DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
 
Center for Medicaid, CHIP and Survey & Certification 
 
SHO #  10-008 
CHIPRA #  19 
 
October 1, 2010 
 
Re: CHIPRA Performance Bonus Payments 
 
Dear State Health Official: 
 
This letter and the enclosed documents provide additional guidance on the implementation of 
section 104 of the Childrens Health Insurance Program Reauthorization Act of 2009 (CHIPRA) 
which added section 2105(a)(3) to the Social Security Act.  CMS provided information on the 
new opportunity for States to obtain Performance Bonus Payments (bonus payments) for Federal 
fiscal years (FYs) 2009 through 2013 in its December 16, 2009 letter to State Medicaid Directors 
and State Health Officials (SHO #09-015), available at 
http://www.insurekidsnow.gov/images/sho_letter.pdf. 
 
Since the release of the SHO letter, we have processed the FY 2009 bonus applications and 
conducted several calls regarding bonus payment applications with States and other interested 
stakeholders in response to requests for additional policy guidance.  The enclosed set of answers 
to frequently asked questions is intended to provide further guidance on our procedures and 
interpretation of the elements of the new statutory provision.  Also enclosed are the templates 
States may use to apply for a FY 2010 bonus payment. 
 
We hope that this guidance will assist States in applying for the bonus payments for FY 2010, as 
well as for subsequent years. We strongly encourage all States that believe they may qualify for a 
bonus payment in FY 2010 to apply by October 15, 2010, according to the process outlined in 
this guidance.  Thank you for your continued commitment to increasing access to health 
coverage for eligible uninsured children in Medicaid and the Childrens Health Insurance 
Program (CHIP).  Questions regarding this guidance may be directed to Ms. Vikki Wachino, 
Director, Family and Childrens Health Programs Group, who may be reached at (410) 786-
5647. 
Sincerely, 
 
/s/ 
 
Cindy Mann 
Director  Page 2  State Health Official 
 
 
Enclosures: 
Bonus Payment Request Template 
Bonus Payment Enrollment Template  
 
cc:  
CMS Regional Administrators  
 
CMS Associate Regional Administrators  
Division of Medicaid and Childrens Health 
 
Richard Fenton 
Acting Director 
Health Services Division 
American Public Human Services Association  
 
Joy Wilson  
Director, Health Committee  
National Conference of State Legislatures  
 
Matt Salo  
Director of Health Legislation  
National Governors Association  
 
Carol Steckel 
President 
National Association of Medicaid Directors 
 
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 R. Weil, J.D., M.P.P.  
Executive Director  
National Academy for State Health Policy  Page 3  State Health Official 
 
Enclosure 
 
CHIPRA Performance Bonus Payments: Questions and Answers 
 
On December 16, 2009, the Centers for Medicare & Medicaid Services (CMS) released a letter 
to State Health Officials (SHO #09-015) describing the new funding opportunity for States 
created by section 104 of the Childrens Health Insurance Program Reauthorization Act of 2009 
(CHIPRA).  Section 104 of CHIPRA provides bonus payments to States that implement certain 
program features and increase enrollment of eligible uninsured children in Medicaid above 
baseline levels.  The letter and enclosure can be accessed on the CMS Web site at:  
http://www.cms.hhs.gov/CHIPRA/07_Guidance%20-%20continued.asp#TopOfPage. 
 
The following questions and answers are intended to further clarify bonus payment application 
procedures and CMS interpretation of the qualifying program features.   CMS encourages 
States, as well as all interested stakeholders, to submit questions regarding the criteria for 
qualifying for a bonus payment to CHIPRAbonuspayments@cms.hhs.gov. 
 
APPLICATION FOR BONUS PAYMENTS 
 
1.  How do States apply for a CHIPRA bonus payment for Federal fiscal year (FY) 2010? 
 
In order to allow sufficient time for review of State information, CMS requests that States 
submit requests for a FY 2010 bonus payment no later than October 15, 2010.  (Please note 
that this date is earlier than the deadline previously outlined in the CMS SHO letter released 
on December 16, 2009.  We have revised the date to allow for additional time and 
communication with States so that CMS can adequately evaluate the States program features 
and ensure that all States that qualify for a bonus payment have an opportunity to receive 
one.)  
 
Bonus payment requests should be submitted in two parts:  1) 5 of 8 program features; and 2) 
Medicaid enrollment data.   
 
1) Program features. A State applying for a CHIPRA bonus payment must describe each of 
the program features it believes qualify toward meeting the 5 out of 8 requirement for 
receiving a bonus payment (listed in section 2105(a)(4) of the Social Security Act).  Also 
enclosed is a Bonus Payment Request Template (Word file) that States may find useful in 
submitting a request for a bonus payment.  This template, as well as all other program feature 
information necessary to determine eligibility for a bonus payment, should be submitted 
electronically to the specially-designated CMS mailbox 
(CHIPRAbonuspayments@cms.hhs.gov) by no later than October 15, 2010. 
 
2) Medicaid enrollment data.  In order to enable CMS to determine whether a State meets 
the enrollment goals and, if it does meet those goals, to calculate the amounts of the bonus 
payments for FY 2010, States should submit the enclosed Bonus Payment Enrollment 
Template (Excel file), providing the monthly average unduplicated number of qualifying  Page 4  State Health Official 
 
children for FY 2010, to the same CMS mailbox (CHIPRAbonuspayments@cms.hhs.gov) by 
no later than November 1, 2010.  
 
States experiencing problems with the CMS electronic mailbox or any other problems with 
electronic submission to CMS may call the Family and Childrens Health Programs Group 
(FCHPG) Directors office at 410-786-5647 and request assistance with submitting a bonus 
payment application. 
 
CMS will acknowledge receipt of all requests.  Any State submitting a request for a 
performance bonus that does not receive an acknowledgement may contact us directly at the 
number listed above as quickly as possible. 
 
2.  Will States that received a bonus payment in FY 2009 automatically qualify for a 
FY 2010 bonus payment? 
 
No.  States must actively apply for a bonus payment for each Federal FY under 
consideration.  States that continue to have program features in place that were accepted by 
CMS for FY 2009 need only indicate that there have been no changes to the application of 
the program feature since the previous year and confirm that the practice remained in effect 
for FY 2010. 
 
However, States that have modified program features in any manner that affects beneficiaries 
must fully describe the modification in order for CMS to determine whether that program 
feature continues to meet the criteria for receipt of a bonus payment.  States seeking 
qualification for new program features not previously accepted for purposes of the 
performance bonus must provide a full description of the program feature, along with all 
necessary supporting documentation.  The enclosed template may be used for this purpose. 
 
3.  Are States that informally submitted information to CMS regarding program features 
they have implemented for FY 2009 required to resubmit this information to be 
considered for a FY 2010 bonus payment? 
 
Yes.  The FY 2010 request must contain all information required to determine eligibility for a 
bonus payment for FY 2010.  States that are reapplying for bonus payments, as well as States 
that are initially applying for a FY 2010 payment will be given equal consideration.  As 
noted above, States that officially submit bonus payment applications for FY 2010 will 
receive written confirmation from CMS upon receipt of the application. 
 
IMPLEMENTATION OF PROGRAM FEATURES 
 
4.  Can CMS clarify what is considered a full year of implementation for purposes of 
qualifying for a bonus payment in FY 2010?  
 
As described in the December 16, 2009, SHO letter, CMS interprets the statutory 
requirement that the State be implementing a program feature throughout the entire fiscal 
year by reference to the following milestones:  Page 5  State Health Official 
 
 
a.  October 1, 2009  The last day by which the State must have effective legislation (if 
necessary) authorizing the State to implement the program features for which the 
State seeks credit in FY 2010.  
 
b.  April 1, 2010  September 30, 2010  Program features must be fully operational in 
the State.  In order for a State to qualify for a program feature that is a required 
element of the Medicaid/CHIP State Plan, the State must have submitted the 
necessary State plan amendment with an effective date of April 1 of the FY in 
question. 
 
Note:  States that receive credit for implementing a program feature in a particular fiscal 
year are expected to continue implementing this program feature throughout the subsequent 
fiscal year in order to continue receiving credit for this program feature.  Also, not all 
program features must be included in the approved State plan in order for the State to receive 
credit for the practice. 
 
5.  Can CMS clarify whether States must implement an application/eligibility 
simplification program feature for all children eligible for Medicaid and CHIP in order 
to qualify for a bonus payment?   
 
States will have to implement program features for most, but not necessarily all, children 
eligible for Medicaid and CHIP.  Application/eligibility simplification program features 
should apply to all children covered under CHIP and to those children covered under 
Medicaid in an eligibility group for which being a child is a requirement of eligibility 
(under both the Medicaid State plan and any section 1115 demonstrations or waivers).  States 
are not required to apply these program features to children covered in Medicaid under 
eligibility groups that are not linked to age (e.g., disability) because we recognize that 
eligibility rules do not allow children to be treated differently than other individuals enrolled 
in the same eligibility group.    
 
In the request for a bonus payment, States should clearly indicate when a particular program 
feature does not apply, or applies differently, to certain populations of children.  CMS will 
evaluate these applications of the program feature to ensure it is consistent with this 
guidance. 
 
Please note that the premium assistance subsidy program feature does not necessarily need to 
apply to both title XIX- and title XXI-funded children.  A State may qualify as having met 
this program feature if it offers a premium assistance subsidy under section 2105(c)(10) or 
section 1906(A) of the Act, and need only provide information on the appropriate title XIX 
or title XXI program. 
 
Any State having questions on whether a particular group of children should be covered for 
purposes of qualifying for a bonus payment may refer to the list of child eligibility groups in 
Appendix II of the December 16, 2009, SHO letter.  
    Page 6  State Health Official 
 
Continuous Eligibility 
 
6.  Are States that disenroll children from CHIP for non-payment of premiums or other 
permissible reasons under title XXI automatically disqualified from meeting the criteria 
for continuous eligibility? 
 
No.  States that elect continuous eligibility in CHIP may disenroll a child for who required 
premiums are not paid, after applying the appropriate grace period.  (See SHO #10-001 for 
additional information about the CHIPRA premium grace period requirements, available at 
http://www.insurekidsnow.gov/professionals/CHIPRA/chiprapremiumgraceperiod.pdf.) 
 
Same Application/Renewal Forms and Procedures 
 
7.  Does the term same application and renewal forms and procedures for Medicaid and 
CHIP mean that States must have a joint application for Medicaid and CHIP? 
 
No.  This program feature does not require a joint program application for Medicaid and 
CHIP enrollment.  States may meet this program feature by using a joint program 
application, or by using Medicaid and CHIP program forms interchangeably, when 
determining a childs eligibility for either program (i.e. no wrong door).  In order to meet 
the requirements of this program feature, States must allow the use of the same application 
forms and procedures for initial eligibility determinations for Medicaid and CHIP, as well as 
the same renewal forms and procedures for redeterminations of eligibility for Medicaid and 
CHIP.   
 
Automatic/Administrative Renewal 
 
8.  Are States required to implement both administrative and ex parte renewal procedures 
to satisfy the criteria for automatic/administrative renewal?  Can CMS clarify how 
States can meet the criteria for automatic/administrative renewal?   
 
No.  In order to qualify for the automatic/administrative renewal program feature, States can 
implement one or both of two renewal procedures that are designed to rely on information 
available to the State and to have no, or minimal, involvement from the beneficiary:  (a) 
administrative redeterminations; and (b) ex parte redeterminations.  The objective of this 
program feature is to ensure that States have made the renewal process as simple and 
efficient as possible for families.  These procedures provide for redetermination without an 
in-person interview, but also involve other practices to minimize burden on families.  
 
Practices that qualify as automatic/administrative renewal: 
  
  Administrative Redeterminations  The State sends a form pre-populated with all 
eligibility information available to the State to the family in advance of the renewal date.  
Then the State will either:  Page 7  State Health Official 
 
i.  Continue the childs coverage based on the information available unless the 
family responds with more current information, or the State otherwise obtains 
such information that affects eligibility (e.g., through data matches); or 
ii.  Require the parent/representative to confirm the accuracy of the information 
by returning a signed copy of the pre-populated form with any changes in 
information noted on the form.  
 
No additional action is required by the parent/representative for continuation of the 
childs coverage. 
 
  Ex parte Redeterminations  The State performs the eligibility redetermination based on 
information contained in the individual's Medicaid or CHIP file, or by obtaining   
information available to the State through other sources.  Then the State will either 
complete the redetermination based on the information available and notify the 
parent/representative that the childs coverage will continue, as appropriate, or complete 
the redetermination to the maximum extent possible using all available electronic means 
and contact the parent/representative for only the information the State is unable to obtain 
or verify.  (Note that a signed application or renewal form is not required under Federal 
law for renewals.) For more information about CMS policy on ex parte redeterminations, 
please see the State Medicaid Director letter, released on April 22, 1997, available at  
http://www.cms.hhs.gov/smdl/downloads/SMD042297.pdf.  
 
Example:  The State Medicaid Agency makes an eligibility redetermination based on 
information already in its files or based on information that it obtains through interagency 
Memoranda of Understanding with other State agencies.  Such interagency agreements 
can promote overall efficiency by ensuring that family/beneficiary household data 
pertinent to redetermining eligibility (e.g., address, household members, gross earned 
income, child care expenses, etc.) are available without requiring the beneficiary to 
separately report that data to the State Medicaid agency. 
 
  If the State has sufficient information to determine eligibility for continued 
coverage, the renewal is complete.  The State need not require a signed renewal 
form or any further information from the family.  Alternatively, the State may 
require the family to confirm the accuracy of the information through phone, e-
mail, fax, or postal mail, but coverage will not be interrupted pending 
confirmation.   
 
  If the State needs additional supporting information to complete the 
redetermination, the State contacts the parent/representative to provide only the 
information the State was unable to obtain from other sources.  For example, the 
State may have information that there is a new adult in the household (i.e., a 
change in household members), but cannot reasonably obtain information on the 
new household member from other sources.  In this case, the parent/representative 
is not asked to complete a new application but only to provide the supplemental 
information necessary to complete the renewal.  In this example, even though the 
family was required to provide information, this practice satisfies ex parte  Page 8  State Health Official 
 
requirements because the State relied on information from other sources to the 
fullest extent possible.  
 
Practices that do not qualify for automatic/administrative renewal: 
 
a.  Sending blank renewal form(s) to the parent/representative to fill out and return to the 
State in order for the childs coverage to continue. 
b.  Requiring the family to complete renewal forms and/or respond with information that 
is already available to the State through other sources.  
c.  Requiring the parent/representative to return proof of current income or other 
supplemental information when that information could be obtained by the State 
through other sources and when there is no basis to believe that the information the 
State has available is incorrect.   
d.  Attempting to obtain beneficiary information through electronic means only after it 
requests information (e.g., current income) from the parent/representative and 
receives no response.    
 
Presumptive Eligibility 
 
9.  How can States with separate CHIP programs that charge premiums or similar cost-
sharing implement presumptive eligibility? 
 
States can implement presumptive eligibility for CHIP children and still require beneficiary 
cost sharing upon full enrollment.  However, States may not require payment of premiums, 
enrollment fees, or similar cost-sharing charges while the childs CHIP eligibility 
determination is pending.  States would apply presumptive eligibility rules in the same 
manner as applied to children not subject to cost sharing during the presumptive period.    
 
Express Lane Eligibility  
 
10. Can an integrated eligibility system that processes TANF, Medicaid, and CHIP be used 
to implement Express Lane eligibility (ELE)? 
 
Yes, but an integrated eligibility system by itself does not automatically constitute an ELE 
process.  For example, the fact that the TANF agency makes Medicaid or CHIP eligibility 
determinations does not by itself qualify the States process as an ELE process.  States that 
utilize a combined application form for multiple programs, such as TANF, SNAP, Medicaid, 
and CHIP, will not necessarily qualify as having an ELE process unless all other 
requirements for ELE are met, including the requirement that the State also have regular 
procedures for determining eligibility that are used if a finding from the Express Lane agency 
would result in a determination that a child does not satisfy an eligibility requirement for 
Medicaid or CHIP.  The ELE process is an alternative to the regular Medicaid eligibility 
determination process, rather than the regular Medicaid eligibility process itself.  There are 
circumstances in which States could design an ELE process using a TANF agency as an 
Express Lane agency.  We encourage States to explore how this might work in their State. 
  Page 9  State Health Official 
 
Enrolling children through a determination authorized under section 1931 of the Act does not 
automatically constitute an ELE process, even when that determination is similar to a TANF 
determination or takes into account the TANF determination.  Also, as mentioned above, in 
order to qualify for bonus payments, program features should apply to those children in a 
Medicaid eligibility group for which being a child is a requirement of eligibility, and 
should apply to all children covered under CHIP. 
 
Four States (Alabama, Iowa, Louisiana, and New Jersey) currently have approved State plan 
amendments to offer Express Lane Eligibility.  We would be happy to work with additional 
States interested in pursuing this option.  For additional information about Express Lane 
Eligibility, please see SHO #10-003, available at 
http://www.insurekidsnow.gov/professionals/federal/express_lane.pdf. 
 
 
Premium Assistance 
 
11. How can a State convert its currently approved Medicaid or CHIP premium assistance 
program to the new CHIPRA premium assistance State plan options under sections 
1906A and 2105(c)(10) of the Act in order to qualify for a bonus payment?   
 
Premium assistance is one of the qualifying program features for the CHIPRA performance 
bonus, but, under the law, only premium assistance programs operating under the authority of 
section 1906A and section 2105(c)(10) of the Act may qualify.  However, a State may 
already be providing premium assistance to children who meet the requirements for 
participation under section 1906A and section 2105(c)(10) of the Act if the State currently 
has approved a premium assistance program for Medicaid and CHIP under section 1906, 
section 2105(c)(3), and/or a section 1115 demonstration.  To implement a section 1906A or a 
section 2105(c)(10) premium assistance program, the State must submit a State plan 
amendment to exercise this option.  CMS has provided a model template for this amendment 
in CHIPRA letter # 10-002, which was issued February 4, 2010.  
http://www.insurekidsnow.gov/professionals/federal/chipra_premium.pdf 
 
Changes in the scope of premium assistance may be required for converting a premium 
assistance program under section 1906 of the Act to a program under section 1906A of the 
Act as well as for converting a program under section 2105(c)(3) to a program under section 
2105(c)(10) of the Act.  Premium assistance provided under sections 1906A and section 
2105(c)(10) must be offered on a voluntary basis to all eligible children who can obtain 
qualified employer-sponsored coverage.  Qualified employer-sponsored coverage is defined 
in both section 1906A(b) and section 2105(c)(10)(B) of the Act, and this definition includes 
an employer contribution of at least 40 percent of the cost of the premium. 
 
In general, under these premium assistance options, States will need to consider establishing 
processes to confirm the individuals voluntary election to receive a premium assistance 
subsidy and to permit the parent of an individual under age 19 to disenroll the individual 
from the qualified employer-sponsored coverage for any month.  Premium assistance 
programs operating under section 1906A of the Act must ensure that Medicaid claims  Page 10  State Health Official 
 
payments systems pay all enrollee premiums, deductibles, coinsurance, and other cost-
sharing obligations for items and services covered under the State plan for the individual 
under age 19 and the individuals parent.  
 
States that currently provide premium assistance to Medicaid- or CHIP-eligible children who 
have access to qualified employer sponsored coverage may move those children from an 
existing demonstration into the State plan, as long as the States do not apply more restrictive 
criteria for employer participation.  States with existing premium assistance programs where 
the employer coverage being offered does not qualify under the definition of qualified 
employer sponsored coverage may leave existing demonstrations in place for these 
individuals.  
 
12. If CMS determines that a State does not qualify for a bonus payment, will the State be 
able to request a review of that determination? 
 
Yes.  If CMS determines that a State does not qualify for a bonus payment, CMS will outline 
in the States CMS bonus payment determination letter a procedure for the State to request 
reconsideration of the decision and/or reevaluation of the States enrollment data.  All 
reconsiderations will be evaluated on a case-by-case basis, depending on the issues 
presented.