	Status of Legislation

This report summarizes key provisions applicable to Medicaid and the Children's Health Insurance Program (CHIP) in H.R. 3590 , the Patient Protection and Affordable Care Act (PPACA), as passed by the Senate on December 24, 2009. The eligibility issue area may include the bill's most dramatic health reforms applicable to Medicaid, namely a coverage expansion for nonelderly, non-pregnant individuals with income up to 133% of the federal poverty level (FPL). Mandatory benefit additions would include premium assistance for employer-sponsored health insurance, coverage of free standing birth clinics, and tobacco cessation services for pregnant woman. Cost control reforms include proposed reductions in Medicaid disproportionate share hospital (DSH) payments, reduced expenditures for prescription drugs and payment reforms to reduce inappropriate hospital expenditures for health-care acquired conditions. The bill would give states and other stakeholders new program integrity enforcement and monitoring tools as well as impose new data reporting and oversight requirements on states and providers. Additional Medicaid and CHIP program integrity provisions would include requirements for states to implement initiatives used by the Medicare program, such as a national correct coding initiative and a recovery audit contract program. The bill includes a number of demonstrations, pilot programs, and grants. Among the provisions that would impact eligibility, the bill would add two new mandatory eligibility groups, and several new optional eligibility groups. Optional Eligibility Expansions

			Non-elderly, Non-pregnant Individuals with Family Income Above 133% of the FPL (§2001, §10201)

Beginning on January 1, 2014 the bill would create a new optional Medicaid eligibility category for all non-elderly, non-pregnant individuals (e.g., childless adults, and certain parents) who are otherwise ineligible for Medicaid, or enrolled in an existing Medicaid eligibility group. Enrollment Simplification and Coordination with State Health Insurance Exchanges (§2202)

As a condition of the Medicaid state plan and receipt of any federal financial assistance after January 1, 2014, the bill would require states to meet the following requirements: 
(1) States would be required to establish procedures for:
enabling individuals to apply for, or renew enrollment in, Medicaid or CHIP through an internet website allowing electronic signatures; enrolling individuals who are identified by an Exchange as being eligible for Medicaid or CHIP, without any further determination by the state; ensuring that individuals who apply for Medicaid and/or CHIP but are determined ineligible for either program are screened for enrollment eligibility in qualified plans offered through the Exchange, and if applicable, obtain premium assistance for such coverage without having to submit an additional or separate application; ensuring that the state Medicaid agency, CHIP agency, and the Exchange utilize a secure electronic interface that allows for eligibility determinations and enrollment in Medicaid, CHIP or premium assistance for a qualified plan as appropriate; ensuring that Medicaid and/or CHIP enrollees who are also enrolled in qualified health benefits plan through the Exchange are provided Medicaid medical assistance and/or CHIP child health assistance that is coordinated with the Exchange coverage, including services related to Early and Periodic Screening, Diagnostic and Treatment (EPSDT); and conduct outreach and enrollment of vulnerable populations such as unaccompanied homeless youth, racial and ethnic minorities, and individuals with HIV/AIDS;
(2) The state Medicaid and CHIP agencies may enter into an agreement with the Exchange under which each agency may determine whether a state resident is eligible for premium assistance for the purchase of a qualified health benefits plan under the Exchange, so long as the agreement meets specified requirements to reduce administrative costs, eligibility errors, and disruptions in coverage;
(3) The Medicaid and CHIP agency would be required to comply with the requirements for the system established under Section 1413 (relating to streamlined procedures for enrollment through an Exchange, Medicaid and CHIP); and
(4) The bill would require states to establish a website (not later than January 1, 2014) that links Medicaid to the state Exchange. The bill would make a number of changes to the federal statute that established MACPAC. The Innovation Center would test innovative payment and service delivery models to reduce Medicare, Medicaid, and CHIP program expenditures, while preserving or enhancing the quality of care furnished to beneficiaries.
This report summarizes key provisions applicable to Medicaid and the Children's Health Insurance Program (CHIP) in H.R. 3590, the Patient Protection and Affordable Care Act, as passed by the Senate on December 24, 2009. In general, the bill would expand health insurance coverage to many Americans who currently are uninsured, while attempting to reduce expenditures and offering mechanisms to increase care coordination, encourage more use of health prevention, and improve quality of care. The bill would reform the private health insurance market, impose a mandate for most legal U.S. residents to obtain health insurance, establish health insurance "Exchanges" that would subsidize health insurance coverage for eligible individuals; expand Medicaid eligibility; create programs to improve quality of care and encourage more use of preventive services; address healthcare workforce issues; and propose a number of other Medicaid and Medicare program and federal tax code changes.
Among the proposed Medicaid reforms, the bill would modify eligibility standards and methodologies, add several new mandatory and optional Medicaid benefits, expand Medicaid benefits, and increase CHIP funding. Beginning in 2014, or sooner at state option, nonelderly, non-pregnant individuals with income below 133% of the federal poverty level (FPL) would become eligible for Medicaid. New optional eligibility groups also would be added, such as non-elderly, non-pregnant individuals (childless adults) with income above 133% of poverty. The bill also would require states to maintain current coverage levels for individuals under Medicaid and CHIP. In addition, the bill would add several new mandatory Medicaid benefits including coverage of services in free standing birth clinics, and coverage of tobacco cessation services for pregnant women.
The bill would make a number of Medicaid and CHIP financing changes, such as reducing Medicaid disproportionate share hospital (DSH) payments, increasing prescription drug rebates and increasing certain pharmacy reimbursement, increasing federal spending for the Territories, providing special enhanced disaster recovery Medicaid funding, and requiring payment system reforms.
The bill includes provisions that would give states and other stakeholders new program integrity (PI)—waste, fraud and abuse—enforcement and monitoring tools as well as impose some new data reporting and oversight requirements on states and providers. Additional PI provisions affecting Medicaid and CHIP include requirements for states to implement a national correct coding initiative similar to the Medicare program, a broad new nursing home accountability initiative, and other new requirements to enhance PI that increase the uniformity of Medicare, Medicaid, and CHIP requirements.
The bill also offers opportunities for states and other stakeholders to use new demonstrations and grants to modify payment systems, introduce care delivery models, and improve care quality, which include a medical global payment system demonstration and school-based health center grants.