DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
                         
                    SHO # 09-015 
                    CHIPRA #10 
 
December 16, 2009 
 
            Re: CHIPRA Performance Bonus Payments 
       
Dear State Health Official: 
 
On February 4, 2009, the President signed into law the Childrens Health Insurance Program 
Reauthorization Act of 2009 (CHIPRA), Public Law 111-3.  The law contains provisions that 
directly affect both the Childrens Health Insurance Program (CHIP) under title XXI of the 
Social Security Act (the Act) and the Medicaid program under title XIX of the Act.  Under 
CHIPRA, States will be able to strengthen their existing programs and provide coverage to 
additional low-income, uninsured, children, and pregnant women.  The purpose of this letter is to 
provide guidance on the new sections 2105(a)(3) and (4) of the Act which provides Performance 
Bonus Payments (Bonus Payments) for Federal fiscal year (FY) 2009 through FY 2013 to help 
States offset the costs of increased Medicaid child enrollment.    
 
The Centers for Medicare & Medicaid Services (CMS) is providing initial guidance on this new 
provision as we release the bonus payments for FY 2009. We look forward to working with 
States in future years to determine if they qualify for the Bonus Payment, and will continue to 
encourage States to submit information to conduct a determination even if they are not certain 
they qualify.  
 
Explanation of Bonus Payments (Section 2105(a)(3) and (4))of the Act   
The Performance Bonus provides added Federal funding for qualifying States that have increased 
Medicaid enrollment of children above a baseline level.  To qualify during a Federal fiscal year, 
a State must be implementing during the year at least five of eight program features that simplify 
the application and renewal process.  The goal is to encourage and assist States in reaching and 
enrolling more uninsured children who are eligible for Medicaid.  The children that count 
towards the Bonus Payment are children enrolled in Medicaid who meet eligibility criteria in 
effect on July 1, 2008.  These qualifying children include children enrolled in CHIP-funded 
Medicaid expansion programs.  
 
The eight program features, which are described in more detail in Appendix I, are:  
 
1.  Continuous Eligibility 
2.  Liberalization of Asset (or Resource) Requirements 
3.  Elimination of In-Person Interviews 
4.  The Same Application and Renewal Process for Medicaid and CHIP  
5.  Automatic/Administrative Renewal   Page 2  State Health Official 
 
6.  Presumptive Eligibility for Children   
7.  Express Lane   
8.  Premium Assistance  
 
U.S. Commonwealths and Territories are eligible to receive Bonus Payments, to the extent that 
the Department of Health and Human Services has determined that there are satisfactory 
methods for reporting and collecting reliable data regarding the Medicaid enrollment of children 
in the Commonwealth or Territory.  CMS is working with the individual Commonwealth and 
Territories to establish reliable data collection methods. 
 
Qualifying for Receipt of Bonus Payments  Implementing the Five of Eight Program Features 
 
To qualify for a Bonus Payment for a fiscal year, a State must be implementing at least five of 
the eight program features throughout the Federal fiscal year for which the Bonus Payment will 
be made.  Because we recognize that implementation is a multi-faceted process, we intend to 
issue regulations to provide further guidance on the parameters under which a State will be 
considered to have implemented a program feature. 
 
For FY 2009, we will consider a State to be qualified for a Bonus Payment when five of the eight 
program features have been operational at least as of April 1, 2009 (when this provision of 
CHIPRA became effective), and through the end of the Federal fiscal year on September 30, 
2009.  For FFY 2010, the State must undertake a process to implement at least five of the eight 
program features that meet the following milestones: 
 
  Any required State legislation, if applicable, is effective on or before the start of the 
Federal fiscal year (October 1st) for which a Bonus Payment is being made; and 
  Five of the eight program features are operational for a minimum of 6 months during the  
first fiscal year for which the Bonus Payment is being made; and are still in effect on 
September 30 of that fiscal year.   
 
If a State is implementing a new program feature that requires a State plan amendment (SPA), it 
should note that the SPA should be submitted and approved in time to ensure that the program 
feature at issue is actually operational for the 6-month period.   
 
CMS Procedures for Acting on Requests for Bonus Payments 
 
The CMS will make determinations that a State is qualified for a Bonus Payment based on timely 
requests by States containing needed information.  CMS has previously provided information 
directly to States regarding their requests for 2009 Bonus Payments.  In future years (2010-
2013), CMS will act on requests received no later than November 1 following the end of the 
fiscal year for which the Bonus Payment is being requested.  For example, requests for Bonus 
Payments with respect to FY 2010 should be submitted no later than November 1, 2010, 
following the end of the fiscal year on September 30, 2010.  The request should specify which of 
the eight enrollment and retention program features qualifies the State for the payment, identify 
the sections and pages of the approved State plan authorizing the program feature, if applicable,  Page 3  State Health Official 
 
and, where necessary, provide supporting documentation for a program feature that may not be 
addressed in the State plan. 
 
The CMS intends to use the chart in Appendix III to document the determinations made for those 
States requesting Bonus Payments.  CMS will record the relevant information from State 
submissions and maintain the chart for determinations that were completed.  States are 
encouraged to populate this chart with the information required above and to submit the 
information to CMS with their request for a determination of qualification for a Bonus Payment.  
 
Submitted State materials will be reviewed and evaluated by CMS.  CMS intends to make the 
determination of whether the State requesting a payment meets the required conditions by 
December 1 of each year.  The State should provide as much information as possible to allow 
CMS to accurately evaluate the States qualification for a Bonus Payment.  A list of the States 
making such requests and the program features that constitute the basis for the request will be 
posted on the CMS Web site.  After CMS determines which States qualify under the five out of 
eight requirement, CMS will notify each State and publish a list of the States that qualify on the 
CMS Web site.    
     
Determining Whether a State Meets the Enrollment Target and Calculation of Bonus Payments 
 
Once CMS has determined that a State meets the five out of eight requirement, as discussed 
above, we will determine whether the State qualifies for a Bonus Payment based on enrollment 
and, if so, the amount of the State's Bonus Payment.  These determinations are calculated with 
respect to certain State-specific baseline information relating to the States Medicaid (title 
XIX) enrollment and per capita expenditures for children.  In particular, the baseline enrollment 
for a State for FY 2009 is based on the monthly average unduplicated number of qualifying 
children enrolled in the State plan under Medicaid during FY 2007.  This amount is then 
adjusted forward to the fiscal year for which the Bonus Payment is being made (that is, for 
example, to FY 2009 for purposes of the FY 2009 Bonus Payment) based on the percentage 
change (either positive or negative) in the population growth for children in the State from FY 
2007 to FY 2009.  An additional adjustment factor (set out in the statute, by CHIPRA) is added 
to arrive at the baseline enrollment level (see Appendix II for a detailed explanation).  
 
A State will qualify for a Bonus Payment if its enrollment exceeds the baseline enrollment level 
for the fiscal year.  Bonus payments are two-tiered based on the level of the States enrollment 
increase above the baseline.  The first-tier Bonus Payment amount is calculated by multiplying 
the State-specific per capita amount by the amount the current Medicaid child enrollment 
exceeds the baseline child enrollment for the fiscal year; this enrollment amount is limited to no 
more than 10 percent of the baseline enrollment amount for the fiscal year.  The second-tier 
Bonus Payment amount is available for States that have increased enrollment by more than 10 
percent above the baseline enrollment level for the fiscal year.    
 
The CMS will identify, obtain, and validate the data elements needed to calculate the Bonus 
Payment for each qualifying State (CMS is currently working with States on the FY 2009 data 
calculations).  Payments to qualifying States will be made by December 31 of the calendar year 
following the end of the fiscal year for which the criteria was implemented.  The Bonus  Page 4  State Health Official 
 
Payments will be provided to a State through the issuance of a grant award; a State will be able 
to access these funds through the Payment Management System. 
 
Additional information on the process for determination of the Bonus Payment, including the 
identification and validation of data elements, and associated timeframes for FY 2009 is found in 
Appendix II  Bonus Payments for FY 2009.  CMS will use the same processes and validation of 
data elements in FY 2010-2013, provided the anticipated process and results are successful for 
FY 2009. CMS will provide additional guidance on these and other issues related to the 
performance bonus payments in forthcoming regulations. 
 
States with questions about the calculation of the Bonus Payment or the process explained in 
Appendix II can contact Mr. Richard Strauss of the CMS Financial Management Group for 
additional information or assistance.  Mr. Strauss contact information is as follows: 
 
  Centers for Medicare & Medicaid Services 
  Center for Medicaid and State Operations 
  Mail Stop S3-13-15 
  7500 Security Boulevard 
  Baltimore, MD  21244-1850 
  Telephone:  410-786-2019 
  E-mail:  Richard.Strauss@cms.hhs.gov 
 
We look forward to working with States in this initial year of implementation and in the future.  
If you have questions regarding this guidance please send an e-mail to 
CMSOCHIPRAquestions@cms.hhs.gov or contact Ms. Maria Reed, Deputy Director, Family 
and Childrens Health Programs Group, who may be reached at (410) 786-5647. 
 
 
           
            Sincerely, 
             
            /s/ 
 
            Cindy Mann 
            Director 
 
    Page 5  State Health Official 
 
cc: 
 
CMS Regional Administrators 
 
CMS Associate Regional Administrators 
Division of Medicaid and Childrens Health 
 
Ann C. Kohler          
NASMD Executive Director 
American Public Human Services Association 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Matt Salo 
Director of Health Legislation 
National Governors Association 
 
Debra Miller 
Director for Health Policy 
Council of State Governments 
 
Christine Evans, M.P.H 
Director, Government Relations 
Association of State and Territorial Health Officials 
 
Alan Weil, J.D., M.P.P. 
Executive Director 
National Academy for State Health Policy Page 6  State Health Official 
 
APPENDIX I  Program Features for Bonus Payment Qualification 
 
1)  Continuous Eligibility in both Medicaid and CHIP  Continuous eligibility assures 
coverage to a child for 12 months, regardless of changes in circumstances other than the 
situations identified below:  
 
a)  The child is no longer a resident of the State. 
b)  The death of the child. 
c)  The child reaches the age limit. 
d)  The child/representative requests disenrollment. 
e)  A child who is enrolled in a separate CHIP program files a Medicaid application, 
is determined eligible for Medicaid, and is enrolled in Medicaid without a 
coverage gap. 
 
The option to provide continuous eligibility for Medicaid is described in section 
1902(e)(12) of the Act.  Continuous eligibility is not specifically defined under CHIP 
(title XXI of the Act).  A State with separate CHIP programs that chooses to implement 
the option of continuous eligibility to qualify for a Bonus Payment must follow the 
procedures described in section 1902(e)(12) of the Act.  CMS will address the definition 
of continuous eligibility under title XXI in forthcoming regulations.  Pending further 
guidance regarding the interaction of premium payment requirements and continuous 
eligibility under CHIP, CMS will consider State CHIP programs that utilize 12-month 
continuous eligibility contingent on premium payment to be consistent with this program 
feature. 
2)  Liberalization of Asset (or Resource) Requirements in Both Medicaid and CHIP  
Under this program feature, the State must either: 
 
a)  Impose no asset test for determining eligibility for children or; 
 
b)  Allow administrative verification of assets.  In this case, the State:  (1) permits the 
child or the childs parent, or other representative, to declare and certify under 
penalty of perjury the required information relating to the familys assets; and (2) 
takes steps to verify assets through means other than by requiring documentation 
from the child or the childs parent or representative, except if there is a 
discrepancy, or if otherwise justified. 
 
3)  Elimination of In-Person Interview Requirement in Both Medicaid and CHIP  The 
State does not require an in-person application or face-to-face interview for applications 
and renewals of Medicaid and CHIP eligibility unless there are discrepancies or 
individual circumstances justifying an in-person application or face-to-face interview in a 
particular situation. 
 
 
  Page 7  State Health Official 
 
4)  Use of the Same Application and Renewal Forms and Procedures for Medicaid and 
CHIP  The State uses the same or interchangeable application and renewal forms, 
supplemental forms, and information verification process for establishing and renewing 
eligibility for Medicaid and for CHIP.   
 
a)  Supplemental forms are forms requesting additional information needed to 
establish or verify one or more factors of eligibility.  Examples include forms to 
verify employment, income, or residency.  To qualify under this program feature, 
the same supplemental forms must be used in Medicaid and CHIP unless a 
Federal program rule requires differences. 
 
b)  The information verification process refers to the States procedures for verifying 
all factors of eligibility.  For example, if a State allows self declaration of income 
in CHIP, it must also do so in Medicaid to qualify under this program feature.  
The verification process includes both the methods and the timeline for verifying 
eligibility.  For example, to qualify under this program feature, the time frame for 
submitting documentation to renew eligibility (if documentation is required) must 
be the same in Medicaid and in CHIP. 
 
5)  Automatic/Administrative Renewal in both Medicaid and CHIP  This program 
feature requires a State to rely on either or both of the following procedures: 
 
a)  Administrative Redeterminations:  The State provides a preprinted form 
populated with eligibility information available to the State to the child or the 
childs parent or other representative, along with a notice that eligibility will be 
renewed and continued based on such information unless the State is provided 
other information that affects eligibility.  A State may choose to require that the 
child/representative return a signed copy of the preprinted form to confirm the 
desire to continue coverage of the child.  The State will verify eligibility through 
electronic and other means. 
 
b)  Ex Parte Redeterminations:  The State makes a redetermination to the maximum 
extent possible based on information contained in the individual's Medicaid file or 
other information available to the State, before it seeks any information from the 
childs parent or representative.  A State can complete an ex parte renewal 
without sending a renewal form to the childs parent or representative.  Refer to 
CMS State Medicaid Director Letter, released on April 22, 1997, explaining 
Federal requirements for ex parte redeterminations available at 
http://www.cms.hhs.gov/smdl/downloads/SMD042297.pdf.   
 
Further guidance on ex parte redeterminations will be provided in forthcoming regulations. 
 
6)  Presumptive Eligibility for Children for Both Medicaid and CHIP  Presumptive 
eligibility allows children who appear to be eligible for Medicaid and CHIP to enroll 
pending a full determination of eligibility.  To qualify using this program feature, the 
State must implement presumptive eligibility for children in Medicaid, in accordance  Page 8  State Health Official 
 
with section 1920A of the Act, and also for children in CHIP, in accordance with section 
2107(e)(1)(E) of the Act, if the State has a separate CHIP.    
  
7)  Express Lane Eligibility in both Medicaid and CHIP  This program feature allows a 
State to utilize the Express Lane option for eligibility determinations or redeterminations 
in accordance with section 203 of CHIPRA and section 1902(e)(13) of the Act, and also 
for CHIP eligibility determinations or redeterminations in accordance with section 
2107(e)(1)(B) of the Act, if the State has a separate CHIP program.  CMS is issuing 
separate guidance on the Express Lane option. 
  
8)  Premium Assistance Subsidies for Medicaid or CHIP  A State can qualify under this 
program feature if it has implemented premium assistance:  
 
a)  In CHIP in accordance with section 2105(c)(10) of the Act, as added by section 
301(a)(1) of CHIPRA; or  
 
b)  In Medicaid in accordance with section 1906A of the Act, as added by section 
301(b) of CHIPRA.   Page 9  State Health Official 
 
Appendix II - Calculation of the Bonus Payment 
The following describes the data elements, processes, and methodologies (including a 
preliminary finalizing payment adjustment process) for calculating the CHIP Performance Bonus 
Payments (Bonus Payments) for a fiscal year.  Bonus Payments for a Federal fiscal year must be 
made by December 31 following the end of such fiscal year. 
A.  DATA ELEMENTS FOR BONUS PAYMENTS 
The amount of the total Bonus Payment payable to a State eligible for such payment for a fiscal 
year may be comprised of 2 components, "First Tier" and "Second Tier", based on the number of 
Qualifying Children enrollees and the Medicaid Per Capita expenditures for the fiscal year for 
which the Bonus Payment is being made.  Refer to items 1 through 4 below for further 
clarification of the elements of the Bonus Payment calculation.   
The following provides details and discusses the data elements used in the calculation of the 
Bonus Payment for a State: 
1.  Baseline Enrollment of Qualifying Children.   
The calculation of the Bonus Payment requires establishing for each State eligible for 
such payment a "baseline number of child enrollees" for the fiscal year for which the 
Bonus Payment is being determined.  In general, as referenced in statute, Baseline 
Enrollment refers to the monthly average unduplicated number of "qualifying children" 
enrolled in title XIX; and, for FY 2009, the Baseline Enrollment must be established 
using such data for FY 2007. 
Section 2105(a)(3)(F) of the Act defines "qualifying children" as children who meet the 
eligibility criteria (including income, categorical eligibility, age, and immigration status 
criteria) under title XIX, and including those eligible pursuant to a waiver under section 
1115 of the Act (see section 4 below for a further discussion of qualifying children).  As 
required under section 2105(a)(3)(C)(iii) of the Act, enrollment data from FY 2007 are 
the basis for the Baseline Enrollment for FY 2009; such data for FY 2007 were obtained 
from the Medicaid Statistical Information System (MSIS).  In particular, the Baseline 
Enrollment for each State was established using all of the MSIS Coding Categories for 
which States report individuals under the Basis-Of-Eligibility (BOE) of child in their 
Medicaid programs.  The purpose and intention was to capture every individual 
considered and reported by each State to be eligible as a child under the unique 
provisions of its Medicaid (title XIX) program.   
The enrollment number from MSIS includes all individuals identified and reported 
eligible as a child under title XIX, including individuals under the Medicaid Expansion 
option under section 1905(u) of the Act.  That is, "Medicaid Expansion" children are 
covered under section 1905(u) of title XIX of the Act and, as such, are considered as 
children covered under title XIX (Medicaid), even if the Federal share (at the enhanced 
Federal medical assistance percentage (FMAP)) of the expenditures for such individuals  Page 10  State Health Official 
 
are applied against such States' (those with Medicaid Expansions) available CHIP 
allotments. 
The MSIS "BOE codes" associated with Child used for developing the FY 2009 
Baseline Enrollment using the FY 2007 Baseline Enrollment are as follows: 
  4 Child (not Child of Unemployed Adult, not Foster Care Child) 
  6 Child of Unemployed Adult (optional) 
  8 Foster Care Child 
As indicated above, the FY 2009 Baseline Enrollment for a State is based on the FY 2007 
enrollment data for the State.  Section 2105(a)(3)(C)(iii)(I) of the Act requires that, in 
order to determine the FY 2009 Baseline Enrollment, the Baseline Enrollment from 
FY 2007 be adjusted by the application of a growth factor.  In particular, as specified by 
the statute, based on estimates obtained from the Bureau of the Census, the FY 2007 
enrollment data are adjusted by the application of a child population growth factor for 
each State to reflect the percentage change (either positive or negative) in the population 
of children from 2007 to 2008, and then from 2008 to 2009.   
As provided under section 2105(a)(3)(iii)(II) of the Act, the baseline number of child 
enrollees for a State for fiscal years after FY 2009 is determined by the application of a 
growth factor to the previous fiscal years Baseline Enrollment, which is based on the 
child population growth for the State as estimated by the Bureau of the Census. 
The details of the Bonus Payment calculation methodology are discussed in more detail 
in section C below. 
2.  Current Enrollment of Qualifying Children.   
This data element is the monthly average unduplicated number of qualifying children 
for a State for the current fiscal year (e.g., FY 2009) for which the Bonus Payment is 
being determined, and which is compared to the Baseline Enrollment level for such fiscal 
year (item 1. above) in order to calculate the Bonus Payment for such fiscal year.  
Because of timing, such data is not available directly from the MSIS (that is, such data 
would not be available by December 31 following the end of the fiscal year).  Therefore, 
this current enrollment data element needs to be obtained directly from a State prior to 
December 31 in order to make the Bonus Payments by that date.  In order to provide 
current enrollment, a State should use the same State institutional data sources that are 
used for reporting under MSIS and for child enrollment reporting by States (that is, the 
Statistical Enrollment Data System, including the States' Medicaid Management 
Information Systems and other State data sources. 
The FY 2007 Baseline Enrollment data obtained from MSIS may not represent an exact 
one-to-one mapping for each of the above statutory eligibility categories.  However, as 
discussed in section 1 above, the Baseline Enrollment data represents all individuals 
identified and reported by each State with a BOE of child.  We believe this approach 
appropriately addresses the intent of the statute in a way that is operationally feasible.   Page 11  State Health Official 
 
The CMS will work with States to obtain the current enrollment level of qualifying 
children for each State, consistent with the statutory definition, the reporting mechanisms, 
and validation process for such data in the State and/or Nationally. 
With respect to the FY 2009 current Baseline Enrollment, which CMS requested that 
States provide for purposes of determining the FY 2009 Bonus Payments, the MSIS data 
are not available on a current basis.  The current enrollment data must also reflect 
conditions and requirements not effective or applicable in FY 2007.  For example, the 
definition of qualifying children must not include children for whom the State has made 
an election to provide medical assistance under paragraph (4) of section 1903(v) of the 
Act (section 2105(a)(3)(F)(iii) of the Act); this election under section 1903(v)(4) of the 
Act was made available under section 214(a)(2) of CHIPRA; therefore, the provision was 
not available in FY 2007.   
Furthermore, as indicated in section 2105(a)(3)(F) of the Act, and as further discussed in 
section 4 below, the definition of qualifying children refers to children who meet the 
eligibility criteria ... in effect as of July 1, 2008 for enrollment under title XIX, taking 
into account criteria applied as of such date under title XIX pursuant to a waiver under 
section 1115.  That is, in providing the current enrollment, the State should include 
individuals who are considered to be eligible as children under the indicated statutory 
citations above, but should exclude the individuals indicated above who are children for 
which the State has made an election under section 1903(v)(4) of the Act, or children 
who may be eligible under groups or criteria which were not available or in effect under 
the States Medicaid (title XIX) program on July 1, 2008. 
3.  Projected Per Capita State Medicaid Expenditures. 
The amount of a Bonus Payment for a State for a fiscal year is determined by multiplying 
the excess amount of the current enrollment for the fiscal year over the Baseline 
Enrollment for the fiscal year by the projected per capita State Medicaid expenditures for 
the fiscal year.  Under section 2105(a)(3)(D) of the Act, the projected per capita State 
Medicaid expenditures amount: 
is equal to the average per capita expenditures (including both State and Federal 
financial participation) for children ... but not including children eligible for 
assistance by virtue of the receipt of benefits under title XVI, for the most recent 
fiscal year for which actual data are available (as determined by the Secretary), 
increased by the annual increase in per capita amount of National Health 
Expenditures (as estimated by the Secretary) for the calendar year in which the 
respective subsequent fiscal year ends and multiplied by a State matching percentage 
... for the fiscal year involved.  Page 12  State Health Official 
 
The per capita Medicaid expenditure data element for each State, which includes only 
those expenditures which are directly associated with children, must reflect expenditures 
for a State from the most recent fiscal year for which such data is available and must 
exclude expenditures for children eligible for Medicaid on the basis of receipt of benefits 
under title XVI of the Act (that is, the Supplemental Security Income (SSI) program, 
which provides benefits to blind and disabled individuals). 
Per Capita Growth Factor.  As indicated, when the available per capita expenditure data 
is from a fiscal year prior to the fiscal year for which the Bonus Payment is being 
determined, a growth factor is applied to increase the per capita to the fiscal year for 
which the Bonus Payment is being determined.  In developing this data element for each 
State for the most recent fiscal year available for the State, the same MSIS expenditure 
and enrollment data and the same BOE codes for children (as discussed in section 1 
above) were used.  This growth factor is based on the percentage increase in per capita 
National Health Expenditures (NHE); this information is available from CMS. 
State matching percentage.  The final per capita amount for a fiscal year is determined by 
multiplying the per capita for the fiscal year (including both State and Federal share 
amounts, and after application of the growth factor) by the State matching percentage.  
The State matching percentage is equal to 100 percent minus the FMAP, as defined in 
section 1905(b) of the Act, for the current fiscal year for which the Bonus Payment is 
being determined for each State 
4.  Qualifying children.     
With the exceptions noted below, qualifying children include all children enrolled in 
Medicaid who meet State eligibility criteria in effect on July 1, 2008, including children 
covered through CHIP-funded Medicaid expansions and children covered under section 
1115 demonstrations.   
 
More specifically, qualified children are defined as those enrolled in one of the following 
eligibility groups as well as children enrolled under a title XIX demonstration: 
  1902(a)(10)(A)(i)(I) and 1931(b): low-income families 
  1902(a)(10)(A)(i)(III) and 1905(a)(i): Qualified Children 
  1902(a)(10)(A)(i)(IV) and 1902(l)(1)(B): poverty-level related children under age 1 
  1902(a)(10)(A)(i)(VI) and 1902(l)(1)(C): poverty-level related children aged 1 up to 
age 6 
  1902(a)(10)(A)(i)(VII) and 1902(l)(1)(D): poverty-level related children aged 6 up to 
age 19 
  1902(a)(10)(A)(ii)(I) and 1905(a)(i): reasonable categories of AFDC-related children 
  1902(a)(10)(A)(ii)(II) and 1905(a)(i): children who would meet the AFDC 
requirements if work-related child care costs were paid from earnings rather than by 
State agency 
  1902(a)(10)(A)(ii)(III) and 1905(a)(i): children who would meet the AFDC 
requirements if they were as broad as allowed under Federal law  Page 13  State Health Official 
 
  1902(a)(10)(A)(ii)(VIII): non-IV-E State subsidized adoption children 
  1902(a)(10)(A)(ii)(IX) and 1902(l)(1)(B): poverty-level related children under age 1 
  1902(a)(10)(A)(ii)(XIV): optional targeted low-income children 
  1902(a)(10)(A)(ii)(XVII): independent foster care adolescents 
  1902(a)(10)(A)(ii)(XIX): Family Opportunity Act children (certain disabled children) 
  1902(a)(10)(C)(i)(III) and 1905(a)(i): medically needy children 
  1902(e)(3): TEFRA children (disabled children receiving home and community-based 
services) 
  1920A: presumptive eligibility for children (only if the child is determined to be 
eligible for medical assistance under title XIX) 
 
The term Qualifying Children does not include any children for whom the State has made 
an election to provide medical assistance under paragraph (4) of section 1903(v) of the 
Act.  Section 214(a)(2) of CHIPRA amended section 1903(v) to provide States the option 
of covering children under Medicaid who are lawfully residing in the U.S. without regard 
to the 5-year waiting period.  Section 2105(a)(3)(F)(iii) specifies that such children 
cannot be counted for purposes of the Bonus Payment calculation.   
 
Section 115 of CHIPRA provides an option for States to claim expenditures for Medicaid 
expansion children under the regular Medicaid FMAP rather than the CHIP enhanced 
FMAP.  However, such children shall be disregarded for purposes of the Bonus Payment 
calculations in determining the current enrollment number for the first 3 fiscal years of 
such election; furthermore, the Baseline Enrollment numbers would also be affected for 
fiscal years occurring after this 3-fiscal-year period . 
 
 
B.  PROCESS FOR ADJUSTMENT TO BONUS PAYMENTS 
As discussed in section A above, CMS developed data, and States provided data, for determining 
the FY 2009 Bonus Payments using the most recent data available for States.  In particular, 
because of the timing relating to availability of the current FY 2009 child enrollment numbers, 
such data may not have been finalized or finally validated.  Furthermore, because of the potential 
for determinations of retroactive eligibility of children for FY 2009, the FY 2009 data used in 
calculating the Bonus Payments may not include all children whose eligibility would ultimately 
be attributed to the fiscal year.  Accordingly, CMS intends to establish a process for adjusting the 
data used in determining and making the FY 2009 Bonus Payments that are required by statute to  
be made by December 31, 2009, and for future fiscal years.  This Bonus Payment adjustment 
process, to be established, is intended to ensure that the appropriate data are used for calculating 
the fiscal year Bonus Payments.  Information about the Bonus Payment adjustment process will 
be provided to States as soon as possible.   
 
 
C.  BONUS PAYMENT CALCULATION 
The Bonus Payment for a fiscal year is comprised of two components:  Bonus Payment for the 
first Tier 1 Enrollment levels (BP ) and the Bonus Payment for the second Tier 2 Enrollment 
1
levels (BP ) as follows: 
2 Page 14  State Health Official 
 
 
BP  (Bonus Payment for Tier 1 Enrollment) = .15 x T  x PC
1 1 FY 
 
BP  (Bonus Payment for Tier 2 Enrollment) = .625 x T  x PC  
2 2 FY
 
T  (Tier 1 enrollment level) =  
1
 
Minimum of: 
 
CE   BE  
FY FY
.1 x BE  
FY
 
T  (Tier 2 enrollment level) =  
2
 
CE   1.1 x BE  
FY FY
 
 
BE  = Baseline Enrollee level (monthly average number of unduplicated 
FY
qualifying children) for the fiscal year for which the Bonus Payment is 
being determined; this is based on the historical FY 2007 levels for 
qualifying children to which the growth factor is applied. 
 
CE  = Current Enrollment level (monthly average number of unduplicated 
FY
qualifying children) for the fiscal year for which the Bonus Payment is 
being determined. 
 
 
BE  (Baseline Enrollment for FY 2009) would be determined as: 
09
 
BE  = BE  x [(1 + (CPG ) + .04) x (1 + (CPG ) + .04)] 
09 07 07-08 08-09
 
BE  = Baseline Enrollment for FY 2007 
07
 
 
CPG  = Child Population Growth percentage increase from 2007 to 
07-08
2008 
CPG  = Child Population Growth percentage increase from 2008 to 
08-09
2009 
  
For fiscal years 20102012, the Baseline Enrollment (BE ) would be the 
10-12
Baseline Enrollment for the previous fiscal year (BE ) increased by the 
FY-1
population growth for children for the State for the calendar year in which the 
fiscal year begins to the succeeding calendar year plus 3.5 percentage points: 
 
BE  = BE  x [1 + (CPG ) + .035] 
10-12 FY-1 CY-1 to CY
 
For example, for FY 2010 (BE ): 
10 Page 15  State Health Official 
 
 
BE  = BE  x [1 + (CPG ) + .035] 
10 09 09-10
 
For fiscal years 20132015, the Baseline Enrollment (BE ) would be the 
13-15
Baseline Enrollment for the previous fiscal year (BE ) increased by the 
FY-1
population growth for children for the State for the calendar year in which the 
fiscal year begins to the succeeding calendar year plus 3.0 percentage points: 
 
BE  = BE  x [1 + (CPG ) + .03] 
13-15 FY-1 CY-1 to CY
 
Finally, for fiscal years after FY 2015, the Baseline Enrollment (BE ) would be 
16
the Baseline Enrollment for the previous fiscal year (BE ) increased by the 
FY-1
population growth for children for the State for the calendar year in which the 
fiscal year begins to the succeeding calendar year plus 2.0 percentage points: 
 
BE  = BE  x [1 + (CPG ) + .02] 
16 15 CY-1 to CY
 
PC  = Per Capita Medicaid Expenditures for the fiscal year for which the Bonus 
FY
Payment is being determined.  This is based on the per capita for the most 
recent fiscal year for which data is available and to which a growth factor 
is applied, as appropriate, to increase the most recent available fiscal year 
per capita amount to the current fiscal year for which the Bonus Payment 
is being made.  For example, if the most recent per capita amount 
available was from FY 2007 (PC ), the per capita for FY 2009 (PC ) 
07 09
would be:  
 
PC  =  [(100% - FMAP ) x PC  x (1 + NHE ) x (1 + NHE )]   
09 09 07 07-08 08-09
 
FMAP  = Federal medical assistance percentage (as determined 
09
under section 1905(b) of the Act) for FY 2009 
 
NHE  = Percentage growth in per capita national health 
07-08
expenditures from 2007 to 2008 
 
NHE  = Percentage growth in per capita national health 
08-09
expenditures from 2008 to 2009 
 
  Appendix III  Sample Request for Bonus Payment 
 
State Request for Childrens Health Insurance Program (CHIP) Performance Bonus Payment 
Federal Fiscal Year 20XX 
 
State: (fill-in)   
Contact: (fill-in)  Telephone: (xxx-xxx-xxxx)  Email: (fill-in)  Date: MM/DD/YYYY 
 
The following provides the States certification regarding eligibility for a CHIP Performance Bonus Payment for Federal fiscal year 20XX with 
respect to each of the indicated Qualifying Criteria in accordance with the provisions of section 2105(a)(3) and (4) of the Social Security Act.  This 
template represents this State's request for a determination of eligibility for a CHIP Performance Bonus Payment for FY 20XX under the provisions 
of section 2105(a)(3) and (4) of the Social Security Act. 
 
A.   B.  C.  D.  E.  F. 
Qualifying Criteria  Criteria  State Plan Information  Additional Information   Program Limitations  Effective Date 
Met 
(Y/N) 
Continuous Eligibility          
   Title XIX   
   Title XXI 
Liberalization of Asset         
(or Resource) 
Requirements    
   Title XIX 
   Title XXI 
Elimination of In-Person         
Interview  
 
   Title XIX 
   Title XXI 
Use of Same Application         
and Renewal Form and 
Procedures for Medicaid 
 
and CHIP  
Title XIX 
Title XXI 
Automatic/Administrative         
 
Renewal  Page 17  State Health Official 
 
A.   B.  C.  D.  E.  F. 
Qualifying Criteria  Criteria  State Plan Information  Additional Information   Program Limitations  Effective Date 
Met 
(Y/N) 
Title XIX 
Title XXI 
Presumptive Eligibility         
for Children 
 
Title XIX 
Title XXI 
Express Lane         
Title XIX   
Title XXI 
Premium Assistance         
Subsidies  
 
Title XIX or 
Title XXI 
  Page 18  State Health Official 
 
Template Instructions for Line Entries in Each Column 
 
A.  Qualifying Criteria  Lines 1 through 8 in Column A  list the eight program features identified in section 2105(a)(4) of CHIPRA.  With respect to each of 
these program features, in Columns B through F each State must identify information for both its title XIX and XXI programs for all programs except 
Premium Assistance Subsidies.  A State may qualify as having met that program feature if it offers a Premium Assistance Subsidy under section 
2105(c)(10) of CHIPRA  or section 1906A of the Act, and need only provide information on the appropriate title XIX or title XXI program. 
B.  Criteria Met  In Column B, each State should indicate a Y or N with respect to each of the program features in Column A for which it believes it 
meets the respective criteria for that program feature.  A State must meet the criteria for at least 5 of 8 of the program features to qualify for a bonus 
payment. 
C.  State Plan Information  In Column C, each State must indicate the location (section and page number) within its approved State plan(s), if the program 
feature is authorized through the respective title XIX or title XXI approved State plan.  States may also submit copies of the State plan page with the 
template as supporting documentation.  An example would be the location of the section of the Medicaid- and CHIP-approved State plan that provides 
authorization for continuous eligibility.  
D.  Additional Information  In Column D, each State should identify the supporting documentation it submitted to demonstrate it has met the requirements 
for each program feature in Column A for which it is providing information.  This is needed for program features not captured within the States title XIX- 
and title XX- approved State plan.  Examples of the types of additional information a State should submit are:  program application(s) for eligibility in 
Medicaid and CHIP, redetermination forms, income and asset instruction forms, process descriptions including time frames used to receive and process 
information for Medicaid and CHIP, and instruction manuals provided to eligibility intake/determination employees regarding State policy for the program 
feature. 
E.  Program Limitations  In Column E, each State should identify any limitations associated with the program feature referenced in Column A.  In 
particular, the State should identify any categories or groups of children to which the program feature does not apply (such as age limitations) or any 
income level to which the program feature does not apply (income limitations).  States should identify any other type of program feature limitation that 
would limit the availability of the program feature only to certain beneficiaries. 
F.  Effective Date  In Column F, each State should indicate the date the program feature became operational in each of the applicable programs, Medicaid or 
CHIP.