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Chapter 3
Medicaid History and
Organization
Texas Medicaid operates within a framework established by federal
law, but the state of Texas manages key elements of the program.
Over time, both federal and state changes have affected Medicaid in
Texas. This chapter outlines the history and organization of the
Medicaid program in Texas.
History and Background
Congress established the Medicaid program under Title XIX of the Social
Security Act of 1965. Title XVIII of the Social Security Act of 1965 created
Medicare. Title XIX created the Medicaid program to pay medical bills for low-
income persons who have no other way to pay for care. Medicaid is a federal-
state matching program, in which both the federal and state governments must
contribute a specified percentage of total expenditures. Texas began
participating in the Medicaid program in September 1967.
Medicaid was intended to ensure access to health care for low-income
Americans. However, the expense of the program and the number of Americans
served has grown beyond original expectations. Over the past 39 years,
Congress has transformed Medicaid from a narrowly defined program available
only to persons eligible for cash assistance into a large insurance program with
complex eligibility rules.
During the late 1980s and early 1990s, Congress expanded Medicaid eligibility to
include a greater number of people who are elderly, people with disabilities,
children, and pregnant women. As a result of these changes, the Texas Medicaid
population tripled in just a decade, adding more than 1 million people between
1990 and 1995 alone. In the mid to late 90’s, caseload declined as a result of
stricter eligibility requirements for TANF.
Figure 3.1 illustrates Texas Medicaid enrollment trends by category for 1994
through 2002.
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Figure 3.1: Unduplicated Number of Medicaid Beneficiaries
By Eligibility Category: Federal Fiscal Years 1994 - 2002
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
1994 1995 1996 1997 1998 1999 2000 2001 2002
B
e
nef
i
ci
ari
e
s (
R
eci
p
i
ent
s
)
Total
All Other
TANF - Cash
Assistance Only
Aged
Blind and
Disabled
Source: CMS's MSIS and HCFA 2082 historical reports.
Medicaid’s Early Years:
Linked to Financial Assistance Programs
As originally enacted, Medicaid coverage was available only to persons eligible
for Aid to Families with Dependent Children (AFDC), now referred to as
Temporary Assistance for Needy Families (TANF). TANF is the federal-state
cash assistance program for impoverished families, usually headed by a single
parent. To be able to receive Medicaid, individuals were required to be receiving
cash assistance or welfare. In this sense, Medicaid was “linked” to welfare.
TANF
Individuals who qualify for TANF cash assistance or have incomes below the
TANF income cap automatically qualify for Medicaid. Each state sets its own
income eligibility guidelines for TANF. Texas has historically maintained very low
TANF income caps. As of 2004, the income cap for a parent with two children is
$188 per month. The TANF monthly cap is based on a set dollar amount and is
not determined by federal poverty levels.
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SSI
In 1972, federal law established the Supplemental Security Income (SSI)
program, which provides federally funded cash assistance to the elderly and
disabled poor. In Texas, SSI recipients are also automatically eligible for
Medicaid. The Social Security Administration (SSA) determines SSI eligibility
criteria and sets the cash benefit amounts for SSI. States may supplement SSI
payments with state funds. About half the states supplement the monthly SSI
payment by $3 per month or more. Texas does not do so.
To be eligible for SSI, an individual must be at least 65 years old or disabled and
have limited assets and income. The individual’s income must be below the
Federal Benefit Rate (FBR). In 2004, the limit for individuals is $564 a month in
countable income and no more than $2,000 in countable resources. The limit for
couples is $846 a month with no more than $3,000 in countable resources. The
amount of the SSI payment is the difference between the person’s countable
income and the FBR.
De-Linking Medicaid and Cash Assistance
Historically, all Medicaid enrollees were either on SSI or welfare. Federal laws
passed in the late 1980s mandated Medicaid coverage for groups of people
ineligible for TANF or SSI. This resulted in a major expansion of the eligible
population. The laws precipitated a gradual de-linking of federal assistance
(under either welfare or SSI) from Medicaid. Members of working families and
others with low incomes were now also eligible to receive Medicaid.
The following program expansions resulted from federal mandates:
• Payments to hospitals that serve large numbers of poor uninsured or
Medicaid clients were significantly increased. These payments, known as
disproportionate share hospital payments (“DSH” or “Dispro”) slowed or
mitigated local property tax increases in Texas’ large urban areas and slowed
the rate of rural hospital closures.
• Coverage of prenatal and delivery services for certain pregnant women and
their infants who have no other insurance.
• Expansion of services to many children in low-income families who do not
receive TANF cash assistance.
• Expansion of Medicaid to fill gaps in Medicare services for low-income
persons who are elderly or disabled.
• Coverage of the full array of federally allowable Medicaid services as
medically necessary and appropriate for all children on Medicaid.
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As a result of these and other changes in federal law, the Medicaid eligibility
determination process is far more complicated today than in the past. Computer
systems designed for a smaller and simpler program must now manage
information for millions of people in dozens of different eligibility groups. Figure
3.2 depicts the current Medicaid income eligibility levels in the most common
Medicaid eligibility categories.
Figure 3.2 Texas Medicaid Income Eligibility Levels for Selected
Categories , December 2003
14%
21%
74%
74%
100%
133%
133%
133%
220%
158%
185%
0%
50%
100%
150%
200%
250%
Pregnant
Women
(<19) and
Infants
Pregnant
Women 19
and Older
Children
Ages 1 - 5
Children
Ages 6 - 18
Parent w /
TANF
Children
SSI, Aged
and Disabled
Long Term
Care
Medically
Needy *
Mandatory
Optional
* Applies to pregnant w omen and children only.
In SFY 2004, for TANF parents w ith children, eligibility is determined based on an income no higher than $188 a
month for a family of 3, w hich translates to 14% of poverty. For medically needy pregnant w omen and children, the
maximum monthly income limit is $275, w hich translates to 21% of poverty.
Source: Health and Human Services Commission, Texas Medicaid Program
Mandatory levels identify the coverage levels required by the federal
government. Optional levels show coverage Texas has implemented at higher
levels allowed but not mandated by the federal government.
Medicaid Coverage
An Insurance Program
Medicaid is both a basic health insurance program and an insurance program for
people with chronic or long-term care needs. Medicaid makes no cash
payments to clients, but instead makes all payments directly to health care
providers or managed care organizations (MCOs).
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“Health care providers” is a general term that includes:
• Health professionals - doctors, nurses, physician assistants, chiropractors,
physical therapists, clinical social workers, dentists, psychologists,
nutritionists
• Health facilities - hospitals, nursing homes, institutions and homes for the
mentally retarded, clinics, community health centers
• Providers of other critical services like pharmaceuticals or drugs, medical
supplies and equipment, medical transportation.
Basic Health Care
Medicaid pays for typical health services such as physician services, inpatient
and outpatient hospital services, pharmacy, and lab and x-ray services. These
five areas accounted for 46 percent of Texas Medicaid health expenditures in
federal fiscal year (FFY) 2002.
a
Medicaid also provides a broader array of basic
health services to children than do most private health plans, such as dental
benefits.
Services to Aged and Disabled
Medicaid covers a broad range of services for people who need assistance with
activities of daily living. These services, typically called long-term care, include
nursing facility care; care in facilities for people with mental retardation; and a
range of in-home and community care services for people with disabilities and
those who are elderly. These long-term care services accounted for
approximately 30 percent of all Texas Medicaid services expenditures in FFY
2002.
b
Mandatory vs. Optional Spending
The federal government mandates certain benefits and coverage levels. Texas
has chosen to cover some optional services allowed but not required by the
federal government (see Table 4.4 in Chapter 4). Eliminating some optional
services and eligibility categories could actually increase Medicaid costs. For
example, dropping the option of covering prescription drugs could ultimately cost
Medicaid more. People who do not receive needed drugs may require more
physician services, increased hospitalizations or even long-term care. Similarly,
Texas saves money by covering pregnant women under age 19 up to 185
percent of the FPL and pregnant women aged 19 and older up to 158 percent of
the FPL because many women would not otherwise receive adequate prenatal
care. This coverage helps prevent poor (and costly) pregnancy outcomes. It
a
Source: MSIS for FFY 2002.
b
Long-term care services included are mental health facilities, nursing facilities, ICFs/MR, home
health, and hospice.
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costs Medicaid much more to pay for unhealthy infants than it does to cover
prenatal care.
In addition, some of the optional services covered by Texas Medicaid were paid
with 100 percent state or local funds prior to Medicaid coverage. For example,
services for persons with mental retardation provided through state schools and
in community residential settings now receive federal Medicaid matching dollars
in addition to state dollars.
Basic Principles
The Social Security Act sets out the following fundamental principles and
requirements for the Medicaid program:
Statewideness: All Medicaid services must be available on a statewide basis
and may not be restricted to residents of particular localities.
Comparability: Except where federal Medicaid law specifically creates an
exception, the same level of services (amount, duration, and scope) must be
available to all clients. A 1989 federal law (OBRA 89) created an exception to
this principle by mandating that all state Medicaid programs cover any service
that is medically necessary for a Medicaid-eligible child, as long as that service
is allowable under federal Medicaid law. As a result, children are generally
entitled to a broader range of services under Medicaid than are adults. Another
exception allows states to provide a reduced package of services to persons who
are eligible for Medicaid because they qualify as Medically Needy. This means
they only meet income requirements after subtracting medical expenses from
their income.
Freedom of Choice: Clients must be allowed to go to any Medicaid health care
provider who meets program standards.
Amount, Duration, & Scope: States must cover each service in an amount,
duration, and scope that is “reasonably sufficient.” States may impose limits on
services only for Medicaid clients who are age 21 and over. But the State may
not arbitrarily limit services for any specific illness or condition.
State Medicaid programs must follow these basic principles and comply with all
mandates related to eligibility and covered services unless the Centers for
Medicare and Medicaid Services (CMS, formerly known as HCFA) grants a
specific exemption via a waiver to the state. (Waivers are discussed in more
detail later in this chapter.)
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How Medicaid is Financed
Medicaid is an entitlement program. This means that the federal government
does not, and states cannot, limit the number of eligible people who can enroll
and Medicaid must pay for any services covered under the program. States
must provide medically necessary care to all eligible individuals who seek
services.
Medicaid is jointly financed by the federal government and the states. The
Secretary of the U.S. Department of Health and Human Services determines
each state’s federal share of most health care costs (federal medical
assistance percentage - FMAP) using a formula based on average state per
capita income compared to the U.S. average. These matching rates are updated
every year to reflect changes in average income. Under current law, the
maximum federal share is 83 percent and the minimum is 50 percent. In FFY
2004, 15 states are matched at the 50 percent “floor” rate, and no state is at the
cap. (Mississippi has the highest match at 77.08 percent.)
Texas’ matching rate for FFY 2004 is 60.22 percent; that is, the state must pay
39.78 percent of most Medicaid costs. Federal fiscal relief legislation gives all
states an additional one time 2.95 percent FMAP increase for the period of April
1, 2003 to June 30, 2004. The state also uses what is called a “one month
differential” FMAP figure. This takes into account differences between the federal
fiscal year (FFY: October through September), on which the federal FMAP rate is
based, and the state fiscal year (SFY: September through August). The “one
month differential” FMAP for Texas in SFY 2004 (which includes one month of
the FFY 2003 rate and 11 months of the FFY 2004 rate) plus the additional
FMAP from the federal fiscal relief legislation results in a “blended” FMAP of
62.67 percent.
The federal government matches program costs in addition to client services at
different rates. Medicaid administrative costs, related to program administration,
are generally matched at 50 percent. Administrative services that can be
performed only by skilled professional medical personnel draw a 75 percent
federal match. Family planning services draw a 90 percent federal match and
certain approved information system development costs are matched at 90
percent.
States may use local government funding for up to 60 percent of the state’s
share. Texas uses local government funding for the disproportionate share
hospital reimbursement program, the upper payment limit, and other aspects of
the Medicaid program. Federal law specifies that taxes on health care
providers cannot make up more than 25 percent of the state’s share of total
Medicaid expenditures. Texas also assesses quality assurance fees for ICF-MR
facilities; these funds contribute to the ICF-MR operating budget.
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How Medicaid Operates in Texas
The Texas Medicaid program, under the direction of the Health and Human
Services Commission (HHSC), involves multiple state agencies. This section
explains the different parts of the program and how they interrelate.
Federal Oversight
The Social Security Act and federal regulations establish minimum levels of
coverage that states must provide in order to operate a Medicaid program.
Federal law and regulations also establish optional coverage categories, all or
part of which states may choose to cover. Each state covers the required
services and eligibility groups, but develops a unique program by determining
which optional services and eligibility groups to cover.
While states are responsible for the hands-on operation of Medicaid, the federal
government plays a very active oversight role. CMS, a part of the U.S.
Department of Health and Human Services, oversees the Medicaid program.
CMS approves the Medicaid State Plan that each state creates, as well as any
waivers for which states apply.
Single State Agency
Federal Medicaid regulations require that each state designate a single state
agency responsible for the state’s Medicaid program. HHSC has been the
single state agency for the Medicaid program since January 1993. Within HHSC,
the State Medicaid Director administers the Medicaid program.
As the single state agency, HHSC has final authority in the state for Medicaid
policies and operations. HHSC’s Medicaid responsibilities include:
• Serving as the primary point of contact with the federal government.
• Establishing policy directions for the Medicaid program.
• Administering the Medicaid State Plan.
• Contracting with the various state agencies (see Figure 3.4) to carry out the
technical operations of the Medicaid programs.
• Operating the state’s acute care vendor drug and Medicaid managed care
(STAR and STAR+PLUS) programs.
• Approval of Medicaid policies, rules, reimbursement rates, and oversight of
operations of the state agencies contracted to operate Medicaid programs.
• Organizing and coordinating initiatives to maximize federal funding.
• Administering the Medical Care Advisory Committee (MCAC) (mandated by
federal Medicaid law).
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The Medicaid State Plan is a dynamic document that functions as the state’s
contract with CMS. The State Plan documents the specific services, eligible
populations and payment methodologies that comprise the Texas Medicaid
program. Significant changes to a state’s Medicaid program require the state to
submit a State Plan Amendment for CMS approval.
Transformation of Health and Human Services
in Texas
House Bill 2292 (78
th
Legislature, Regular Session, 2003) initiated a major
reorganization of health and human services administration in Texas. The bill
directed the twelve existing health and human services agencies to consolidate
their organizational structures and functions. The goal is to improve integration of
services and diminish duplication throughout the system. The reorganization,
anticipated to be complete by September 2004, will result in a health and human
services system administered by five agencies:
• Health and Human Services Commission (HHSC)
• Department of State Health Services (DSHS)
• Department of Aging and Disability Services (DADS)
• Department of Assistive and Rehabilitative Services (DARS)
• Department of Family and Protective Services (DFPS)
The commissioners of the other four agencies will report to the HHSC Executive
Commissioner. In addition, each of the agencies will have an advisory council of
nine gubernatorial appointees. Each council will be responsible for advising the
commissioner of its respective agency regarding policies and programs.
Figure 3.3 illustrates the transformation of the Texas health and human services
system pursuant to H.B. 2292.
Operating Agencies in Texas
Federal law allows the single state agency to delegate some of its functions to
other state agencies, so long as it monitors quality of care and program integrity
for delegated functions. Functions, which may be delegated, include:
• Determining eligibility
• Processing claims
• Certifying that health providers meet program standards
• Collecting data on Medicaid spending and services
• Evaluating appropriateness and quality of institutional care
• Setting provider rates and methodology
• Determining program benefits
• Other program specifications.
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In Texas, HHSC delegates many of the day-to-day operations of the Medicaid
program (see Figure 3.4) to other state agencies; thus, these agencies are
known as operating agencies. The H.B. 2292 (78
th
Legislature, Regular Session,
2003) reorganization resulted in changes to operating agencies. Figure 3.3
shows the new organizational structure with the dates that agencies are
scheduled to begin operations.
GOVERNOR
Health and Human Services Commission
HHS Centralized Administrative Services
TANF
Medicaid
Eligibility Determination
HHS Rate Setting
Nutritional Services
HHS Program Policy
Family Violence Services
Vendor Drug Program
HHS Ombudsman
CHIP
Interagency Initiatives
Department of State Health Services (DSHS)
(Scheduled to begin operations 9/1/04)
Health Services
Mental Health Services- State hospitals, Community Services
Alcohol and Drug Abuse Services
Department of Aging and Disability Services
(DADS)
(Scheduled to begin operations 9/1/04)
Mental Retardation Services - State Schools, Community Services
Community Care Services
Nursing Home Services
Aging Services
Department of Assistive and Rehabilitative
Services (DARS)
(Began operations 3/1/04)
Rehabilitation Services
Blind and Visually Impaired Services
Deaf and Hard of Hearing Services
Early Childhood Intervention Services
Department of Family and Protective Services
(DFPS)
(Began operations 2/2/04)
Child Protective Services
Adult Protective Services
Child Care Regulatory Services
Figure 3.3 Consolidated Texas Health and Human Services System
Department of Protective and Regulatory Services (PRS)
Early Childhood Intervention (ECI)
Texas Commission for the Blind (TCB)
Texas Commission for the Deaf and Hard of Hearing
(TCDHH)
Texas Rehabilitation Commission (TRC)
Department of Human Services (DHS)
Department of Mental Health and Mental Retardation
(MHMR)
Texas Department on Aging (TDoA)
Department of Mental Health and Mental Retardation
(MHMR)
Texas Commission on Alcohol and Drug Abuse (TCADA)
Texas Department of Health (TDH)
Texas Health Care Information Council (THCIC)
Health and Human Services
Commission (HHSC)
Department of Human Services
(DHS)
Agencies formerly providing programs
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GOVERNOR
HHSC
Executive Commissioner
Single State Agency
Medicaid Eligibility Determination
Medicaid Services
STAR and STAR+PLUS Programs
Vendor Drug Program
Office of Inspector General (OIG)
Department of State Health Services (DSHS)
(Scheduled to begin operations 9/1/04)
Texas Health Steps
Family Planning
Targeted Case Management - Mental Health
NorthSTAR
Rehabilitation Services for Mental Illness
Department of Aging and Disability Services
(DADS)
(Scheduled to begin operations 9/1/04)
Nursing Facility Programs and Services
LTC Licensing, Survey and Certification
Community Care (personal care, DAHS)
PASRR
Hospice
Waivers (CLASS, PACE, CBA, MDCP, DBMD, HCS, TxHmL)
Targeted Case Management for Mentally Retarded
Department of Assistive and Rehabilitative
Services (DARS)
(began operations 3/1/04)
Targeted Case Management for Blind
Developmental Rehabilitative Services for Early Childhood
Department of Family and Protective Services
(DFPS)
(began operations 2/2/04)
Targeted Case Management for Children in Protective Services
Texas Department of Transportation *
Medical Transportation Program
* Medical Transportation Program services are being provided
through an Inter-Agency Contract. The Texas Department of
Transportation is not part of the HHS System.
Figure 3.4 Medicaid Operating Agencies, 2004
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Medicaid Waivers
Federal law allows states to apply to CMS for permission to depart from certain
Medicaid requirements. These “waivers” allow states to operate programs that
include exceptions to Medicaid’s basic principles, required array of benefits,
mandated eligibility and income groups, or combinations of these. Waivers allow
states to develop creative alternatives to the traditional Medicaid program.
States seek waivers to:
• Provide different kinds of services
• Provide Medicaid eligibility to new groups
• Target certain services to certain groups, and/or
• Implement innovative new service delivery and management models.
Table 3.1 describes the three major types of waivers federal law allows. More
information on Medicaid waivers can be found on the CMS website.
Table 3.1: Common Types of Federal Medicaid Waivers
Waiver
Description
Research and
Demonstration
1115 waivers
PURPOSE
•
Allow flexibility for states to test substantially new ideas for operating
their Medicaid programs. Waives a variety of requirements, such as
comparability or statewideness.
STATES HAVE USED THESE WAIVERS TO
•
Structure statewide health system reforms.
•
Test the value of access to new services or service delivery
mechanisms (cost effectiveness, efficacy).
•
Maximize coverage of health insurance for people below 200% of FPL
(Health Insurance Flexibility and Accountability Waiver).
•
Extend drug coverage to certain low-income non-Medicaid elderly and
disabled individuals (Pharmacy Plus waiver).
REQUIREMENTS
•
Must be budget neutral for the duration of the waiver.
TIMEFRAME
•
Generally 5-year waivers, subject to renewal.
•
CMS analyzes impact on utilization, insurance coverage, public and
private expenditures, quality, access, and satisfaction.
Freedom of
Choice
1915(b)
waivers
PURPOSE:
•
Allow states to waive statewideness, comparability of services and
freedom of choice. With 1915(b) waivers, states can mandate
Medicaid enrollment into managed care, use a “central broker” (e.g.
enrollment broker) to assist people in making health plan choices, use
cost savings to provide additional services, and/or limit the number of
providers for clients.
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Table 3.1: Common Types of Federal Medicaid Waivers
Waiver
Description
STATES MAY USE TO
•
Limit clients’ choice of Medicaid providers.
•
Require Medicaid clients to join managed care organizations (such as
HMOs) in order to receive Medicaid services.
•
Provide an enhanced benefit package (beyond what is available
through the State Plan) with cost savings from managed care.
•
Selectively contract with hospitals and other types of health care
providers to increase cost-effectiveness and to better control quality of
services.
REQUIREMENTS:
•
Must be cost effective.
•
Client access, quality of care and cost must not be negatively
impacted by implementation of waiver.
TIMEFRAME:
•
1915(b) waivers are 2-year waivers, subject to renewal.
•
CMS requires an independent assessment to show that cost, quality,
and access have not been compromised.
Home and
Community-
Based
Services
1915(c)
waivers
PURPOSE:
•
Allow states to provide community-based services to people who meet
eligibility criteria for care in an institution (nursing home, intermediate
care facilities for persons with mental retardation, or hospital) or who
would otherwise meet eligibility criteria for care.
STATES MAY USE TO
•
Serve elderly persons or persons with physical and/or developmental
disabilities, mental retardation or mental illness. States may also target
more specialized populations such as clients with traumatic brain
injuries or those with developmental disability and sensory impairment.
•
Develop community-based treatment alternatives to institutional care
in hospitals, nursing facilities or intermediate care facilities for persons
with mental retardation (ICFs/MR).
•
Provide services which are not found in the state plan or which extend
state plan services. Examples include case management,
homemaker/home health aide services, personal care services, adult
day health, habilitation, respite care, non-medical transportation, in-
home support services, special communication services, minor home
modifications, and adult day care.
REQUIREMENTS:
•
Must be budget neutral for the duration of the waiver.
•
Must assure safeguards are in place to protect clients.
TIMEFRAME:
•
1915(c) waivers are initially approved for 3 years and may be renewed
at 5-year intervals.
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Texas currently has five 1915(b) waivers. They enable the state to do Medicaid
managed care and selectively contract with hospitals for services. The state also
has seven 1915(c) waivers that provide a broad array of home and community-
based services to the elderly or people with disabilities as an alternative to
institutional care.
Texas Medicaid Administrative System
In 1996, the State examined future needs for claims administration and managed
care support in light of its administrative systems and management information
system (MIS) requirements. The State decided to meet these needs by
contracting with private organizations to obtain specialized services to support
the Texas Medicaid program. Under the design of the Texas Medicaid
Administrative Systems (TMAS), the State and its contractors coordinate and
work closely together in an enhanced system to support Medicaid clients and
their health care providers.
The four current TMAS contract functions are:
• The Claims Administrator, currently Texas Medicaid and Healthcare
Partnership (TMHP), processes and adjudicates all claims for Medicaid
services that are outside the scope of capitated arrangements between the
health plans and the State. The Claims Administrator also collects encounter
data from HMOs to use in the evaluation of quality and utilization of services.
• The Primary Care Case Management (PCCM) Administrator, currently
TMHP, develops and administers a network of providers to ensure that
enrollees in the PCCM program have adequate access to primary care
providers (PCPs) and all medical services.
• The Enrollment Broker, currently MAXIMUS, assists in educating clients
who are to be enrolled in Medicaid managed care about their health plan and
PCP choices. The Enrollment Broker also enrolls clients into Medicaid
managed care and processes health plan changes.
• The Quality Monitor, currently the Institute for Child Health Policy (ICHP),
provides external reviews to assess access to care and the quality of care
provided by the PCCM network, Medicaid HMOs and CHIP health plans. The
Quality Monitor also collects encounter data.
Prior to 1997, TMAS functions were handled entirely by the National Heritage
Insurance Company (NHIC). In 1997, the state contracted with ACS/Birch and
Davis Health Management Corporation (BDHMC) to act as PCCM Administrator
in Harris County, and with MAXIMUS to act as Enrollment Broker for the entire
managed care program. In 1998, the state awarded the contract for Claims
Administrator to NHIC, and the contract for PCCM Administrator in all service
delivery areas to BDHMC. The contracts for NHIC and BDHMC expired on
December 31, 2003. MAXIMUS is still under contract as the Enrollment Broker.
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Effective January 1, 2004, a coalition of contractors, headed by Affiliated
Computer Services, Inc. (ACS) and working under the name of the Texas
Medicaid and Healthcare Partnership (TMHP), became the Texas Medicaid
Claims Administrator. At the same time, TMHP also became the PCCM
Administrator.
The Texas Health Quality Alliance (THQA) was the state’s first Quality Monitor,
the term used for the external quality review organization (EQRO) which is
federally required for state Medicaid managed care programs. In August 2002,
the Quality Monitor function was contracted to the Institute for Child Health Policy
(ICHP) at the University of Florida.
Fiscal Agent Arrangement
A fiscal agent arrangement is one of two methods allowed under federal law for
Medicaid claims payment. Most states contract with private entities known as
fiscal agents to perform part or all of the Medicaid claims processing functions.
Prior to January 1, 2004, Texas contracted with NHIC for claims processing
under an “insured arrangement,” which provided for shared risk for a small
portion of claims.
Texas transitioned to a fiscal agent arrangement on January 1, 2004. Under a
fiscal agent arrangement, the contractor is responsible for paying claims and the
State is responsible for covering the cost of the claims. The State’s fiscal agent,
TMHP, pays for claims for the same services that NHIC paid under the insured
arrangement.
Compass 21
The State developed a new Medicaid Management Information System (MMIS)
called Compass 21 in August 2001. Compass 21 replaced the previous existing
20-year-old automation system to better support claims processing and
information needs.
Compass 21 added several new capabilities, including the ability to support
multiple claims systems, such as traditional fee-for-service Medicaid and other
non-Medicaid programs. The new system also includes a data warehouse that
improves access to data for analysis. Other features include the flexibility to add
new benefit plans and pricing methodologies.
The TIERS Project
The Texas Integrated Eligibility and Redesign System (TIERS) project was
created by the 76
th
Texas Legislature to implement several improvements in the
delivery of social service programs. The project’s goal is to redesign and replace
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the current eligibility systems for Food Stamps, Temporary Assistance for Needy
Families (TANF), Medicaid and Long-Term Care. It will also improve existing
business processes in order to enhance service delivery. The project includes
replacing several outdated automation systems with one state-of-the-art
integrated system. One data system to be replaced is the 20-year-old eligibility
data system, known as System for Application Verification, Eligibility, Referrals,
and Reporting (SAVERR), which contains all Medicaid eligibility information.
HHSC and the Medicaid operating agencies are working with the TIERS project
staff to design the improved eligibility system. The new eligibility system is
currently in a test phase.
Detecting Fraud and Abuse
Prior to legislation enacted during the 78
th
Legislature (Regular Session) in 2003,
the Office of Investigation and Enforcement (OIE) within HHSC was responsible
for detecting, investigating and preventing fraud, abuse or waste in the provision
of health and human services, including Medicaid. In 2003 the Legislature
renamed and expanded the responsibilities of OIE. The new Office of Inspector
General (OIG) at HHSC is responsible for the former OIE functions, as well as
enforcing state law relative to the provision of health and human services,
including Medicaid. The Legislature consolidated the following functions into the
OIG:
• The Office of Investigator General of the Texas Department of Human
Services.
• The Criminal Investigation Division of the Texas Department of Health.
• Investigations functions at the Texas Rehabilitation Commission, the Texas
Department of Mental Health and Mental Retardation, and the Texas.
Department of Protective and Regulatory Services.
The Legislature also gave the OIG expanded power and jurisdiction to enhance
its ability to investigate fraud and abuse.
The OIG is required to set clear objectives, priorities and performance standards
that emphasize:
• Coordinating investigative efforts to aggressively recover Medicaid
overpayments.
• Allocating resources to cases that have the strongest supportive evidence
and the greatest potential for recovery of money.
• Maximizing the opportunities for referral of cases to the Office of Attorney
General for investigation and possible presentation for prosecution.
If the investigation of an allegation, complaint, or referral produces tangible
evidence of potential fraud, abuse, or waste by a provider, vendor, or contractor,
the OIG has the authority to impose administrative actions and/or sanctions.
Administrative sanctions may include any one or a combination of the following:
1) recoupment of overpayments, 2) payment hold, 3) contract cancellation,
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4) exclusion from participation in the Medicaid program, and/or 5) civil monetary
penalties. Providers may appeal sanctions and receive a hearing presided over
by an independent administrative law judge. The most serious sanctions imposed
by OIG involve contract cancellation and exclusion from the Medicaid program.
OIG also refers quality of care issues to the appropriate licensing board or
authority and makes referrals, as warranted to the Office of the Inspector
General, U. S. Health and Human Services Department.
Total recoupments by OIE for all of its activities in SFY 2003 exceeded $390
million. Cost avoidance and savings achieved by OIE exceeded $237 million.
Federal and State Legislation Affecting
the Texas Medicaid Program
Nationally and in Texas, Medicaid programs change in response to legislative
requirements. The following sections highlight recent significant legislative
changes that have affected the Texas Medicaid program, highlights from the 78
th
Texas Legislative Session and a summary of relevant federal legislation since
1965.
Significant Recent Legislation
Welfare Reform and the Link to Medicaid
The 74th Texas Legislature pre-empted federal welfare legislation with the
passage of House Bill 1863 in 1995. HB 1863 required the Texas Department of
Human Services (DHS) to seek a waiver for a demonstration welfare reform
program called Achieving Change for Texans (ACT). The ACT waiver received
federal approved in March of 1996 and was fully implemented in January 1997.
The waiver expired on March 31, 2002. The program required clients who
received TANF benefits to sign a personal responsibility agreement that
addressed such issues as child support cooperation, meeting Texas Health
Steps (THSteps) screening schedules, work requirements, drug and alcohol
treatment, and parenting skills.
1
The Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) of 1996 (PL 104-193) is federal legislation that requires adult TANF
clients to participate in work activities within two years of entering the program
and prohibits them from receiving federally funded TANF benefits for more than
60 months over a lifetime. The impact of welfare reform is thought to be partly
responsible for the State’s Medicaid caseload drop in the mid to late 1990s.
Individuals who qualified for TANF made up around 18 percent of the Medicaid
population in 1999, down from 28 percent in 1997.
2
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PRWORA also gave states the option to decide whether or not to continue
providing Medicaid to most legal immigrants. Most immigrants entering the U.S.
after August 22, 1996 are subject to a 5-year "bar" period, during which no
federal Medicaid funds can be accessed for their care. The Balanced Budget Act
of 1997 (BBA) restored SSI benefits for legal immigrants who arrived in the
United States prior to August 22, 1996, but limited the benefit to the first seven
years of a person’s residence in this country. Beginning in 2003, some persons
began to reach the 7-year limit. Those arriving after August 22, 1996, are still
ineligible for the SSI program.
Medicaid benefits have never been available to undocumented immigrants, thus
the BBA made no changes in this area. States are mandated to reimburse health
providers for costs of emergency services to undocumented persons who would
otherwise be income-eligible for Medicaid, including costs of labor and delivery.
The Balanced Budget Act of 1997 (PL 105-33)
Under the Balanced Budget Act (BBA), both Medicaid and Medicare statutes and
regulations were significantly altered. Total federal Medicaid spending was cut
$17.2 billion through:
• Reduction of payments to disproportionate share hospitals (DSH)
• Allowances for states to lower what they paid for Medicare co-payments,
deductibles and coinsurance for Qualified Medicare Beneficiaries
• Repeal of the Boren Amendment, eliminating minimum payment guarantees
for hospitals, nursing homes and community health centers that serve
Medicaid clients.
3
Under the BBA, states no longer needed a waiver, such as an 1115 or 1915(b),
to require most Medicaid-eligible pregnant women and children to enroll in
managed care plans. A waiver is still required if a state wants to expand
Medicaid eligibility, require SSI recipients and foster children to enroll in
managed care plans, or expand benefits.
4
States also gained two new eligibility options.
• Guaranteed eligibility. This option allows states to choose to guarantee
Medicaid coverage for up to 12 months for all children, even if they no longer
meet Medicaid income eligibility tests. Pursuant to Senate Bill 43 (77
th
Legislature), Texas implemented 6 month guaranteed eligibility for children
effective January 2002. House Bill 2292 (78
th
Legislature, Regular Session,
2003) deferred the implementation of 12-month continuous eligibility until
September 1, 2005.
• Buy-in. This option allows states to offer individuals with income below 250
percent of the FPL who would be eligible for SSI except for their earned
income, an opportunity to “buy-in” to the Medicaid program. Each state
creates guidelines for its own Medicaid buy-in program.
5
Texas currently does
not operate a buy-in program.
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Children’s Health Insurance Program
While the BBA created cuts in the Medicaid program, it also provided funds to
cover some of America’s 11.8 million uninsured children. The BBA dedicated
nearly $50 billion over 10 years to the Children’s Health Insurance Program or
CHIP. Estimates from the 1999 Current Population Survey calculated the number
of uninsured Texas children ages 0 to 18 at 1.4 million, or nearly one-quarter of
the children in the state.
In July 1998, Texas implemented Phase I of its CHIP program, providing
Medicaid to children aged 15 to 18 under 100 percent of the FPL. Phase I of
CHIP was created to run from July 1998 through September 2002. The program
phased out as Medicaid expanded to cover those children.
Implementing legislation for Phase II of CHIP was passed during the 76
th
Legislature. Senate Bill 445 specified that coverage under CHIP be available to
families with incomes up to 200 percent of the FPL. Coverage under Phase II of
the program began on May 1, 2000. HHSC, which was given overall authority for
the program, initially estimated that about 478,000 Texas children would qualify
for CHIP. By February 2002, 516,000 children were enrolled.
H.B. 2292 (78
th
Legislature, Regular Session, 2003) made numerous policy
changes to the CHIP program including tightened eligibility standards. As of
February 2004, CHIP enrollment totaled 399,306 children.
Balanced Budget Refinement Act of 1999 (BBRA) (Incorporated by
reference in P.L. 106-113)
The Balanced Budget Refinement Act of 1999 (BBRA) provided approximately
$17 billion in "BBA relief" over 5 years. Most of the provisions of the BBRA were
focused specifically on rural health care delivery and access to services for rural
Medicare beneficiaries; however, there were provisions specific to the Medicaid
program. In particular, the BBRA:
5
• Extended the phase-out of cost-based reimbursement for community health
centers. A study will determine how these clinics should be paid in the future.
• Changed Medicaid disproportionate share hospital (DSH) payments and
rules. The base-year data used to set the DSH allotments in the BBA were
flawed for some states and adjustments were made. The DSH transition rule
was also made permanent and states were prohibited from using enhanced
federal matching payments under the state Children's Health Insurance
Program (CHIP, see below) for DSH.
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA) (P.L. 108-173)
The most historic feature of the MMA is the creation of an outpatient prescription
drug benefit in Medicare. The bill also changed many provider payments, some
of which had been reduced or constrained under previous legislation. Major
provisions affecting the Medicaid program include:
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• Implementation of a voluntary prescription drug benefit beginning January 1,
2006. Called Part D, the benefit will be available to all Medicare beneficiaries,
including those who are also eligible for Medicaid (dual eligibles).
• Recoupment of part of the federal cost of the new drug benefit by requiring
states to refund a portion of their savings from Medicare providing drug
coverage to dual eligibles (referred to as the “clawback” provision).
• Addition of preventive benefits to Medicare, which will reduce the cost to
Medicaid, which previously covered the services.
• Increases in the cost of Medicare Part B premiums (physician, lab services,
etc.), for which Medicaid currently pays on behalf of certain dual eligibles.
• Increases in the Disproportionate Share Hospital Payments State Allotments
for 2004-2010.
Highlights of Texas Legislation Affecting
Medicaid from the 78
th
Legislature, Regular
Session, 2003
House Bill 2292
H.B. 2292 relates to the provision of health and human services in the state.
Article I realigns operations of the existing 12 health and human services
agencies by consolidating similar functions within 5 agencies. Article 2 includes
the following provisions specific to Medicaid:
• Continues coverage for all children currently eligible for Medicaid.
• Maintains the term of children's coverage (continuous eligibility period) at six
months.
• Provides that more thorough procedures (such as using information from
consumer reporting agencies, appraisal districts, or vehicle registration
records) to verify assets may be implemented.
• Requires a personal interview for initial eligibility determination if requested by
the applicant; otherwise allows a personal interview for initial eligibility
determination only if eligibility cannot be determined through mail
correspondence.
• Requires a personal interview for recertification of eligibility if requested by
the client; otherwise allows a personal interview to renew coverage if eligibility
cannot be determined through a telephone interview or mail correspondence.
• Allows establishment of cost sharing (i.e., co-pays and monthly premiums)
based on federal maximum levels.
• Requires that adult cash assistance recipients comply with the personal
responsibility agreement to continue receiving Medicaid coverage
• Discontinues coverage for pregnant women over age 19 with income above
158 percent of the FPL.
• Discontinues coverage for medically needy non-pregnant adult clients with
incomes above the TANF eligibility level.
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• Allows establishment of prior authorization requirements for high-cost medical
services.
• Directs the implementation of disease management efforts.
• Requires that medical assistance be delivered through the most cost-effective
method of managed care throughout the state and that guidelines for
appropriate usage of out-of-network providers be established.
• Directs that a Preferred Drug List (PDL) be implemented, with prior
authorization required for prescribed drugs not on the PDL.
• Allows establishment of four brand name and 34-day brand-name supply
limits for clients previously eligible for unlimited prescriptions (does not affect
current three-prescription limits for certain clients).
• Discontinues coverage for certain optional Medicaid services for adults age
21 and over:
•• Eyeglasses/contact lenses
•• Hearing aids
•• Services provided by podiatrists
•• Services provided by chiropractors
•• Psychological services from licensed psychologists, marriage and family
therapists, professional counselors, and master social worker-advanced
clinical practitioners
• Establishes a statutory basis for estate recovery of Medicaid expenditures
pursuant to federal requirements.
• Discontinues reimbursement of Graduate Medical Education.
• Decreases reimbursement rates by 5 percent for Medicaid acute care
providers such as physicians, hospitals and HMOs. Note: this decrease has
been partially restored to a 2.5 percent decrease.
• Decreases reimbursement rates by 2.2 percent to 3.5 percent for non-acute
care providers such as nursing homes, community care providers and
ICF/MR providers. Note: these decreases have been partially restored to 1.1
percent to 1.75 percent decreases.
House Bill 727
Requires HHSC to contract with vendor(s) to implement disease management in
fee-for-service Medicaid.
House Bill 1735
Requires implementation of disease management efforts in managed care.
House Bill 3122
Relates to the establishment of two types of locally based demonstration projects
to provide health care benefits to certain low-income parents of children receiving
Medicaid or enrolled in CHIP.
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House Bill 3484
Creates a workgroup charged with developing policy options to increase
employment of people with disabilities.
House Bill 3588 (Omnibus Transportation Bill)
Requires all HHS agencies to contract with the Texas Department of
Transportation for all responsibilities relating to the provision of transportation
services for clients.
Senate Bill 240
Requires HHSC to request federal matching funds for the employer’s share of
required premiums for CHIP eligible children enrolled in a group health plan.
Senate Bill 418
Delineates claims processing-related requirements for Medicaid and CHIP
HMOs.
Senate Bill 691
Requires HHSC to review the current Medicare reimbursement policy for
telemedicine and, to the extent practicable, modify rules and procedures
applicable for reimbursement for telemedicine services under Medicaid.
Major Federal Medicaid Legislation
1965 to Present
Social Security Amendments of 1967
Mandated
• EPSDT program for children’s health.
• Freedom of choice of providers.
Public Law 92-223 of 1971
Option
• Allows states to cover services in ICF and ICF/MR.
Social Security Amendments of 1972
Option
• Allows states to cover care for Medicaid clients under age 22 in inpatient
psychiatric hospitals.
Omnibus Budget Reconciliation Act (OBRA) of 1981
Option
• Allows states to provide home- and community-based services to persons
who would otherwise require institutional (hospital, ICF/MR, or nursing home)
services under “1915(c)” or “2176” waivers.
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Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982
Option
• Allows states to extend coverage to disabled children under age 18 living at
home who would be eligible for SSI if in a hospital, ICF/MR, or nursing home
(the “Katie Beckett law”). This is not offered in Texas.
Deficit Reduction Act of 1984 (DEFRA)
Mandated
• Provides coverage of children up to age 5 born after 9/30/83 whose families
meet AFDC (now TANF) income and resource limits, even if the family
doesn’t qualify for AFDC (i.e., if both parents are in the home). Texas also
covers children from ages 6-19 in such families.
• Provides coverage of pregnant women in households that would meet AFDC
(now TANF) income/resource limits after a child is born, including households
with an unemployed “principal wage earner” present.
• Provides automatic coverage of infants born to (and living with) Medicaid-
eligible mothers.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Mandated
• Extends coverage of pregnant women to households with an employed
principal wage earner if TANF financial standards are met. Discretionary
distributions from a "Medicaid-qualifying trust" are countable regardless of
whether such distributions are made.
Option
• Allows states to cover DEFRA children up to age 5 without waiting to phase
in.
Omnibus Budget Reconciliation Act (OBRA) 1986
Mandated
• Provides coverage of emergency care services (including labor and delivery)
for undocumented immigrants.
• Provides coverage of homeless persons: lack of home address may not be
grounds for denial of eligibility.
Option
• Allows states to cover infants up to age 1 and pregnant women under 100
percent of poverty. Creates phase-in for kids up to age 5 under 100 percent of
poverty. Also allows coverage for prenatal care while Medicaid application is
pending and guaranteed coverage for the full-term of pregnancy and
postpartum care. Allows states to waive assets tests for this group.
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Omnibus Budget Reconciliation Act (OBRA) 1987
Mandated
• Extends to age 7 coverage of kids born after September 30, 1983, whose
families meet AFDC (now TANF) financial standards, even if the family
doesn’t qualify for AFDC (extension to age 8 at state’s option).
• Makes sweeping changes in nursing home standards, including requirement
that all current and prospective nursing home clients be screened to identify
persons with mental illness, mental retardation, or related conditions (pre-
admission screening and resident reviews - PASRR).
Option
• Allows states to cover infants up to age 1 and pregnant women under 185
percent of poverty and allows immediate coverage (no phase-in) of kids up to
age 5 under 100 percent of poverty.
• Allows states to develop systems of care for home and community-based and
institutional long-term care via 1915 (d) waivers. (Not applicable in most
states.)
Medicare Catastrophic Coverage Act of 1988
Mandated
• Provides phased-in coverage of out-of-pocket costs (premiums, deductibles,
co-insurance) for Qualified Medicare Beneficiaries (QMBs) under 100 percent
of poverty.
• Provides phased-in coverage of infants up to age 1 and pregnant women
under 100 percent of poverty.
• Requires more comprehensive coverage of hospital services for infants.
• Requires the deduction of incurred medical expenses in the post-eligibility
treatment of income.
• Establishes minimum standards for income and asset protection for spouses
of Medicaid clients in nursing homes.
• Establishes a 30-month penalty period for transfers of assets to establish
Medicaid eligibility.
• Expands payments for hospital services for infants in all hospitals, and for
children up to age 6 in disproportionate share hospitals.
• Once eligibility is established, coverage of pregnant women may not be
terminated until two months postpartum. Infants born to Medicaid-eligible
mothers must be covered through first birthday if mother remains eligible or if
she would be eligible if she were pregnant.
Option
• Allows states to create home and community care programs for functionally
disabled persons [1929(b) “Frail Elderly”] and to apply for funding services for
persons with developmental disabilities [1930 Community Supported Living
Arrangements].
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Omnibus Budget Reconciliation Act (OBRA) of 1989
Mandated
• Does not permit states to limit amount, duration, scope or availability of state
plan services to children on Medicaid.
Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of
1991
Mandated
• Restricts use of voluntary donations from health care providers to state
Medicaid programs.
• Caps spending on disproportionate share hospital (DSH) reimbursement.
• Sets strict standards for taxes on health care providers and ceilings on the
share of state Medicaid funds that may be financed through provider taxes.
Omnibus Budget Reconciliation Act (OBRA) 1993
Mandated
• States must distribute federally provided vaccines to Medicaid providers.
• States without medically needy spend-down programs for nursing home
services must allow eligibility of persons with certain trusts.
• Sets new standards for participation in and payments under the
disproportionate share reimbursement program.
• Sets stricter standards for transfer-of-assets penalties for nursing facility care
and home and community based waiver services. Also sets new standards for
the treatment of trusts in determining Medicaid eligibility.
Option
• States may create a new eligibility category for persons infected with
tuberculosis who meet Medicaid financial standards for disabled persons.
Health Insurance Portability and Accountability Act of 1996 (HIPAA) (P.L.
104-191)
• Requires standardized electronic exchange of administrative and financial
health services information for all health plans, including Medicaid.
• Protects the security and privacy of transmitted information.
• Phased in over multi-year period, culminating in 2003.
The Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) of 1996 (Welfare Reform) (P.L. 104-193)
Selected Highlights Affecting Medicaid
• Retains the link to Medicaid eligibility for welfare recipients who meet the
state’s AFDC requirements in effect on July 16th, 1996. Persons eligible for
cash assistance under TANF guidelines are automatically entitled to coverage
under the Medicaid program.
• Families who lose eligibility for cash assistance due to child support or
increased earnings will receive Medicaid for a transitional period of up to 12
months.
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• States may terminate medical assistance for persons denied cash assistance
because of refusal to work. Pregnant women and children cannot be denied
Medicaid because of a parent’s refusal to work.
• States may deny Medicaid coverage to certain legal residents who are not
citizens.
• New immigrants will be automatically barred for five years after entry, but
states may offer Medicaid coverage after that time.
• Legal immigrants who lost SSI benefits also lost Medicaid coverage. Aged,
blind and disabled immigrants cannot be categorically eligible for Medicaid
unless a state covers those individuals through optional eligibility categories.
• Illegal immigrants are barred from most federal public benefit programs.
•
States may not deny emergency Medicaid to either illegal or legal aliens.
9
The Balanced Budget Act (BBA) of 1997 (P.L. 105-33)
(See summary on page 3-18 of this chapter.)
Balanced Budget Refinement Act of 1999 (BBRA)
(See summary on page 3-18 of this chapter.)
The Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA)
(P.L. 106-170)
Option:
• Expands the BBA by creating two optional categorically needy Medicaid buy-
In groups for individuals aged 16-64 who, except for earned income, would be
eligible for Medicaid.
• Creates a new Medicaid buy-in demonstration to help people who are not yet
too disabled to work.
• Extends Medicare coverage for people with disabilities who return to work.
• Enhances the employment services system by creating a "Ticket to Work
Program." This system is intended to enable SSI or SSDI beneficiaries to
obtain vocational rehabilitation and employment services from either
participating public or private providers. If the beneficiary goes to work and
achieves substantial earnings, providers would be paid a portion of the
benefits saved.
6
Breast and Cervical Cancer Prevention and Treatment Act of 2000 (P.L. 106-
354)
7
• Allows states to create a new Medicaid eligibility category for persons
screened by a Centers for Disease Control and Prevention (CDC) breast and
cervical cancer early detection program, found to be in need of treatment for
cancer, and not otherwise eligible. Texas implemented this option in 2002.
• Provides federal funds for services at the same enhanced rate as for CHIP.
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Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA) (P.L. 106-554)
8
• Increases 2001 and 2002 Disproportionate Share Hospital Payments State
Allotments.
• Requires new federal rules to be issued by the end of 2000 limiting Medicaid
Upper Payment Limits to government facilities and provides for a transition
period.
• Allows unspent 1998 and 1999 CHIP funds to be carried forward to
subsequent years and allows up to 10 percent of retained 1998 allotments to
be use for outreach activities.
Jobs and Growth Tax Relief Reconciliation Act of 2003 (TRRA) (P.L. 108-27)
• Temporarily increases the Federal Medical Assistance Percentage (FMAP)
for five calendar quarters (April 2003 through June 2004) as part of a “state
fiscal relief” package.
• As a condition for eligibility, requires states to maintain Medicaid eligibility in
effect on September 2, 2003.
CHIP Allotment Extension (P.L. 108-74)
• Allows states to retain unexpended FY 1998-1999 federal allocations through
FY 2004.
• Allows states additional time to spend 50 percent of unused FY 2000-2001
federal allocations (through FY 2004 and FY 2005, respectively).
• Allows approximately 10 states that had expanded Medicaid prior to the
enactment of CHIP to use their CHIP funds to cover the cost of some of those
expansions. This provision does not apply to Texas.
Welfare reform extensions
• Various laws passed in 2002 and 2003 to extend PRWORA beyond its
expiration date of Sept. 30, 2002. The most recent act (PL 108-89) extended
TANF and its related programs such as Transitional Medical Assistance
(TMA), until March 31, 2004.
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)
(See summary on page 3-19 of this chapter.)
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Endnotes
1 N. Pindus, R. Capps, J. Gallagher, L. Giannarelli, M. Saunders, & R. Smith,
Income Support and Social Services for Low-Income People in Texas, The
Urban Institute, Washington, D.C., 1998, p 2-3.
2 Health Care Financing Administration, 2082 Report, 1997 and 1999.
3 Center on Budget and Policy Priorities, Overview of Medicaid Provisions in the
Balanced Budget Act of 1997, P.L. 105-33, September 8, 1997,
(April 7, 2004).
4 Center on Budget and Policy Priorities, Overview of Medicaid Provisions in the
Balanced Budget Act of 1997, P.L. 105-33, September 8, 1997,
(April 7, 2004).
5 Rural Policy Research Institute, “Rural Implications of the Medicare, Medicaid
and SCHIP Balanced Budget Refinement Act of 1999: A Rural Analysis of the
Health Policy Provisions,” Executive Summary, December 1999, Implication of the Medicare, Medicaid and SCHIP Balanced Budget Refinement
Act of 1999, P99-11> (April 7, 2004)
6 Centers for Medicare and Medicaid Services, TWWIIA, n.d.
, (April 15, 2004).
7 U.S. House of Representatives, Committee on Ways and Means, Green Book
2003, (April 7,
2004).
8 U.S. House of Representatives, Committee on Ways and Means, Green Book
2003, (April 7,
2004).