SMD Letter 11/24/00 - 4th Qtr Expenditure Reports for FY 2000  
November 24, 2000  
Dear State Medicaid and State Children's Health Insurance Program Director:  
We are writing to alert you of the need to submit your Medicaid and State Children's Health 
Insurance Program (SCHIP) fourth quarter expenditure reports for Federal Fiscal Year (FFY) 2000 
as soon as possible, but no later than December 15, 2000.  
The Reallocation Process  
Under the SCHIP statute (title XXI of the Social Security Act), States are provided Federal funds through the 
mechanism of FFY specific and State specific allotments, for the purpose of enabling them to provide health 
insurance for uninsured low-income children. Under the current SCHIP statute, each State's fiscal year specific 
SCHIP allotment is only available for expenditure by the State for a 3-year period of availability, the fiscal year in 
which allotments were distributed and the two succeeding fiscal years. With respect to States' FFY 1998 SCHIP 
allotments, the 3-year period of availability ended at the end of FFY 2000, that is, on September 30, 2000. 
Following the end of the 3-year period for each fiscal year, the Secretary of the Department of Health and Human 
Services is required by law to redistribute the amounts of any States' unexpended SCHIP allotments to those States 
that have fully expended their SCHIP allotments. Furthermore, under current statute, the redistributed allotments for 
a fiscal year are available only through the end of the fiscal year in which the redistribution occurs. Therefore, under 
current statute the redistributed FFY 1998 allotments would be available only through the end of FFY 2001, that is, 
through September 30, 2001. States' expenditures made in FFY 2001 prior to the redistribution of FFY 1998 
allotments, however, can be re-characterized as expenditures to be applied against the redistributed amount.  
In order for HCFA to distribute the unexpended FY 1998 funds in a timely manner, we need to determine the 
amounts of the unexpended FFY 1998 SCHIP allotments, and which States have fully expended their FFY 1998 
SCHIP allotments by the end of the 3-year period of availability. For this purpose, we must have State FFY 2000 
fourth quarter SCHIP and Medicaid expenditure reports as soon as possible.  
States should also be aware that Congress is currently considering proposed legislation that would revise the way 
the FFY 1998 and FFY 1999 unexpended allotments would be redistributed. Under this proposal, expenditures that 
have been reported as of November 30, 2000 will be considered with respect  
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Expenditure Reports for FY 2000  
to the reallocation. There is no way of knowing at this time whether the proposed legislation will be 
enacted and, if so, whether the November 30th date will continue to be the operative date for the 
purpose of calculation of the FFY 1998 expenditures.  
 
Reports Must Be Submitted in a Timely Manner  
Under Federal Medicaid and SCHIP regulations (42 CFR 430.30(c) and 42 CFR 457.630(c)(1), 
respectively), States are required to submit their quarterly expenditure reports for Medicaid and 
SCHIP no later than 30 days after the end of each quarter. For the fourth quarter of FFY 2000,  which ended on September 30, 2000, the relevant expenditure reports should have been submitted 
by October 30, 2000. This is the standard requirement for submission of these expenditure 
reports.  
If you have any questions regarding this issue, please contact Richard Strauss at (410) 786-2019.  
Sincerely,  
/s/  
Timothy M. 
Westmoreland 
Director  
cc: All HHS Regional Directors All HCFA Regional Administrators All HCFA Associate Regional 
Administrators for Medicaid and State Operations Brett Ewig, Association of State and Territorial 
Health Officials Lee Partridge, American Public Human Services Association Matt Salo, National 
Governors' Association Joy Wilson, National Conference of State Legislatures  
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