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HHS FY2017 Budget in Brief - CMS - State Grants and Demonstrations


Centers for Medicare & Medicaid Services (CMS): State Grants and Demonstrations

CMS logoThe Centers for Medicare & Medicaid Services ensures availability of effective, up-to-date health care coverage and promotes quality care for beneficiaries.

State Grants and Demonstrations Budget Overview

(Dollars in millions)

Current Law Budget Authority  2015 2016 2017 2017
+/- 2016
Medicaid Integrity Program /1 77 77 84 +7
Money Follows the Person Demonstration 416 418 -418
Money Follows the Person Evaluations 1 1 —1
Demonstration Program to Improve Community Mental Health Services 23 -23
CHIP Outreach and Enrollment Grants 40 -40
Total, Current Law Budget Authority 494 562 84 -478

Proposed Law Budget Authority 2015 2016 2017 2017
+/- 2016
Create Demonstration to Address Over-Prescription of Psychotropic Medications for Children in Foster Care /2 500 +500
Expand Funding for the Medicaid Integrity Program /1 25 +25
Total, Proposed Law Budget Authority 525 +525
Total, Current and Proposed Law Budget Authority 494 562 609 +47

Current Law Outlays 2015 2016 2017 2017
+/- 2016
Incentives for Prevention of Chronic Diseases in Medicaid /3 18 23 16 -7
Medicaid Emergency Psychiatric Demonstration /3 35 -2
CHIP Outreach and Enrollment Grants /4 18 15 15
Medicaid Integrity Program /1 84 83 83
Psychiatric Residential Treatment Demonstration and Evaluation /3 2 20 -20
Money Follows the Person Demonstration 427 462 425 -37
Money Follows the Person Evaluations 1 2 2
Expansion of State Long-Term Care Partnership Program /3 2
Ticket to Work Grant Programs /3 1 -1
Emergency Services for Undocumented Aliens /3 /5 1 2 2
Demonstrations to Improve Community Mental Health Services 1 24 * -24
Total, Current Law Outlays 589 633 543 +90

Proposed Law Outlays 2015 2016 2017 2017
+/- 2016
Create Demonstration to Address Over-Prescription of Psychotropic Medications for Children in Foster Care /2
Expand Funding for the Medicaid Integrity Program /1 25 +25
Total, Proposed Law Outlays 25 +25
Total Current and Proposed Law Outlays 589 633 568 -65

Table Footnotes

1/ Budget authority for the Medicaid Integrity Program is adjusted annually by Consumer Price Index for All Urban Consumers, and outlays include some spending from prior year budget authority. This program and the related legislative proposal are described in the Program Integrity chapter.

2/ This is a joint proposal with the Administration for Children and Families (ACF). These totals represent the proposed law budget authority and outlays for State Grants and Demonstrations. Please see the ACF Chapter for more information.

3/ Outlays are from prior year budget authority.

4/ See CHIP chapter for additional information about this program.

5/ On 12/28/15, CMS announced the sunsetting of this program at the end of fiscal year 2016, as its goals have largely been met.

  • Outlays are less than $500,000.

The State Grants and Demonstrations account funds a diverse set of program activities.  Many activities were authorized in the Affordable Care Act, the Children’s Health Insurance Program Reauthorization Act, the Deficit Reduction Act of 2005, and the Ticket to Work and Work Incentives Improvement Act of 1999.  Such activities include strengthening Medicaid program integrity, supporting enrollment of children into Medicaid and the Children’s Health Insurance Program (CHIP) through funding for outreach activities, and promoting prevention and wellness by providing grants to states to prevent chronic diseases.

Incentives for Prevention of Chronic Diseases in Medicaid

The Affordable Care Act provided $100 million for states to award incentives to Medicaid beneficiaries of all ages who participate in prevention programs and demonstrate changes in risky health behaviors and outcomes related to chronic disease, including by adopting healthy behaviors.  Funds were available through December 31, 2015, and states must commit to operating prevention programs for a minimum of three years.  In September 2011, CMS awarded the first year of grants to 10 states, and the initial Report to Congress was submitted on December 16, 2013.

Medicaid Emergency Psychiatric Demonstration

Section 2707 of the Affordable Care Act authorizes a demonstration project where selected states may provide payment under the State Medicaid plan, under title XIX of the Social Security Act, to an institution for mental diseases that is not publicly owned or operated.  Payment is for eligible Medicaid beneficiaries, ages 21 through the age of 64, who require medical assistance to stabilize a psychiatric emergency medical condition.  The Affordable Care Act authorized $75 million for the demonstration, of which $68 million was for federal matching payments to the participating states, and $7 million was set aside for implementation and evaluation of the demonstration.  In March 2012, CMS announced 11 participating states and the District of Columbia were selected to participate in the demonstration.  The demonstration was conducted for a period of three consecutive years (July 1, 2012 through June 30, 2015), with the funding for the demonstration ending on December 31, 2015.  In January 2014, an evaluation report was submitted to Congress as mandated by the demonstration’s authorization.  During the first 21 months of the program, the participating states and the District of Columbia reported 7,538 inpatient admissions involving 5,702 Medicaid beneficiaries to Institutions for Mental Disease.  Data continues to be collected on outcomes for the enrolled participants and impacts on Medicaid costs; an updated evaluation of the demonstration will be completed in 2016.

Money Follows the Person Demonstration

This demonstration, extended by the Affordable Care Act through FY 2016, helps states support individuals to achieve independence.  States that are awarded competitive grants receive an enhanced Medicaid matching rate to help eligible individuals transition from a qualified institutional setting to a qualified home or community based setting.  Approximately $3 billion has been awarded to 44 states and the District of Columbia since the program’s inception.  This demonstration is funded at $450 million for each fiscal year through FY 2016.  Funding awarded to states in FY 2016 is available to states for expenditures through FY 2020.  These additional funds will enable state grantees to continue to develop their home- and community‑based programs and increase the number of beneficiaries served while continuing to rebalance their long‑term care systems between institutional and community settings.  As of December 31, 2014, over 51,000 individuals across 44 states and the District of Columbia have transitioned to community services and supports through this effort.  In 2013, CMS awarded funding to states and tribal partners to build sustainable community‑based long‑term services and supports specifically for American Indians through the tribal initiative.

State Grants and Demonstrations Legislative Proposals

Create Demonstration to Address Over-Prescription of Psychotropic Medications for Children in Foster Care

The Budget continues to propose a five-year Medicaid demonstration in partnership with the Administration for Children and Families beginning in FY 2017 to encourage states to implement evidence-based psychosocial interventions targeting children and youth in the foster care system, as an alternative to the current over-prescription of psychotropic medications in this population. States will receive performance‑based Medicaid incentive payments to improve care coordination and delivery for children and youth in foster care through increased access to evidence‑based psychosocial interventions with the goal of reducing the over-prescription of psychotropic medications and improving outcomes for these young people.  The Medicaid investment of $500 million over five years will provide incentive payments to states that demonstrate measured improvement in outcomes.  This investment is paired with $250 million from the Administration for Children and Families to support state efforts to build provider and systems capacity.  One hundred and nine national and state child welfare organizations, including the American Psychological Association and the Child Welfare League of America, expressed their support for this proposal in a letter to the Senate Majority and Minority leaders in April 2014.  [$500 million in State Grants and Demonstrations costs, $567 million in Medicaid costs, and $250 million in mandatory child welfare costs over 10 years]

Expand Funding for the Medicaid Integrity Program

This proposal is described in the Program Integrity chapter.

FY 2017 State Grants and Demonstrations Legislative Proposals

(negative numbers reflect savings and positive numbers reflect costs)

(dollars in millions

State Grants and Demonstrations Proposals 2017 2017
-2021
2017
-2016
Create Demonstration to Address Over-Prescription of Psychotropic Medications for Children in Foster Care /1 395 +500
Expand Funding for the Medicaid Integrity Program /2 25 180 +580
Total Current and Proposed Law Outlays 25 570 1,080

Table Footnotes

1/ This is a joint proposal with CMS and the Administration for Children and Families.

2/ The totals represent proposed budget authority for the Medicaid Integrity Program rather than outlays.

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Content created by Office of Budget (OB)
Content last reviewed on February 12, 2016