The Division of Medical Assistance (DMA) provides comprehensive health care coverage for low-income children, families, elders, and people with disabilities. The Division provides three managed care benefit plans: the Primary Care Clinician plan, the Health Maintenance Organization plan, and the Mental Health and Substance Abuse plan. In addition, the Division provides a Senior Care Plan for elders and the CommonHealth program for employed disabled adults and disabled children who do not qualify for Medicaid. During Fiscal Year 1998, the Division anticipates serving over 700,000 residents of the Commonwealth, including 54,000 adults and children made eligible for comprehensive health care coverage under the Health Care Access Improvement Act.

Objectives

In Fiscal Year 1998, the Division will implement the first phase of the Health Care Access Improvement Act adopted by the Legislature in July, 1996. DMA will:

• expand Medicaid eligibility to include children ages one through seventeen living in families with incomes up to 133% of the federal poverty level;
• expand Medicaid eligibility to include all adults under age sixty-five who are categorically eligible and with family incomes up to 133% of the federal poverty level;
• implement a new comprehensive health care benefit, the New State Benefit plan, for adults with incomes up to 133% of the federal poverty level, who have been unemployed for a period of at least twelve consecutive months, or are chronically unemployed; and
• provide pharmacy assistance to 53,000 seniors with incomes between 100% and 133% of the federal poverty level, in conjunction with the Executive Office of Elder Affairs.

In addition to implementing the Health Care Access Improvement Act, the Division will:

• implement changes required by the federal Personal Responsibility and Work Opportunities Act (Welfare Reform), including establishing a state-funded program to provide medical coverage for certain legal immigrants no longer eligible for Medicaid;
• seek a federal waiver to provide better coordinated and more efficient health care coverage for seniors enrolled in both Medicare and Medicaid, in conjunction with several New England states;
• develop, along with the Massachusetts Extended Care Federation, an all-inclusive prospective payment rate methodology for nursing facilities that provides reimbursement for ancillary services; and
• complete the implementation of a new eligibility system and re-contract for the operation of the claims-processing system.

Budget Recommendations

The Fiscal Year 1998 recommendation for the Medicaid program reflects a 2% increase over the Fiscal Year 1997 funding level. In addition, $132.53 million is recommended for new and expanded services authorized by the Health Care Access Improvement Act, funded entirely through new cigarette tax revenues, federal funds, and a reallocation of current state operating dollars. This proposal also includes a $6.18 million increase for the CommonHealth program to accommodate a rising caseload. Finally, a new account structure is proposed that: consolidates the Division's administrative funds into three line-items, administration (4000-0300), contracts (4000-0310), and systems (4000-0325); presents Medicaid program funding by health benefit plans; and separately accounts for expanded services related to the Health Care Access Improvement Act (see below).

Budgetary Direct Appropriations

DIVISION OF MEDICAL ASSISTANCE ADMINISTRATION
4000-0300	For the administration of the division; provided, that in consultation with the division of health care finance and policy, the division of medical assistance shall not approve any increase in existing medicaid provider rates without taking all measures possible under Title XIX of the Social Security Act to ensure that rates of payment to providers do not exceed such rates as are necessary to meet only those costs which must be incurred by efficiently and economically operated providers in order to provide services of adequate quality; provided further, that expenditures for the purposes of each item appropriated to the division by this act shall be accounted for according to such purpose on the Massachusetts management accounting and reporting system, so called, not more than ten days after such expenditures have been made by the medicaid management information system; provided further, that the division shall not make expenditures that are not federally reimbursable, except as specifically authorized herein, or unless made for cost-containment efforts the purposes and amounts of which have been submitted to the house and senate committees on ways and means thirty days prior to making such expenditures; provided further, that the division may continue to recover provider overpayments made in the current and prior fiscal years through the medicaid management information system, and that such recoveries shall be deemed current fiscal year expenditure refunds, so called; provided further, that the division shall report quarterly to the house and senate committees on ways and means the amounts of said expenditure refunds credited to each item of appropriation; provided further, that, unless otherwise expressly authorized by law, the division shall deposit all federal funds received in the General Fund; provided further, that the division shall report quarterly to the house and senate committees on ways and means the amount of hand generated payments, so called, to providers by item of appropriation from which said payments were made; provided further, that administrative costs incurred as a result of the implementation and operations of programs authorized by chapter two hundred three of the acts of nineteen hundred and ninety-six may be paid from this item; and provided further, that the division shall report these costs to the house and senate committees on ways and means in a manner determined by the committees	39,991,886
	General Fund 93.98% Children's and Seniors' Health Care Assistance Fund 6.02%

DIVISION OF MEDICAL ASSISTANCE CONTRACTED SERVICES
4000-0310	For administrative support and related services purchased contractually by the division, including, but not limited to, pre-admission screening, utilization review, medical consultants, disability determination reviews, health benefit managers, and including services procured through interdepartmental service agreements; provided, that a summary description of interdepartmental service agreements for which funds are allocated by the division to other agencies shall be submitted to the house and senate committees on ways and means not more than ten days after making such allocations; provided further, that no funds shall be expended from this item for the systems costs funded in item 4000-0325; provided further, that administrative support costs incurred as a result of the implementation and operation of programs authorized by chapter two hundred three of the acts of nineteen hundred and ninety-six may be paid from this item; and provided further, that the division shall report these costs to the house and senate committees on ways and means in a manner determined by the committees	34,601,132
	General Fund 91.98% Children's and Seniors' Health Care Assistance Fund 8.02%

DIVISION OF MEDICAL ASSISTANCE SYSTEMS
4000-0325	For the non-personnel systems costs of the division, including, but not limited to, contracts for the management and operation of the central automated vendor payment system, including the recipient eligibility verification system, contracts for the operation and enhancement of the client eligibility systems, contracted staff whose main duties are systems related, and personal computers and other systems equipment used by division staff; provided, that systems costs incurred as a result of the implementation and operation of programs authorized by chapter two hundred three of the acts of nineteen hundred and ninety-six may be paid from this item; and provided further, that the division shall report these costs to the house and senate committees on ways and means in a manner determined by the committees	36,913,157
	General Fund 89.78% Children's and Seniors' Health Care Assistance Fund 10.22%

COMMONHEALTH
4000-0430	For the commonhealth program to provide primary and supplemental medical care and assistance to disabled working adults and children; provided, that not more than one million five hundred thousand dollars shall be expended from this item for health care services provided under the commonhealth program in prior fiscal years; provided further, that no payment for special provider costs shall be made from this item without the prior written approval of the secretary of administration and finance; provided further, that the division shall maximize federal reimbursement for state expenditures made on behalf of said adults and children; provided further, that expenditures for services provided to aliens are hereby authorized but not required, whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; and provided further, that the division shall close enrollments or promulgate regulations that adjust eligibility, benefits, and other requirements to limit expenditures to the amount appropriated herein	27,559,223

SENIOR PHARMACY PROGRAM
4000-0450	For a pharmacy assistance program for eligible residents of the commonwealth aged sixty-five or older, pursuant to the provisions of chapter two hundred three of the acts of nineteen hundred and ninety-six; provided, that expenditures for services provided to aliens are hereby authorized but not required, whether or not federal reimbursement is available and whether or not they are qualified aliens, so called	30,000,000
	Children's and Seniors' Health Care Assistance Fund 100%

MANAGED CARE PLANS
4000-0500	For health care services provided to medical assistance recipients under the division's primary care clinician/mental health and substance abuse plan or through a health maintenance organization under contract with the division; provided, that not more than two hundred twenty-seven million one hundred thousand dollars shall be expended from this item for health care services provided to said recipients in prior fiscal years; provided further, that expenditures for services provided to aliens are hereby authorized but not required, whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that no payment for special provider costs shall be made from this item without the prior written approval of the secretary of administration and finance; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	1,259,047,313

SENIOR CARE PLANS
4000-0600	For health care services provided to medical assistance recipients under the division's senior care plan; provided, that not more than two hundred fifty-five million three hundred thousand dollars shall be expended from this item for health care services provided to said recipients in prior fiscal years; provided further, that no payment for special provider costs shall be made from this item without the prior written approval of the secretary of administration and finance; provided further, that notwithstanding the provisions of item 4000-0310 to the contrary, not less than eight million six hundred thousand dollars shall be made available from this item to pay for the cost of home and community-based health waiver services provided to elderly medicaid recipients enrolled in the section 2176 waiver, so called; provided further, that expenditures for services provided to aliens are hereby authorized but not required, whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that pursuant to the terms of an interdepartmental service agreement between the division of medical assistance and the executive office of elder affairs, an amount not to exceed two million dollars may be made available from this item to pay for costs of enhanced community options program services provided to the elderly regardless of the availability of federal matching funds; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	1,550,743,751

HEALTH CARE INDEMNITY/THIRD PARTY LIABILITY PLAN
4000-0700	For health care services provided to medical assistance recipients under the division's health care indemnity/third party liability plan and medical assistance recipients not otherwise covered under the division's managed care or senior care plans; provided, that not more than one hundred twenty-seven million dollars shall be expended from this item for health care services provided to said recipients in prior fiscal years; provided further, that expenditures for services provided to aliens are hereby authorized but not required, whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that no payment for special provider costs shall be made from this item without the prior written approval of the secretary of administration and finance; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	599,085,936

SAFETY NET/INTERGOVERNMENTAL TRANSFERS
4000-0820	For a program of intergovernmental transfers of medicaid payments to certain hospitals or other state or municipally operated entities providing Title XIX reimbursable services directly or through contracts with hospitals, established in accordance with Title XIX, federal regulations promulgated thereunder, the medicaid state plan, and the terms and conditions of agreements reached between such hospitals and the division for such transfer payments; provided, that such funds may be expended from this item only for such payments owed during the current fiscal year; and provided further, that an accounting of such payments shall be reported quarterly to the house and senate committees on ways and means	37,000,000
	Local Aid Fund 100%

MEDICAID EXPANSION
4000-0860	For health care services provided to children and adults participating in the medical assistance program pursuant to clauses (a), (b), (c), (d), (e), and (h) of subsection two of section nine A of chapter one hundred eighteen E of the General Laws; provided, that expenditures for services provided to aliens are hereby authorized but not required, whether or not they are qualified aliens, so called; and provided further, that all revenues received as a result of expenditures authorized herein shall be credited to the Children's and Seniors' Health Care Assistance Fund	48,085,380
	Children's and Seniors' Health Care Assistance Fund 100%

NEW STATE BENEFIT PLAN
4000-0870	For health care services provided to adults participating in the medical assistance program pursuant to clause (g) of subsection two of section nine A of chapter one hundred eighteen E of the General Laws; provided, that expenditures for services provided to aliens are hereby authorized but not required, whether or not they are qualified aliens, so called; provided further, that all revenues received as a result of expenditures authorized herein shall be credited to the Children's and Seniors' Health Care Assistance Fund; and provided further, that the division may enter into an interdepartmental service agreement with the department of transitional assistance for the provision of health benefits for enrollees in the emergency aid to the elderly, disabled, and children program	54,443,124
	Children's and Seniors' Health Care Assistance Fund 100%

Budgetary Retained Revenues

PRIOR-YEAR SPENDING RECOVERIES RETAINED REVENUE
4000-0320	The division of medical assistance is hereby authorized to expend an amount not to exceed sixty-five million dollars from the moneys received from recoveries of any prior-year expenditures and collections from liens, estate recoveries, third party recoveries, drug rebates, accident and trauma recoveries, case-mix recoveries, computer audits, insurance recoveries, provider overpayment recoveries, bankruptcy settlements, masspro and healthpro refunds, medicaid fraud returns, data match returns, medicare appeals, and program and utilization review audits; provided, that said expenditures shall be solely for the provision of medical care and assistance rendered in the current fiscal year; provided further, that expenditures for services provided to aliens are hereby authorized but not required, whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that any revenues collected by the division that are not attributable to the aforementioned categories shall be deposited in the General Fund and shall be tracked separately therein; provided however, that additional categories of recoveries and collections may be credited to this item after providing written notice to the house and senate committees on ways and means; and provided further, that no funds from this item shall be used for the purposes of items 4000-0300, 4000-0310, or 4000-0325	65,000,000

Federal Grant Spending

WELFARE REFORM ADMINISTRATION
4000-0314	For the purposes of a federally funded grant entitled, Welfare Reform Administration	4,300,000

Trust and Other Spending

4000-0312

CENTER FOR HEALTH CARE STRATEGIES

40,000

4000-0313

MENTAL HEALTH SERVICES YOUTH REPLICATION

67,500