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Federal Legislative Milestones in Medicaid and CHIP

Year Legislative milestones or key provisions
1965   Medicaid, an individual entitlement with federal-state financing, is enacted as Title XIX of the Social Security Act (the Act, P.L. 89-97) to provide health coverage for certain groups of low-income people. Title XIX:

  • links Medicaid eligibility to receipt of Aid to Families with Dependent Children (AFDC) for families with dependent children under age 18 considered to be deprived of parental support due to the death, continued absence, incapacity, or unemployment of the principal family earner in a two-parent household, and
  • requires hospital payments to be based on reasonable cost.

Medicare is also created as Title XVIII of the Act.

1967 Social Security Amendments of 1967 (P.L. 90-248) limit Medicaid eligibility to the medically needy, that is, individuals with income below 133⅓ percent of the AFDC maximum payment level for a given family size in a state. P.L. 90-248 also:

  • requires states to “assure that payments are not in excess of reasonable charges consistent with efficiency, economy, and quality of care”;
  • establishes Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit for all Medicaid-enrolled children under age 21; and
  • allows Medicaid beneficiaries to use Medicaid-participating providers of their choice.
1971 Social Security Amendments of 1971 (Public Law 92-223) allow states to provide Medicaid coverage for services in intermediate care facilities (ICFs), as well as those for “the mentally retarded” (ICF-MRs).
1972 Social Security Amendments of 1972 (P.L. 92-603): repeal the maintenance of effort, allowing states to reduce expenditures from one year to the next. They also:

  • create the Supplemental Security Income (SSI) program to federalize cash assistance for the aged, blind, and permanently and totally disabled, which entitles SSI beneficiaries to Medicaid coverage;
  • require that payments to nursing facilities and ICFs are based on a reasonable cost-related basis; and
  • require that payments for inpatient hospital services not exceed customary charges.
1977 Departments of Labor and Health, Education, and Welfare Appropriations Act for FY 1977 (P.L. 94-439) enacts the Hyde Amendment, prohibiting federal Medicaid payments for abortions except when the life of the mother is endangered and in cases of rape and incest.
1980 Omnibus Budget Reconciliation Act of 1980 (P.L. 96-499) enacts the Boren Amendment, which removes Medicaid’s state plan requirement to pay nursing facilities according to Medicare cost principles. Instead, the Boren Amendment requires Medicaid payments to be “reasonable and adequate” to meet the costs of “efficiently and economically operated” facilities.
1981 Omnibus Budget Reconciliation Act of 1981 (OBRA 81, P.L. 97-35) establishes two new types of Medicaid waivers to test new Medicaid payment methods:

  • Section 1915(b) freedom-of-choice waivers, which allow states to pursue mandatory managed care enrollment of certain Medicaid populations, and
  • Section 1915(c) home- and community-based services waivers, which allow states to cover home- and community-based long-term care services for the elderly and individuals with disabilities who are at risk of institutional care.

OBRA 81 also:

  • expands the Boren Amendment’s nursing facility requirements to hospitals, removing the requirement that Medicaid state plans pay according to Medicare cost principles;
  • removes the reasonable charges limitation added in 1980; and
  • institutes additional payments to hospitals serving a disproportionate share of Medicaid and low-income patients, which are now known as disproportionate share hospital (DSH) payments.
1982 Tax Equity and Fiscal Responsibility Act (P.L. 97-248) expands states’ options to impose cost-sharing requirements on Medicaid beneficiaries and services.
1984 Deficit Reduction Act of 1984 (P.L. 98-369) mandates Medicaid coverage of children born after September 30, 1983, up to age five, in AFDC-eligible families and mandates coverage for AFDC-eligible, first-time pregnant women and pregnant women in two-parent unemployed families.
1985 Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272) requires Medicaid coverage for all remaining AFDC-eligible pregnant women. It also requires hospice payments to be in the same amounts and using the same methodology as Medicare, and permits separate room and board payment for hospice patients residing in nursing facilities or ICFs.
1986 Omnibus Budget Reconciliation Act of 1986 (P.L. 99-509) requires states to cover treatment of emergency medical conditions for illegal immigrants otherwise eligible for Medicaid and allows states to cover pregnant women and infants under age one with income up to 100 percent of the federal poverty level (FPL) at their option.
1987 Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203) requires that payment methods for nursing facilities take into account the cost of complying with new quality requirements. It also:

  • phases out the distinction between skilled nursing facilities and ICFs, upgrades quality of care requirements, and revises monitoring and enforcement;
  • adds Section 1923 of the Act, strengthening DSH requirements and outlining DSH payment methods;
  • gives states the option of covering pregnant women and children under age one in families with income up to 185 percent FPL; and
  • gives states the option to cover children up to age eight in families below 100 percent FPL.
1988 Medicare Catastrophic Coverage Act of 1988 (P.L. 100-360) requires states to phase in coverage for pregnant women and infants with incomes below 100 percent FPL. It also:

  • establishes special eligibility rules for an institutionalized person whose spouse remains in the community to prevent spousal impoverishment,
  • establishes the qualified Medicare beneficiary eligibility group requiring states to pay premiums, deductibles and cost-sharing for individuals dually eligible for Medicare and Medicaid with incomes up to 100 percent FPL, and
  • clarifies that Medicaid may pay for certain school-based and health related services described in a child’s individualized education plan or individualized family service plan under the Individuals with Disabilities Education Act.

Family Support Act of 1988 (P.L. 100-485) requires states to extend 12 months of transitional Medicaid coverage to families leaving AFDC rolls due to earnings from work, and requires states to cover unemployed two-parent families meeting AFDC income and resource (asset) standards.

1989 Omnibus Budget Reconciliation Act of 1989 (OBRA 89, P.L. 101-239) requires states, by April 1, 1990, to provide Medicaid coverage to pregnant women and to children up to age six in families with income up to 133 percent FPL (or the state’s income threshold at enactment, if higher). It also:

  • adds a requirement to Section 1902(a)(30)(A) of the Act that provider payments are sufficient to attract enough providers to ensure that covered services will be as available to Medicaid beneficiaries as they are to the general population (this requirement was previously established only by regulation);
  • establishes specific reporting requirements for obstetric and pediatric payment rates in order to allow the Secretary of the U.S. Department of Health and Human Services (the Secretary) to determine the adequacy of state payments for these services;
  • requires coverage and full payment of reasonable cost of federally qualified health centers (FQHCs);
  • requires payment for room and board for hospice patients residing in nursing facilities that is equal to 95 percent of the Medicare nursing facility rate; and
  • expands the EPSDT benefit for children under age 21 to include optional diagnostic and treatment services that not covered under the state’s Medicaid program for adult beneficiaries.
1990 Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) requires states to phase in Medicaid coverage for all poor children under age 19 born after September 30, 1983, by the year 2002. It also:

  • establishes the prescription drug rebate program requiring “best price” rebates to states and federal government;
  • modifies the Boren Amendment to require that Medicaid payment methods take into account the cost of implementing 1987 nursing home quality reforms;
  • creates additional flexibility in DSH payment method design; and
  • establishes the specified low-income Medicare beneficiary eligibility group, which requires states to pay Medicare Part B premiums for enrollees with incomes 120 percent to 135 percent FPL.
1991 Medicaid Voluntary Contribution and Provider-Specific Tax Amendments (P.L. 102-234) restrict the use of provider donations and provider taxes as non-federal share. They also:

  • prohibit the Health Care Financing Administration (HCFA)[1] from restricting intergovernmental transfers of state or local tax revenues, and
  • place national and state-specific ceilings on special payments to DSH hospitals.
1993 Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66) places hospital-specific ceilings on DSH payments. It also:

  • establishes standards for state use of formularies to limit prescription drug coverage;
  • strengthens prohibitions against transferring assets with the purpose of qualifying for Medicaid nursing home coverage;
  • requires recovery of nursing home payments from beneficiary estates; and
  • establishes the Vaccines for Children program, which uses federal Medicaid funds to pay for vaccines provided to public health clinics and enrolled private providers.
1996 Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L.104-193) repeals the AFDC program and replaces it with Temporary Assistance for Needy Families (TANF), a program that provides block grants to states. It also:

  • severs the link between AFDC and Medicaid, meaning that enrollment or termination of Medicaid is no longer automatic with receipt or loss of cash assistance;
  • establishes Section 1931 family-coverage category, requiring states to extend Medicaid eligibility to families meeting July 16, 1996 AFDC eligibility criteria and allowing states to establish higher income eligibility thresholds; and
  • bars full-benefit Medicaid coverage for legal immigrants who enter the United States after August 22, 1996 and who have been in the country less than five years (allowing coverage after the five-year bar at state option).
1997 Balanced Budget Act of 1997 (BBA 97, P.L. 105-33) permits states to require most Medicaid beneficiaries to enroll in managed care plans without obtaining a Section 1915(b) waiver. The BBA also:

  • requires Medicaid managed care payments to be actuarially sound;
  • creates the State Children’s Health Insurance Program (CHIP), providing federal matching funds to states to expand health insurance coverage for children above states’ Medicaid eligibility levels;
  • repeals OBRA 89 requirements for state reporting on obstetric and pediatric payments;
  • repeals the Boren Amendment, and instead requires state agencies to use a public process to determine payment rates for inpatient hospitals, nursing facilities, and ICF-MRs;
  • for FQHCs and rural health clinics (RHCs), begins phase out of cost-based payment and adds supplemental payments for difference between Medicaid managed care and fee-for-service payments; and
  • limits state DSH allotments to 12 percent of states’ total annual Medicaid expenditures.
1999 Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA, P.L. 106-113) slows the phase-out of cost-based payment for FQHCs and RHCs and increases DSH allotments for the District of Columbia, Minnesota, New Mexico, and Wyoming.

Ticket to Work and Work Incentives Improvement Act of 1999 (P.L. 106-170) allows states to cover working disabled individuals with incomes above 250 percent FPL and requires them to pay income-related premiums.

2000 Breast and Cervical Cancer Prevention and Treatment Act of 2000 (P.L. 106-354) allows states to provide Medicaid coverage at enhanced CHIP federal matching rates to uninsured women—regardless of their income or resources—who are screened by the Centers for Disease Control and Prevention’s National Breast and Cervical Cancer Early Detection Program and found to need treatment for breast or cervical cancer.

The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act, as incorporated into the Consolidated Appropriations Act, 2001 (P.L. 106-554) directs the Secretary to issue regulations tightening upper payment limits (UPLs), as well as:

  • creates a new prospective payment system for FQHCs and RHCs and establishes a floor for payments based on 100 percent of the average cost of services provided; and
  • modifies DSH funding amounts.
2003 Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27) raises state-specific DSH allotments for fiscal year (FY) 2004 for all states and through FY 2009 for low-DSH states.

Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA, P.L. 108-173) creates Medicare Part D, a prescription drug benefit for Medicare enrollees effective January 1, 2006, shifting coverage of prescription drugs for dually eligible individuals  from Medicaid to the new plans created under Medicare Part D. Additionally, the MMA:

  • specifies that dually eligible beneficiaries may choose a Medicare Part D plan during the six-month Medicare enrollment period, or be automatically enrolled in one;
  • provides dually eligible beneficiaries with low-income subsidies to cover Part D cost sharing to varying degrees based on income and assets, including premiums, copayments, and deductibles; and
  • requires states to make monthly payments known as Medicare Part D clawback payments, which help offset the cost to the federal government of providing prescription drug coverage to dually eligible individuals.
2005 Deficit Reduction Act of 2005 (P.L. 109-171) permits states to use benchmark coverage for certain populations, instead of the regular Medicaid benefits package. It also:

  • permits states to increase copayments for non-emergency services;
  • increases penalties for assets transferred at less than fair market value to qualify for nursing home cares; and
  • changes the basis of the federal upper limit for Medicaid payment of multiple source drugs from the lowest published price to the average manufacturer price, to improve the collection of rebates on physician-administered drugs.
2007 Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173) extends CHIP funding through March 31, 2009 and extends Transitional Medical Assistance (TMA) for individuals transitioning from welfare to work. TMA provides Medicaid coverage to members of low-income families who would otherwise lose Medicaid coverage because of an increase in work hours or increased income from child or spousal support.
2009 Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA, P.L. 111-3) extends CHIP appropriations through 2013. CHIPRA also:

  • establishes the express lane eligibility option, allowing states to rely on findings about eligibility factors from another program such as the National School Lunch Program or the Temporary Assistance for Needy Families (TANF) program in order to enroll eligible children in Medicaid and CHIP;
  • phases out coverage of parents by 2014;
  • establishes the Medicaid and CHIP Payment and Access Commission (MACPAC) to review state and federal Medicaid and CHIP access and payment policies and to make recommendations to the Congress, the Secretary, and the states on issues affecting Medicaid and CHIP populations;
  • improves collection of physician-administered drug rebates; and
  • makes children’s hospitals eligible for the 340B Drug Pricing Program requiring drug manufacturers to offer Medicaid the lowest price paid by any other purchaser of the drug.

American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) contains a temporary increase to the federal medical assistance percentage (FMAP) for 2009 and 2010. It also establishes the Health Information Technology for Economic and Clinical Health Act of 2009, which creates the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs to encourage providers to adopt, implement, operate, upgrade, or meaningfully use EHR technology.

2010 Patient Protection and Affordable Care Act of 2010 (ACA, P.L. 111-148, as amended) expands Medicaid eligibility to include nearly all individuals under age 65 with incomes up to 133 percent FPL based on modified adjusted gross income. The U.S. Supreme Court later ruled in National Federation of Independent Business v. Sebelius that Congress could not compel states to participate in this Medicaid expansion. The ACA also:

  • increases some primary care payment rates provided by certain physicians to 100 percent of the Medicare payment rates for 2013 and 2014;
  • extends CHIP funding an additional two years through 2015 and enacts a 23 percentage point increase in CHIP’s enhanced FMAP;
  • prohibits Medicaid payments for health care-acquired conditions;
  • establishes a new Center for Medicare and Medicaid Innovation to support pilot programs for innovative payment and delivery arrangements in Medicare and Medicaid;
  • establishes the Federal Coordinated Health Care Office to improve the integration between Medicaid and Medicare for dually eligible beneficiaries;
  • schedules reductions in federal Medicaid DSH allotments; and
  • includes demonstration program funding for bundled payments, global payment for safety-net hospitals, pediatric accountable care organizations, and a project to provide Medicaid payment to institutions for mental disease in certain cases.

Amendments to the ARRA incorporated into H.R. 1586 (P.L. 111-226) extend the ARRA FMAP increase through June 30, 2011.

2012 Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96), extends Medicaid DSH allotment reductions to FY 2021.
2013 American Taxpayer Relief Act of 2012 (P.L. 112-240) extends Medicaid DSH allotment reductions to FY 2022.

Bipartisan Budget Act of 2013 (P.L. 113-67) allows state Medicaid agencies to recover any payments by a third party rather than limiting recovery to payments made solely for health care items or services and creates an exception to Medicaid’s anti-lien statute for third-party liability. It also delays the onset of Medicaid DSH allotment reductions until FY 2016 by eliminating the FY 2014 reduction and adding the FY 2015 reduction to that for FY 2016 and extends the reductions to FY 2023.

2014 Protecting Access to Medicare Act of 2014 (P.L. 113-93) delays the implementation of the third-party liability changes enacted in the Bipartisan Budget Act of 2013. It also:

  • eliminates the FY 2016 reduction in Medicaid DSH allotments, delaying the reductions until FY 2017, adjusting the amounts of reductions in future years and extending them to FY 2024;
  • creates a demonstration program for certified community behavioral health clinics;
  • extends a number of other Medicaid-related provisions, such as the Medicaid and CHIP express lane eligibility program and TMA; and
  • requires MACPAC to submit an annual report to Congress on DSH payments.
2015 Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10) extends funding for CHIP through FY 2017, leaving the enhanced federal CHIP matching rate intact and extending the authorization of contingency fund payments through FY 2017. It also:

  • permanently extends the Qualifying Individuals program, which pays Medicare Part B premiums for qualified individuals with incomes between 120–135 percent FPL;
  • permanently extends TMA;
  • extends the state express lane eligibility (ELE) option for children in Medicaid or CHIP from September 30, 2015 through September 30, 2017. ELE permits states to rely on findings from another program designated as an Express Lane agency, such as the Supplemental Nutrition Assistance Program, the National School Lunch Program, or Head Start, when making Medicaid and CHIP eligibility determinations; and
  • delays the time period for DSH allotment reductions to FYs 2018–2025, rather than FYs 2017–2024;
  • changes the aggregate amount of DSH allotment reductions to $2 billion in FY 2018, increasing by $1 billion each subsequent fiscal year up to $8 billion in FYs 2024 and 2025.

Bipartisan Budget Act of 2015 (P.L. 114-74) applies the Medicaid additional rebate requirement, imposed when a drug’s price rises faster than the rate of inflation, to generic drugs.

Consolidated Appropriations Act, 2016 (P.L. 114-113) provides additional funding for Medicaid and CHIP program integrity activities and limits state Medicaid durable medical equipment payment to Medicare payment rates.

2016 21st Century Cures Act (P.L. 114-255) includes provisions addressing a range of different Medicaid issues, including several designed to enhance access to mental health services and improve program integrity:

  • beginning in FY 2018, limits federal financial participation (FFP) for Medicaid payments for durable medical equipment, prosthetics and orthotics, and supplies to Medicare payment rates;
  • establishes a new requirement for states to screen and enroll all providers participating in Medicaid or CHIP managed care (who are not already enrolled) in the state’s fee-for-service program;
  • requires states to submit additional information to the Secretary about terminated providers, and requires the Secretary to create and maintain a centralized and uniform database of terminated Medicaid and CHIP providers with the reasons for termination;
  • prohibits FFP for items and services furnished by terminated providers (including those delivered through a managed care organization);
  • requires state Medicaid programs to provide an electronic directory of participating physicians to beneficiaries enrolled in fee for service or primary care case management;
  • permits non-elderly individuals with disabilities to set up special needs trusts for themselves without filing a petition with a court;
  • eliminates FFP for Medicaid expenditures for non-medically necessary prescription drugs used for cosmetic purposes or hair growth;
  • clarifies that Medicaid patients may see a physical and a mental health provider on the same day, eliminating the so-called same day billing glitch;
  • requires the Secretary to conduct studies, release reports, and issue guidance around several issues relating to mental health services (e.g., improving care delivery to individuals with mental illness, the emergency psychiatric demonstration project, and mental health parity);
  • specifies that children receiving Medicaid-covered inpatient psychiatric hospital services are eligible for the full range of EPSDT services; and
  • directs states to require the use of electronic visit verification systems for Medicaid-provided personal care by January 1, 2019 and home health services by January 1, 2023.

Comprehensive Addiction and Recovery Act of 2016 (CARA, P.L. 114-198) excludes certain abuse-deterrent drug formulations from the definition of line-extension drugs in the Medicaid drug rebate program. Additionally, the statute:

  • adds $5 million to the Medicaid Improvement Fund;
  • requires the Government Accountability Office (GAO) to issue reports on the impact of the Medicaid institution for mental diseases exclusion on access to treatment for individuals with substance abuse disorders, and on Medicaid coverage of neonatal abstinence syndrome; and
  • prohibits states from using or disclosing analytic technologies to identify improper Medicaid claims (including predictive modeling systems), except for the purposes of administering a state Medicaid or CHIP program (as long as a state has adequate data security and control policies).
2017 Second Continuing Appropriations, Fiscal Year 2018 (P.L. 115-90) includes provisions to ensure the availability of CHIP redistribution funding for states experiencing CHIP funding shortfalls before December 31, 2017.

Continuing Appropriations Act, 2018 and Supplemental Appropriations for Disaster Relief Requirements Act, 2017 (P.L. 115-96) provided an appropriation to make semi-annual CHIP allotments for the first half of FY 2018.

2018 The HEALTHY KIDS Act as incorporated into Making further continuing appropriations for the fiscal year ending September 30, 2018, and for other purposes (P.L. 115-120) extends funding for CHIP through FY 2023. It also:

  • extends the child enrollment contingency fund and express lane eligibility state option and funding for child obesity research demonstrations, the pediatric quality measures program, and outreach and enrollment grants until FY 2023;
  • provides an 11.5 percentage point increase to the enhanced CHIP matching rate in FY 2020;
  • returns the matching rate to the regular CHIP enhanced matching rate in FY 2021 and subsequent years;
  • continues the Medicaid and CHIP maintenance of effort requirements for children with family incomes below 300 percent FPL until FY 2023; and
  • creates a new program for CHIP children and children enrolled in look-alike programs to be included in the same risk pool.

 Bipartisan Budget Act of 2018 (P.L. 115-123) extends funding for CHIP through FY 2027. It also:

  • extends the CHIP child enrollment contingency fund the CHIP qualifying states option, the express lane eligibility state option, the CHIP and Medicaid maintenance of effort for coverage of children with family income at or below 300 percent FPL, pediatric quality measures program funding, and outreach and enrollment grant funding for four additional years, FY 2024–2027;
  • mandates that the state report the pediatric core set for Medicaid and CHIP beginning FY 2024;
  • permanently authorizes Medicare Advantage dual-eligible special needs plans;
  • directs the Secretary to establish a unified grievances and appeals process no later than April 1, 2020;
  • eliminates DSH allotment reductions for FYs 2018 and 2019;
  • changes the amount of DSH allotment reductions for FYs 2020–2025;
  • eliminates the requirement that states pay for prenatal care services and then seek reimbursement from the liable third party (i.e., pay and chase);
  • repeals the provision that permits states to recover a broader range of payments from third parties, and limits them to those where there is legal liability for health care items and services;
  • applies Medicaid TPL requirements to CHIP;
  • directs states to count qualified lottery winnings or qualified lump sum income for the purpose of MAGI-based eligibility determinations;
  • rescinds funding for the Medicaid Improvement Fund; and
  • makes a technical correction to the alternative rebate calculation for line extension drugs in Section 1927(c)(2)(C). The correction makes the additional rebate the greater of the line extension’s additional rebate or the highest additional rebate (calculated as a percentage of average manufacturer price) for any strength of the original single source drug or innovator multiple source drug.

Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act, P.L. 115-271):

  • requires state Medicaid programs to suspend rather than terminate Medicaid eligibility when youth under age 21 or former foster care youth up to age 26 are incarcerated;
  • requires states to ensure that former foster youth enrolled in Medicaid at age 18 are able to keep coverage in any state until age 26, effective January 1, 2023 or sooner if states so choose;
  • requires CMS to establish demonstration projects to increase Medicaid substance use disorder (SUD) provider capacity by providing an enhanced FMAP for SUD treatment services, authorizes planning grants in up to 10 states and the increased FMAP in up to 5 states;
  • requires state Medicaid programs to have drug utilization review safety edits for opioid refills, automated claims review process, monitoring of concurrent prescribing of opioids and benzodiazepines or antipsychotics, require managed care organizations to have these processes in place, and monitor the prescribing on antipsychotics in children;
  • directs the Secretary to issue guidance within one year of enactment on improving care for infants with neonatal abstinence syndrome and their families, and requires a GAO study on gaps in Medicaid coverage for pregnant and postpartum women with SUD;
  • extends the enhanced FMAP for Medicaid home health activities for beneficiaries with SUD from 8 to 10 quarters for state plan amendments approved on or after October 1, 2018, and requires state Medicaid programs to cover all medications approved by the U.S. Food and Drug Administration (FDA) for medication assisted treatment (MAT) in FYs 2021–2024;
  • allows states to provide infants under age one who have neonatal abstinence syndrome, and their families, with inpatient or outpatient care in residential pediatric recovery centers;
  • directs GAO to report on implementation of Medicaid peer support services;
  • directs the Secretary of HHS to issue guidance on state options for providing Medicaid SUD services via telehealth, directs GAO to report on children’s access to SUD services, and directs the Secretary to report on best practices to reduce barriers to SUD services for children via telehealth;
  • directs the Secretary to issue guidance on state options for non-opioid treatment and management of pain;
  • directs GAO to report on barriers to SUD treatment medications under various drug distribution models and options to address them;
  • authorizes Medicaid payments for coverable services provided outside an institution for mental diseases (IMD) for pregnant and postpartum women receiving SUD treatment services in an IMD;
  • codifies regulations permitting managed care plans to cover services in an IMD for up to 15 days per month;
  • directs MACPAC to study and report on state Medicaid MAT utilization controls in fee-for-service and managed care programs;
  • requires the Secretary of HHS to publish a state-level data book on prevalence and treatment of SUD among Medicaid beneficiaries using data from the Transformed Medicaid Statistical Information System (T-MSIS);
  • directs state Medicaid programs to ensure reasonable access to prescription drug monitoring programs (PDMPs);
  • requires the Secretary to report on Medicaid initiatives and strategies to provide housing-related services and supports to Medicaid beneficiaries with SUD who are at risk for or are experiencing homelessness;
  • directs the Secretary to provide technical assistance to states on providing housing-related supports to beneficiaries with SUD;
  • allows states adopting a Medicaid managed care medical loss ratio of 85 percent after FY 2020 and before FY 2024 to keep remittances collected from managed care organizations based on the regular FMAP instead of the enhanced FMAP;
  • mandates state reporting of the behavioral health measures of the adult core set measures beginning in 2024;
  • requires MACPAC to report on state Medicaid requirements and standards for IMDs;
  • mandates CHIP coverage of mental health services, including SUD services;
  • requires the Secretary to convene a stakeholder group to report on best practices for health care-related transitions for inmates of public institutions to the community, and to issue guidance on related demonstration waiver opportunities;
  • requires Medicaid providers to check PDMPs before prescribing Schedule II controlled substances, requires state Medicaid programs to report annually to CMS on PDMP data and information, requires the Secretary to issue guidance on PDMP best practices, and requires GAO to report on PDMP operations;
  • creates a Medicaid state option to cover medically necessary services (up to any 30 days in a 12-month period) in an IMD for FYs 2019–2023 for beneficiaries age 21–64 with SUD;
  • provides $30 million for the Medicaid Improvement Fund for oversight of contracts and contractors and evaluation of demonstration projects;
  • requires the Secretary to develop an action plan and recommendation related to Medicaid payment and coverage policies that create barriers to addressing the opioid crisis; and
  • directs the Secretary to issue guidance on existing Medicaid opportunities and flexibilities to provide SUD treatment to pregnant and postpartum women, parents and guardians, and children in family-focused residential treatment programs.
2019 Medicaid Services Investment and Accountability Act of 2019 (P.L. 116-16) made the following changes: 

  • establishes a state Medicaid option to provide health homes for children with medically complex conditions, beginning October 1, 2022;
  • requires drug manufacturers with Medicaid rebate agreements for covered outpatient drugs to disclose drug product information;
  • subjects manufacturers that knowingly misclassify drugs to civil monetary penalties;
  • requires manufacturers to compensate for rebates that were initially underpaid as a result of misclassification;
  • extends the third-party liability period for pediatric preventive services to 100 days;
  • provides additional funding for the Money Follows the Person Demonstration program; and
  • denies federal financial participation for certain expenditures related to vacuum erection systems and penile prosthetic implants.

The Continuing Appropriations Act, 2020, and Health Extenders Act of 2019 (P.L. 116-59) made the following change: 

  • implements MACPAC recommendation to remove the statutory requirement in Section 1927(k)(1)(C) of the Act that manufacturers blend the average manufacturer price of a brand drug and its authorized generic. 

Further Consolidated Appropriations Act, 2020 Subtitle B (P.L. 116-94) made the following changes:

  • extends the Community Mental Health Services Demonstration Program through May 22, 2020;
  • provides additional funds for each territory by amending the annual allotment under Section 1108(g) of the Social Security Act for FYs 2020 and 2021;
  • provides an enhanced FMAP beginning December 21, 2019 through FY 2021 of 76 percent for Puerto Rico and 83 percent for the other four territories;
  • establishes new program integrity and reporting requirements for all territories;
  • delays DSH reductions to May 23, 2020;
  • extends protections against the impoverishment of spouses of Medicaid beneficiaries using home- and community-based services until May 22, 2020; and
  • extends availability of Money Follows the Person demonstration program funds through May 22, 2020, and provides additional funding for the period beginning January 1, 2020 and ending May 22, 2020.
2020  The Families First Coronavirus Response Act (FFCRA, P.L. 116-127) included the following provisions:

  • requires Medicaid and CHIP coverage of COVID-19 testing with no cost sharing;
  • creates a state option to provide Medicaid coverage to uninsured individuals for purposes of COVID-19 testing during the period of the national emergency declaration (states would receive a 100 match for testing and the related office visit);
  • provides a temporary 6.2 percentage point increase to the FMAP to states, the District of Columbia, and the territories for the period of the national emergency declaration, provided they:
    • maintain eligibility standards, methodologies, and procedures that are no less restrictive than those in place at enactment,
    • do not increase premiums in premium assistance programs to levels greater than were in place on January 1, 2020,
    • provide an individual who enrolled in Medicaid as of the date of enactment or during the period of the emergency declaration period coverage until the end of the month in which the emergency period ends unless the individual requests to terminate eligibility or leaves the state, and
    • do not impose cost sharing on COVID-19 testing and treatment services;
  • provides territories with additional funding under their Section 1108 annual cap for fiscal years 2020 and 2021 that is not tied to COVID-19 testing and treatment services or the national emergency declaration.

Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136):

  • appropriates $100 billion to be available until expended for a provider relief fund to prevent, prepare for, and respond to coronavirus, domestically or internationally, and to reimburse hospitals and other eligible providers for health care related expenses or lost revenues that are attributable to coronavirus;
  • clarifies that states may provide coverage under the new optional COVID-19 related Medicaid eligibility group created by the FFCRA, to individuals with Medicaid coverage that is not considered minimum essential coverage, as well as that individuals who would be eligible for Medicaid under the new adult group if their state had expanded Medicaid can be covered;
  • clarifies that COVID-19 testing products are not required to be FDA-approved to be covered and exempt from cost-sharing in Medicaid;
  • allows states to receive the 6.2 percentage point increase in FMAP during the 30-day period after the CARES Act becomes law, even if the state has a premium higher than what was in effect on January 1, 2020, provided that the higher premium was in effect on the date that the CARES Act became law;
  • extends through November 30, 2020 the Money Follows the Person Demonstration program, spousal impoverishment protections, and the Certified Behavioral Health Clinic Demonstration program;
  • delays DSH cuts to December 1, 2020. DSH allotment will be reduced by $4 billion starting December 1, 2020 through the end of the FY 2021, and then by $8 billion in each of FYs 2022–2025;
  • aligns privacy rules in 42 CFR Part 2 and the Health Insurance Portability and Accountability Act (HIPAA, P.L. 104-191);
  • extends funding for community health centers, the National Health Service Corps, and teaching health centers that operate graduate medical education programs at current levels until November 30, 2020;
  • allows nurse practitioners, clinical nurse specialists, or physician assistants to certify the need for Medicare and Medicaid home health services;
  • allows Medicaid home and community-based services to be provided in acute care hospital settings if certain conditions are met including that these services:
    • are identified in an individual’s service plan,
    • meet individual needs that are unmet by hospital services,
    • do not substitute for services that the hospital is obligated to provide, and
    • are designed to ensure smooth transitions between acute care and home and community-based settings and preserve functional abilities.

Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139) provides an additional $75 billion in the provider relief fund.

2021 Consolidated Appropriations Act of 2021 (P.L. 116-260):

  • requires states to provide Medicaid coverage for citizens of freely associated states lawfully residing in the United States following the Compacts of Free Association (COFA) between the U.S. government and the governments of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau;
  • expands Medicaid State Fraud and Abuse Control Units authority outside institutional settings;
  • grants MACPAC and MedPAC access to prescription drug rebate data;
  • delays DSH allotment reductions until FY 2024, extends reductions until FY 2027, and increases the amount of reductions to $8 billion a year;
  • requires HHS to require states to report fee-for-service supplemental payment data beginning October 1, 2021, and make upper payment limit demonstration data publicly available on the CMS website;
  • redefines the DSH definition of Medicaid shortfall to exclude costs and payment for patients for whom Medicaid is not the primary payer, except for facilities with a high share or number of Medicaid SSI patient days, which have the option of calculating shortfall based on CMS’s current policy;
  • appropriates $450 million annually for the Money Follows the Person (MFP) Rebalancing Demonstration through September 30, 2023;
  • shortens the institutional stay requirements for MFP eligibility from 90 to 60 days, effective 30 days from enactment;
  • mandates MACPAC to report on the types of home- and community-based settings that qualify for both the MFP demonstrations and under the home- and community-based services (HCBS) settings final rule, and make recommendations to align MFP qualified residence criteria with the HCBS settings final rule, if appropriate, by March 17, 2023;
  • codifies the requirement that state Medicaid programs must cover non-emergency medical transportation (NEMT), including for beneficiaries enrolled with benchmark or benchmark-equivalent coverage;
  • makes routine patient costs for items and services furnished in connection with participation in a qualifying clinical trial a mandatory Medicaid benefit beginning January 1, 2022;
  • extends spousal impoverishment protections through FY 2023;
  • extends funding for the certified community behavioral health clinic (CCBHC) demonstration program through September 30, 2023, and appropriates not less than $600 million for the CCBHC Expansion Grant program.

American Rescue Plan Act (ARPA; P.L. 117-2):

  • increases FMAP by five percentage points for two years for states that newly expand Medicaid;
  • creates a state plan option that is available for five years beginning April 1, 2022, that permits states to extend postpartum coverage to twelve months;
  • provides a temporary increase in FMAP for HCBS by 10 percentage points through March 30, 2022, provided that states use the funds to supplement, not supplant existing HCBS spending;
  • increases FMAP to 100 percent for two years, until March 30, 2023, for services provided through Urban Indian Healthcare organizations and Native Hawaiian health systems;
  • adds coverage of COVID-19 treatment services without cost-sharing for enrollees in the COVID-19 testing group for the uninsured and those in alternative benefit plans, during the public health emergency period and through the end of the quarter that begins one year after the COVID-19 public health emergency period ends, respectively;
  • requires Medicaid and CHIP coverage of COVID-19 vaccines and administration, and treatment with no cost-sharing through the end of the first calendar quarter that begins one year after the COVID-19 public health emergency period ends;
  • provides 100 percent FMAP for the above mandatory coverage of COVID-19 vaccines and administration beginning April 1, 2021, through the first fiscal quarter that begins one year after the COVID-19 public health emergency period ends;
  • removes the cap on total drug rebates that manufacturers pay state Medicaid programs under the Medicaid drug rebate program starting in 2024;
  • creates an option for states to provide community-based mobile crisis intervention services for behavioral health crises for five years, with 85 percent FMAP for the first three years, with funding available until March 30, 2027;
  • appropriates $250 million to states to implement strike teams to respond to COVID-19 in nursing homes during the public health emergency;
  • requires that the HHS Secretary recalculate DSH allotments to ensure that states’ DSH allotments remain at the same levels that would have been paid without the FMAP increase from the FFCRA, while the increased FMAP is in effect (for the duration of the public health emergency).
2022 Consolidated Appropriations Act of 2022 (P.L. 117-103):

  • contains several provisions related to Medicaid in the territories, including:
    • extends the 83 percent FMAP for American Samoa, Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands through December 13, 2022;
    • provides a 76 percent FMAP for Puerto Rico through December 13, 2022;
    • provides $200 million for Puerto Rico for FY 2022 if it establishes a physician payment floor of at least 70 percent of Medicare;
    • requires Puerto Rico Medicaid to submit a report to Congress on Medicaid procurement processes and standards by December 1, 2022;
  • requires states to require state-licensed insurers to accept assignment from the state Medicaid program for all claims approved by Medicaid;
  • includes several provisions to improve maternal health outcomes, such as through grant programs and data collection.

HCFA was renamed the Centers for Medicare & Medicaid Services in 2001.
Source: MACPAC analysis as of April 2022.