Medicaid and CHIP
Opportunities Exist to Improve U.S. Insular Area Demographic Data That Could Be Used to Help Determine Federal Funding Gao ID: GAO-09-558R June 30, 2009The five largest insular areas of the United States--American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto Rico, and the U.S. Virgin Islands--receive federal funding through Medicaid and the State Children's Health Insurance Program (CHIP), joint federal-state programs that finance health care for certain low-income individuals. These programs are administered and funded differently in the insular areas when compared to the states. For example, while states must extend Medicaid eligibility to certain individuals whose incomes are at or below a percentage of the federal poverty level (FPL), the insular areas are not required to cover this population. In addition, under both Medicaid and CHIP, the federal government matches state or local government spending. However, federal law establishes the federal matching rate for expenditures by the insular areas at the lowest rate available to states, while matching rates for the states are determined each year based on a formula that takes into account variations in per capita income in each state. Furthermore, federal Medicaid spending in the insular areas is subject to an annual limit that does not apply to the states. Finally, while CHIP funding is subject to annual limits for both states and insular areas, the formula for determining each state's CHIP allotment differs from the formula used for allotments for the insular areas. Taken together, these differences in funding formulas have contributed to per capita federal Medicaid and CHIP spending that has been lower in the insular areas than in the states. Some insular area governors and other insular area officials contend that federal Medicaid and CHIP spending in the insular areas is not sufficient to meet the needs of the areas and have recommended that the Medicaid spending limits be removed and the federal matching rates for Medicaid and CHIP be increased. However, Congress and others have raised concerns that limitations in Medicaid and CHIP program data and in available demographic data for the insular areas make it difficult to accurately assess the needs of the areas. For example, states are required to report all of their Medicaid and CHIP spending to the Centers for Medicare & Medicaid Services (CMS)--the agency that oversees these programs. In contrast, insular areas must report only spending up to their annual limits. Furthermore, while the Bureau of the Census (Census) collects household demographic data from the states annually, it generally only collects household demographic data for the insular areas once every 10 years as part of the decennial census.
Insular areas' Medicaid and CHIP income eligibility criteria vary, and contribute to wide variation in the estimated percent of the population covered by Medicaid in each of the insular areas. For example, two of the areas base their income eligibility criteria on the FPL, while two other areas base their income eligibility criteria on locally established income limits. In 2008, the estimated percentage of the populations covered by Medicaid in the insular areas ranged from 6 percent in the U.S. Virgin Islands to 88 percent in American Samoa, according to the Congressional Research Service (CRS). In addition, CMS provides the insular areas with flexibility in how they report Medicaid and CHIP enrollment data and requires the areas to report spending data quarterly using a standard form. Based on their review of reported spending data, CMS officials have determined that spending reports from the insular areas are sufficient to justify the federal matching payments made to them. For a number of reasons, CPS and ACS data are not available for the five insular areas in our review. However, Census updates certain data annually for Puerto Rico, including demographic, socioeconomic, and housing data collected through a tailored version of the ACS. According to Census officials, such data could be used in a CHIP allotment formula that used ACS data. Similar demographic, socioeconomic, and housing data for the other four insular areas are collected once every 10 years through the decennial census. Census officials identified two options to update demographic information for the other four insular areas between decennial censuses--the agency could implement survey programs to collect demographic, socioeconomic, and housing data or it could update certain demographic data through its Population Estimates Program. However, according to agency officials, the agency would need additional resources or would need to take additional steps to develop either of these updates, depending on the method used.
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Director: Team: Phone:GAO-09-558R, Medicaid and CHIP: Opportunities Exist to Improve U.S. Insular Area Demographic Data That Could Be Used to Help Determine Federal Funding
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GAO-09-558R:
United States Government Accountability Office:
Washington, DC 20548:
June 30, 2009:
The Honorable John D. Rockefeller IV:
Chairman:
Subcommittee on Health Care:
Committee on Finance:
United States Senate:
Subject: Medicaid and CHIP: Opportunities Exist to Improve U.S. Insular
Area Demographic Data That Could Be Used to Help Determine Federal
Funding:
Dear Mr. Chairman:
The five largest insular areas of the United States--American Samoa,
the Commonwealth of the Northern Mariana Islands (CNMI), Guam, Puerto
Rico, and the U.S. Virgin Islands--receive federal funding through
Medicaid and the State Children's Health Insurance Program (CHIP),
joint federal-state programs that finance health care for certain low-
income individuals. These programs are administered and funded
differently in the insular areas when compared to the states.[Footnote
1] For example, while states must extend Medicaid eligibility to
certain individuals whose incomes are at or below a percentage of the
federal poverty level (FPL),[Footnote 2] the insular areas are not
required to cover this population. In addition, under both Medicaid and
CHIP, the federal government matches state or local government
spending. However, federal law establishes the federal matching rate
for expenditures by the insular areas at the lowest rate available to
states, while matching rates for the states are determined each year
based on a formula that takes into account variations in per capita
income in each state.[Footnote 3] Furthermore, federal Medicaid
spending in the insular areas is subject to an annual limit that does
not apply to the states.[Footnote 4] Finally, while CHIP funding is
subject to annual limits for both states and insular areas, the formula
for determining each state's CHIP allotment differs from the formula
used for allotments for the insular areas. Taken together, these
differences in funding formulas have contributed to per capita federal
Medicaid and CHIP spending that has been lower in the insular areas
than in the states.[Footnote 5]
Some insular area governors and other insular area officials contend
that federal Medicaid and CHIP spending in the insular areas is not
sufficient to meet the needs of the areas and have recommended that the
Medicaid spending limits be removed and the federal matching rates for
Medicaid and CHIP be increased.[Footnote 6] However, you and others
have raised concerns that limitations in Medicaid and CHIP program data
and in available demographic data for the insular areas make it
difficult to accurately assess the needs of the areas. For example,
states are required to report all of their Medicaid and CHIP spending
to the Centers for Medicare & Medicaid Services (CMS)--the agency that
oversees these programs. In contrast, insular areas must report only
spending up to their annual limits. Furthermore, while the Bureau of
the Census (Census) collects household demographic data from the states
annually, it generally only collects household demographic data for the
insular areas once every 10 years as part of the decennial census.
The Children's Health Insurance Program Reauthorization Act of 2009
(CHIPRA), which was enacted in February 2009,[Footnote 7] modified the
formula for determining federal CHIP allotments for states and insular
areas for fiscal years 2009 through 2013. Under CHIPRA, increases in
federal CHIP allotments to the insular areas and the states are to be
based, in part, on any annual percentage increase in the population of
children as determined using the most recent estimates published by
Census.[Footnote 8] Prior to CHIPRA, for each fiscal year, CHIP
allotments for the insular areas were to be distributed based on set
percentages, and for the states were to be determined based, in part,
on population data derived from the Current Population Survey (CPS), a
monthly survey administered by the Department of Commerce (DOC) and
designed to capture national demographic trends. Because the CPS was
not designed to capture state-level demographic data, some researchers
were concerned about the use of CPS data to determine CHIP funding for
each state. CHIPRA directs the Secretary of DOC to assess whether
available data from its annual American Community Survey (ACS)--an
annual household survey designed to capture community-level
demographic, housing, and socioeconomic data--would provide more
reliable estimates than CPS for the purpose of determining increases in
federal CHIP allotments.
In light of these issues, you asked us to examine the Medicaid and CHIP
programs in the insular areas and to provide information on the
availability of program-related data for the areas. Specifically, we
examined (1) Medicaid and CHIP income eligibility criteria used by the
insular areas, (2) CMS's approach to collecting Medicaid and CHIP
enrollment and spending data from the insular areas and its assessment
of the reported spending data, and (3) the extent to which CPS or ACS
data are available for the insular areas.
To examine Medicaid and CHIP income eligibility criteria, we reviewed
relevant federal laws and regulations, reviewed insular areas' approved
State Medicaid Plans, and interviewed officials from CMS regional
offices and from each of the insular area Medicaid offices. To examine
CMS's approach to collecting Medicaid and CHIP enrollment data from the
insular areas, we interviewed officials from CMS regional offices and
from each insular area and obtained recent enrollment data from the
insular areas. To examine CMS's approach to collecting Medicaid and
CHIP spending data from the insular areas, we interviewed officials
from CMS regional offices and each insular area and obtained from CMS
electronic copies of summarized Medicaid spending reports from 1991
through 2008--the most recent data available at the time of our review.
To examine CMS's assessment of the insular area spending data, we
interviewed CMS regional officials, reviewed CMS guidance on its review
of spending data, and reviewed the single audit reports available for
the insular areas for fiscal years 2004 through 2007--the most recent
available at the time or our review.[Footnote 9] We did not
independently verify the reliability of the enrollment and spending
data reported to CMS by the insular areas because our analysis focused
on CMS's approach to collecting and reviewing these data, not the data
themselves. To examine the extent to which CPS or ACS data are
available for the insular areas, we interviewed officials from the U.S.
Department of Interior, which has general federal administrative
authority over most insular areas, and from Census. We also reviewed
related congressional testimony by a Census official.
We conducted our work from October 2008 through June 2009 in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
In summary, insular areas' Medicaid and CHIP income eligibility
criteria vary, and contribute to wide variation in the estimated
percent of the population covered by Medicaid in each of the insular
areas. For example, two of the areas base their income eligibility
criteria on the FPL, while two other areas base their income
eligibility criteria on locally established income limits. In 2008, the
estimated percentage of the populations covered by Medicaid in the
insular areas ranged from 6 percent in the U.S. Virgin Islands to 88
percent in American Samoa, according to the Congressional Research
Service (CRS). In addition, CMS provides the insular areas with
flexibility in how they report Medicaid and CHIP enrollment data and
requires the areas to report spending data quarterly using a standard
form. Based on their review of reported spending data, CMS officials
have determined that spending reports from the insular areas are
sufficient to justify the federal matching payments made to them. For a
number of reasons, CPS and ACS data are not available for the five
insular areas in our review. However, Census updates certain data
annually for Puerto Rico, including demographic, socioeconomic, and
housing data collected through a tailored version of the ACS. According
to Census officials, such data could be used in a CHIP allotment
formula that used ACS data. Similar demographic, socioeconomic, and
housing data for the other four insular areas are collected once every
10 years through the decennial census. Census officials identified two
options to update demographic information for the other four insular
areas between decennial censuses--the agency could implement survey
programs to collect demographic, socioeconomic, and housing data or it
could update certain demographic data through its Population Estimates
Program. However, according to agency officials, the agency would need
additional resources or would need to take additional steps to develop
either of these updates, depending on the method used.
To improve the availability of the data that could be used in a CHIP
allotment formula, we are recommending that the Secretary of Commerce
direct Census to update, between decennial censuses, the demographic
data for American Samoa, CNMI, Guam, and the U.S. Virgin Islands. In
written comments on a draft of this report, DOC agreed with our
recommendation.
Background:
American Samoa, Guam, CNMI, the Commonwealth of Puerto Rico, and the
U.S. Virgin Islands are the largest insular areas of the United States.
While each insular area has its own government and maintains a unique
diplomatic relationship with the United States, all areas are under the
sovereignty of the United States.[Footnote 10] With the exception of
Puerto Rico, the populations in the insular areas are small relative to
the states, and with the exception of Guam, they are significantly
poorer.[Footnote 11] Although insular area participation in Medicaid
and CHIP is voluntary, all insular areas currently participate in both
programs.
Medicaid:
Established in 1965, Medicaid operates as a joint federal-state program
to finance health care coverage for certain categories of low-income
individuals. To obtain federal matching funds, the states and insular
areas must operate their Medicaid programs within broad federal
guidelines and under federally approved plans. Two insular areas,
however, operate their Medicaid programs under federally approved
waivers, which exempt them from federal eligibility
requirements.[Footnote 12] The remaining insular areas have some
flexibility in covering their Medicaid populations.[Footnote 13]
Program eligibility in the insular areas is generally limited to
certain categories of individuals whose incomes do not exceed certain
limits.
The federal share of spending on services for the insular areas'
Medicaid programs--the Federal Medical Assistance Percentage (FMAP)--
is statutorily set at 50 percent, the lowest rate available to any
state under the program.[Footnote 14] In addition, total federal
Medicaid spending in the insular areas is subject to an annual limit or
cap.[Footnote 15] As a result, the federal government will match every
Medicaid dollar spent by the insular areas up to each area's limit, and
any insular area spending above the limit is not matched.
Under the Balanced Budget Act of 1997, the fiscal year 1998 limits on
federal Medicaid spending for the insular areas were increased by
varying amounts, subject to an additional percentage increase in the
medical care component of the Consumer Price Index (CPI) for all urban
consumers for subsequent fiscal years.[Footnote 16] The Jobs and Growth
Tax Relief Reconciliation Act of 2003 provided the insular areas with a
temporary increase of 5.9 percent above each areas' annual limits for
fiscal years 2003 and 2004,[Footnote 17] and the Deficit Reduction Act
of 2005 increased the annual limits in fiscal years 2006 and 2007 by
varying amounts in each of the insular areas, and maintained these
increases for subsequent fiscal years.[Footnote 18] Figure 1 shows the
changes in insular areas' annual federal Medicaid spending limits from
1998 through 2008. (See enclosure I for more detail on federal Medicaid
spending to the insular areas.) More recently, the American Recovery
and Reinvestment Act of 2009 (Recovery Act), which was enacted on
February 17, 2009, provides temporary increases to each insular area's
FMAP and annual federal spending limits from the first quarter of
fiscal year 2009 through the first quarter of fiscal year 2011.
[Footnote 19]
Figure 1: Insular Areas' Federal Medicaid Spending Limits, 1998 through
2008:
[Refer to PDF for image: multiple line graph]
Year: 1998;
CNMI: $1.8 million;
Guam: $5.1 million;
Puerto Rico: $ million;
American Samoa: $3 million;
U.S. Virgin Islands: $5.3 million.
Year: 1999;
CNMI: $1.9 million;
Guam: $5.2 million;
Puerto Rico: $171.5 million;
American Samoa: $3.1 million;
U.S. Virgin Islands: $5.4 million.
Year: 2000;
CNMI: $1.9 million;
Guam: $5.4 million;
Puerto Rico: $177.5 million;
American Samoa: $3.2 million;
U.S. Virgin Islands: $5.6 million.
Year: 2001;
CNMI: $2.0 million;
Guam: $5.6 million;
Puerto Rico: $184.4 million;
American Samoa: $3.3 million;
U.S. Virgin Islands: $5.8 million.
Year: 2002;
CNMI: $2.1 million;
Guam: $5.9 million;
Puerto Rico: $192.9 million;
American Samoa: $3.5 million;
U.S. Virgin Islands: $6.1 million.
Year: 2003;
CNMI: $2.3 million;
Guam: $6.3 million;
Puerto Rico: $207.3 million;
American Samoa: $3.7 million;
U.S. Virgin Islands: $6.5 million.
Year: 2004;
CNMI: $2.4 million;
Guam: $6.7 million;
Puerto Rico: $219.4 million;
American Samoa: $4.0 million;
U.S. Virgin Islands: $6.9 million.
Year: 2005;
CNMI: $2.4 million;
Guam: $6.7 million;
Puerto Rico: $219.6 million;
American Samoa: $4.0 million;
U.S. Virgin Islands: $6.9 million.
Year: 2006;
CNMI: $3.5 million;
Guam: $9.5 million;
Puerto Rico: $241 million;
American Samoa: $6.1 million;
U.S. Virgin Islands: $9.7 million.
Year: 2007;
CNMI: $4.6 million;
Guam: $12.3 million;
Puerto Rico: $250.4 million;
American Samoa: $8.3 million;
U.S. Virgin Islands: $12.5 million.
Year: 2008;
CNMI: $4.8 million;
Guam: $12.8 million;
Puerto Rico: $260.4 million;
American Samoa: $8.6 million;
U.S. Virgin Islands: $13.0 million.
Source: GAO analysis of Centers for Medicare & Medicaid Services (CMS)
data.
Note: Figure 1 uses a logarithmic scale. A logarithmic scale can be
useful when displaying data with large differences in numeric values.
Logarithmic scales do not include zero.
[End of figure]
CHIP:
In 1997, Congress created CHIP, a joint federal-state program that
provides health care coverage to uninsured, low-income children living
in families whose incomes exceed the eligibility limits for Medicaid
programs.[Footnote 20] States and insular areas have three options for
implementing CHIP; they can either expand their Medicaid programs,
establish separate child health programs, or do a combination of both.
The federal government matches insular area CHIP spending using an
enhanced FMAP, which for all five areas is at the lowest rate available
for the states--65 percent.[Footnote 21] Federal CHIP spending for both
the insular areas and the states is limited to an annual allotment set
in statute.[Footnote 22]
Prior to CHIPRA, insular areas were allotted 0.25 percent of the total
annual amount appropriated for CHIP allotments, which was distributed
among the insular areas using statutorily set percentages,[Footnote 23]
and allotments to the states were to be determined based, in part, on
population data derived from the CPS.[Footnote 24] (See enclosure II.)
Under CHIPRA, increases in CHIP allotments for fiscal years 2009
through 2013 for states and the insular areas are to be determined
based, in part, on any annual percentage increase in the population of
children using the most recent estimates published by Census prior to
the beginning of each fiscal year.[Footnote 25] CHIPRA also directs the
Secretary of DOC--the department responsible for collecting demographic
data in the United States--to assess whether available data from the
ACS would provide more reliable estimates than CPS for determining
increases in these CHIP allotments.[Footnote 26] Based on this
assessment, the Secretary of DOC must recommend to the Secretary of HHS
whether ACS data should be used in lieu of, or in combination with, CPS
data, a recommendation that the Secretary of HHS may implement using a
transition period.[Footnote 27]
Medicaid and CHIP Program Data:
Insular areas report Medicaid and CHIP enrollment and spending data to
CMS, and CMS uses the spending reports to determine the amount of
federal Medicaid and CHIP matching payments.[Footnote 28] CMS's Region
2 office, located in New York, New York, has oversight responsibility
for Puerto Rico and the U.S. Virgin Islands and reviews reports
submitted by these areas. CMS's Region 9 office, located in San
Francisco, California, has oversight responsibility for American Samoa,
CNMI, and Guam and reviews the reports submitted by these areas. All
five insular areas operate their CHIP programs as expansions of their
Medicaid programs, and accordingly, include CHIP enrollment and
spending data in their Medicaid reports. Because federal Medicaid and
CHIP spending in the insular areas is limited, the areas are required
to report only local spending up to that limit. However, CMS officials
told us that for several years the agency has encouraged the insular
areas to report actual spending, including any spending above the
annual federal limits, to provide better estimates of Medicaid and CHIP
costs for each area.
Insular Areas' Medicaid and CHIP Income Eligibility Criteria Vary, and
Wide Variation in Covered Populations Is Reported:
Each insular area relies on different income criteria to determine
Medicaid and CHIP eligibility. Two of the areas explicitly base
Medicaid income eligibility on the FPL: Guam extends eligibility to
certain individuals earning up to 100 percent of the FPL, and American
Samoa extends eligibility to individuals earning under 200 percent of
the FPL. The other three areas use different income eligibility
criteria for eligible individuals, such as locally established income
limits.[Footnote 29] As a result, the Medicaid annual income
eligibility limits for individuals vary widely among the five insular
areas, ranging from $4,800 in Puerto Rico to about $22,000 in American
Samoa. For the CHIP program, four of the five insular areas' income
eligibility criteria are the same as their Medicaid income eligibility
criteria.[Footnote 30] Puerto Rico is the only insular area that uses
CHIP funds to extend Medicaid eligibility to children in families
earning incomes that exceed its Medicaid program's income eligibility
limits. See table 1 for more detailed descriptions of the Medicaid and
CHIP income eligibility criteria used in each insular area.
Table 1: Insular Area Medicaid and CHIP Income Eligibility Criteria in
2009:
Insular area: American Samoa;
Program: Medicaid and CHIP;
Income eligibility criteria[A]: Below 200 percent of the FPL;
2009 annual income limits for an individual[B]: $21,660.
Insular area: CNMI;
Program: Medicaid and CHIP;
Income eligibility criteria[A]: At or below 150 percent of the
Supplemental Security Income (SSI) federal benefit amount[C];
2009 annual income limits for an individual[B]: $12,132.
Insular area: Guam; Program: Medicaid and CHIP; Income eligibility
criteria[A]: At or below 100 percent of the FPL; 2009 annual income
limits for an individual[B]: $10,830.
Insular area: Puerto Rico;
Program: Medicaid;
Income eligibility criteria[A]: At or below 100 percent of the
commonwealth poverty level (CPL)[D];
2009 annual income limits for an individual[B]: $4,800[E].
Insular area: Puerto Rico;
Program: CHIP;
Income eligibility criteria[A]: Over 100 percent and up to 200 percent
of the CPL;
2009 annual income limits for an individual[B]: Over $4,800 and up to
$9,600.
Insular area: U.S. Virgin Islands;
Program: Medicaid and CHIP;
Income eligibility criteria[A]: At or below locally established income
limits[D];
2009 annual income limits for an individual[B]: $5,500.
Source: CMS and insular area officials and GAO analysis of insular area
Medicaid State Plans.
[A] In addition to income eligibility requirements, some insular areas
consider resources when determining Medicaid eligibility.
[B] CHIP eligibility is generally determined based on family income.
[C] SSI is a federal income supplement program designed to help aged,
blind, and disabled people who have little or no income and provides
cash to meet basic needs for food, clothing, and shelter.
[D] Puerto Rico and the U.S. Virgin Islands use a lower Medicaid income
limit for certain groups of people. The CPL is used by Puerto Rico as a
measure of poverty in lieu of the FPL.
[E] Certain aged, blind, and disabled individuals who earn up to $9,600
per year may also qualify for Medicaid in Puerto Rico. In these cases,
up to $4,800 of the individual's income can be excluded when
determining Medicaid eligibility.
[End of table]
Insular areas' rationale for determining their Medicaid and CHIP income
eligibility criteria varied. For example, CNMI and Guam based income
eligibility on the SSI federal benefit amount and the FPL,
respectively, because these two areas used these criteria to determine
eligibility for other poverty-related programs. In addition, the U.S.
Virgin Islands, which is relatively poor when compared to the states,
based income eligibility on a locally established income limit which is
equivalent to about half the FPL because, according to a U.S. Virgin
Islands Medicaid official, limits on both federal and local program
spending have required the area to restrict the size of the covered
population. In contrast, American Samoa, which is similarly poor,
considers every resident with an income below twice the FPL--the
majority of the population--eligible for Medicaid.[Footnote 31]
According to American Samoan officials, the area must use this
relatively high income limit in order to spend all available federal
funds.[Footnote 32]
The differences in the income eligibility criteria used by the insular
areas contribute to wide variation in the estimated percent of the
population covered by Medicaid in each of the insular areas. For
example, according to estimates by the CRS, in 2008 the covered
populations ranged from 6 percent in the U.S. Virgin Islands to 88
percent in American Samoa. (See table 2.)
Table 2: Congressional Research Service Estimates of the Medicaid
Populations in Each Insular Area, 2008:
Insular area: American Samoa;
Estimated enrollment: 60,864[A];
Estimated percentage of the population covered: 88.
Insular area: CNMI;
Estimated enrollment: 11,292;
Estimated percentage of the population covered: 13.
Insular area: Guam;
Estimated enrollment: 29,625;
Estimated percentage of the population covered: 17.
Insular area: Puerto Rico;
Estimated enrollment: 888,370[B];
Estimated percentage of the population covered: 23.
Insular area: U.S. Virgin Islands;
Estimated enrollment: 6,668;
Estimated percentage of the population covered: 6.
Source: CRS.
Note: Background Material and Data on the Programs within the
Jurisdiction of the Committee on Ways and Means, 2008 Edition (May 5,
2008).
[A] American Samoan residents are not required to enroll in Medicaid or
CHIP. Under the authority of its approved waiver, American Samoa
annually estimates the number of residents below 200 percent of the FPL
based on population estimates derived by American Samoa's Statistics
Office. This number is presumed eligible for Medicaid and provides the
basis for determining the federal share of Medicaid funding.
[B] According to Puerto Rico officials, coverage was extended to more
than 100,000 additional children using CHIP funds.
[End of table]
CMS Provides the Insular Areas Flexibility in Reporting Enrollment, Has
a Standard Requirement for Reporting Spending, and Has Determined That
Reported Spending Justifies Federal Matching Payments:
CMS provides the insular areas with flexibility in how they report
Medicaid and CHIP enrollment data, and requires the areas to report
spending data quarterly using a standard form. CMS officials told us
that insular area spending reports are sufficient to justify federal
matching payments provided to them, but they have concerns that reports
from Puerto Rico and the U.S. Virgin Islands may not reflect the full
costs of their programs.
CMS Provides Insular Areas Flexibility in Reporting Enrollment Data and
Requires the Areas to Report Spending Using a Standard Form:
CMS provides the insular areas with flexibility in how they report
Medicaid and CHIP enrollment data because they do not use the Medicaid
Statistical Information System (MSIS)--the system required for
reporting Medicaid data to CMS.[Footnote 33] For example, CNMI and Guam
have historically provided enrollment data to CMS on their quarterly
budget reports, which include certain information on enrollees, such as
age.[Footnote 34] Puerto Rico provides a monthly:
enrollment report to CMS, which provides different information on
enrollees, such as where they live and in what health plan they are
enrolled.[Footnote 35] American Samoa and the U.S. Virgin Islands
report enrollment data to CMS less frequently than the other insular
areas. American Samoa, which does not enroll individuals in Medicaid or
CHIP, provides an annual estimate of eligible individuals to CMS. The
U.S. Virgin Islands also reports enrollment data annually.
Unlike enrollment data, CMS requires all five insular areas to report
Medicaid and CHIP spending data using a standard quarterly report that
states are also required to use, and CMS uses these reported data to
determine the amount of federal Medicaid and CHIP matching
payments.[Footnote 36] The standard report is designed to capture both
aggregate spending and spending by service category, such as hospital
inpatient services or laboratory and radiological services. While CNMI,
Guam, and the U.S. Virgin Islands report aggregate spending as well as
spending by service category, American Samoa and Puerto Rico report
only aggregate spending because their programs are not designed to
track spending by service.[Footnote 37]
According to CMS Officials, Insular Area Spending Reports Are
Sufficient to Justify Federal Matching Payments, but May Not Reflect
All Insular Area Program Costs:
CMS officials told us that based on their review of the insular area
spending reports, they have determined that the reports are sufficient
to justify the federal matching payments made to them. CMS's review is
focused primarily on determining whether the areas report enough
spending to reach their annual federal Medicaid limits, and if an area
does not, CMS works with the area to determine why and resolve any
problems.[Footnote 38] In their review of insular area spending
reports, CMS officials do not follow the same procedures used to review
state reported spending.[Footnote 39] However, CMS requires the insular
areas to attest to the reliability of their data.[Footnote 40] CMS
officials told us that they also review the results of single audit
reports for each area to identify problems with the areas' financial
reporting and work with the insular areas to clear and close Medicaid-
related findings from the single audits. CMS officials also told us
that they do not conduct more rigorous reviews of insular area spending
data because they do not think the reviews would result in changes in
federal payments to the insular areas, as federal funds available to
the insular areas are limited and the areas typically report spending
in excess of their federal limits, according to officials.[Footnote 41]
Although CMS officials have determined that the insular area spending
reports are sufficient to justify the federal matching payments made to
them, they have concerns that reports from the U.S. Virgin Islands and
Puerto Rico may not reflect the full costs of their programs. For
example, the U.S. Virgin Islands' preliminary spending reports for 2007
and 2008 indicate it spent several million dollars below the federal
limit. CMS officials told us that they believe these spending reports
may not reflect all of the insular area's payments for services
eligible for Medicaid reimbursement, such as certain services that are
provided to Medicaid beneficiaries by a U.S. Virgin Islands government
department outside of Medicaid.[Footnote 42] Similarly, CMS officials
also noted that, despite rising costs, the area has not updated its
Medicaid payment rate to hospitals in over a decade. As a result, the
U.S. Virgin Islands' government currently uses non-Medicaid funds to
pay hospitals the difference between the Medicaid rate and the actual
cost they incur for providing services to Medicaid-eligible
individuals.[Footnote 43] However, according to a CMS official, the
Virgin Island's Medicaid program cannot include these payments in its
spending reports because they exceed the area's Medicaid hospital
payment rate. Similarly, CMS officials told us that they also question
the completeness of the 2009 quarterly spending reports received from
Puerto Rico. While these reports show that the area spent enough to
receive all federal funds up to the area's Medicaid limit, the reported
spending is significantly lower than quarterly reports from previous
years. CMS officials told us that, based on their examination of
Medicaid enrollment data and the managed care costs for the area, they
question whether these recent reports capture the cost of all payments
for Puerto Rico Medicaid enrollees.
CPS and ACS Data Are Not Available for the Insular Areas, but Data
Similar to ACS Data Could Be Collected:
CPS and ACS data are not currently available for the five insular areas
in our review. According to Census officials, CPS data are not
collected from the insular areas because the CPS sampling method was
designed to develop only national estimates. These officials further
noted that it would not be feasible to collect CPS data from four of
the five insular areas due to their small populations and that Puerto
Rico was the only insular area with a large enough population from
which it could draw a reliable CPS sample.
ACS data--demographic, socioeconomic, and housing data collected
annually--are not available for all of the insular areas.[Footnote 44]
However, we found that Census currently collects similar data from
Puerto Rico and could also do so in the other four insular areas.
Census has conducted the Puerto Rico Community Survey (PRCS)--a
tailored version of the ACS--annually since 2005, and according to
agency officials, will include PRCS data when it evaluates the ACS data
for use in a CHIP allotment formula. Currently, Census collects data
similar to ACS data for the other four insular areas once every 10
years through the decennial census. Census officials told us that it
would be possible to collect the same type of data more frequently--
that is, between decennial censuses--from the other four areas through
surveys. However, to do so, agency officials told us they would first
need to develop survey programs through which they would establish a
sampling frame for each area.[Footnote 45] Officials said the initial
sampling frames could be developed during the 2010 Census and, if
updated, could be used as a basis for future data collection in each of
these areas. Census officials explained that the data from the insular
areas that are similar to ACS data could be used in a CHIP allotment
formula that uses, or is based on, ACS data. However, the officials
also told us the agency would need additional resources to implement
these types of survey programs for the other four areas. According to
Census officials, it is also possible to estimate certain demographic
data--not including socioeconomic and housing data--for the insular
areas between decennial censuses through the agency's Population
Estimates Program.[Footnote 46] While Population Estimates Program data
are available for the states, the District of Columbia, and Puerto
Rico, they are not available for the four other insular areas in our
review. According to Census officials, the agency would have to take
additional steps to begin producing such estimates for these four
areas.
Conclusions:
To determine whether federal Medicaid and CHIP spending has been
sufficient to meet the needs of the insular areas and whether the way
this spending is determined--particularly the practice of capping
federal spending--should be changed, policymakers can review program
data as well as data on the insular areas' populations. Insular areas
report program data--including spending data--to CMS, and officials
there are working with the areas to improve the data and to ensure they
provide a more complete reflection of program costs. In addition,
Census has the opportunity to improve the availability of demographic
data from the insular areas that could be used in a CHIP allotment
formula. Census has identified two methods for collecting these data--
developing survey programs to update demographic, socioeconomic, and
housing data that are similar to ACS data, or updating only demographic
data through the agency's Population Estimates Program. Regardless of
the method, updated demographic data could be used to help determine
future increases in federal CHIP allotments. Such data could also have
broader value for federal programs in the insular areas, as
policymakers could use these data to help assess the ongoing funding
needs of Medicaid, CHIP, and other federal programs in the insular
areas.
Recommendation for Executive Action:
To improve the availability of the data that could be used in a CHIP
allotment formula, we are recommending that the Secretary of Commerce
direct Census to update, between decennial censuses, the demographic
data for American Samoa, CNMI, Guam, and the U.S. Virgin Islands.
Agency Comments and Our Evaluation:
We received written comments on a draft of this report from DOC and
CMS, and the comments are reprinted in enclosures III and IV,
respectively. In commenting on the draft report, DOC concurred with our
recommendation, noting that regular updates of the demographic data for
the insular areas would be beneficial. DOC also noted that as part of
the 2010 Census, Census plans to collect detailed socioeconomic and
demographic data from all five insular areas, and is prepared to
develop methodologies for updating these data should funding become
available. Commenting on behalf of HHS, CMS also stated its concurrence
with our recommendation and noted that CHIPRA authorized additional
funding for DOC to improve data collection. We amended our report to
describe this additional funding.
As arranged with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
after its issue date. At that time, we will send copies to the
Secretary of Commerce, the Secretary of Health and Human Services, the
Secretary of Interior, insular area governments, and interested parties
upon request. The report will also be available at no charge on GAO's
Web site at [hyperlink, http://www.gao.gov]. If you or your staff have
any questions regarding this report, please call me at (202) 512-7114.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Susan Anthony,
Assistant Director; Rebecca Abela; Gerardine Brennan; Krister Friday;
and Hemi Tewarson were major contributors to this report.
Sincerely yours,
Signed by:
Linda T. Kohn:
Director, Health Care:
[End of section]
Enclosure I:
Insular Areas Federal Medicaid Funding Caps (Amount in dollars) 1998-
2008:
Year: 1998;
American Samoa: $3,010,000;
CNMI: $1,810,000;
Guam: $5,090,000;
Puerto Rico: $167,000,000;
U.S. Virgin Islands: $5,260,000.
Year: 1999;
American Samoa: $3,090,000;
CNMI: $1,860,000;
Guam: $5,230,000;
Puerto Rico: $171,500,000;
U.S. Virgin Islands: $5,400,000.
Year: 2000;
American Samoa: $3,200,000;
CNMI: $1,930,000;
Guam: $5,410,000;
Puerto Rico: $177,500,000;
U.S. Virgin Islands: $5,590,000.
Year: 2001;
American Samoa: $3,320,000;
CNMI: $2,010,000;
Guam: $5,620,000;
Puerto Rico: $184,400,000;
U.S. Virgin Islands: v5,810,000.
Year: 2002;
American Samoa: $3,470,000;
CNMI: $2,100,000;
Guam: $5,880,000;
Puerto Rico: $192,900,000;
U.S. Virgin Islands: $6,080,000.
Year: 2003[A];
American Samoa: $3,727,000;
CNMI: $2,255,000;
Guam: $6,321,000;
Puerto Rico: $207,341,000;
U.S. Virgin Islands: $6,537,000.
Year: 2004[A];
American Samoa: $3,947,000;
CNMI: $2,381,000;
Guam: $6,683,000;
Puerto Rico: $219,397,000;
U.S. Virgin Islands: $6,913,000.
Year: 2005;
American Samoa: $3,950,000;
CNMI: $2,380,000;
Guam: $6,690,000;
Puerto Rico: $219,600,000;
U.S. Virgin Islands: $6,920,000.
Year: 2006[B];
American Samoa: $6,120,000;
CNMI: $3,480,000;
Guam: $9,480,000;
Puerto Rico: $241,000,000;
U.S. Virgin Islands: $9,720,000.
Year: 2007[B];
American Samoa: $8,290,000;
CNMI: $4,580,000;
Guam: $12,270,000;
Puerto Rico: $250,400,000;
U.S. Virgin Islands: $12,520,000.
Year: 2008;
American Samoa: $8,620,000;
CNMI: $4,760,000;
Guam: $12,760,000;
Puerto Rico: $260,400,000;
U.S. Virgin Islands: $13,020,000.
Source: CMS.
[A] The federal amount includes funds made available through the Jobs
and Growth Tax Relief Reconciliation Act of 2003.
[B] The federal amount includes funds made available through the
Deficit Reduction Act of 2005.
[End of table]
[End of section]
Enclosure II:
Insular Areas CHIP Allotments (Amount in dollars) 1998-2008:
Year: 1998;
American Samoa: 128,850;
CNMI: $118,113;
Guam: $375,812;
Puerto Rico: $9,835,550;
U.S. Virgin Islands: $279,175.
Year: 1999;
American Samoa: $512,250;
CNMI: $469,562;
Guam: $1,494,063;
Puerto Rico: $39,101,750;
U.S. Virgin Islands: $1,109,875.
Year: 2000;
American Samoa: $538,650;
CNMI: $493,762;
Guam: $1,571,063;
Puerto Rico: $41,116,950;
U.S. Virgin Islands: $1,167,075.
Year: 2001;
American Samoa: $538,650;
CNMI: $493,763;
Guam: $1,571,062;
Puerto Rico: $41,116,950;
U.S. Virgin Islands: $1,167,075.
Year: 2002;
American Samoa: $396,900;
CNMI: $363,825;
Guam: $1,157,625;
Puerto Rico: $30,296,700;
U.S. Virgin Islands: $859,950.
Year: 2003;
American Samoa: $396,900;
CNMI: $363,825;
Guam: $1,157,625;
Puerto Rico: $30,296,700;
U.S. Virgin Islands: $859,950.
Year: 2004;
American Samoa: $396,900;
CNMI: $363,825;
Guam: $1,157,625;
Puerto Rico: $30,296,700;
U.S. Virgin Islands: $859,950.
Year: 2005;
American Samoa: $510,300;
CNMI: $467,775;
Guam: $1,488,375;
Puerto Rico: $38,952,900;
U.S. Virgin Islands: $1,105,650.
Year: 2006;
American Samoa: $510,300;
CNMI: $467,775;
Guam: $1,488,375;
Puerto Rico: $38,952,900;
U.S. Virgin Islands: $1,105,650.
Year: 2007;
American Samoa: $630,000;
CNMI: $577,500;
Guam: $1,837,500;
Puerto Rico: $48,090,000;
U.S. Virgin Islands: $1,365,000.
Year: 2008;
American Samoa: $630,000;
CNMI: $577,500;
Guam: $1,837,500;
Puerto Rico: $48,090,000;
U.S. Virgin Islands: $1,365,000.
Source: CMS.
Note: The allotments do not include reallocated CHIP funds.
[End of table]
[End of section]
Enclosure III:
Comments from the Department of Commerce:
United States Department Of Commerce:
The Secretary of Commerce:
Washington, D.C. 20230:
June 15, 2009:
Ms. Linda R. Kohn:
Director, Health Care:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Ms. Kohn:
Thank you for the opportunity to respond to the Government
Accountability Office's (GAO) draft report entitled Federal Medicaid
and SCHIP Funding in the U.S. Insular Areas (GAO-09-558R). Currently,
the Census Bureau provides updated demographic data for the five
Insular Areas through its International Data Base, and provides
annually updated socioeconomic data for Puerto Rico through the Puerto
Rican Community Survey (PRCS). Recently, the Census Bureau conducted a
Compact of Free Association migrant survey in two of the Insular Areas-
Guam and the Commonwealth of the Northern Mariana Islands-that provided
limited socioeconomic and demographic data for residents of these
islands. As part of the Census 2010 effort, the Census Bureau plans to
collect detailed socioeconomic and demographic data from residents of
the five Insular Areas in April 2010.
The Census Bureau concurs with the GAO recommendation that regularly
updating demographic data for all five Insular Areas would be
beneficial. For example, the Census Bureau could conduct specialized
surveys like the PRCS in the remaining four Insular Areas, building
from results of Census 2010. Should funding become available for such
opportunities, the Census Bureau is prepared to develop methodologies
for collecting these updated socioeconomic and demographic data in the
Insular Areas.
Sincerely,
Signed by:
Gary Locke:
[End of section]
Enclosure IV:
Comments from the Centers for Medicare & Medicaid Services:
Department Of Health & Human Services:
Office Of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
June 2, 2009:
Linda Kohn:
Director, Health Care:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Ms. Kohn:
Enclosed are comments on the U.S. Government Accountability Office's
(GAO) report entitled: Medicaid and SCHIP: Opportunities Exist to
Improve U.S. Insular Area Demographic Data That Could Be Used to Help
Determine Federal Funding (GAO-09-558R).
The Department appreciates the opportunity to review this report before
its publication.
Sincerely,
Signed by:
Barbara Pisaro Clark:
Acting Assistant Secretary for Legislation:
Attachment:
[End of letter]
Department Of Health & Human Services:
Centers for Medicare and Medicaid Services:
Administrator:
Washington, DC 20201:
Date: June 1, 2009:
T0: Barbara Pisaro Clark:
Acting Assistant Secretary for Legislation:
Office of the Secretary:
From: [Signed by] Charlene Frizzera:
Acting Administrator:
Subject: Government Accountability Office (GAO) Draft Report: "Medicaid
and SCRIP: Opportunities Exist to Improve U.S. Insular Area Demographic
Data That Could Be Used to Help Determine Federal Funding" (GAO-09-
558R):
The Centers for Medicare & Medicaid Services (CMS) appreciates the
opportunity to review and comment on the subject draft report. As
indicated in the report, Census officials identified two options to
update demographic information for the four insular areas between
decennial censuses: (1) the agency could implement survey programs to
collect demographic, socioeconomic, and housing data or (2) it could
update certain demographic data through its Populations Estimates
Program. CMS offers the following comment.
GAO Recommendation:
To improve the availability of the data that could be used in a SCHIP
allotment formula, we are recommending that the Secretary of Commerce
direct Census to update, between decennial censuses, the demographic
data for American Samoa, CNMI, Guam, and the Virgin Islands.
CMS Response:
The CMS agrees with the GAO recommendation. Section 602 of the
Children's Health Insurance Program Reauthorization Act of 2009
authorizes $20 million for Commerce to improve the Current Population
Survey and American Community Survey data collection in order to
produce more reliable estimates.
We appreciate the effort that went into this report and look forward to
working with the GAO on this and other issues.
[End of section]
Footnotes:
[1] For purposes of Medicaid and CHIP, federal law generally defines
states to include the 50 states, the District of Columbia, American
Samoa, CNMI, Guam, Puerto Rico, and the U.S. Virgin Islands. 42 U.S.C.
§ 1301(a)(1). In this report, however, the term states refers to the 50
states and the District of Columbia, and the term insular areas only
refers to American Samoa, CNMI, Guam, Puerto Rico, and the U.S. Virgin
Islands.
[2] FPL refers to the federal poverty guidelines which are used to
establish eligibility for certain federal assistance programs. The
Department of Health and Human Services (HHS) publishes these
guidelines on an annual basis, updating the guidelines to reflect
changes in the cost of living and variations according to family size.
[3] 42 U.S.C. §§ 1396d(b), 1397ee(a), (b).
[4] 42 U.S.C. § 1308(g). Under the American Recovery and Reinvestment
Act of 2009 (Recovery Act), both states and insular areas may qualify
for a temporary increase in the federal share of spending on Medicaid
services--the Federal Medical Assistance Percentage (FMAP). Each
insular area may choose between (1) an FMAP increase of 6.2 percentage
points and a 15 percent increase in its annual federal Medicaid
spending limit, or (2) a 30 percent increase in its annual federal
Medicaid spending limit. Pub. L. No. 111-5, div. B, tit. V, § 5001(b),
(d), 123 Stat. 115, 497-498 (2009).
[5] GAO, U.S. Insular Areas: Multiple Factors Affect Federal Health
Care Funding, [hyperlink, http://www.gao.gov/products/GAO-06-75]
(Washington, D.C.: Oct. 14, 2005).
[6] Department of the Interior, Office of Insular Affairs, Future of
Health Care in the Insular Areas Leaders Summit: Report on Health Care
in the Insular Areas (Washington, D.C.: Jan. 12, 2008).
[7] Pub. L. No. 111-3, §§ 102, 602, 123 Stat. 8, 11-15, 98-99 (2009)
(codified, as amended, at 42 U.S.C. §§ 1397dd, 1397ii(b)).
[8] The estimates for fiscal year 2009 were derived from Population
Estimates Program data--annual data that update the demographic data
collected through the decennial census. Allotments for the insular
areas were based on national estimates instead of insular areas'
estimates.
[9] In accordance with the Single Audit Act of 1984, as amended, 31
U.S.C. §§ 7501-7505, and the Office of Management and Budget (OMB)
Circular A-133, Audits of States, Local Governments and Non-Profit
Organizations (June 27, 2003), nonfederal entities, including states
and insular areas, that expend $500,000 or more a year in federal
awards must have a single or program-specific audit conducted for that
year subject to applicable requirements.
[10] The Department of Interior has general federal administrative
authority over all insular areas except Puerto Rico. All departments,
agencies, and officials of the executive branch treat Puerto Rico
administratively "as if it were a state" subject to few exceptions. Any
matters concerning the fundamentals of the U.S.-Puerto Rican
relationship are referred to the Office of the President. See
Memorandum of the President, Nov. 30, 1992, 57 Fed. Reg. 57,093 (1992).
Insular area residents are not subject to the same level of income
taxes as residents of the states. For example, they pay no federal
income tax on income from sources within the insular area.
[11] For example, the median household income in Puerto Rico in 1999
was $14,412 compared to $41,994 in the United States.
[12] The Secretary of HHS may waive or modify requirements with respect
to Medicaid programs in American Samoa and CNMI, except for the annual
limits on federal Medicaid spending, the statutorily set Federal
Medical Assistance Percentage (FMAP), and the requirement that federal
payments only be made for Medicaid services. 42 U.S.C. § 1396a(j).
[13] States are required to cover defined categories of individuals
under their Medicaid program, including children, pregnant women,
adults in families with children, the elderly, and individuals with
disabilities. Guam, Puerto Rico, and the U.S. Virgin Islands, however,
are not required to cover all the same categories of individuals.
[14] In contrast, for states, the FMAP generally is determined
according to a formula based on each state's per capita income in
relation to the national average per capita income and may range from
50 percent to 83 percent. See 42 U.S.C. 1396d(b). As a result, poorer
states receive higher federal matching rates than wealthier states. In
2009, the FMAP ranged from 50 percent in wealthier states, such as New
York and Connecticut, to about 76 percent in Mississippi. The federal
share for Medicaid administrative costs, however, is established under
federal law at the same percent for states and the insular areas, with
the percent defined by the type of administrative cost. See 42 U.S.C. §
1396b(a)(2)-(7).
[15] 42 U.S.C. § 1308(f), (g). In contrast, federal Medicaid spending
in the states generally is open ended, provided the states contribute
their share of program expenditures.
[16] Pub. L. No. 105-33, § 4726, 111 Stat. 251, 519 (1997) (codified,
as amended, at 42 U.S.C. § 1308(g)).
[17] Pub. L. No.108-27, § 401, 117 Stat. 752, 764 (2003). This
temporary increase only applied to the last 2 calendar quarters of
fiscal year 2003 and the first 3 calendar quarters of fiscal year 2004.
[18] Pub. L. No. 109-171 § 6055, 120 Stat. 4, 96 (2006) (codified, as
amended, at 42 U.S.C. § 1308(g)).
[19] Under the Recovery Act, each insular area may choose between (1)
an FMAP increase of 6.2 percentage points and a 15 percent increase in
its annual federal spending limit, or (2) a 30 percent increase in its
annual federal spending limit. Pub. L. No. 111-5, div. B, tit. V, §
5001(b), (d), 123 Stat. 115, 497-498 (2009).
[20] See the Balanced Budget Act of 1997, Pub. L. No. 105-33, § 4901,
111 Stat. 251, 552-571 (codified, as amended at 42 U.S.C. §§ 1397aa et
seq.).
[21] States and insular areas qualify for an enhanced FMAP equal to
their Medicaid FMAP plus 30 percent of the difference between the
state's FMAP and 100 percent. Thus, because insular areas receive a 50
percent FMAP--the minimum FMAP for states--the areas' enhanced FMAP for
CHIP may only be increased to 65 percent. See 42 U.S.C. § 1397ee(a),
(b).
[22] 42 U.S.C. § 1397dd.
[23] Of the total amount available for CHIP allotments for insular
areas each fiscal year: Puerto Rico received 91.6 percent; Guam, 3.5
percent; the U.S. Virgin Islands, 2.6 percent; American Samoa, 1.2
percent; and CNMI, 1.1 percent. 42 U.S.C. § 1397dd(c).
[24] A state's CHIP allotment was to be determined, in part, based on
the average number of low-income children (including those without
health insurance) in the state as reported and defined in the three
most recent March supplements to the CPS published by Census before the
beginning of the calendar year in which the fiscal year begins. 42
U.S.C. § 1397dd(b).
[25] Pub. L. No. 111-3, § 102, 123 Stat. 8, 11-15 (2009) (codified, as
amended, at 42 U.S.C. § 1397dd). The estimates for fiscal year 2009
were derived from Population Estimates Program data--national estimates
were used for the insular areas and state-level estimates were used for
the states.
[26] Through CHIPRA, Congress appropriated additional funds for this
assessment as well as for other purposes, including the improvement of
the data collected by DOC through the CPS for all states. The ACS, an
annual survey that replaces the decennial census's long form, was not
available when CHIP was initially authorized. Researchers have
suggested that the ACS could provide better state-level population data
than the CPS in part because its sample is larger than the CPS sample.
Census--an agency within DOC--is responsible for collecting CPS and ACS
data.
[27] Pub. L. No. 111-3, § 602, 123 Stat. 8, 98-99 (2009) (codified, as
amended, at 42 U.S.C. § 1397ii(b)). According to a CMS official, CMS
will work with Census to determine the appropriate data to use in
determining increases in CHIP allotments for the states and insular
areas for fiscal years 2010 through 2013.
[28] Medicaid spending is reported on the form known as the CMS 64. At
the beginning of each program year, CMS makes the amounts of the
insular areas' federal Medicaid spending limits available to the
insular areas, and each area draws down its funds throughout the year
based on the spending reported on the CMS 64.
[29] Insular areas define the income eligibility criteria in their
Medicaid plans, which are approved by CMS.
[30] According to CMS officials, these insular areas may not use CHIP
funds for eligible populations in any given year until they have
exhausted all available federal Medicaid funds.
[31] American Samoan residents are not required to enroll in Medicaid
or CHIP. Under the authority of its approved waiver, American Samoa
annually estimates the number of residents below 200 percent of the FPL
based on population estimates derived by American Samoa's Statistics
Office. This number is presumed eligible for Medicaid and provides the
basis for determining the federal share of Medicaid funding.
[32] Prior to 2006, American Samoa's income eligibility was limited to
100 percent of the FPL--about 65 percent of the population--but was
increased to 200 percent of the FPL in 2006 when the area received an
increase in its Medicaid cap. An official from the U.S. Virgin Islands
told us that in response to these increased federal funds, the area is
also considering increasing the program's income eligibility limits.
[33] The Balanced Budget Act of 1997 required states and insular areas
to participate in the MSIS beginning in 1999 to report Medicaid claims
data, including enrollee encounter data, and provided states and
insular areas with increased federal Medicaid funding to develop MSIS
systems. Pub. L. No. 105-33, § 4753, 111 Stat. 251, 525 (1997)
(codified, as amended, at 42 U.S.C. § 1396b(r)). Although insular areas
could have accessed these federal Medicaid funds to develop MSIS
systems, none did so because those funds would have counted against
their annual Medicaid caps, according to CMS officials. Officials also
stated that because the insular areas do not have this technical
capability, CMS does not require the areas to report enrollment data
through the MSIS. CHIPRA, Pub. L. No. 111-3 § 109, 123 Stat. 8, 25
(2009) (codified, as amended, at 42 U.S.C. § 1308(g)), has since
allowed the insular areas to access federal Medicaid funding to develop
MSIS systems outside of the areas' annual Medicaid caps. If the insular
areas develop MSIS systems, enrollment data could become standardized.
[34] Medicaid budget reports are submitted quarterly on the form known
as CMS 37.
[35] Puerto Rico's Medicaid program operates as a managed care system
that includes several health plans. Medicaid funds are used to pay the
health plans for their Medicaid enrollees.
[36] States and insular areas report, on a quarterly basis, spending on
a standard report known as the CMS 64. States and insular areas that
operate CHIP as an expansion of their Medicaid programs must report
CHIP spending on the CMS Form 64. Expenditures related to stand-alone
CHIP programs are reported quarterly on the CMS 21.
[37] Specifically, because American Samoa does not enroll individuals
in Medicaid or CHIP, it cannot link spending to eligible individuals.
Instead, it reports Medicaid spending in terms of a percentage of the
area's total hospital expenditures. Similarly, because Puerto Rico
operates Medicaid and CHIP through a managed care program, it only
reports spending in terms of the total payments made for all Medicaid
and CHIP enrollees.
[38] According to CMS officials, CMS 64 spending reports and associated
payments may be adjusted up to 2 years after the end of the program
year.
[39] CMS does not require officials that review insular area spending
reports to follow the standard procedures outlined in its Financial
Review Guide for the Quarterly Statement of Expenditures (Form CMS-64
Report)--the guide that CMS uses to ensure uniform and comprehensive
reviews of state-reported Medicaid spending data.
[40] Specifically, the insular areas are required to attest to the
accuracy of the Medicaid and CHIP data they report to CMS. By attesting
to the data, insular areas confirm that they can readily provide
documentation, such as provider payment invoices, to support the
spending they report.
[41] Furthermore, officials noted that total federal spending in the
insular areas accounts for a very small part of total federal spending
on Medicaid and CHIP. They noted that due to the logistics of
performing rigorous reviews, CMS determined there is limited value in
conducting more thorough reviews of insular area data.
[42] A U.S. Virgin Islands' Medicaid official told us that the area is
working with CMS to capture spending on these services in their
spending reports.
[43] A U.S. Virgin Islands' Medicaid official told us that the area has
hired a contractor to examine updating its Medicaid payment rates.
[44] The ACS is an annual survey that produces detailed demographic,
socioeconomic, and housing data and will replace the decennial census
long form survey beginning with the 2010 Census.
[45] A sampling frame is a list of all members of a population used as
a basis from which to draw a sample. According to Census officials, the
method used to develop sampling frames in the insular areas differs
from the method used in the states.
[46] Population Estimates Program data provide annual updates to the
demographic data collected through the decennial census short form,
specifically data on age, sex, race, and Hispanic origin. Population
Estimates Program data were used in the fiscal year 2009 CHIP allotment
formula. 2009 CHIP allotments for the insular areas were based on
national estimates instead of insular area estimates.
[End of section]
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