42 USC 1397ee - Payments to States

U.S Code last checked for updates: Nov 22, 2024

§ 1397ee.

Payments to States

(a)

Payments

(1)

In general

Subject to the succeeding provisions of this section, the Secretary shall pay to each State with a plan approved under this subchapter, from its allotment under section 1397dd of this title, an amount for each quarter equal to the enhanced FMAP (or, in the case of expenditures described in subparagraph (D)(iv), the higher of 75 percent or the sum of the enhanced FMAP plus 5 percentage points) of expenditures in the quarter—

(A)

for child health assistance under the plan for targeted low-income children in the form of providing medical assistance for which payment is made on the basis of an enhanced FMAP under the fourth sentence of section 1396d(b) of this title;

(B)

(C)

for child health assistance under the plan for targeted low-income children in the form of providing health benefits coverage that meets the requirements of section 1397cc of this title; and

(D)

only to the extent permitted consistent with subsection (c)—

(i)

for payment for other child health assistance for targeted low-income children;

(ii)

for expenditures for health services initiatives under the plan for improving the health of children (including targeted low-income children and other low-income children);

(iii)

for expenditures for outreach activities as provided in section 1397bb(c)(1) of this title under the plan;

(iv)

for translation or interpretation services in connection with the enrollment of, retention of, and use of services under this subchapter by, individuals for whom English is not their primary language (as found necessary by the Secretary for the proper and efficient administration of the State plan); and

(v)

for other reasonable costs incurred by the State to administer the plan.

(2)

Order of payments

Payments under paragraph (1) from a State’s allotment shall be made in the following order:

(A)

First, for expenditures for items described in paragraph (1)(A).

(B)

Second, for expenditures for items described in paragraph (1)(B).

(C)

Third, for expenditures for items described in paragraph (1)(C).

(D)

Fourth, for expenditures for items described in paragraph (1)(D).

(3)

Performance bonus payment to offset additional Medicaid and CHIP child enrollment costs resulting from enrollment and retention efforts

(A)

In general

(B)

Amount for above baseline Medicaid child enrollment costs

Subject to subparagraph (E), the amount described in this subparagraph for a State for a fiscal year is equal to the sum of the following amounts:

(i)

First tier above baseline Medicaid enrollees

(ii)

Second tier above baseline Medicaid enrollees

(C)

Number of first and second tier above baseline child enrollees; baseline number of child enrollees

For purposes of this paragraph:

(i)

First tier above baseline child enrollees

The number of first tier above baseline child enrollees for a State for a fiscal year under subchapter XIX is equal to the number (if any, as determined by the Secretary) by which—

(I)

the monthly average unduplicated number of qualifying children (as defined in subparagraph (F)) enrolled during the fiscal year under the State plan under subchapter XIX; exceeds

(II)

the baseline number of enrollees described in clause (iii) for the State and fiscal year under subchapter XIX;

but not to exceed 10 percent of the baseline number of enrollees described in subclause (II).

(ii)

Second tier above baseline child enrollees

The number of second tier above baseline child enrollees for a State for a fiscal year under subchapter XIX is equal to the number (if any, as determined by the Secretary) by which—

(I)

the monthly average unduplicated number of qualifying children (as defined in subparagraph (F)) enrolled during the fiscal year under subchapter XIX as described in clause (i)(I); exceeds

(II)

the sum of the baseline number of child enrollees described in clause (iii) for the State and fiscal year under subchapter XIX, as described in clause (i)(II), and the maximum number of first tier above baseline child enrollees for the State and fiscal year under subchapter XIX, as determined under clause (i).

(iii)

Baseline number of child enrollees

Subject to subparagraph (H), the baseline number of child enrollees for a State under subchapter XIX—

(I)

for fiscal year 2009 is equal to the monthly average unduplicated number of qualifying children enrolled in the State plan under subchapter XIX during fiscal year 2007 increased by the population growth for children in that State from 2007 to 2008 (as estimated by the Bureau of the Census) plus 4 percentage points, and further increased by the population growth for children in that State from 2008 to 2009 (as estimated by the Bureau of the Census) plus 4 percentage points;

(II)

for each of fiscal years 2010, 2011, and 2012, is equal to the baseline number of child enrollees for the State for the previous fiscal year under subchapter XIX, increased by the population growth for children in that State from the calendar year in which the respective fiscal year begins to the succeeding calendar year (as estimated by the Bureau of the Census) plus 3.5 percentage points;

(III)

for each of fiscal years 2013, 2014, and 2015, is equal to the baseline number of child enrollees for the State for the previous fiscal year under subchapter XIX, increased by the population growth for children in that State from the calendar year in which the respective fiscal year begins to the succeeding calendar year (as estimated by the Bureau of the Census) plus 3 percentage points; and

(IV)

for a subsequent fiscal year is equal to the baseline number of child enrollees for the State for the previous fiscal year under subchapter XIX, increased by the population growth for children in that State from the calendar year in which the fiscal year involved begins to the succeeding calendar year (as estimated by the Bureau of the Census) plus 2 percentage points.

(D)

Projected per capita State Medicaid expenditures

(E)

Amounts available for payments

(i)

Initial appropriation

(ii)

Transfers

Notwithstanding any other provision of this subchapter, the following amounts shall also be available, without fiscal year limitation, for making payments under this paragraph:

(I)

Unobligated national allotment

(aa)

Fiscal years 2009 through 2012

(bb)

First half of fiscal year 2013

(cc)

Second half of fiscal year 2013

(II)

Unexpended allotments not used for redistribution

(III)

Excess child enrollment contingency funds

(iii)

Proportional reduction

(F)

Qualifying children defined

(i)

In general

(ii)

Limitation

(iii)

Exclusion

(G)

Application to commonwealths and territories

(H)

Application to States that implement a Medicaid expansion for children after fiscal year 2008

In the case of a State that provides coverage under section 115 of the Children’s Health Insurance Program Reauthorization Act of 2009 for any fiscal year after fiscal year 2008—

(i)

any child enrolled in the State plan under subchapter XIX through the application of such an election shall be disregarded from the determination for the State of the monthly average unduplicated number of qualifying children enrolled in such plan during the first 3 fiscal years in which such an election is in effect; and

(ii)

in determining the baseline number of child enrollees for the State for any fiscal year subsequent to such first 3 fiscal years, the baseline number of child enrollees for the State under subchapter XIX for the third of such fiscal years shall be the monthly average unduplicated number of qualifying children enrolled in the State plan under subchapter XIX for such third fiscal year.

(4)

Enrollment and retention provisions for children

For purposes of paragraph (3)(A), a State meets the condition of this paragraph for a fiscal year if it is implementing at least 5 of the following enrollment and retention provisions (treating each subparagraph as a separate enrollment and retention provision) throughout the entire fiscal year:

(A)

Continuous eligibility

(B)

Liberalization of asset requirements

The State meets the requirement specified in either of the following clauses:

(i)

Elimination of asset test

(ii)

Administrative verification of assets

The State—

(I)

permits a parent or caretaker relative who is applying on behalf of a child for medical assistance under subchapter XIX or child health assistance under this subchapter to declare and certify by signature under penalty of perjury information relating to family assets for purposes of determining and redetermining financial eligibility; and

(II)

takes steps to verify assets through means other than by requiring documentation from parents and applicants except in individual cases of discrepancies or where otherwise justified.

(C)

Elimination of in-person interview requirement

(D)

Use of joint application for Medicaid and CHIP

(E)

Automatic renewal (use of administrative renewal)

(i)

In general

(ii)

Satisfaction through demonstrated use of ex parte process

(F)

Presumptive eligibility for children

(G)

Express Lane

(H)

Premium assistance subsidies

(b)

Enhanced FMAP

(c)

Limitation on certain payments for certain expenditures

(1)

General limitations

(2)

Limitation on expenditures not used for medicaid or health insurance assistance

(A)

In general

(B)

Waiver authorized for cost-effective alternative

The limitation under subparagraph (A) on expenditures for items described in subsection (a)(1)(D) shall not apply to the extent that a State establishes to the satisfaction of the Secretary that—

(i)

coverage provided to targeted low-income children through such expenditures meets the requirements of section 1397cc of this title;

(ii)

the cost of such coverage is not greater, on an average per child basis, than the cost of coverage that would otherwise be provided under section 1397cc of this title; and

(iii)

such coverage is provided through the use of a community-based health delivery system, such as through contracts with health centers receiving funds under section 254b of this title or with hospitals such as those that receive disproportionate share payment adjustments under section 1395ww(d)(5)(F) or 1396r–4 of this title.

(C)

Nonapplication to certain expenditures

The limitation under subparagraph (A) shall not apply with respect to the following expenditures:

(i)

Expenditures to increase outreach to, and the enrollment of, Indian children under this subchapter and subchapter XIX

(ii)

Expenditures to comply with citizenship or nationality verification requirements

(iii)

Expenditures for outreach to increase the enrollment of children under this subchapter and subchapter XIX through premium assistance subsidies

(iv)

Payment error rate measurement (PERM) expenditures

(3)

Waiver for purchase of family coverage

Payment may be made to a State under subsection (a)(1) for the purchase of family coverage under a group health plan or health insurance coverage that includes coverage of targeted low-income children only if the State establishes to the satisfaction of the Secretary that—

(A)

purchase of such coverage is cost-effective relative to—

(i)

the amount of expenditures under the State child health plan, including administrative expenditures, that the State would have made to provide comparable coverage of the targeted low-income child involved or the family involved (as applicable); or

(ii)

the aggregate amount of expenditures that the State would have made under the State child health plan, including administrative expenditures, for providing coverage under such plan for all such children or families; and

(B)

such coverage shall not be provided if it would otherwise substitute for health insurance coverage that would be provided to such children but for the purchase of family coverage.

(4)

Use of non-Federal funds for State matching requirement

(5)

Offset of receipts attributable to premiums and other cost-sharing

(6)

Prevention of duplicative payments

(A)

Other health plans

(B)

Other Federal governmental programs

(7)

Limitation on payment for abortions

(A)

In general

(B)

Exception

(C)

Rule of construction

(8)

Limitation on matching rate for expenditures for child health assistance provided to children whose effective family income exceeds 300 percent of the poverty line

(A)

FMAP applied to expenditures

(B)

Exception

(9)

Citizenship documentation requirements

(A)

In general

(B)

Enhanced payments

(10)

State option to offer premium assistance

(A)

In general

(B)

Qualified employer-sponsored coverage

(i)

In general

Subject to clause (ii), in this paragraph, the term “qualified employer-sponsored coverage” means a group health plan or health insurance coverage offered through an employer—

(I)

that qualifies as creditable coverage as a group health plan under section 2701(c)(1) of the Public Health Service Act; ³

(II)

for which the employer contribution toward any premium for such coverage is at least 40 percent; and

(III)

that is offered to all individuals in a manner that would be considered a nondiscriminatory eligibility classification for purposes of paragraph (3)(A)(ii) of section 105(h) of the Internal Revenue Code of 1986 (but determined without regard to clause (i) of subparagraph (B) of such paragraph).

(ii)

Exception

Such term does not include coverage consisting of—

(I)

benefits provided under a health flexible spending arrangement (as defined in section 106(c)(2) of the Internal Revenue Code of 1986); or

(II)

a high deductible health plan (as defined in section 223(c)(2) of such Code), without regard to whether the plan is purchased in conjunction with a health savings account (as defined under section 223(d) of such Code).

(C)

Premium assistance subsidy

(i)

In general

(ii)

State payment option

(iii)

Employer opt-out

(iv)

Treatment as child health assistance

(D)

Application of secondary payor rules

(E)

Requirement to provide supplemental coverage for benefits and cost-sharing protection provided under the State child health plan

(i)

In general

Notwithstanding section 1397jj(b)(1)(C) of this title, the State shall provide for each targeted low-income child enrolled in qualified employer-sponsored coverage, supplemental coverage consisting of—

(I)

items or services that are not covered, or are only partially covered, under the qualified employer-sponsored coverage; and

(II)

cost-sharing protection consistent with section 1397cc(e) of this title.

(ii)

Record keeping requirements

(F)

Application of waiting period imposed under the State

(G)

Opt-out permitted for any month

(H)

Application to parents

If a State provides child health assistance or health benefits coverage to parents of a targeted low-income child in accordance with section 1397kk(b) of this title, the State may elect to offer a premium assistance subsidy to a parent of a targeted low-income child who is eligible for such a subsidy under this paragraph in the same manner as the State offers such a subsidy for the enrollment of the child in qualified employer-sponsored coverage, except that—

(i)

the amount of the premium assistance subsidy shall be increased to take into account the cost of the enrollment of the parent in the qualified employer-sponsored coverage or, at the option of the State if the State determines it cost-effective, the cost of the enrollment of the child’s family in such coverage; and

(ii)

any reference in this paragraph to a child is deemed to include a reference to the parent or, if applicable under clause (i), the family of the child.

(I)

Additional State option for providing premium assistance

(i)

In general

(ii)

Access to choice of coverage

(iii)

Clarification of payment for administrative expenditures

(J)

No effect on premium assistance waiver programs

(K)

Notice of availability

If a State elects to provide premium assistance subsidies in accordance with this paragraph, the State shall—

(i)

include on any application or enrollment form for child health assistance a notice of the availability of premium assistance subsidies for the enrollment of targeted low-income children in qualified employer-sponsored coverage;

(ii)

provide, as part of the application and enrollment process under the State child health plan, information describing the availability of such subsidies and how to elect to obtain such a subsidy; and

(iii)

establish such other procedures as the State determines necessary to ensure that parents are fully informed of the choices for receiving child health assistance under the State child health plan or through the receipt of premium assistance subsidies.

(L)

Application to qualified employer-sponsored benchmark coverage

(M)

Coordination with medicaid

(11)

Enhanced payments

(12)

Temporary enhanced payment for coverage and administration of COVID–19 vaccines

(d)

Maintenance of effort

(1)

In medicaid eligibility standards

(2)

In amounts of payment expended for certain State-funded health insurance programs for children

(A)

In general

The amount of the allotment for a State in a fiscal year (beginning with fiscal year 1999) shall be reduced by the amount by which—

(i)

the total of the State children’s health insurance expenditures in the preceding fiscal year, is less than

(ii)

the total of such expenditures in fiscal year 1996.

(B)

State children’s health insurance expenditures

The term “State children’s health insurance expenditures” means the following:

(i)

The State share of expenditures under this subchapter.

(ii)

The State share of expenditures under subchapter XIX that are attributable to an enhanced FMAP under the fourth sentence of section 1396d(b) of this title.

(iii)

State expenditures under health benefits coverage under an existing comprehensive State-based program, described in section 1397cc(d) of this title.

(3)

Continuation of eligibility standards for children through September 30, 2029

(A)

In general

During the period that begins on March 23, 2010, and ends on September 30, 2029, as a condition of receiving payments under section 1396b(a) of this title, a State shall not have in effect eligibility standards, methodologies, or procedures under its State child health plan (including any waiver under such plan) for children (including children provided medical assistance for which payment is made under section 1397ee(a)(1)(A) of this title) that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan (or waiver) as in effect on March 23, 2010. During the period that begins on October 1, 2019, and ends on September 30, 2029, the preceding sentence shall only apply with respect to children in families whose income does not exceed 300 percent of the poverty line (as defined in section 1397jj(c)(5) of this title) applicable to a family of the size involved. The preceding sentences shall not be construed as preventing a State during any such periods from—

(i)

applying eligibility standards, methodologies, or procedures for children under the State child health plan or under any waiver of the plan that are less restrictive than the eligibility standards, methodologies, or procedures, respectively, for children under the plan or waiver that are in effect on March 23, 2010;

(ii)

after September 30, 2015, enrolling children eligible to be targeted low-income children under the State child health plan in a qualified health plan that has been certified by the Secretary under subparagraph (C); or

(iii)

imposing a limitation described in section 1397ll(b)(7) of this title for a fiscal year in order to limit expenditures under the State child health plan to those for which Federal financial participation is available under this section for the fiscal year.

(B)

Assurance of exchange coverage for targeted low-income children unable to be provided child health assistance as a result of funding shortfalls

(C)

Certification of comparability of pediatric coverage offered by qualified health plans

(e)

Advance payment; retrospective adjustment

(f)

Flexibility in submittal of claims

(g)

Authority for qualifying States to use certain funds for medicaid expenditures

(1)

State option

(A)

In general

(B)

Payments to States

(i)

In general

(ii)

Expenditures described

(iii)

No impact on determination of budget neutrality for waivers

(2)

Qualifying State

(3)

Construction

(4)

Option for allotments for fiscal years 2009 through 2029

(A)

Payment of enhanced portion of matching rate for certain expenditures

(B)

Expenditures described

(Aug. 14, 1935, ch. 531, title XXI, § 2105, as added Pub. L. 105–33, title IV, § 4901(a), Aug. 5, 1997, 111 Stat. 560; amended Pub. L. 105–100, title I, § 162(5), (7), Nov. 19, 1997, 111 Stat. 2189, 2190; Pub. L. 106–113, div. B, § 1000(a)(6) [title VII, § 705(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–402; Pub. L. 106–554, § 1(a)(6) [title VIII, § 802(a), (d)(4), (e)], Dec. 21, 2000, 114 Stat. 2763, 2763A–580 to 2763A–582; Pub. L. 108–74, § 1(b), Aug. 15, 2003, 117 Stat. 895; Pub. L. 108–127, § 1, Nov. 17, 2003, 117 Stat. 1354; Pub. L. 109–171, title VI, §§ 6102(b), 6103(a), Feb. 8, 2006, 120 Stat. 131, 132; Pub. L. 109–482, title II, § 201(b), Jan. 15, 2007, 120 Stat. 3701; Pub. L. 110–92, § 136(d), Sept. 29, 2007, 121 Stat. 995; Pub. L. 110–173, title II, § 201(b)(1), Dec. 29, 2007, 121 Stat. 2509; Pub. L. 111–3, title I, §§ 104, 107(a), 113(a), 114(a), title II, §§ 201(b)(1), 202(b), 211(c), title III, §§ 301(a)(1), (2)(A), 302(b), title VI, § 601(a), Feb. 4, 2009, 123 Stat. 17, 24, 34, 39, 40, 54, 57, 61, 63, 96; Pub. L. 111–148, title II, §§ 2101(a)–(c), 2102(a)(3)–(5), title X, §§ 10201(g), 10203(b)(3), (4), (c), (d)(2)(C), Mar. 23, 2010, 124 Stat. 286–288, 922, 927, 928, 930; Pub. L. 114–10, title III, § 301(c), Apr. 16, 2015, 129 Stat. 158; Pub. L. 115–120, div. C, §§ 3002(d)(1), (f)(1), 3005, Jan. 22, 2018, 132 Stat. 34, 37; Pub. L. 115–123, div. E, title I, § 50101(d), (f)(1), Feb. 9, 2018, 132 Stat. 174; Pub. L. 116–117, § 3(b)(3), Mar. 2, 2020, 134 Stat. 134; Pub. L. 117–2, title IX, § 9821(b), Mar. 11, 2021, 135 Stat. 219; Pub. L. 117–328, div. FF, title V, § 5111(c)(2), (3), Dec. 29, 2022, 136 Stat. 5939.)

cite as: 42 USC 1397ee

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