DEPARTMENT OF HEALTH & HUMAN SERVICES 
Health Care Financing Administration  
Center for Medicaid and State Operations 7500 Security Boulevard Baltimore, MD 21244-1850  
August 29, 2000  
Dear State Medicaid Director:  
This is the second in a series of letters that provide guidance on the implementation of the "Ticket to 
Work and Work Incentives Improvement Act of 1999" (TWWIIA). This legislation improves access to 
employment training and placement services for people with disabilities who want to work. It also offers 
States unprecedented opportunities to eliminate barriers to employment for people with disabilities by 
improving access to health care. Our first letter, dated March 29, 2000, provided (a) general information 
about the legislation, (b) an overview of our plans for implementing the two new Medicaid eligibility 
groups created by the legislation, and (c) a description of our plans for issuing grants to assist States with 
the infrastructure and for demonstration projects.  
This letter provides more detailed information about the two new Medicaid eligibility groups. Those 
groups are briefly described below, with particular emphasis (as discussed in the enclosure to this letter) 
on how eligibility is determined for those applying for coverage under these groups.  
New Eligibility Groups Related to Employment (Section 201 of the legislation). TWWIIA created 
two new optional categorically needy Medicaid eligibility groups.  
Under what we are calling the "Basic Coverage Group" (otherwise known as the 
subsection (XV) eligibility group), States can cover individuals who are age 16 or over, 
but under age 65, and who, except for earned income, would be eligible to receive 
Supplemental Security Income (SSI) benefits, regardless of whether they have ever 
received SSI cash benefits. This group is similar to the group created by section 4733 of 
the Balanced Budget Act (BBA), except that eligibility is not limited to people with 
family income below 250 percent of the Federal poverty level family income limit, AND 
under this new group States are free to establish their own income and resource standards  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (1 of 14)4/12/2006 12:58:48 PM  
(including the option to have no income or resource standards at all).  
Under what we are calling the "Medical Improvement Group," States can cover 
employed individuals with a medically improved disability who lose Medicaid eligibility 
under the Basic Coverage Group described above because their medical conditions have 
improved to the point where they are no longer disabled under the SSI definition of 
disability. If a State wants to cover this group, it must cover the Basic Coverage Group 
described above.  
Page 2 - State Medicaid Director   As with the original BBA group, States may impose premiums or other cost-sharing 
charges on a sliding scale based on income for individuals eligible under both of the new 
eligibility groups. For individuals with annual adjusted gross income (as defined by the 
IRS) that exceeds $75,000, States are required to charge 100 percent of the premiums they 
may impose. However, States can subsidize the premium cost for these individuals, using 
State funds.  
Both of these new eligibility groups become effective on October 1, 2000.  
I enclose a detailed explanation of how eligibility is determined under the two new groups. We have also 
developed draft State plan preprint pages which States can use, if they wish, when submitting Medicaid 
State plan amendments to implement either or both of these groups. The draft preprint pages are available 
from your HCFA regional office eligibility contact or State Representative, from the HCFA Central 
Office contact shown below, or they can be downloaded from HCFA's Work Incentives website at 
www.hcfa.gov/medicaid/twwiia/twwiiahp.htm.  
If you have questions about the new eligibility groups created by the Ticket to Work and Work 
Incentives Improvement Act of 1999, please contact Roy Trudel of my staff at 410-786-3417 (e-mail 
rtrudel@hcfa.gov).  
We look forward to working with you as you consider the options available to your State under this 
legislation, which has the remarkable potential to assist people with disabilities to work in competitive 
employment.  
Sincerely,  
/s/  
Timothy M. Westmoreland 
Director  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (2 of 14)4/12/2006 12:58:48 PM  
Enclosure  
cc:  
Richard Riley Secretary Department of Education  
Alexis Herman Secretary Department of 
Labor  
Page 3  State Medicaid Director  
Ken Apfel Commissioner Social Security Administration   All HCFA Regional Administrators  
All HCFA Associate Regional Administrators for Medicaid and State Operations  
Lee Partridge Director, Health Policy Unit American Public Human Services Association  
Joseph Owens Executive Director Council for State Administrators of Vocational Rehabilitation  
Robert M. Gettings Executive Director National Association of State Directors of Developmental 
Disability Services  
Robert Glover President National Association of State Mental Health Program Directors  
Joy Wilson Director, Health Committee National Conference of State Legislatures  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (3 of 14)4/12/2006 12:58:48 PM  
Bryon R. MacDonald Social Security Subcommittee Co-Chair National Council on Independent Living  
Matt Salo Director of Health Legislation National Governors' Association  
Becky Ogle Executive Director President's Task Force on the Employment of People with Disabilities  
 
State Options for Medicaid Coverage 
to Enable People with Disabilities 
to Work 
 
Health Care Financing Administration  
Center for Medicaid and State Operations  
Disabled and Elderly Health Programs Group 
 
August 2000 
 
 
ENCLOSURE  
EXPLANATION OF ELIGIBILITY GROUPS   Topic Page 
 
I.  Basic  Coverage  Group 
 
A. Key Elements..................................1 
 
B. Defining Work ................................3 
 
  II. Medical Improvement Group 
 
  A. Key Elements .................................4 
 
  B. Defining "Employed Individual" and Work.........5 
 
  C. Defining "Medically Improved Disability" .....6 
 
 
  III. Premiums and Cost-Sharing 
 
  A. Key Elements........................................7 
 
  B. Sliding Scale Based on Income.................8 
 
  C. Private Health Insurance......................9 
 
 
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (4 of 14)4/12/2006 12:58:48 PM  
IV. Maintenance of Effort .....................10 
The "Ticket to Work and Work Incentives Improvement Act of 1999" (TWWIIA) created two new 
Medicaid eligibility groups to allow States to provide Medicaid to certain individuals with disabilities 
who want to work, or who are already working but want to increase their earnings. Both groups are 
optional categorically needy groups. Following is detailed information about these groups, including how 
eligibility is determined and your options for charging premiums and other cost-sharing expenses.  
I. BASIC COVERAGE GROUP  
A. Key Elements Under Section 1902(a)(10)(A)(ii)(XV) of the Act  
To be eligible under this group, an individual must:  
  Be at least 16 but less than 65 years old; 
 
 
  Be disabled as defined under the SSI program (except for earnings); 
 
    Have income and resources that do not exceed a standard established by the State.  
 
You have sole discretion to establish income and/or resource standards for this group, including the 
choice not to have any income and/or resource standard at all if you wish.  
The following rules and requirements apply to this group:  
 If you choose to establish an income and/or resource standard, SSI methodologies apply in 
determining eligibility, including the SSI earned income disregard of $65 plus one-half of the 
remainder. Unlike the BBA Group, all earned income is not automatically disregarded in 
determining eligibility under this group. However, you can use section 1902(r)(2) of the Act 
(described below) to disregard additional earned income beyond the SSI earned income 
disregard, including a total disregard of earned income.  
  
  Section 1902(r)(2) of the Act (optional use of more liberal income and resource methodologies 
than are used by the SSI program) applies to this group.  
  The limitations on Federal Financial Participation (FFP) at section 1903(f) of the Act do not apply 
to this group. This means that States can use more liberal income methodologies under section 1902(r)(2) 
without the usual FFP restrictions.  
 
  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (5 of 14)4/12/2006 12:58:48 PM  
  
If a State exercises its option not to establish an income and resource standard for this group, the 
 
above requirements are not applicable.  
  
Section 1902(f) (209(b) States) applies to this group. 209(b) States may (but are not required to) 
 
apply their more restrictive eligibility criteria in determining eligibility for this group.  
  
There is no requirement that an individual must at one time have been an SSI recipient to be 
 
eligible under this group. However, if the individual is not currently an SSI or SSDI recipient, 
you must do a disability determination to ensure that the individual would meet the definition of 
disability under the SSI program. NOTE: The disability test must be identical to the SSI/SSDI 
disability test except that employment activity, earnings, and substantial gainful activity (SGA) 
must not considered in determining whether the individual meets the definition of disability.  
  
Because this is an optional categorically needy eligibility group, the benefits and services 
 
available to individuals eligible under the group are the same as are available to the categorically 
needy under your State plan.  
  
You may provide services under a home and community-based services (HCBS) waiver to 
 
individuals eligible under this group. To do so, you must amend an existing waiver (or apply to  HCFA for a new waiver) to cover the group. Individuals receiving services under an HCBS waiver 
must meet the level of care requirement (i.e., would require the level of care provided in a medical 
institution if not for receipt of waiver services). NOTE: Individuals eligible for Medicaid under the 
Basic Coverage Group are eligible under community, not institutional rules. Therefore, 
institutional rules under HCBS waivers (including spousal impoverishment, institutional deeming 
of income and resources, and post-eligibility treatment of income) do NOT apply to this group.  
B. Limitations on Defining Employment Under the BBA and Basic Coverage (Subsection (XV)) 
Groups  
We are aware that many States, concerned about the potential costs of covering one or more of the 
eligibility groups created by TWWIIA and the BBA, would like to define "employment" or "work" in a 
manner similar to the definition of employment discussed later for the Medical Improvement Group. We 
appreciate States' concerns, but must make it clear that under the statute, defining employment for the 
Medical Improvement Group applies only to the Medical Improvement Group. There is no authority 
under the statute to apply that definition (or any similar definition) to the Basic Coverage Group  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (6 of 14)4/12/2006 12:58:48 PM  
(subsection (XV)) described previously, nor can it be applied to the existing eligibility group created by 
section 4733 of the BBA (section 1902(a)(10)(A)(ii)(XIII) of the Act).  
For both the BBA group and the Basic Coverage Group, you:  
  Must require that an individual have earned income; i.e., that the individual be working; 
 
 
  May require that the individual provide evidence of employment or work; for example, pay stubs, 
evidence of FICA taxes paid, or other evidence of employment that the State finds appropriate and 
necessary.  
 
  
May use your options under the premium and cost-sharing process (described in more detail 
 
below) to encourage substantive work efforts while discouraging participation by individuals with 
high levels of unearned income (e.g., SSDI or other benefits) who do not intend to engage in a 
substantive work effort. For example, you can establish a two-tiered cost-sharing structure that 
charges a low amount on earned income, but a high amount on unearned income above a personal 
maintenance level.  
However, under the law a State cannot establish a definition of work or employment for the Basic 
Coverage Group (or the BBA Group) that sets a minimum standard for number of hours worked during a 
period of time, or a minimum level of earnings. Any such definition is inherently more restrictive than 
permitted under the applicable provisions of the Medicaid statute, and as such would be out of 
compliance with the statute.  
NOTE: See section III. below for information concerning State options for requiring payment of 
premium or other cost-sharing charges. See section IV. below for information on maintenance of effort  requirements.  
II. MEDICAL IMPROVEMENT GROUP SECTION 1902(a)(10)(A)(ii)(XVI) OF THE ACT  
NOTE: TO COVER THIS GROUP, YOU MUST ALSO COVER THE BASIC COVERAGE 
GROUP DISCUSSED ABOVE.  
A. Key Elements  
To be eligible under this group, an individual must:  
  Be at least 16 but less than 65 years of age;  
Be employed and have a medically improved disability (see below for further explanation); 
    
  Have been eligible under the Basic Coverage Group discussed above, but lost that eligibility 
because the individual, by reason of medical improvement, is determined at the time of a regularly 
scheduled continuing disability review to no longer meet the definition of disability under the SSI or 
SSDI programs;  
 
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (7 of 14)4/12/2006 12:58:48 PM  
  
  
Have income and resources that do not exceed a standard established by the State.  
 
You have sole discretion to establish income and/or resource standards for this group, including the 
choice to not have any income and/or resource standard at all if you wish.  
The following rules and requirements apply to this group:  
 If you choose to establish an income and/or resource standard, SSI methodologies apply in 
determining eligibility, including the SSI earned income disregard of $65 plus one-half of the 
remainder. Unlike the BBA Group, all earned income is not automatically disregarded in 
determining eligibility under this group. However, you can use section 1902(r)(2) of the Act 
(described below) to disregard additional earned income beyond the SSI earned income 
disregard, including a total disregard of earned income.  
  
Section 1902(r)(2) of the Act (optional use of more liberal income and resource methodologies 
 
than are used by the SSI program) applies to this group.  
  
The limitations on Federal Financial Participation (FFP) at section 1903(f) of the Act do not 
 
apply to this group. This means that States can use more liberal income methodologies under 
section 1902(r)(2) without the usual FFP restrictions.  
   If a State exercises its option not to establish an income and resource standard for this group, the 
 
above requirements are not applicable.  
  
Section 1902(f) (209(b) States) applies to this group. 209(b) States may (but are not required to) 
 
apply their more restrictive eligibility criteria in determining eligibility for this group.  
  
There is no requirement that an individual must at one time have been an SSI recipient to be 
 
eligible under this group. A disability test, different from the SSI/SSDI disability test, will apply  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (8 of 14)4/12/2006 12:58:48 PM  
and is discussed below in Part II.C. below.  
  
Because this is an optional categorically needy eligibility group, the benefits and services available 
 
to individuals eligible under the group are the same as are available to the categorically needy 
under your State plan.  
  
You may provide services under a home and community-based services (HCBS) waiver to 
 
individuals eligible under this group. To do so, you must amend an existing waiver (or apply to 
HCFA for a new waiver) to cover the group. Individuals receiving services under an HCBS waiver 
must meet the level of care requirement (i.e., would require the level of care provided in a medical 
institution if not for receipt of waiver services). NOTE: Individuals eligible for Medicaid under the 
Medical Improvement Group are eligible under community, not institutional rules. Therefore, 
institutional rules under HCBS waivers (including spousal impoverishment, institutional deeming 
of income and resources, and post-eligibility treatment of income) do NOT apply to this group.  
Employed Individual with a Medically Improved Disability  
To be eligible under the Medical Improvement Group, an individual must be employed, and have a 
medically improved disability. In the interest of clarity, the following addresses the definitions of 
"employed individual" and "medically improved disability" as separate topics.  
B. Employed Individual  
For purposes of determining eligibility under the Medical Improvement Group, an employed individual 
is one who:  
  Is at least age 16 but less than 65 years of age; and 
 
 
  Is earning at least the Federally required minimum wage AND is working at least 40 hours per 
month; OR is engaged in a work effort that meets an alternate definition of substantial and reasonable 
threshold criteria for hours of work, wages, or other measures as defined by the State and approved by the 
Secretary.    
State-Defined Work Effort  
As noted above, a State may establish its own definition of employment that differs from the minimum 
level of earnings and hours worked per month set forth in the statute. A State's alternative definition of 
work effort must be approved by HCFA. If a State wishes to establish an alternative definition of work 
effort, it should do so as part of an amendment to its Medicaid plan to cover the Medical Improvement  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (9 of 14)4/12/2006 12:58:48 PM  
Group.  
At this time HCFA does not plan to approve alternative definitions of work effort that involve an across-
the-board change in the statutory number of hours worked per month or level of earnings described 
above. We believe that Congress intended those levels to serve as the reasonable baseline for work effort 
for the Medical Improvement Group as a whole, and thus should serve as the standard most individuals 
eligible under the group should be expected to meet.  
However, we recognize that there is considerable diversity among people with disabilities, including 
relative degrees of disability, the employment opportunities available to them, and many other 
considerations that can affect types and amounts of work people with disabilities do, and consequently 
how work effort can be measured. Therefore, we will consider alternative definitions of work effort 
involving different levels of earnings and/or hours worked for identifiable groups of individuals with 
disabilities provided the State can clearly define the group involved and explain why the proposed 
alternative definition is in fact reasonable and necessary for members of that group.  
We will also consider alternative definitions of work effort using threshold criteria (and ways of 
determining if those criteria are met) that do not necessarily rely on measuring earnings levels and/or 
hours worked. It is quite possible that people with disabilities have access to employment and work 
opportunities where the number of hours worked or level of earnings is not the best or most valid 
measurement of the quality of the work effort. An example might be people who are self-employed. We 
believe States are in the best position to identify such situations and address them through alternative 
definitions and measurements of work effort. Therefore, we will definitely consider such alternative 
definitions, where appropriate, as part of an amendment to your Medicaid plan to cover the Medical 
Improvement Group.  
C. Defining "Medically Improved Disability"  
For purposes of determining eligibility under the Medical Improvement Group, an individual with a 
medically improved disability is one who:  
Was eligible for Medicaid under the Basic Coverage (subsection (XV)) Group discussed above; 
    
  Continues to have a medically determinable severe impairment, but 
 
 
  Whose disability, impairment, or condition has, by reason of medical improvement, improved to  the point where the individual has lost eligibility under the Basic Coverage (subsection (XV)) Group 
because it was determined, at the time of a regularly scheduled continuing disability review, that he or she 
no longer met the definition of disability under the SSI and SSDI programs.  
 
It is important to emphasize that the loss of eligibility under the Basic Coverage Group must be the  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (10 of 14)4/12/2006 12:58:48 PM  
direct and specific result of loss of disability status because of medical improvement. Loss of disability 
status for a reason unrelated to medical improvement would not qualify as loss because of medical 
improvement.  
Under the statute, the Secretary is required to define the term "medically determinable severe 
impairment." Information concerning how that term is defined, as well as information on other related 
disability issues in the context of the work incentives legislation, will be forthcoming in a separate letter 
to State Medicaid Directors.  
NOTE: See section III below for information concerning State options for requiring payment of 
premiums or other cost-sharing charges. See section IV below for information on maintenance of effort 
requirements.  
III. PREMIUMS AND COST-SHARING CHARGES  
Under the existing eligibility group created by section 4733 of the BBA (section 1902(a)(10)(A)(ii)  
(XIII) of the Act), States may (but are not required to) require eligible individuals to pay premiums or 
other cost-sharing charges. If States require such payments, the amount must be set on a sliding scale 
based on income.  
TWWIIA also permits States to require payment of premiums or other cost-sharing charges by 
individuals eligible under both the Basic Coverage Group and the Medical Improvement Group. While 
some aspects of the premium and cost-sharing requirements under TWWIIA are similar to those under 
the BBA, many are different.  
A. Key Elements of TWWIIA Premiums and Cost-Sharing  
The rules applicable to payment of premiums or other cost-sharing charges under TWWIIA are discussed 
below. The same basic rules apply to both the Basic Coverage (subsection (XV)) Group and the Medical 
Improvement Group, and your requirements for payment of premiums or other cost-sharing charges must 
apply equally to all individuals eligible under either of the two groups.  
It should also be emphasized that while you have the option to require payment of premiums or other 
cost-sharing charges, you are not required to do so. A State can elect to impose no premium or cost-
sharing charges at all on individuals eligible under either or both of these groups.   For individuals eligible under the Basic Coverage (subsection (XV)) Group and the Medical 
Improvement Group you may, in a uniform manner for all individuals eligible under those groups:  
a. Require individuals to pay such premiums or other cost-sharing charges, set on a sliding scale based  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (11 of 14)4/12/2006 12:58:48 PM  
on income, as the State may determine;  
  b. For any individual whose annual family income is less than 450 percent of the Federal poverty 
level, you can require payment of premiums only to the extent that the amount of the premiums does not 
exceed 7.5 percent of the individual's income.  
  c. For any individual whose (IRS) adjusted gross income exceeds $75,000 annually, you must 
charge 100% of premiums.  
  B. Sliding Scale Based on Income  
 
The requirement under (a.) above that payments be on a sliding scale based on income applies to both 
premiums and other cost-sharing charges. While the degree to which such premiums and charges 
increase with increasing levels of income is up to the State, the underlying principle is that individuals 
with higher levels of income should contribute more toward the cost of services they receive than those 
with less income. A percentage premium or cost-sharing charge (e.g., 5 percent of income) is, by 
definition, on a sliding scale based on income because the actual amount paid increases as income 
increases.  
For purposes of this provision, premiums are defined as fees (usually monthly) that are charged to secure 
coverage under one of the work incentives Medicaid eligibility groups. Premiums would normally be paid 
by the individual directly to the State Medicaid agency. By contrast, cost- sharing charges are defined as 
any other charges that the State may establish through which an individual eligible under one of the work 
incentives groups shares in the cost of the care and services provided to him or her under the Medicaid 
program. Cost-sharing charges can either be paid by the individual directly to the State Medicaid agency, 
or paid by the individual to providers of services in the form of co-pays, deductibles, or co-insurance 
payments.  
A flat cost-sharing or co-payment charge (e.g., $5.00 for each doctor's visit) does not, if applied alone, 
meet the requirement that charges be on a sliding scale based on income. However, you can use a flat 
cost-sharing charge system provided that premiums charged to eligible individuals rise with increasing 
income, either because the premium is a percentage of income or the specified dollar amount of the 
premium increases as the individual's income increases. A flat cost-sharing charge in conjunction with a 
sliding scale premium produces an aggregate premium/cost-sharing charge that would meet the 
requirement that such charges be on a sliding scale based on income.  
This means, for example, that a State's normal cost-sharing requirements, when used in conjunction with 
a sliding scale premium structure, would meet the sliding scale based on the income requirement. So long 
as there is a sliding scale premium structure, there is no need for a State to incur the added administrative 
expense of establishing a cost-share system which is different from that used in the rest of its Medicaid 
program.   file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (12 of 14)4/12/2006 12:58:48 PM  
It is important to emphasize that while under (a.) above you may require payment of premiums and other 
cost-sharing charges, the limitation of 7.5 percent of annual income described in (b) above applies only to 
premiums. The restrictions and requirements outlined in items (b.) and (c.) do not apply to cost-sharing 
charges that are not premiums.  
Regardless of whether or not you exercise your option to require payment of premiums and other cost-
sharing charges for the individuals described above you are required, under the statute, to charge 100 
percent of premiums for certain other individuals. Individuals subject to payment of 100 percent of 
premiums are those whose adjusted gross annual income (as determined under the IRS statute) exceeds 
$75,000. This amount will increase each year after 2000 by the percentage of the annual Social Security 
cost-of-living increase.  
If you exercise the option described above to require individuals eligible under these groups to pay 
premiums, "100 percent of premiums" would be the highest amount of premiums that an individual would 
be required to pay under your premium structure. For individuals with income below $75,000, you can 
require payment of the same amount of premiums, or a lower amount, provided the total premium for 
individuals with income below 450 percent of the poverty level does not exceed 7.5 percent of the 
person's income.  
You may, if you wish, subsidize payment of premiums for individuals whose income exceeds $75,000. 
However, any such subsidy must be made solely with State funds. No Federal matching funds are 
available for such subsidies.  
C. Private Health Insurance and TWWIIA Premiums or Other Cost-Sharing Charges  
In some instances an individual eligible under the Basic Coverage Group or the Medical Improvement 
Group may have access to private health insurance coverage; for example, through employment or 
membership in an organization. If the individual could be covered under such private health insurance at 
no cost to him or her you may require, under your premium and cost-sharing rules, that the individual 
take advantage of that insurance. Where private insurance in the form of a group health plan is available 
to the individual, although at some cost, section 1906 of the Act allows States to enroll individuals in such 
plans provided such enrollment is cost-effective AND the State pays the cost of enrollment in the plan, 
including premiums, deductibles and co-insurance  
Unless the State pays the full cost of enrollment in the private health insurance plan (including all 
premiums, deductibles and co-insurance) you may not require individuals to take advantage of the 
availability of private health insurance. Section 1906 of the Act does not permit mandatory enrollment in 
private health insurance when that insurance involves a cost to the individual.  
IV. MAINTENANCE OF EFFORT REQUIREMENT  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (13 of 14)4/12/2006 12:58:48 PM   Under the statute, States are not permitted to supplant State funds directed toward programs to enable 
working individuals with disabilities to work with Federal funds used to provide benefits under the Basic 
Coverage Group and the Medical Improvement Group. If a State covers either or both of the eligibility 
groups discussed above, Federal Financial Participation (FFP) will not be available for services provided 
to individuals eligible under those groups for any fiscal year unless the State establishes, to the 
satisfaction of the Secretary, that its expenditures for those programs are not less than its expenditures for 
such programs for the fiscal year ending before December 17, 1999.  
We will provide additional information concerning this requirement, including procedures to follow to 
establish and submit to HCFA baseline expenditure levels and annual reports on State expenditures, as 
well as HCFA's review and determination process, in a separate letter to State Medicaid Directors.  
<% 'Sitewide navigation info / do NOT edit %>  
file:///F|/New%20Website%20Content/PCPG%20Files/2000/2000/smd082900.asp (14 of 14)4/12/2006 12:58:48 PM