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U.S. Code as of:
01/19/04
Section 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 (B), the
Federal medical assistance percentage (as defined in the first
sentence of section 1396d(b) of this title)) 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) for the provision of medical assistance on behalf of a
child during a presumptive eligibility period under section
1396r-1a of this title;
(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) of this section -
(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; and
(iv) 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).
(b) Enhanced FMAP
For purposes of subsection (a) of this section, the "enhanced
FMAP", for a State for a fiscal year, is equal to the Federal
medical assistance percentage (as defined in the first sentence of
section 1396d(b) of this title) for the State increased by a number
of percentage points equal to 30 percent of the number of
percentage points by which (1) such Federal medical assistance
percentage for the State, is less than (2) 100 percent; but in no
case shall the enhanced FMAP for a State exceed 85 percent.
(c) Limitation on certain payments for certain expenditures
(1) General limitations
Funds provided to a State under this subchapter shall only be
used to carry out the purposes of this subchapter (as described
in section 1397aa of this title), and any health insurance
coverage provided with such funds may include coverage of
abortion only if necessary to save the life of the mother or if
the pregnancy is the result of an act of rape or incest.
(2) Limitation on expenditures not used for medicaid or health
insurance assistance
(A) In general
Except as provided in this paragraph, the amount of payment
that may be made under subsection (a) of this section for a
fiscal year for expenditures for items described in paragraph
(1)(D) of such subsection shall not exceed 10 percent of the
total amount of expenditures for which payment is made under
subparagraphs (A), (C), and (D) of paragraph (1) of such
subsection.
(B) Waiver authorized for cost-effective alternative
The limitation under subparagraph (A) on expenditures for
items described in subsection (a)(1)(D) of this section 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.
(3) Waiver for purchase of family coverage
Payment may be made to a State under subsection (a)(1) of this
section 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
the amounts that the State would have paid to obtain comparable
coverage only of the targeted low-income children involved, 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
Amounts provided by the Federal Government, or services
assisted or subsidized to any significant extent by the Federal
Government, may not be included in determining the amount of
non-Federal contributions required under subsection (a) of this
section.
(5) Offset of receipts attributable to premiums and other
cost-sharing
For purposes of subsection (a) of this section, the amount of
the expenditures under the plan shall be reduced by the amount of
any premiums and other cost-sharing received by the State.
(6) Prevention of duplicative payments
(A) Other health plans
No payment shall be made to a State under this section for
expenditures for child health assistance provided for a
targeted low-income child under its plan to the extent that a
private insurer (as defined by the Secretary by regulation and
including a group health plan (as defined in section 1167(1) of
title 29), a service benefit plan, and a health maintenance
organization) would have been obligated to provide such
assistance but for a provision of its insurance contract which
has the effect of limiting or excluding such obligation because
the individual is eligible for or is provided child health
assistance under the plan.
(B) Other Federal governmental programs
Except as provided in subparagraph (A) or (B) of subsection
(a)(1) of this section or any other provision of law, no
payment shall be made to a State under this section for
expenditures for child health assistance provided for a
targeted low-income child under its plan to the extent that
payment has been made or can reasonably be expected to be made
promptly (as determined in accordance with regulations) under
any other federally operated or financed health care insurance
program, other than an insurance program operated or financed
by the Indian Health Service, as identified by the Secretary.
For purposes of this paragraph, rules similar to the rules for
overpayments under section 1396b(d)(2) of this title shall
apply.
(7) Limitation on payment for abortions
(A) In general
Payment shall not be made to a State under this section for
any amount expended under the State plan to pay for any
abortion or to assist in the purchase, in whole or in part, of
health benefit coverage that includes coverage of abortion.
(B) Exception
Subparagraph (A) shall not apply to an abortion only if
necessary to save the life of the mother or if the pregnancy is
the result of an act of rape or incest.
(C) Rule of construction
Nothing in this section shall be construed as affecting the
expenditure by a State, locality, or private person or entity
of State, local, or private funds (other than funds expended
under the State plan) for any abortion or for health benefits
coverage that includes coverage of abortion.
(d) Maintenance of effort
(1) In medicaid eligibility standards
No payment may be made under subsection (a) of this section
with respect to child health assistance provided under a State
child health plan if the State adopts income and resource
standards and methodologies for purposes of determining a child's
eligibility for medical assistance under the State plan under
subchapter XIX of this chapter that are more restrictive than
those applied as of June 1, 1997.
(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
of this chapter 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.
(e) Advance payment; retrospective adjustment
The Secretary may make payments under this section for each
quarter on the basis of advance estimates of expenditures submitted
by the State and such other investigation as the Secretary may find
necessary, and may reduce or increase the payments as necessary to
adjust for any overpayment or underpayment for prior quarters.
(f) Flexibility in submittal of claims
Nothing in this section or subsections (e) and (f) of section
1397dd of this title shall be construed as preventing a State from
claiming as expenditures in the quarter expenditures that were
incurred in a previous quarter.
(g) Authority for qualifying States to use certain funds for
medicaid expenditures
(1) State option
(A) In general
Notwithstanding any other provision of law, a qualifying
State (as defined in paragraph (2)) may elect to use not more
than 20 percent of any allotment under section 1397dd of this
title for fiscal year 1998, 1999, 2000, or 2001 (insofar as it
is available under subsections (e) and (g) of such section) for
payments under subchapter XIX of this chapter in accordance
with subparagraph (B), instead of for expenditures under this
subchapter.
(B) Payments to States
(i) In general
In the case of a qualifying State that has elected the
option described in subparagraph (A), subject to the
availability of funds under such subparagraph with respect to
the State, the Secretary shall pay the State an amount each
quarter equal to the additional amount that would have been
paid to the State under subchapter XIX of this chapter with
respect to expenditures described in clause (ii) if the
enhanced FMAP (as determined under subsection (b) of this
section) had been substituted for the Federal medical
assistance percentage (as defined in section 1396d(b) of this
title).
(ii) Expenditures described
For purposes of this subparagraph, the expenditures
described in this clause are expenditures, made after August
15, 2003, and during the period in which funds are available
to the qualifying State for use under subparagraph (A), for
medical assistance under subchapter XIX of this chapter to
individuals who have not attained age 19 and whose family
income exceeds 150 percent of the poverty line.
(iii) No impact on determination of budget neutrality for
waivers
In the case of a qualifying State that uses amounts paid
under this subsection for expenditures described in clause
(ii) that are incurred under a waiver approved for the State,
any budget neutrality determinations with respect to such
waiver shall be determined without regard to such amounts
paid.
(2) Qualifying State
In this subsection, the term "qualifying State" means a State
that, on and after April 15, 1997, has an income eligibility
standard that is at least 184 percent of the poverty line with
respect to any 1 or more categories of children (other than
infants) who are eligible for medical assistance under section
1396a(a)(10)(A) of this title or, in the case of a State that has
a statewide waiver in effect under section 1315 of this title
with respect to subchapter XIX of this chapter that was first
implemented on August 1, 1994, or July 1, 1995, has an income
eligibility standard under such waiver for children that is at
least 185 percent of the poverty line, or, in the case of a State
that has a statewide waiver in effect under section 1315 of this
title with respect to subchapter XIX of this chapter that was
first implemented on January 1, 1994, has an income eligibility
standard under such waiver for children who lack health insurance
that is at least 185 percent of the poverty line, or, in the case
of a State that had a statewide waiver in effect under section
1315 of this title with respect to subchapter XIX of this chapter
that was first implemented on October 1, 1993, had an income
eligibility standard under such waiver for children that was at
least 185 percent of the poverty line and on and after July 1,
1998, has an income eligibility standard for children under
section 1396a(a)(10)(A) of this title or a statewide waiver in
effect under section 1315 of this title with respect to
subchapter XIX of this chapter that is at least 185 percent of
the poverty line.
(3) Construction
Nothing in paragraphs (1) and (2) shall be construed as
modifying the requirements applicable to States implementing
State child health plans under this subchapter.
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