I
105TH CONGRESS
1ST SESSION
H. R. 835
To amend title XIX of the Social Security Act to improve the Federal
medical assistance percentage used under the Medicaid program, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 25, 1997
Mrs. THURMAN (for herself, Mrs. MEEK of Florida, Ms. BROWN of Florida,
Mr. GOSS, Mr. DEUTSCH, Mr. BOYD, Mr. FOLEY, Mrs. FOWLER, Mr.
WEXLER, Mr. CANADY of Florida, and Mr. MCCOLLUM) introduced the
following bill; which was referred to the Committee on Commerce
A BILL
To amend title XIX of the Social Security Act to improve
the Federal medical assistance percentage used under
the Medicaid program, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Fairness in Medicaid
Funding Act of 1997’’.
SEC. 2. CHANGE IN FEDERAL MEDICAL ASSISTANCE PER-
CENTAGE.
(a) IN GENERAL.—Subsection (b) of section 1905 of
the Social Security Act (42 U.S.C. 1396d(b)) is amended
to read as follows:
‘‘(b)(1)(A) Except as provided in paragraph (3), the
term ‘Federal medical assistance percentage’ means, for
each of the 50 States and the District of Columbia, 100
percent reduced by the product of the applicable percent-
age (as defined in subparagraph (B)) and the ratio of—
‘‘(i)(I) for each of the 50 States, the total tax-
able resources ratio (as defined in subparagraph
(C)) of the State, or
‘‘(II) for the District of Columbia, the per cap-
ita income ratio (as defined in subparagraph (D)),
to—
‘‘(ii) the population in poverty ratio (as defined
in subparagraph (E)) of the State or District.
‘‘(B)(i) For purposes of this subsection, the term ‘ap-
plicable percentage’ means a percentage estimated by the
Secretary with the advice of the General Accounting Office
that, when applied under subparagraph (A), would result
in an amount of aggregate payments under section
1903(a) for calendar years 1998 through 2002 equal to
the amount of aggregate payments that would have been
made under such section for quarters in such years if this
subsection were applied as in effect on the day before the
date of the enactment of the Medicaid Fairness in Fund-
ing Act of 1997.
‘‘(ii) The applicable percentage estimated by the Sec-
retary under clause (i) shall continue to apply with respect
to quarters beginning after calendar year 2002.
‘‘(C) For purposes of this subsection, the term ‘total
taxable resources ratio’ means—
‘‘(i) an amount equal to the most recent 3-year
average of the total taxable resources of the State,
as determined by the Secretary of the Treasury, di-
vided by
‘‘(ii) an amount equal to the sum of the 3-year
averages determined under clause (i) for each of the
50 States.
‘‘(D) For purposes of this subsection, the term ‘per
capita income ratio’ means—
‘‘(i) an amount equal to the most recent 3-year
average of the total personal income of the District
of Columbia, as determined in accordance with the
provisions of section 1101(a)(8)(B), divided by
‘‘(ii) an amount equal to the total personal in-
come of the continental United States (including
Alaska) and Hawaii, as determined under section
1101(a)(8)(B).
‘‘(E) For purposes of this subsection, the term ‘popu-
lation in poverty ratio’ means—
‘‘(i) an amount equal to the 3-year-average of
the number of individuals in the State (or the Dis-
trict of Columbia) whose family income is below the
income official poverty line (as defined by the Office
of Management and Budget and revised annually in
accordance with section 673(2) of the Omnibus
Budget Reconciliation Act of 1981), divided by
‘‘(ii) an amount equal to the sum of the aver-
ages determined under clause (i) for the 50 States.
‘‘(2) The Federal medical assistance percentage for
Puerto Rico, the Virgin Islands, Guam, the Northern Mar-
iana Islands, and American Samoa shall be 50 percent.
‘‘(3)(A) Except as provided in subparagraph (B), the
Federal medical assistance percentage shall in no case be
less than 40 percent or greater than 83 percent.
‘‘(B) The Federal medical assistance percentage shall
be 100 percent with respect to amounts expended as medi-
cal assistance for services which are received through an
Indian Health Service facility whether operated by the In-
dian Health Service or by an Indian tribe or tribal organi-
zation (as defined in section 4 of the Indian Health Care
Improvement Act).
‘‘(4) For purposes of any provision of law other than
a provision of this title, unless otherwise specifically pro-
vided, any reference to the ‘Federal medical assistance
percentage’ as defined in this section shall be considered
a reference to such term as defined under this subsection
as in effect on the day before the date of the enactment
of the Medicaid Fairness in Funding Act of 1997.’’.
(b) CONFORMING AMENDMENT.—Section 1118 of the
Social Security Act (42 U.S.C. 1318) is amended by strik-
ing ‘‘(as defined in section 1905)’’ and inserting ‘‘(as de-
fined in section 1905(b), as in effect on the day before
the date of the enactment of the Medicaid Fairness in
Funding Act of 1997)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to payments made to States with
respect to calendar quarters beginning on or after January
1, 1998.
SEC. 3. ADMINISTRATION EXPENDITURES.
(a) IN GENERAL.—Section 1903(a) of the Social Se-
curity Act (42 U.S.C. 1396b(a)) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A), by striking ‘‘75
per centum’’ and inserting ‘‘the Federal medical
assistance percentage’’;
plan) as are attributable to State activities under
section 1919(g); plus’’;
(2) in paragraph (3)—
(A) in subparagraph (A)—
(i) by striking ‘‘(A)(i)’’ and inserting
‘‘(A)’’;
(ii) by striking ‘‘90 per centum’’ and
inserting ‘‘the Federal medical assistance
percentage’’;
(iii) by striking ‘‘under this title, and’’
and inserting ‘‘under this title; plus’’; and
(iv) by striking clause (ii);
(B) in subparagraph (B), by striking ‘‘75
per centum’’ and inserting ‘‘the Federal medical
assistance percentage’’;
(C) in subparagraph (C), by striking ‘‘75
per centum’’ and inserting ‘‘the Federal medical
assistance percentage’’; and
(D) in subparagraph (D), by striking ‘‘75
percent’’ and inserting ‘‘the Federal medical as-
sistance percentage’’;
(3) in paragraph (4), by striking ‘‘100 percent’’
and inserting ‘‘the Federal medical assistance per-
centage’’;
(4) in paragraph (5), by striking ‘‘90 per cen-
tum’’ and inserting ‘‘the Federal medical assistance
percentage’’;
(5) by striking paragraph (6) and inserting the
following new paragraph:
‘‘(6) subject to subsection (b)(3), an amount
equal to the Federal medical assistance percentage
of the sums expended with respect to costs incurred
during such quarter (as found necessary by the Sec-
retary for the elimination of fraud in the provision
and administration of medical assistance provided
under the State plan) which are attributable to the
establishment and operation of (including the train-
ing of personnel employed by) a State medicaid
fraud control unit (described in subsection (q));
plus’’; and
(6) in paragraph (7), by striking ‘‘subject to
section 1919(g)(3)(B), an amount equal to 50 per
centum’’ 
and 
inserting 
‘‘subject 
to 
section
1919(g)(3)(C), an amount equal to the Federal med-
ical assistance percentage’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to payments made to States with
respect to calendar quarters beginning on or after January
1, 1998.
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