Medicare Compliance & Reimbursement

The Centers for Medicare and Medicaid Services (CMS) recent move to limit expansion of the State Children's Health Insurance Program (SCHIP) has caught a lot of heat.

The new directive, obtained without congressional approval, blocks all states from extending Medicaid to children in families with income above 250 percent of the federal poverty line, "without first showing that 95 percent of those eligible below 200 percent of poverty have been enrolled in the program," according to a recent article in the Commonwealth Fund's CQ Healthbeat.

Meeting the unrealistic target is impossible, due to difficulty in locating those who are eligible and then convincing them to participate in the cumbersome enrollment process, stress advocates for the uninsured.

In a letter dated Aug. 17, 2007, to state officials, CMS announced a similar standard but did not mention the Medicaid expansion. However, in a Dec. 20 letter to state officials, Dennis Smith, director of the Center for Medicaid and State Operations, applied the stated standards to Medicaid, the article says.

CMS' plan is being viewed as a move to offset the proposals of various state officials who wanted to expand the coverage up to 300 percent of the poverty line.

Cindy Mann, executive director for the Center for Children and Families at the Georgetown University Health Policy Institute, said that this policy will hinder any state from covering children above 250 percent of poverty in SCHIP. She further stated that 23 percent of the states will be affected by this policy: 14 states have already covered children above 250 percent and nine states' legislatures had approved plans to go above 250 percent. Mann considers the new policy "an extraordinary departure from 20 years of law," according to HealthBeat. Other administration officials express concern that going above 250 percent crowds private coverage out of the marketplace.

David Parrella, head of the Connecticut Medicaid program, said that his state also intended to extend Medicaid coverage to children in families with incomes up to 300 percent of poverty. Until now, the states could raise the Medicaid children's coverage to essentially whatever percentage of the poverty line they wanted to fund and the recent directive would restrict their autonomy.

Parrella added that the state Medicaid directors would oppose the policy through legislation, though he ruled out the possibility of judicial challenge, saying that "individual states may or may not decide to do that."

However, Leighton Ku, a Medicaid analyst for the Center on Budget and Policy Priorities, said that the legislation to upend the directive has failed to obtain congressional approval. "Many people believe that the Aug. 17 letter in the first place was not legal," he said. "But getting a court to block the letter and its application would be a slow process."

Many lawmakers criticize the policy as an attempt to discourage the states' efforts to protect the health of low-income citizens. "The Bush administration has again chosen to prevent states from providing affordable coverage to more uninsured children," said Rep. John D. Dingell, D-MI. "The restrictions the administration is imposing -- on both SCHIP and Medicaid -- are arbitrary, shameful and harmful."

An aide to Senate Finance Committee chairman Max Baucus said the Montana Democrat "is watching closely to make certain that CMS does not block access to health care for poor, uninsured Americans who are eligible for Medicaid and who desperately need the doctor's visits and care the program provides."