St@teside

The Children’s Health Insurance Program Reauthorization Act (the reauthorization law known as CHIPRA), enacted on February 4, 2009, includes a number of significant program and financing changes that affect both Medicaid and the Children’s Health Insurance Program (CHIP).  States that are focused on increased enrollment and retention now have new and important financial support: the Medicaid Performance Bonus. The bonus recognizes the additional costs for states making a concerted effort to enroll eligible children in Medicaid above targets specified in the law, and therefore is designed to help offset some of these costs.  The state receives the Medicaid bonus as a lump sum payment, but essentially the bonuses increase a state’s federal Medicaid matching rate for child enrollment that exceeds the target level.[1]  The table below shows examples of the effective Medicaid match rate for achieving enrollment targets:

To qualify for the performance bonus, states must have already implemented or will soon adopt at least five of the following eight policies (known as the “5 of 8” policy measures) in both Medicaid and CHIP:

• 12-month continuous coverage
• No asset test (or simplified asset verification)
• No face-to-face interview requirement
• Joint application and the same information verification process for separate Medicaid and CHIP programs
• Administrative or ex parte renewals
• Presumptive eligibility
• Express Lane eligibility
• Offer a premium assistance option (not required to be offered to both Medicaid and CHIP beneficiaries)

According to the Kaiser Family Foundation and the Center for Children and Families at the Georgetown University Health Policy Institute, most of these strategies required for performance bonus eligibility have been shown to be effective in increasing enrollment and retention of eligible children.  Better enrollment and retention lead to greater access to children’s preventive care and improvement in health outcomes.

If states determine that their existing enrollment and renewal policies do not allow for bonus eligibility, states should consider implementing additional strategies so that they can qualify for the bonus if they are very successful in enrolling eligible children above target levels.  Measures must be in place for the entire federal fiscal year 2009 in order for a state to qualify.  Therefore, it is imperative that states move quickly to implement any necessary changes.  Here are some other key performance bonus dates:

• Bonus calculation for the first three years will be based on the number of children enrolled under the state’s eligibility criteria in effect on July 1, 2008.  States that expand eligibility for children after that date can begin to count newly eligible children after the third year of implementation.
• For 2010 and beyond, the “5 of 8” policies must be in place for the full federal fiscal year for the state to qualify for a bonus.
• Bonuses will be paid by December 31 following the end of the fiscal year. [2]

Does your state need technical assistance with implementing these measures? Please contact State Coverage Initiatives (SCI) program (phone: 202-292-6731; email: sci@academyhealth.org) to discuss your needs.

The Kaiser Family Foundation and the Center for Children and Families at the Georgetown University Health Policy Institute are producing a “CHIP TIPS” series which looks at new opportunities for covering children under Medicaid and CHIP based on provisions included in CHIPRA.  The two briefs released so far have both focused on the performance bonus.  For information about the specifics of each “5 of 8” policy measure, more details about bonus computation, and links to relevant resources, please see CHIP TIPS:  Medicaid Performance Bonus and CHIP TIPS:  Medicaid Performance Bonus “5 of 8” Requirements.