DEPARTMENT OF HEALTH & HUMAN SERVICES 
Health Care Financing Administration  
 Center for Medicaid and State Operations 
7500 Security Boulevard 
Baltimore, MD 21244-1850 
November 24, 1997  
Dear State Medicaid Director:  
This letter is one of a series that provides guidance on the implementation of the Balanced Budget Act. This letter 
addresses section 4723 of the Balanced Budget Act which provides for additional funding for State emergency health 
services furnished to undocumented aliens for 1998 through 2001. There will also be a separate Federal Register Notice 
providing further guidance on this provision. For each of the four fiscal years, a $25 million allotment will be available to 
the 12 States with the highest number of undocumented aliens.  
In a fiscal year, each State's portion of the total funds available will be based on its share of total undocumented aliens in 
all of the eligible States. Enclosed is the list of the 12 States with the highest number of undocumented aliens and the 
respective allocations for each of those States for fiscal year 1998.  
As required by the statute, the allotments for each year are based on the estimates provided by the Statistics Division of 
the Immigration and Naturalization Service (INS). INS estimates refer to the population of immigrants that have 
established residence in the United States (U.S.) by remaining in the Country for more than 12 months in an illegal status. 
INS estimates that the total number of illegal residents in the U.S. as of October 1996 was 5 million. The statistics as of 
October 1996 also provide for the estimated Statewide distribution of the illegal resident population. The 12 States that are 
to receive funds under section 4723 account for a full 88 percent (4,411,000/5,000,000) of the illegal alien resident 
population living in the U.S.  
These 12 States will receive Federal funding up to each State's allotment in the amount that the State demonstrates it paid 
for emergency health services furnished to undocumented aliens. Therefore, for those States eligible for the allotments, 
they can recover the State share of the cost of treatment of emergency health services furnished to undocumented aliens 
who, except for their alien status, would otherwise qualify for Medicaid and also amounts paid for services to 
undocumented aliens who do not meet the Medicaid eligibility requirements. For purposes of the allotment, emergency 
health services must meet the definition of emergency services that is located at 42 CFR 440.255(c).  
The State (or a political subdivision of the State) must actually pay for the care described above. Any amounts not used by 
the State will be available for payment during the next fiscal year. The cost of care written off by a provider as charity 
care, or bad debts, or which was reimbursed in whole or part by any other Federal program is not eligible for the 
allotment. The HCFA-64 Report (expenditures) and HCFA-37 Report (budget) will be modified to add a Line (27) to 
capture expenditures for emergency services furnished to undocumented aliens.  
If you have any questions, please contact Mark Ross of my staff at (410) 786-5855.  
Sincerely,   
/s/   
Sally K. Richardson   
Director   
Center for Medicaid State Operations  
 
Enclosure  
cc:   
All Regional Administrators   
All Associate Regional Administrators for Medicaid and State Operations   
Jennifer Baxendell, NGA   
Joy Wilson, NCSL   
Lee Partridge, APWA     
 FY 1998 ALLOTMENTS FOR STATE EMERGENCY HEALTH SERVICES FURNISHED TO 
UNDOCUMENTED ALIENS UNDER SECTION 4723 OF THE BALANCED BUDGET ACT OF 1997 
 
RANKING  STATE  POPULATION (1)  PERCENT OF POPULATION  ALLOTMENT 
1  California   2,000,000  45.34%  11,335,298 
2  Texas   700,000  15.87%  3,967,354 
3  New York   540,000  12.24%  3,060,530 
4  Florida   350,000  7.93%  1,983,677 
5  Illinois   290,000  6.57%  1,643,618 
6  New Jersey   135,000  3.06%  765,133 
7  Arizona   115,000  2.61%  651,780 
8  Massachusetts   85,000  1.93%  481,750 
9  Virginia   55,000  1.25%  311,721 
10  Washington   52,000  1.18%  294,718 
11  Colorado   45,000  1.02%  255,044 
12  Maryland   44,000  1.00%  249,377 
TOTAL   4,411,000  100.00%  25,000,000 
 
   
(1) Source: INS, Statistics Branch, Demographic Statistics Section  Estimated Resident Undocumented Population by 
State of Residence  October, 1996