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 
 
CMCS Informational Bulletin 
  
 
DATE:  February 16, 2011 
     
FROM:  Cindy Mann  
  Director 
  Center for Medicaid, CHIP and Survey & Certification (CMCS) 
 
SUBJECT:  Recent Developments in Medicaid and CHIP Policy  
 
This Informational Bulletin is to provide you a summary of recent activities and guidance to the 
States related to Medicaid policy and continued efforts to effectively implement CHIPRA and 
the Affordable Care Act.  
 
This week we have released the CHIPRA Quality State Health Officials letter providing 
guidance on reporting processes for the initial core set of measures and two Federal Register 
notices, including the final rule containing the methodologies to determine States CHIP fiscal 
year allotments through FY 2013 and the proposed rule implementing section 2702 of the 
Affordable Care Act regarding health care-acquired conditions.  
 
CHIPRA Quality Measures   
On February 14, 2011 CMCS released this letter to State Health Officials providing guidance on 
the implementation of the Childrens health Insurance Program Reauthorization Act (CHIPRA) 
Quality Reporting.  The letter includes numerous tools to improve the quality of care provided to 
children in Medicaid and CHIP, including requiring the HHS Secretary to identify an initial core 
set of recommended pediatric quality measures for voluntary use by State Medicaid and CHIP 
Programs. Most States already collect and report quality measures and have done so for years but 
differences across states limit comprehensive national comparisons on childrens quality of care 
and impede States ability to evaluate their progress relative to other States.  As our next step to 
actively building the infrastructure needed to assess the quality of care children receive, CMS is 
releasing additional information on the initial core set of childrens health care quality measures 
published in December 2009.  While reporting by States on the initial core measures set is 
voluntary, these measures represent a major advance toward developing a quality-driven, 
evidence-based system for measuring childrens quality of care.  This letter explains the 
reporting processes for the initial core set of measures and highlights the 11 (of 24) measures on 
which CMS intends to focus technical assistance in Year One.  The letter can be accessed at: 
http://www.cms.gov/smdl/downloads/SHO11001.pdf. 
 
CHIP Allotment Methodology and FY2011 CHIP Allotments  
CMCS is pleased to announce the release of the Final Rule regarding States FY 2009 through 
FY 2013 Childrens Health Insurance Program (CHIP) allotments, as well as States FY2011  
 
  Page 2  CMCS Informational Bulletin 
 
CHIP Allotments.  The Childrens Health Insurance Program Reauthorization Act (CHIPRA), 
enacted on February 4, 2009, and the Affordable Care Act, enacted on March 23, 2010, extended 
the CHIP through FY 2015. On September 16, 2009, CMS published in the Federal Register a 
proposed rule which addressed the revised methodologies for determining States CHIP fiscal 
year allotments.  The final rule containing the methodologies to determine States CHIP fiscal 
year allotments through FY 2013 is now displayed in the Federal Register and it will be formally 
published there on February 17, 2011.  The regulation text is displayed on the Federal Register  
website at http://www.ofr.gov/OFRUpload/OFRData/2011-03639_PI.pdf  until February 17, 2011 at 
which time it can be found at http://www.access.gpo.gov/su_docs/fedreg/frcont11.html. 
 
Health Care-Acquired conditions 
CMCS is also pleased to announce the release of a proposed rule implementing section 2702 of 
the Affordable Care Act which requires that Medicaid promulgate regulations effective as of July 
1, 2011, providing a payment adjustment for health care-acquired conditions (HCAC).  
Specifically, the Statute directs the Secretary to identify current State practices that prohibit 
payment for HCAC and incorporate those practices, as appropriate, into Medicaid policy 
regulations; ensure that the Medicaid HCAC regulations do not impact beneficiary access to 
care; define the term health care-acquired condition in accordance Medicares inpatient 
hospital statutory language at 1886(d)(4)(D)(iv); and apply Medicares provisions regarding the 
identifiable HAC, excluding any condition identified for non-payment under Medicare that may 
not be applicable to Medicaid.   
 
Reducing payment for conditions that are largely preventable through evidence-based guidelines 
is an important tool to both improve care and lower costs.  Many states have already done 
extensive work in this area; there are currently 21 States that already have a nonpayment policy 
in effect.  The proposed rule proposes a definition of HCAC that includes Medicares current list 
of HAC as the floor for Medicaid requirements but allows States flexibility in identifying HCAC 
beyond Medicares list of HAC.  In addition, we have introduced an umbrella term, Provider-
Preventable Conditions (PPC) to be defined by two categories; HCAC and other provider-
preventable conditions (OPPC) that can occur in outpatient hospital, nursing facility, 
ambulatory care settings, and other healthcare settings.  The NPRM proposes that data on HCAC 
be reported by providers through State claims systems, to facilitate ease of reporting and to 
develop baseline data to be used by States and CMS in evaluating HCAC policy.  This proposed 
rule is now displayed on the Federal Register website at 
http://www.ofr.gov/OFRUpload/OFRData/2011-03548_PI.pdf until February 17, 2011, at which 
time it can be found at http://www.access.gpo.gov/su_docs/fedreg/frcont11.html.  
 
I hope you will find this information helpful.  Thank you for your continued commitment to the 
success of these critical health coverage programs.