H.R. 3963 (Dingell)

Reauthorization of SCHIP and State Allotments
Appropriates $9.125 billion in funds for fiscal year (FY) 2008, and increasing annual amounts are specified up to $16 billion in FY 2012.

Changes formula for state allotments to reflect actual or projected spending and increases funding to territories. Allotments available to states for two years. A Child Enrollment Contingency Fund, capped at 20% of the national allotment, would be created to cover state shortfalls associated with enrollment of children in excess of population growth. Costs of Medicaid presumptive eligibility for children would no longer count against SCHIP allotments.

States are eligible for a performance bonus payment to offset the additional costs resulting from adoption of specific enrollment and retention efforts (see "Outreach and Enrollment"). $3 billion would be appropriated for this purpose in 2008, and each year through 2012 would include appropriated funds not otherwise allotted to states and unexpended state allotments. For Medicaid child enrollment increases less than or equal to 3% above the baseline (growth in the population of children plus 1 percentage point), the bonus payment per additional enrollee would equal 15% of per capita Medicaid expenditures for children; for Medicaid child enrollment increases greater than 3.0% above the baseline, the bonus payment per additional enrollee would be 62.5% of per capita Medicaid expenditures for children. Bonuses would be subject to availability of funds.

Coverage Expansions
Provides states the option of covering pregnant women up to the state's income eligibility level for children and automatic enrollment of newborns.

Provides federal SCHIP matching funds only for children in families with incomes below 300% of the FPL (including income disregarded by the state in determining SCHIP eligibility), unless the state has an approved waiver or state plan amendment in effect on the date of enactment. No federal matching funds would be available for children above this income level.

Makes several changes to phase out coverage of parents and childless adults under SCHIP and limit coverage of parents. Approval or renewal of waivers providing coverage of nonpregnant childless adults would be prohibited, and existing coverage ended by December 31, 2008. States may apply for a Medicaid waiver to continue coverage of this population (as opposed to an SCHIP waiver).

Approval or renewal of SCHIP waivers providing coverage to parents of low-income children would be prohibited, and existing coverage phased out by the end of fiscal year 2009. States may continue coverage with a fixed amount of the state's allotment set aside for this purpose, and the SCHIP federal matching rate would be reduced in 2010 unless a state meets certain coverage benchmarks for children. In 2011 and 2012, states that meet the benchmarks would receive federal matching rates set between the Medicaid and SCHIP amounts; other states would receive the Medicaid matching rate only.

A study by the Government Accountability Office on best practices by states in addressing the crowd out of private coverage by SCHIP, and a study by the Institute of Medicine on the best ways to measure the rate of health insurance coverage of low income children and the extent of crowd out would be required within 18 months of enactment. Within 6 months of receiving these reports, the Secretary of Health and Human Services (HHS) would develop recommendations for best practices by states in addressing crowd out and uniform data collection standards for states to measure and report on health insurance coverage and crowd out. Once the recommendations are issued, all states must submit plans for addressing crowd out consistent with the best practices recommendations. States with an effective eligibility standard of 300% or greater (taking into account income disregards) must also meet target coverage rates for lower income children tied to the average rate for the 10 states with the highest rate of such coverage; states that do not meet the target would no longer receive any payment for the higher-income children beginning in FY 2011.

Other changes to SCHIP or Medicaid coverage for children
Requires SCHIP coverage of dental services effective October 1, 2008 and additional reporting and education requirements related to dental services. In providing dental coverage, states may provide the benefit as specified or use a benchmark dental benefit package equivalent to dental coverage under the FEHBP, most common state employees plan for dependents, or a commercial dental plan.

Requires coverage of mental health services so that financial requirements and treatment limitations are no more restrictive than for other benefits.

Provides state option to offer a premium assistance subsidy if the employer contributes at least 40 percent of the premium and the plan meets other requirements. High deductible and flexible spending account plans would not qualify. Other plans may qualify but in this case states must meet a cost effectiveness test by demonstrating that the cost of premium assistance is less than the cost of SCHIP for the individual child or family or in the aggregate. States must provide supplemental coverage to ensure that SCHIP benefits and cost sharing protections are met, and must provide outreach assistance for children likely to be eligible. Employer plans must permit enrollment of children with premium assistance subsidies outside of annual open enrollment periods.

Requires states to provide enrollees with notice and a grace period for payment of premiums of at least 30 days prior to termination of coverage.

Requires the Secretary to develop and implement dental education for parents of newborns and prohibits states from preventing community health centers from contracting with private dental providers under Medicaid or SCHIP. States must report on the number of SCHIP-enrolled children receiving dental services.

Imposes a moratorium until January 1, 2010 on administrative action to restrict Medicaid coverage or payment for rehabilitation services or school based administration, transportation or medical services if restrictions are greater than those in effect on July 1, 2007. Clarifies that under SCHIP. states may provide covered items and services furnished through school based health centers.

Outreach and enrollment
States receive a performance bonus payment (see "Reauthorization of SCHIP and State Allotments") if they implement at least 5 of the following: 1) 12 months continuous eligibility for all children under Medicaid and SCHIP, 2) liberalization of asset requirement, 3) elimination of in-person interview requirement, 4) joint application for Medicaid and SCHIP, 5) automatic renewal, 6) presumptive eligibility for children under both Medicaid and SCHIP, 7) "express lane" eligibility (a new state option described below), and 8) premium assistance subsidies (see "Other changes to SCHIP or Medicaid coverage for children").

Provides $100 million for 2008-2012 for grants to increase participation of children eligible for Medicaid or SCHIP, with 10% set aside for a national enrollment campaign and 10% set aside for enrollment of children who are Indians.

Effective January 1, 2008 and through fiscal year 2012, provides states the option of using an "express lane" process for determining a child's eligibility under Medicaid or SCHIP. Under this process, income determinations made through application for federal programs including temporary assistance to needy families (TANF), Food Stamps, child nutrition and school lunch programs, along with those made by other state designated agencies, can be used to determine eligibility for Medicaid or SCHIP. Under this option, states must provide for a regular eligibility determination if a child is found to be ineligible using the "express lane" process, and must give notice and offer a regular eligibility determination to children found eligible for SCHIP if a lower premium payment might result. In addition, states must meet citizenship verification and "screen and enroll" requirements.

Increases federal matching rate for translation or interpretation services under Medicaid to 75% and under SCHIP to the higher of 75% or the state's SCHIP matching rate plus 5 percentage points.

Requires states to document procedures used to reduce administrative barriers to enrollment and deems a state to meet the requirement if it uses a joint application for Medicaid and SCHIP and permits application other than in person.

Clarifies current law requirements regarding citizenship documentation and provides a new state option to modify documentary evidence requirements for proof of citizenship for Medicaid and SCHIP effective October 1, 2008.

Directs the Secretary of HHS to consult with state Medicaid and SCHIP directors and develop a model process for coordination of enrollment and coverage across states for children who are outside their state of residency because they are migrant families, experience emergency evacuation, for educational needs, or for other reasons.

Other provisions
Requires the Secretary of HHS to develop core pediatric quality measures for children in Medicaid and SCHIP and to encourage voluntary reporting by states. Over 2008-2012, appropriates $20 million for these activities, $20 million for a program of grants to states and child health providers related to improving quality and use of information technology, $5 million for a model electronic health record for children enrolled in Medicaid or SCHIP, and $25 million for a childhood obesity demonstration project.

Certain existing requirements for Medicaid managed care plans would be extended to SCHIP, including those relating to provision of information to enrollees, beneficiary protections, and quality assurance.

Additional $10 million in funding for data collection provided to determine state numbers on uninsured children and Medicaid and SCHIP enrollees.

Requires application of the Medicaid prospective payment system for federally qualified health centers and rural health clinics to SCHIP.

Requires an updated evaluation of SCHIP by December 31, 2010.

The term "CHIP" is deemed a reference to SCHIP, and a number of other changes to Medicaid and SCHIP are included.

Financing
The Congressional Budget Office estimates the bill to have a 10-year cost of $71.5 billion financed by increased tobacco taxes and a one-time change in timing of corporate income taxes in 2012, and lowering baseline spending for SCHIP in 2013 and beyond.

Effective Date
Generally, October 1, 2007.