Medicaid finances health care for certain categories of low-income individuals, including pregnant women, children, certain low-income In parents, persons with disabilities, and persons who are elderly.addition, states can expand Medicaid eligibility to other individuals, including children and eligible parents with incomes above the current minimum levels. Under broad federal requirements, states administer the day-to-day operations of their Medicaid programs; activities that include determining whether applicants are eligible for Medicaid, setting the scope of covered services, paying providers, and ensuring access to covered services. The Centers for Medicare & Medicaid Services (CMS), a federal agency within the Department of Health and Human Services (HHS), oversees state Medicaid programs at the federal level. States are required to ensure that all individuals who want to apply for Medicaid coverage have the opportunity to do so and must, with reasonable promptness, provide coverage to applicants who are determined eligible. In general, states are required to determine eligibility for individuals who apply for Medicaid within 45 days from the date of application, and within 90 days for those who apply on the basis of disability. In some states, Medicaid applications are reviewed and eligibility is determined at the county level, while other states have centralized their eligibility determination processes. States’ Medicaid programs must cover a set of mandatory services, including those provided by primary and specialty care physicians, as well as services provided in hospitals, clinics, and other settings. States may elect to cover additional optional benefits and services, such as home and community-based services, personal care, and rehabilitative services, under their Medicaid programs. In some cases, not all beneficiaries are eligible for all services. For example, Medicaid requires states to cover necessary dental care for children, but dental coverage for adults is optional. Subject to federal requirements, states may establish the amount, duration, and scope of the mandatory and optional services covered in their Medicaid programs. For example, states may limit the number of visits or the days of care that are provided. States are responsible for setting Medicaid provider payment rates within certain federal requirements. Specifically, federal law requires that state Medicaid payments to providers are consistent with efficiency, economy, and quality of care and are sufficient to enroll enough providers so that services are available to beneficiaries at least to the extent that they are available to the general population in the same geographic area. In addition, states must identify the methodologies for making provider payments in their state plans, and such methodologies must be approved by CMS. In addition to payments made directly to providers for services to beneficiaries, most states also make supplemental payments that are separate from and in addition to regular Medicaid payments. Supplemental payments include Disproportionate Share Hospital (DSH) payments, which states are required by federal law to make to hospitals that treat large numbers of Medicaid and low-income individuals; DSH payments cannot exceed the unreimbursed cost of furnishing inpatient and outpatient services to Medicaid beneficiaries and the uninsured. Many states also make other optional supplemental payments that are above the standard Medicaid payment rates but within the Upper We refer to these payments as non-DSH Payment Limit (UPL). supplemental payments. In fiscal year 2010, states and the federal government made at least $32 billion in supplemental payments— representing over 8 percent of the Medicaid program’s total expenditures—with a federal share of at least $19.8 billion. CMS is responsible for overseeing these payment arrangements, including whether states are appropriately financing their share. States may also use provider taxes and certain other sources of revenue to finance their Medicaid programs. Provider taxes are taxes, fees, assessments, or other mandatory payments that states may impose on the provision of or payment for certain types of health care items or services, such as inpatient hospital and nursing facility services. States may use revenue from provider taxes for their state share of Medicaid expenditures only if the taxes meet certain criteria. Many states use revenue from a provider tax on a certain type of provider to increase Medicaid payment rates for the same type of provider, and a state could effectively increase a payment rate for a provider without using additional state funds to finance the increase if the revenue from the provider tax and the federal share of the payment rates account for the total increase. See Pub. L. No. 111-3, § 104, 123 Stat. 8, 17-23. States are eligible for these performance bonuses for fiscal years 2009 through 2013. Under continuous eligibility, states allow children to remain eligible for Medicaid or CHIP for a full year before any redetermination of eligibility, regardless of changes in household income. Under the express lane eligibility option, states may rely on findings, including income data, from certain other state agencies for Medicaid or CHIP eligibility determination. For presumptive eligibility, states may allow qualified entities, such as, community-based organizations or schools, to screen for eligibility and immediately enroll eligible individuals for a defined period of time. apply for or renew enrollment in Medicaid using an electronic signature beginning in 2014. Of the 55 states that responded to our survey, 39 states provided specific data on average application processing times for new Medicaid applications in 2012, and 43 were able to report generally on whether average application processing time increased, decreased, or remained the same since 2008. The average application processing time is the average number of calendar days between the receipt of a new application and the final determination of eligibility. Among the 39 states that reported data, the current application processing ranged from 11 to 45 calendar days, with a median of 25 calendar days.could not report their average processing times, of which about half noted that they do not track these data or that they track them differently than how they were requested in our survey. For example, 4 states noted that they only tracked whether an application met the mandated time frames for the application—not the specific number of days. Another state reported that its data on application processing times were not reliable because of differences in the way the data were reported by counties. We also asked more generally whether states’ application processing times changed since 2008. Of the 55 states that responded, 30 reported decreasing (19 states) or maintaining (11 states) their average processing times for new Medicaid applications, 13 states reported increased processing times, and 12 states reported not knowing whether their processing times had changed. Among the 19 states that reported decreased average processing times for new applications, 15 states attributed the decreases to efforts to streamline application procedures. These 15 states most frequently cited the use of electronic applications and the elimination of face-to-face interviews as streamlining procedures that facilitated decreases in application processing times. (See fig. 1.) Some of these 15 states also cited a decrease in documentation requirements, use of express lane eligibility, revised or shortened applications, or use of presumptive eligibility for helping decrease application processing times. Specifically: Six states reported that the use of express lane eligibility—the reliance on findings from certain other state agencies or state income- tax data to determine eligibility for Medicaid—helped decrease application processing time. Five states reported that their decreased processing times were related to the use of presumptive eligibility procedures, in which authorized entities, including community-based organizations and schools, can screen and immediately enroll eligible individuals into Medicaid for a defined period of time. A few states also attributed decreases in application processing times to other factors not directly related to streamlining application procedures, including additional staff or staff hours (3 states), more intake facilities (2 states) or a reduction in the volume of new applications received (1 state). (See app. II for further information on states’ efforts to use electronic application processing and streamlining the renewal application process.) Almost all of the 13 states that reported an increase in average processing times since 2008 attributed these increases to a growth in the volume of new applications received. (See fig. 2.) States could cite more than one factor, and 9 of these states also identified reductions in staff as a result of layoffs, hiring freezes, or furloughs as factors related to increased application processing time. One state that reported an increase in application processing times indicated that, in addition to an increase in the volume of applications received, its staff were learning to use a new computer system to process applications. Because of data limitations, we were unable to assess the extent to which the number of applications states processed kept pace with the number of new applications received each month from January 2008 through December 2011. Most states provided incomplete or inconsistent data on new applications received and processed. For example, 25 states provided incomplete data for 2008 and 15 states provided incomplete information for 2011. States cited various reasons for providing incomplete applications data, including upgrades to their data systems since 2008 and data systems that do not differentiate between applications received and applications processed. For the states that did submit monthly applications data, there were differences among states in the way these data were reported. For example, one state reported totals of Medicaid applications processed that were cumulative over time, rather than just those processed within a month. (For more information, see app. I.) States reported changes—both increases and decreases—to provider payment rates, provider taxes, and beneficiary services since 2008. In a given year, states could make both increases and decreases; for example, states could reduce payment rates to certain types of providers, while increasing payment rates to others. Overall, more states reported payment and service increases than decreases. However, the number of states reporting payment decreases and service limitations grew since 2008. The number of states that reported making at least one payment rate reduction grew from 13 in 2008 to 34 in 2011, while the number of states increasing at least one provider payment rate fell over the same period. Overall, more states reported increasing provider payment rates in 2011 than reducing them. (See fig. 3.) States most frequently reported reducing payment rates for hospitals across all 4 years. For example, in 2011, 19 states reported payment rate reductions for inpatient hospitals and 17 reported reductions for outpatient hospitals. Of the states that increased provider payment rates, more states generally reported increasing payment rates for nursing facilities than any other provider type across all 4 years.