The Division of Medical Assistance (DMA) provides comprehensive health care coverage to low-income children, families, elders, and people with disabilities. The Division provides two managed care benefit plans: the Primary Care Clinician plan and the Managed Care Organization plan. The Division also provides the Mental Health and Substance Abuse plan that is a component of the Primary Care Clinician plan, the Senior Care Plan for elders, and the CommonHealth plan for employed disabled adults and disabled children who do not qualify for Medicaid. In addition, DMA provides pharmacy assistance to low-income seniors in conjunction with the Executive Office of Elder Affairs.

During Fiscal Year 1999, the Division anticipates serving over 915,000 residents of the Commonwealth, including 129,000 adults and children made eligible for comprehensive health care coverage under the Health Care Access Improvement Act passed in July, 1996. Additionally, the Division anticipates serving approximately 51,000 children newly eligible for health care coverage and 25,000 senior citizens made eligible for pharmacy assistance under the Act Expanding Access to Quality Health Care for Working Families, Children, and Senior Citizens passed in November, 1997.

Objectives

In Fiscal Year 1999, the Division will continue implementation of the recent acts expanding health insurance coverage. DMA will:

• expand MassHealth eligibility to include an additional 39,000 uninsured children through age eighteen in families with incomes at or below 200% of the federal poverty level;
• expand MassHealth eligibility to include pregnant women with incomes at or below 200% of the federal poverty level;
• implement the Insurance Reimbursement Program to increase private health care options for 59,000 low- and moderate-income adults and children by assisting employees with their insurance premiums and by creating incentives for employers to offer and contribute toward comprehensive health coverage; and
• provide pharmacy assistance, in conjunction with the Executive Office of Elder Affairs, to seniors with incomes up to 150% of the federal poverty level and expand the benefit coverage to include not only chronic condition "maintenance" drugs but all prescription drugs.

In addition to implementing health care expansion initiatives, the Division will:

• assume operation of the Children's Medical Security Plan (formerly under the Department of Public Health) in an effort to consolidate child health insurance programs under one department and utilize the purchasing and organizational expertise of the Division;
• work in conjunction with the Department of Public Health to increase outreach efforts and enrollment for child health insurance programs, including the Children's Medical Security Plan;
• continue to work with the Executive Office of Elder Affairs to implement the Enhanced Community Options Program for senior citizens;
• transfer operation of the Division's claims processing system (MMIS) to the Information Technology Division for increased systems efficiency, cost savings to the Division, and long-term benefits for secretariat-wide systems integration; and
• continue to implement a series of cost savings and quality improvement initiatives such as decreasing nursing facility utilization and increasing CommonHealth third party reimbursements as well as replacing complex, cost-reimbursement contracts that inadvertently reward high cost, inefficient providers with simplified, prospective payment rate contracts that reward cost-effective providers.

Budget Recommendations

The Fiscal Year 1999 recommendation for the Medicaid program reflects a 2% increase in traditional programmatic spending over the Fiscal Year 1998 funding level. The Children's and Seniors' Health Care Assistance Fund will be converted into an off-budget trust beginning in Fiscal Year 1999. Thus, these budget recommendations do not reflect the total costs of the expanded services authorized by the health care legislation passed in 1996 and 1997 or the Children's Medical Security Plan, which are funded entirely through cigarette tax revenues, federal funds, and a reallocation of current state operating dollars. Additionally, funding for the Division's Insurance Reimbursement Program and intergovernmental transfer payments to public hospitals (4000-0820 and 4000-0830) is located in separate off-budget trust accounts under the Division of Health Care Finance and Policy.

These recommendations include the following changes in the Division's account structure. CommonHealth prior-year spending (4000-0440) will be collapsed into the larger CommonHealth account to match the account structure of the other Medicaid benefit plans. In addition, a new account structure is proposed that consolidates the Division's three administrative accounts: general administration (4000-0300), contracts (4000-0310), and systems (4000-0325) into one account for administration of the Division. This structure will allow DMA more administrative efficiency in controlling costs and creates consistency among the account structures of all the human service agencies. This proposal also promotes enhanced programmatic flexibility within the Medicaid health benefit plans (4000-0430, 4000-0500, 4000-0600, 4000-0700) by allowing marginal fund transfers between benefit plans for increased cost efficiency.

Budgetary Direct Appropriations

DIVISION OF MEDICAL ASSISTANCE ADMINISTRATION
4000-0300	For the administration of the division of medical assistance; provided, that not more than $32,718,000 may be expended from this item for administrative support and related services purchased contractually by the division; provided further, that not more than $33,362,618 may be expended from this item for the non-personnel systems costs of the division; provided further, that 50 per cent of the cost of provider point of service eligibility verification devices purchased by the division shall be assumed by the providers utilizing said devices; provided further, 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 the division shall not make expenditures that are not federally reimbursable, except as specifically authorized by this act 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 30 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, unless otherwise expressly authorized by law, the division shall deposit all federal funds received in the General Fund; and provided further, that no funds shall be expended by the division for the purpose of funding interpretive services directly or indirectly related to a settlement or resolution agreement, so called, with the Office of Civil Rights or any other office, group, or entity	99,703,527

COMMONHEALTH PLAN
4000-0430	For health services provided to eligible individuals under the division`s commonhealth plan; provided, that not more than $1,900,000 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 except as otherwise provided by this act, the division is hereby authorized and directed to make expenditures from this item for services provided to non-citizens in all optional and mandatory coverage groups identified pursuant to sections 401, 402, 403, 411, and 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that the division may transfer a total of up to 5 per cent of the amount appropriated herein to items 4000-0500, 4000-0600, and 4000-0700, provided that the division notifies the secretary of administration and finance and the house and senate committees on ways and means at least 15 days prior to any such transfer; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	26,751,212

MANAGED CARE PLANS
4000-0500	For health care services provided to eligible individuals under the division`s primary care clinician/mental health and substance abuse plan or through a managed care organization under contract with the division; provided, that not more than $202,920,000 shall be expended from this item for health care services provided to said recipients in prior fiscal years; provided further, that except as otherwise provided by this act, the division is hereby authorized and directed to make expenditures from this item for services provided to non-citizens in all optional and mandatory coverage groups identified pursuant to sections 401, 402, 403, 411, and 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 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; provided further, that the division may transfer a total of up to 5 per cent of the amount appropriated herein to items 4000-0430, 4000-0600, and 4000-0700, provided that the division notifies the secretary of administration and finance and the house and senate committees on ways and means at least 15 days prior to any such transfers; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	1,444,500,000

SENIOR CARE PLANS
4000-0600	For health care services provided to eligible individuals under the division`s senior care plans; provided, that not more than $241,450,000 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 not less than $8,600,000 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 pursuant to the terms of an interdepartmental service agreement between the division and the executive office of elder affairs, an amount not to exceed $7,793,000 shall be made available to provide support for community-based services, provided that said executive office shall ensure that the home care corporations or other entities that receive funds from this item shall comply with any performance measures, outcome goals, or cost-effectiveness standards established by the division in consultation with said executive office; provided further, that except as otherwise provided by this act, the division is hereby authorized and directed to make expenditures from this item for services provided to non-citizens in all optional and mandatory coverage groups identified pursuant to sections 401, 402, 403, 411, and 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that the division may transfer a total of up to 5 per cent of the amount appropriated herein to items 4000-0430, 4000-0500, and 4000-0700, provided that the division notifies the secretary of administration and finance and the house and senate committees on ways and means at least 15 days prior to any such transfers; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	1,482,850,000

HEALTH CARE INDEMNITY/THIRD PARTY LIABILITY PLANS
4000-0700	For health care services provided to eligible individuals under the division`s health care indemnity/third party liability plan and medical assistance recipients not otherwise covered under the division`s commonhealth, managed care, or senior care plans; provided, that not more than $124,300,000 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 except as otherwise provided by this act, the division is hereby authorized and directed to make expenditures from this item for services provided to non-citizens in all optional and mandatory coverage groups identified pursuant to sections 401, 402, 403, 411, and 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; provided further, that the division may transfer a total of up to 5 per cent of the amount appropriated herein to items 4000-0430, 4000-0500, and 4000-0600, provided that the division notifies the secretary of administration and finance and the house and senate committees on ways and means at least 15 days prior to any such transfers; and provided further, that expenditures from this item shall be made only for the purposes expressly stated herein	549,548,670

Budgetary Retained Revenues

PRIOR-YEAR SPENDING RECOVERIES AND COLLECTIONS RETAINED REVENUE
4000-0320	The division of medical assistance is hereby authorized to expend for the provision of medical care and assistance an amount not to exceed $65,000,000 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, so called, Medicaid fraud returns, data match returns, Medicare appeals, and program and utilization review audits; provided, 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 secretary of administration and finance and the house and senate committees on ways and means; provided further, that except as otherwise provided by this act, the division is hereby authorized and directed to make expenditures from this item for services provided to non-citizens in all optional and mandatory coverage groups identified pursuant to sections 401, 402, 403, 411, and 412 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 whether or not federal reimbursement is available and whether or not they are qualified aliens, so called; and provided further, that no funds from this item shall be used for the purposes of item 4000-0300	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

22,389

4000-0313

MENTAL HEALTH SERVICES YOUTH REPLICATION

4,138

4000-0330

CHILDREN`S AND SENIORS` HEALTH CARE ASSISTANCE TRUST

310,324,456

4000-5005

INTERGOVERNMENTAL TRANSFER PAYMENTS TO MENTAL HEALTH FACILITIES

152,270,599