Medicare Compliance & Reimbursement

The Senate Finance Committee June 12 unanimously approved legislation to prevent states from losing $2.7 billion in unspent State Children's Health Insurance Program funds. States have three fiscal years - including the year in which they receive the funds - to spend federal SCHIP allocations. Unspent dollars are redistributed for one year among states that have used up their entire allocations. Any money left over after that year reverts to the federal treasury. Funds allocated right after SCHIP's 1997 creation accumulated "while states worked through the start-up process and established functioning programs," senior panel Democrat Max Baucus (MT) explained in a statement, leaving many states set to lose funding just when their programs were geared up to use the money effectively. In 2000, Congress responded by allowing states to retain some of their unused FY 1998 and FY 1999 allotments. The Finance bill builds on that precedent, extending the availability of 1998 and 1999 funds through 2004. In addition, states that did not spend their full 2000 and 2001 allocations would retain 50 percent of the unspent funds, while the remaining 50 percent would be redistributed to other states. In both cases, 2000 and 2001 funds would remain available through 2004 and 2005, respectively. Congress must approve the legislation by the end of the month, Baucus warned, or the Centers for Medicare & Medicaid Services will finalize its own redistribution scheme for the FY 2000 funds.