§ 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 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 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 of this title; (B) for the provision of medical assistance on behalf of a child during a presumptive eligibility period under section 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 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 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 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 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 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 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 of this title or with hospitals such as those that receive disproportionate share payment adjustments under section or 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 of title ), 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 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 of this title. (iii) State expenditures under health benefits coverage under an existing comprehensive State-based program, described in section 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 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.

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