Medicaid

1. The following provisions of the Medicaid statute are repealed:

• The Boren amendment, effective on the date of enactment.
• The requirements that states pay FQHCs and RHCs on a cost basis. This requirement will be phased out over a multiyear period. In the year 2000, states need only pay 95 percent of cost, declining to 90 percent in 2001, 85 percent in 2002, and 70 percent in 2003, when the provision sunsets. Additionally, the definition of an FQHC look-alike will be rewritten.
• The 75/25 rule for managed care enrollment.
• The requirement that states pay for private insurance coverage for beneficiaries where it is cost effective. This, however, will remain a state option.
• The requirement that individuals be institutionalized prior to receiving habilitation services under a home- and community-based services waiver.
• The duplicative inspections of care requirements for mental hospitals and ICFs/MR.
• The obstetrical and pediatric payment rate annual state plan amendment mandate.
• The special requirements for obstetrician and pediatrician qualifications (board certification, etc.)

2. The following changes to the Medicaid program are made:

• States will no longer have to seek a waiver to implement mandatory managed care. States will still require a waiver to implement mandatory managed care for children with special health care needs and for children in foster care.
• States will be allowed to use Medicaid payment rates in determining whether cost-sharing is owed for QMBs and dual eligibles.
• The FMAP is increased for Alaska, the District of Columbia, and the territories.
• Each state’s DSH allotment for the years between 1998 and 2002 is spelled out in the bill.
• Twenty states and the District of Columbia are guaranteed at least their 1995 allotment for each year of the budget agreement.
• States will be restricted in their ability to use their DSH allocations for IMDs. By 2001, they may spend no more than 50 percent of their total DSH allotment on IMDs, falling to 40 percent in 2002, and 33 percent in 2003 and beyond. In addition, states must make DSH payments directly to hospitals, and may not include them as a part of a managed care organization’s capitation payment.
• States with approved statewide 1115 Medicaid waivers will be given the option to continue them for an additional three-year period.

3. The following new provisions to the Medicaid statute are added:

• To help states offset the costs of Medicare Part B premiums for individuals between 120 percent and 175 percent FPL, $1.5 billion will be provided. Individuals between 120 percent and 135 percent will have their full premium subsidized, and individuals between 135 percent and 175 percent will be subsidized for only a portion of the premium. The language implies that these funds do not constitute an entitlement to any eligible individual. This benefit will be 100 percent federally funded up to the state’s allotment, but if the state exceeds its allotment, any additional funds must be paid at 100 percent state expense.
• The budget incorporates several new consumer protections for individuals enrolled in managed care.
• An additional $100 million has been designated to compensate the 12 states with the highest number of undocumented aliens for emergency health care furnished to such individuals.
• Those children who lost SSI eligibility due to the changes in last year’s welfare reform law will have their Medicaid eligibility grand-fathered in. No new individuals may qualify for this coverage.
• States will be permitted to buy workers with disabilities into Medicaid. The eligibility ceiling for this provision is 250 percent FPL.
• States will be permitted to offer Program for the All-inclusive Care for the Elderly (PACE) services as a state-plan option. States may establish numerical limits on the number of individuals who may be enrolled in a PACE program. States may grandfather in current PACE sites for up to three years.