H.R. 3922 extends funding for the Children’s Health Insurance Program (CHIP) through Fiscal Year (FY) 2022, Federally Qualified Health Centers (FQHCs) through FY2019, and revises CHIP and Medicaid.

Specifically the bill:

Extends funding through FY2022 for CHIP allotments, as well as the Child Enrollment Contingency Fund, the Childhood Obesity Demonstration Project, and Pediatric Quality Measures Program, and specified outreach and enrollment grants;

Reauthorizes through FY2022 the qualifying-states option and the express-land eligibility option;

Extends funding through FY2019 for FQHCs through the Community Health Center Fund;

Extends funding through FY2019 for the National Health Service Corps, Teaching Health Center Graduate Medical Education, Family-to-Family Health Information Centers, the Youth Empowerment Program, and the Personal Responsibility Education Program;

Allows state CHIP programs to adopt more restrictive eligibility standards with respect to children in families whose income exceeds 300% of the poverty line who have an offer of employer-sponsored insurance;

Ensures the unwinding of the enhanced Federal Matching Assistance Percentage (E-FMAP) for child-health assistance by not extending the E-FMAP beyond FY2019, providing a 11.5 percent E-FMAP in FY2020, and returning to the traditional pre-ACA CHIP matching rate in FY2021 and FY2022;

Eliminates Medicaid payment reductions for disproportionate-share hospitals (DSH allotments) in FY2018 and FY2019, and offsets the cost of this policy with new additional reductions in FY2021 through FY2023;

Increases Medicaid funding for Puerto Rico and the Virgin Islands through FY2019 and allows funding be further increased through 2019 if the oversight board certifies Puerto Rico takes specific actions to improve its Medicaid program’s quality, integrity, and accountability;

Allows states to define their grace period requirements for patients receiving advance premium tax credits (APTCs) and cost sharing reductions (CSRs) or move to a default of one month;

Redirects Prevention and Public Health Fund dollars to support critical prevention and public health programs in this bill;

Improves current law related to third-party liability under Medicaid and CHIP to save Medicaid and CHIP programs by ensuring other liable third parties pay to the extent of their liability;

Specifies how a state must treat qualified lottery winnings and lump-sum income for purposes of determining Medicaid eligibility.

Children’s Health Insurance Program (CHIP) – CHIP is a means-tested program that provides health coverage to targeted low-income children and some pregnant women in families that have annual income above Medicaid eligibility levels but have no health insurance[1]. CHIP is financed by the federal government and the states. The states are responsible for administering CHIP. Federal CHIP funding expired on September 30, 2017.

After the expiration of FY2017 funds, and until the provision of FY2018 funds, states may use redistributed funds and unspent allotments to continue to provide healthcare coverage, however at least one state is projected to exhaust all federal CHIP funding as early as November[2], and all states are expected to exhaust federal funding unless FY2018h funding is provided.

**Federal Qualified Health Centers (FQHCs) **– FQHCs, specifically, community health centers, are community-based, patient-centered organizations that provide comprehensive health services to medically-underserved populations, regardless of ability to pay. Funding for community health centers expired at the end of FY2017. This bill would extend funding for an additional two years.

**APTCs and CSRs Grace Period **– Under current law, subsidized patients with exchange plans have a three-month grace period if they do not pay their insurance premiums, meaning their plan cannot discontinue coverage for nonpayment of premiums[3]. H.R. 3922 allows states to define their own grace periods, or move to a default of one month.

**Prevention and Public Health Fund (PPHF) **– PPHF was created under the Affordable Care Act to fund “programs authorized for prevention, wellness, and public health activities”. H.R. 3922 allocates more than $6 billion from this fund to support public health programs under the bill[4].

Federal Matching Assistance Percentage – CHIP spending is by the federal government at a matching rate higher than that of the Medicaid program. This is known as the enhanced federal medical assistance percentage (E-FMAP). Under current law, a 23 percentage point increase in the CHIP federal matching rate that went into effect in FY2016 will expire at the end of FY2019. H.R. 3922 sets this E-FMAP at 11.5 in FY2020 and returns to CHIP’s historic matching rates beginning in FY2021.[5]

**DSH Allotments **– Under current law, allotments are made to states for payments to hospitals that treat a disproportionate share of uninsured and Medicaid patients. DSH allotments are increased each year by the percent change in the consumer price index and then will be adjusted by scheduled cuts between 2018 and 2025. H.R. 3921 eliminates the scheduled cuts for in FY2018 and FY2019, and offsets the cost of this policy with new additional reductions in FY2021 through FY2023.

Source: Republican Policy Committee