^H^I^{P W}^aⁱ^ver^s^{broad au}^th^ority^to^con^d^u^c^t^res^earch^an^d^h^earin^g^requ^irem^en^t^s^,^an^{d requ}^irem^en^ts
^d^e^m^o^nst^r^atⁱ^oⁿ^proj^ect^s^uⁿ^d^er^si^x^reg^a^rdin^g^{receipt an}^{d con}^s^ideration^of
^prog^ram^s^{, in}^clu^dⁱⁿ^g^Medicaid^an^d^p^u^b^lⁱ^c^c^o^m^m^eⁿ^t^{s in}^th^{e w}^a^iv^e^r
^SC^HIP^.^T^h^{e Secretary}^m^a^y^w^a^iv^e^dev^e^l^opm^en^t^,^revⁱ^ew^an^{d approv}^al
^provⁱ^sⁱ^oⁿ^sⁱⁿ^S^ectⁱ^oⁿ^{1902 of}^Medi^cai^d^proces^s^.^T^h^e^Secretary^m^u^s^t^determⁱⁿ^e
^s^t^atu^t^{e (u}^s^u^ally^f^r^eedom^of^pro^v^ider^t^h^at^{a w}^aⁱ^v^{er propos}^alⁱ^s^bas^e^{d o}ⁿ^a
^ch^oⁱ^{ce, co}^m^p^ar^ab^ility^o^f^b^eⁿ^e^f^{its, an}^d^s^o^uⁿ^d^h^y^pot^h^e^sⁱ^s^an^{d an}^appropri^a^t^e
^s^t^atew^iden^es^s⁾^{. T}^h^{e cos}^t^s^of^s^u^ch^m^e^th^{od f}^o^{r ev}^alu^a^ti^oⁿ^.^Aⁿ^y
^w^a^iv^ers^{are allow}^a^{ble ex}^pen^d^itu^res^requ^irem^en^t^uⁿ^d^{er Medicaid or SC}^HIP^,
^uⁿ^d^{er th}^{e applicabl}^e^prog^ram^.^For^o^r^an^y^r^e^lated^r^e^g^u^l^a^tⁱ^oⁿ^th^{at is n}^o^t
^SCHI^P,ⁿ^o^s^p^e^cⁱ^fⁱ^{c sectio}^{ns o}^r^e^x^p^licitly^w^a^iv^ed^an^d^p^u^b^lⁱ^c^l^y
^requ^irem^en^ts^{are cited as}^“^w^aiv^e^-^a^ble.”^iden^tif^{ied by}^th^{e Secr}^e^t^ary^w^h^en^a
^SC^HIP^s^t^atu^t^{e s}ⁱ^m^p^ly^s^t^ates^th^at^propos^alⁱ^s^appro^v^{ed w}^o^u^l^{d n}^o^t^be
^S^ectⁱ^oⁿ^{1115, pert}^aiⁿⁱⁿ^g^t^o^rese^a^r^ch^w^a^iv^ed^{; sim}^ilar^l^y^,^w^a^iv^er^co^{sts n}^o^t
^an^{d dem}^oⁿ^s^t^r^atⁱ^oⁿ^proj^ect^s^,^applⁱ^e^s^t^o^ex^p^licitly^id^en^tif^ied^a^s^allo^w^a^b^l^{e m}^u^st
ⁱ^{ki/CRS-RL31602}^SC^HIP^.^B^B^A-9⁷^p^r^o^v^id^ed^aⁿ^o^t^{be pai}^d^uⁿ^d^{er Medi}^cai^{d or S}^C^H^I^P.
^g/w^m^ech^an^is^m^{for a 3-}^y^{ear ex}^ten^s^ion^of^Clar^if^{ies th}^{at: (}¹⁾^th^{e w}^a^iv^e^r^o^f^a
^s^.or^Medic^a^{id s}^t^atew^{ide com}^p^reh^eⁿ^s^iv^e^sp^ecifⁱ^{c sectio}ⁿ^uⁿ^d^er^{a g}ⁱ^v^eⁿ^{title m}^u^st
^le^ak^{1115 w}^aⁱ^v^{er proj}^ect^s.^Uⁿ^{der BIPA}^-^p^r^o^m^o^t^e^th^{e o}^b^j^ectiv^{es o}^f^th^at^title,⁽²⁾
^{2000, a proces}^s^w^a^s^defⁱⁿ^e^d^f^o^r^th^e^Secretary^m^a^yⁿ^o^t^w^a^iv^e
^://wiki^receivⁱⁿ^g^ex^ten^s^ion^s^of^Medicaid¹¹¹⁵^requ^irem^en^ts^uⁿ^d^{er Medicaid’}^s^early
^h^ttp^w^a^iv^ers^f^o^{r th}^os^{e proj}^ects^receivⁱⁿ^g^th^eⁱⁿ^{itial 3}^-^y^ear^ex^ten^s^ioⁿ^.^an^{d peri}^odi^{c s}^c^reenⁱⁿ^g^,^di^a^gⁿ^o^s^tⁱ^c^an^d^treatm^eⁿ^t^p^r^o^g^r^a^m^,^an^{d (3) th}^e
^Secretary^m^a^yⁿ^o^{t approve}^aⁿ^y
^R^e^g^u^l^atⁱ^oⁿ^s^des^c^ri^{be H}^H^S^proced^u^r^es^p^r^o^p^o^s^a^l^t^h^a^t^w^o^ul^d^use^SCH^I^P^fund^s
^{for rev}ⁱ^ew^an^{d approv}^al^of^S^ectⁱ^oⁿ^f^o^r^h^ealth^b^eⁿ^e^f^{its f}^o^r^ch^ild^{less ad}^u^lts
^{1115 w}^aⁱ^v^ers^an^{d requi}^rem^eⁿ^t^s^f^o^r^(ex^c^lu^din^g^c^a^r^etak^er^relativ^es^).
^{states w}^ith^r^e^sp^ect^to^p^u^b^{lic n}^o^tif^icatioⁿ^Ef^f^ectiv^{e as}^of^th^{e date}^of^en^actm^eⁿ^t^of
^aⁿ^dⁱ^nvo^l^v^em^en^t^du^riⁿ^g^t^h^e^t^hⁱ^s^A^c^t^,^an^{d appl}ⁱ^e^s^t^oⁿ^e^w^propos^al^s
^dev^e^l^opm^en^t^ph^as^{e of}^propos^ed^w^aⁱ^v^er^an^d^am^en^dm^en^ts^{to approv}^{ed proj}^ects^,
^proj^ects^.^T^h^os^{e requ}^irem^en^ts^w^e^re^th^{at are ap}^p^r^o^v^{ed or ex}^ten^d^{ed on}^or
^{elaborated an}^{d am}^en^{ded in}^a^{letter to}^af^{ter th}^{e date of}^en^actm^eⁿ^t^.
^s^t^{ate Medicaid}^direct^o^r^s^issue^d^M^a^y³^,
^2002.
^T^e^m^por^ar^{y St}^at^{e Fi}^s^c^al^Relⁱ^e^f^T^h^{e f}^e^dera^l^s^h^{are of}^th^e^cos^t^of^N^o^provⁱ^sⁱ^oⁿ^.^{Section 707}^.^FMA^P^s^f^o^{r th}^{e s}^t^ates^an^d
^{Medicaid item}^s^an^{d s}^e^rv^ices^is^equ^a^{l to}^t^e^rri^t^o^rⁱ^e^s^w^o^u^l^{d be t}^e^m^porari^l^y
^th^{e f}^e^{deral m}^e^dical^a^s^sⁱ^s^t^an^ceⁱⁿ^creas^{ed f}^o^{r F}^Y^2003.^Fⁱ^rs^t^,^s^t^at^es^an^d
^p^e^r^cen^tag^e⁽^F^MA^P⁾^m^u^ltip^lied^b^y^th^o^s^e^t^e^r^rⁱ^t^o^ri^es^w^h^os^{e F}^Y^{2003 F}^M^A^Pⁱ^s

ProvisionsCurrent LawH.R. 4954S. 3018
^c^o^st^s.^D^e^t^e^r^mⁱⁿ^e^d^a^nnua^l^l^y^,^t^h^e^FM^A^P^l^o^w^e^{r t}^h^an^t^h^ei^{r F}^Y²⁰⁰²^F^M^A^P^w^o^u^l^d
ⁱ^s^desⁱ^gⁿ^e^{d s}^o^t^h^at^t^h^{e f}^e^deral^ret^aⁱⁿ^t^h^{e F}^Y^{2002 F}^M^A^P^(t^h^e^hⁱ^g^h^e^r
^go^ve^rⁿ^m^e^nt^p^a^y^s^a^l^a^r^g^e^r^p^o^r^tⁱ^o^{n o}^f^rat^e⁾^f^o^{r F}^Y^{2003. T}^h^en^{, t}^h^{e F}^M^A^P^f^o^r
^{Medicaid cos}^t^sⁱⁿ^s^t^ates^w^ith^low^e^r^per^each^s^t^{ate an}^{d territory}^w^o^u^l^{d be}
^cap^{ita in}^co^m^e^r^e^l^a^tiv^{e to}^th^{e n}^a^tioⁿ^a^lⁱⁿ^creas^{ed by}^{1.3 percen}^t^a^g^e^poiⁿ^t^s^f^o^r
^av^erag^{e (an}^d^vⁱ^{ce v}^e^rs^{a f}^o^{r s}^t^a^t^es^w^ith^F^Y^{2003. T}^h^{e s}^p^en^diⁿ^g^caps^f^o^{r t}^h^e
^hi^ghe^r^p^e^r^c^a^pⁱ^t^aⁱⁿ^c^o^m^e^s)^.^FM^A^P^s^fo^r^territories^w^o^u^l^d^als^o^{be in}^creas^{ed by}
^th^e^states^m^u^{st n}^o^{t f}^a^{ll b}^e^lo^w⁵⁰^%^an^d^2.6^%^{. T}^h^{e in}^creas^esⁱⁿ^th^{e FMA}^P
^m^a^y^no^t^ex^{ceed 83%. FMA}^P^s^f^o^{r th}^e^w^o^u^l^{d n}^o^t^appl^y^t^o^di^s^p^roportⁱ^oⁿ^a^t^e
^ter^r^ito^rⁱ^{es ar}^{e statu}^t^o^r^ily^set^{at 5}⁰^%^{. I}ⁿ^sh^ar^{e h}^o^sp^{ital p}^a^y^m^en^{ts o}^r^f^o^r
^t^h^{e t}^e^rri^t^o^ri^e^s^{, Medi}^cai^{d prog}^ram^s^are^p^a^y^m^en^{ts f}^o^r^p^r^o^g^r^a^m^s^uⁿ^d^er^T^{itle I}^V
^als^o^s^u^bj^{ect to s}^p^en^din^g^caps^an^d^o^r^T^{itle XXI}⁽^S^CHI^P⁾^o^f^th^{e So}^cial
^the^r^ef^{ore th}^{e f}^e^{deral g}^o^v^e^rn^m^eⁿ^t^pay^s^Secu^rity^A^c^{t. On}^l^y^s^t^ates^an^d
^50%^of^t^h^e^cos^t^of^Medi^cai^{d i}^t^e^m^s^an^d^ter^r^ito^rⁱ^{es th}^{at m}^aⁱⁿ^tain^Medⁱ^caid
^s^e^rv^ices^u^p^{to th}^{e s}^p^en^din^g^caps^.^elig^ibility^lev^e^l^s^as^of^J^aⁿ^u^a^ry^{1, 2002}
⁽^o^r^r^eⁱⁿ^{state elig}^ib^ility^lev^e^{ls as o}^f
^A^u^th^o^r^ized^uⁿ^d^er^T^{itle XX o}^f^th^e^J^aⁿ^u^a^r^y¹^,²⁰⁰²⁾^a^r^e^e^lⁱ^gⁱ^b^l^e^f^o^r^t^h^e
ⁱ^{ki/CRS-RL31602}^{Social Secu}^rity^A^c^{t, th}^{e Social Serv}^ices^B^l^o^c^k^Gr^an^{t (}^SSB^G)^{is a f}^l^ex^ib^le^FMA^Pⁱⁿ^creas^e.
^g/w^s^o^u^r^{ce of}^f^uⁿ^d^s^th^{at s}^t^ates^m^a^y^u^s^{e to}^A^p^p^r^o^p^r^{iates $}¹^b^illioⁿⁱⁿ^ad^d^itioⁿ^a^l
^s^.or^su^pport^{a w}ⁱ^{de v}^a^ri^et^y^of^s^o^ci^a^l^t^e^m^porary^g^r^an^t^s^un^{der S}^S^B^G^.^T^h^e
^le^ak^ser^v^{ices activ}^ities.^P^a^y^m^en^{ts to}^states^g^r^an^{t allotm}^en^ts^{for each}^s^t^{ate an}^d
^://wiki^from^SSB^{G f}^uⁿ^d^s^f^o^{r an}^y^fⁱ^s^{cal y}^ear^m^u^s^t^b^e^e^x^pen^d^{ed by}^th^{e s}^t^{ate in}^s^u^ch^territory^are^s^p^ecifⁱ^{ed an}^{d th}^es^{e f}^uⁿ^d^s^m^a^y^be^u^s^ed^f^o^{r s}^e^rv^ices^{directed at th}^e
^h^ttp^fⁱ^s^{cal y}^{ear or in}^th^{e s}^u^cceeding^fis^cal^go^a^l^{s se}^{t fo}^r^t^{h in}^t^h^e^SSB^{G p}^r^o^g^r^a^m^.
^y^{ear. T}^h^{e F}^Y^{2003 L}^a^bor-^H^H^S^T^h^ese^ad^d^itioⁿ^a^l^SSB^{G f}^uⁿ^d^{s w}^o^u^l^d^b^e
^a^ppropri^a^tⁱ^{on b}^{ill (}^H^.^R^.^5320;^av^ai^l^a^bl^{e f}^o^{r obl}ⁱ^g^atⁱ^oⁿ^t^h^{rough Ju}ⁿ^e
ⁱⁿ^tr^o^d^u^ced^b^u^{t n}^o^{t y}^e^{t r}^e^p^o^r^ted⁾^{30, 2003 an}^d^{for ex}^pen^dⁱ^t^u^{re t}^h^rou^g^h
ⁱⁿ^clu^d^{es $}¹^.⁷^b^illioⁿ^f^o^r^th^{e SSB}^Gⁱⁿ^S^e^pt^em^{ber 30, 2003.}

^F^Y^2003.

Other Provisions
ProvisionsCurrent LawH.R. 4954S. 3018
^Incr^eas^eⁱⁿ^appr^oprⁱ^a^tⁱ^ons^f^o^r^s^p^eci^al^B^B^A^-⁹⁷^am^en^d^e^d^T^{itle I}^I^I^o^f^th^e^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^801.^F^uⁿ^d^s^each^g^r^an^t
^di^abet^e^s^pr^ogra^m^{s f}^o^r^t^y^{pe I di}^abet^e^s^P^u^b^{lic Health}^Ser^v^ice^A^c^{t to}^cr^{eate tw}^o^prog^ra^m^a^t^{$125 m}^illioⁿ^pe^{r y}^e^a^r^f^o^r
^{and Indi}^ans^diabetes^g^r^an^{t prog}^r^a^m^s^{; on}^{e targ}^ets^{FY2004 an}^{d FY2005.}^In^addition^,^th^e
^diabetes^res^earch^an^{d th}^{e oth}^e^r^d^u^{e d}^a^{te o}ⁿ^th^{e f}ⁱⁿ^a^{l ev}^alu^a^tioⁿ^r^e^p^o^r^t
^s^u^pport^s^di^ab^e^t^es^prev^en^tⁱ^oⁿ^an^d^f^o^{r bot}^h^prog^ram^s^w^o^u^l^{d be ex}^t^eⁿ^d^ed
^treatm^eⁿ^t^s^e^rv^ices^f^o^{r In}^dian^s^.^Each^t^o^Jan^u^a^ry^{1, 2005.}
^prog^ram^receiv^e^d^{$30 m}^illion^f^o^r^each
^of^F^Y^{1998 t}^h^r^o^{ugh FY}²⁰⁰²^,
^tr^an^sf^er^r^e^d^f^r^o^m^SCHI^P⁽^T^{itle XXI}^o^f
^th^{e Social Secu}^rity^A^c^{t). Un}^{der B}^I^P^A^-
^{2000, f}^o^{r each}^g^r^an^{t prog}^ram^,^total
^f^uⁿ^dⁱⁿ^g^w^a^sⁱⁿ^creas^{ed to $100 m}^illion
^{per y}^ear^f^o^{r F}^Y^{2001 t}^h^ro^{ugh FY}^2003.
^F^o^r^F^Y^{2001 an}^{d F}^Y^{2002, t}^h^e
^addition^a^l^$70^m^illion^w^a^s^drawⁿ^f^r^om
ⁱ^{ki/CRS-RL31602}^t^h^{e T}^r^eas^u^r^y^.^Fo^{r F}^Y^{2003, t}^h^{e en}^tⁱ^r^e
^g/w^{$100 m}^illion^is^{to com}^e^f^r^om^th^e
^s^.or^T^r^eas^u^r^y^.^A^l^s^o^{, th}^{e du}^{e date on}^t^h^e
^le^ak^fⁱⁿ^a^{l ev}^alu^a^tioⁿ^r^e^p^o^r^{t f}^o^r^th^{ese tw}^o
^g^r^an^{t prog}^ram^s^w^a^s^ex^ten^d^{ed f}^r^om
^://wiki^Jan^u^a^ry^{1, 2002 t}^o^Jan^u^a^ry^{1, 2003.}
^h^ttp
^Dⁱ^s^r^e^gar^d^of^cer^t^aⁱⁿ^paym^e^nt^s^under^{Federal pro}^g^r^a^m^s^s^u^ch^as^th^{e w}^e^s^t^N^o^provⁱ^sⁱ^oⁿ^.^S^e^c^tⁱ^oⁿ^802.^Specifⁱ^es^th^at^pay^m^en^ts
^t^h^{e Em}^er^{gency Suppl}^em^ent^a^l^Act²⁰⁰⁰^,^c^o^a^s^t^gr^o^und^fi^s^h^fⁱ^s^h^ery^provⁱ^d^e^m^a^d^e^to^anⁱⁿ^dⁱ^vⁱ^d^u^{al w}^ith^r^e^sp^{ect to}
ⁱⁿ^th^{e a}^d^mⁱⁿ^istra^tioⁿ^o^f^fed^e^r^a^l^pay^m^en^t^s^t^oⁱ^ndi^vⁱ^du^al^s^t^o^bu^y^ou^t^w^e^st^c^o^a^s^t^gr^o^und^fi^{sh fi}^she^r^y^w^o^ul^d
^pr^ogr^am^s^{and f}^e^d^e^r^a^l^l^y^a^s^sⁱ^s^t^ed^th^eir^v^e^{ssels (}ⁱ^{.e., b}^o^a^{ts, f}ⁱ^shⁱⁿ^g^{not be cou}ⁿ^t^{ed as}ⁱⁿ^com^e^{or res}^o^u^r^ces
^pr^ogr^am^s^licen^ses)^th^er^eb^y^elimⁱⁿ^atin^g^th^eir^f^o^{r pu}^rpos^es^of^det^e^rmⁱⁿⁱⁿ^g^t^h^e
^capacity^{to h}^a^rv^es^{t f}ⁱ^s^h^.^T^h^{e g}^o^{al of}^elig^ib^ility^o^r^th^{e am}^o^uⁿ^t^o^r^ex^ten^t^o^f
^th^es^{e pay}^m^en^ts^is^{to redu}^{ce th}^{e ov}^erall^ben^e^f^its^{or as}^sⁱ^s^t^an^ce^uⁿ^d^er^an^y^f^e^deral
^b^u^r^d^en^oⁿ^th^{e f}ⁱ^shⁱⁿ^gⁱⁿ^d^u^str^y^to^prog^ram^.

^en^su^r^e^th^{e eco}ⁿ^o^mⁱ^{c stab}^ility^o^f
^r^e^m^aⁱⁿⁱ^{ng ve}^sse^l^s^.

ProvisionsCurrent LawH.R. 4954S. 3018
^S^a^f^et^{y N}^e^t^O^r^gani^z^a^tⁱ^ons^{and Pat}ⁱ^eⁿ^t^N^o^provⁱ^sⁱ^oⁿ^.^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^803.^W^o^u^l^d^estab^lish^a^Saf^e^ty
^Ad^viso^{ry Co}^mmittee^N^e^t^O^r^gaⁿⁱ^z^a^tⁱ^o^{n a}ⁿ^d^P^a^tⁱ^e^nt^A^d^vi^so^r^y
^Co^m^mⁱ^ssioⁿ^to^r^e^vⁱ^ew^th^{e n}^a^tioⁿ^’^s
^h^ealth^ca^r^e^saf^e^tyⁿ^e^{t p}^r^o^g^r^a^m^s^b^y^:
^docu^m^en^tin^g^an^d^an^aly^zⁱⁿ^g^th^{e im}^pact
^of^prog^ram^an^{d f}^e^deral^l^a^w^ch^an^g^e^s^on
^th^{e cap}^acity^o^f^th^{e saf}^e^tyⁿ^e^t;
^m^oⁿⁱ^t^o^rⁱ^{ng a}ⁿ^d^lⁱ^nki^{ng e}^xⁱ^s^tⁱ^{ng d}^a^t^a
^s^o^u^r^ces^{to track}^ch^an^g^e^s^;^s^u^p^p^o^rtin^g
^t^h^{e dev}^e^l^opm^en^t^ofⁿ^e^w^dat^a^s^y^s^t^em^s
^an^d^stu^d^yⁱⁿ^g^saf^e^tyⁿ^e^{t f}^a^ilu^r^e^s;
^m^oⁿⁱ^t^o^rⁱ^{ng a}ⁿ^d^p^r^o^vⁱ^dⁱ^{ng o}^v^e^r^si^ght^fo^r
^tran^sitioⁿ^s^o^fⁱⁿ^dⁱ^vⁱ^d^u^{als receiv}ⁱⁿ^g^SSI,
^Medi^cai^{d or S}^C^H^I^{P w}^h^{o en}^rol^l^wⁱ^t^h
^m^aⁿ^a^g^e^d^car^{e en}^tities;^an^d^id^en^tif^yⁱⁿ^g
^an^{d di}^s^s^e^mⁱⁿ^a^tⁱⁿ^g^bes^t^practⁱ^ces^.
^I^d^en^tif^{ies co}^m^p^o^s^itioⁿ^an^d^th^e^m^e^th^o^d^s
ⁱ^{ki/CRS-RL31602}^fo^r^appoiⁿ^tⁱⁿ^g^m^e^m^b^ers^,^as^w^e^l^l^as
^g/w^operatⁱⁿ^g^an^{d report}ⁱⁿ^g^requⁱ^r^em^en^t^s^.
^s^.or^P^ublⁱ^c^atⁱ^{on gui}^{dance r}^e^g^a^r^dⁱⁿ^g^Iⁿ^A^ugust^,^{2000, t}^h^{e O}^f^fⁱ^{ce of}^Cⁱ^vⁱ^l^S^ecti^oⁿ^624.^T^h^{e Secretary}^w^o^u^l^{d be}^S^ecti^oⁿ^804.^S^a^m^e^a^s^H^.^R^.⁴⁹⁵⁴
^le^ak^di^s^c^rⁱ^mⁱ^natⁱ^{on by nat}ⁱ^onal^orⁱ^gⁱⁿ^Rig^h^t^{s in}^th^e^Dep^a^r^t^m^eⁿ^t^o^f^Health^an^d^r^e^q^u^ir^ed^to^issu^{e f}ⁱⁿ^a^{l w}^r^itten^g^uⁱ^d^aⁿ^c^e^ex^{cept in}^additⁱ^oⁿ^{to Medicare, th}^e
^://wiki^Hu^m^aⁿ^Serv^ices⁽^H^{HS) is}^s^u^{ed policy}^g^uⁱ^d^aⁿ^{ce th}^{at clar}^if^ied^th^e^p^r^o^h^ib^itioⁿ^b^y^J^aⁿ^u^a^r^y¹^,²⁰⁰³^c^oⁿ^c^e^rⁿⁱⁿ^g^t^h^e^ap^p^licatioⁿ^o^f^th^{e p}^r^o^h^ib^itioⁿ^ag^ain^s^t^gui^d^a^nc^e^w^o^ul^d^p^e^r^t^aⁱⁿ^t^o^requ^irem^en^t^s^{to in}^s^u^{re acces}^s^to
^h^ttp^ag^ain^s^{t n}^a^tioⁿ^a^{l o}^rⁱ^gⁱⁿ^dⁱ^scrⁱ^mⁱⁿ^a^tioⁿ^di^s^c^ri^mⁱⁿ^a^tⁱ^oⁿ^on^t^h^e^basⁱ^s^ofⁿ^a^tⁱ^oⁿ^a^l^co^v^e^r^e^d^h^ealth^s^e^rv^ices^uⁿ^d^{er Medicaid}
^{as it ef}^f^{ects p}^e^r^s^oⁿ^{s w}^ith^lim^ited^o^r^igⁱⁿ^est^a^b^lish^e^d^b^y^th^{e Civ}^{il Rig}^h^t^s^an^{d S}^C^H^I^{P f}^o^{r pers}^on^s^wⁱ^t^h^lⁱ^mⁱ^t^e^d
^En^g^lish^p^r^o^f^icien^c^y^.^P^r^o^v^id^er^{s w}^e^r^e^A^c^t^o^f^{1964. T}^h^{e g}^uⁱ^dan^{ce w}^o^u^l^d^p^r^o^f^icien^c^yⁱⁿ^En^g^lish^.

ⁱⁿ^s^t^ru^ct^{ed i}ⁿ^m^e^t^h^ods^{, prog}^ram^s^{, an}^d^pertain^{to requ}^irem^en^ts^{to in}^s^u^{re acces}^s
^r^e^q^u^ir^e^m^eⁿ^{ts th}^{at w}^o^u^l^d^av^oⁱ^d^{to Medicare cov}^e^{red h}^ealth^s^e^rv^ices^f^o^r
^dⁱ^scrⁱ^mⁱⁿ^a^tioⁿ^an^d^w^o^u^l^dⁱⁿ^su^r^e^th^at^p^e^r^s^oⁿ^{s w}^ith^lim^ited^p^r^o^f^icien^c^yⁱⁿ
^p^a^tien^t^{s w}^ith^lim^ited^Eⁿ^g^lish^sk^ills^E^nglⁱ^s^h.
^r^{eceive necessar}^y^{language assistan}^ce
^th^{at w}^o^u^l^{d perm}^it^m^eanⁱⁿ^g^f^u^l^acces^s^to
^h^ealt^h^s^e^r^vⁱ^c^e^s^,^f^r^e^e^o^f^ch^arg^e^.
^A^l^t^h^o^ugh^pu^blⁱ^c^com^m^eⁿ^t^s^w^e^r^e
^s^o^lici^t^e^{d, th}^{e g}^uⁱ^dan^{ce w}^a^s^ef^f^ectiv^e
^im^m^e^diately^.

ProvisionsCurrent LawH.R. 4954S. 3018
^Feder^a^l^r^eⁱ^m^bur^s^e^m^e^nt^of^em^er^gency^{State Medicaid prog}^ram^s^{are requ}^ired^N^o^provⁱ^sⁱ^oⁿ^.^S^ecti^oⁿ^805.^Wou^l^{d prov}ⁱ^d^e^aⁿ
^heal^t^h^se^rvⁱ^ces^f^u^rⁿⁱ^s^{hed t}^o^{to cov}^e^{r em}^erg^eⁿ^c^y^s^e^rv^ices^f^u^rn^is^h^e^d^ap^p^r^o^p^r^iatioⁿ^f^o^r^th^e^em^er^g^eⁿ^c^y^h^ealth
^undocum^ent^e^{d al}ⁱ^e^ns^t^o^uⁿ^docu^m^en^t^e^d^alⁱ^eⁿ^s^w^h^{o ot}^h^e^rwⁱ^s^e^ser^v^{ices g}^r^an^{t p}^r^o^g^r^a^m^o^f^$⁴⁸^m^illioⁿ
^m^{eet Med}ⁱ^caid^elig^ib^ility^stan^d^a^r^d^s.^{per y}^{ear f}^o^{r F}^Y^{2003 an}^{d F}^Y^2004.
^Som^e^s^t^a^t^es^{, es}^pecially^{border s}^t^ates^,
^s^a^y^t^h^ey^{bear a di}^s^p^roportⁱ^oⁿ^a^t^e^bu^rden^For^each^fⁱ^s^{cal y}^{ear, $32 m}^illion^of^th^e
^f^o^r^th^{is ty}^p^e^o^f^co^{st. T}^o^h^e^lp^d^e^f^r^ay^to^{tal ap}^p^r^o^p^r^iatioⁿ^wⁱ^l^l^b^e^dⁱ^strⁱ^b^u^ted
^th^{e co}^s^t^s^of^em^erg^eⁿ^c^y^s^e^rv^ices^to^to^th^{e 1}⁷^{states w}^ith^th^{e h}ⁱ^g^h^e^st
^uⁿ^docu^m^en^t^e^d^a^lⁱ^eⁿ^s^{, BBA}^-^{97 m}^a^deⁿ^u^m^{ber of}^uⁿ^docu^m^en^t^e^{d al}ⁱ^eⁿ^s^{. F}^o^r
^{$25 m}ⁱ^llio^{n a}^v^aⁱ^l^a^bl^e^f^o^{r g}^r^aⁿ^t^s^t^o^t^h^e^each^y^{ear, th}^{e Secret}^a^r^y^w^o^u^l^d
¹²^st^a^t^e^s^wⁱ^t^h^t^h^e^hi^ghe^st^num^b^e^r^o^f^com^p^u^t^{e allotm}^en^ts^an^{d calcu}^late
^uⁿ^docu^m^en^{ted alien}^s^f^o^{r each}^of^c^o^unt^{s o}^f^und^o^c^um^eⁿ^t^e^d^a^lⁱ^e^{ns i}ⁿ^t^h^e
^F^Y^1998-^F^Y^2001.^(N^{o s}^u^ch^provⁱ^sⁱ^oⁿ^sa^m^e^m^a^nne^r^a^s^d^e^fi^ne^d^und^e^r^c^u^r^r^e^nt
^w^a^s^m^a^d^e^f^o^{r F}^Y^{2002.) F}^o^{r each}^law^.
^y^{ear, th}^e^Secretary^w^o^u^l^{d com}^p^u^t^e
^allotm^en^ts^bas^e^{d on}^{a s}^t^ate’^s^s^h^{are of}^For^each^fⁱ^s^{cal y}^{ear, $16 m}^illion^of^th^e
^uⁿ^d^o^c^u^m^en^ted^alien^s^r^e^l^a^tiv^{e to}^th^e^to^{tal ap}^p^r^o^p^r^iatioⁿ^w^{ill b}^e^dⁱ^st^rⁱ^b^u^ted
ⁱ^{ki/CRS-RL31602}^uⁿ^d^o^c^u^m^en^ted^alien^sⁱⁿ^{all states}^.^to^th^{e six}^{states w}^ith^th^{e h}ⁱ^g^h^e^st
^g/w^N^u^m^b^er^s^of^uⁿ^docu^m^en^t^e^{d al}ⁱ^eⁿ^s^num^b^e^r^o^f^und^o^c^um^eⁿ^t^e^d^a^lⁱ^eⁿ
^s^.or^w^o^u^l^{d be bas}^e^{d on}^es^tⁱ^m^at^es^prepared^appreh^en^sⁱ^on^s^f^o^{r s}^u^ch^fⁱ^s^{cal y}^ear.^For
^le^ak^b^y^th^{e Statisti}^{cs Div}ⁱ^sioⁿ^o^f^th^e^each^y^{ear, t}^h^e^S^e^cretary^w^o^u^l^d
^I^m^mⁱ^g^r^a^tⁱ^oⁿ^aⁿ^d^N^a^tu^r^a^lizatioⁿ^com^{pute allotm}^en^ts^f^o^{r s}^u^ch^s^t^ates
^://wiki^S^e^rvⁱ^ces^as^of^O^c^t^{ober 1992.}^bas^e^d^on^a^s^t^a^t^e^’^s^s^h^are^of
^h^ttp^uⁿ^docu^m^en^t^e^{d al}ⁱ^eⁿ^appreh^eⁿ^sⁱ^on^s^r^e^lativ^{e to}^th^{e u}ⁿ^d^o^c^u^m^en^ted^alien
^appreh^en^sⁱ^on^sⁱⁿ^{all s}^u^ch^s^t^ates^.
^N^u^m^b^ers^of^uⁿ^docu^m^eⁿ^t^e^d^alⁱ^eⁿ
^appreh^en^sⁱ^on^s^w^o^u^l^{d be bas}^e^d^oⁿ^t^h^e
^f^o^u^r^m^o^s^t^recen^{t qu}^arterl^y
^apprehen^sⁱ^on^rat^e^s^f^o^{r u}ⁿ^docu^m^en^t^e^d
^alien^s^{as r}^e^p^o^r^ted^b^y^th^{e I}^m^mⁱ^g^r^atioⁿ
^an^d^Natu^r^a^lizatioⁿ^Ser^v^ice.
^Gr^an^{ts w}^ill^b^e^av^ailab^l^{e to}^{states f}^o^r
^p^a^y^m^eⁿ^{t to}^lo^{cal g}^o^v^e^rⁿ^m^eⁿ^t^s^,
^h^o^s^pⁱ^t^a^l^s^{, or ot}^h^e^{r prov}ⁱ^d^ers^f^o^r²^fⁱ^s^cal
^y^ears^.