[Federal Register Volume 59, Number 56 (Wednesday, March 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6540]


[[Page Unknown]]

[Federal Register: March 23, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 431, 435, 436, 440, and 447

[MB-13-P]
RIN 0938-AD17

 

Medicaid Program; Low-Income Eligibility Groups and Coverage of 
Services; Legislative Changes

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the Medicaid regulations to: 
incorporate categorically needy eligibility groups of pregnant women, 
infants, and children and aged and disabled individuals with incomes 
related to the Federal poverty income guidelines; expand the deemed 
eligibility group of newborn children; expand the eligibility group of 
qualified children; clarify eligibility of homeless individuals; 
provide for the continuous eligibility of pregnant women without regard 
to changes in income; provide for ambulatory prenatal care for certain 
pregnant women during a limited period of presumptive eligibility, 
based on income eligibility only; and tie the medical assistance 
program to the Aid to Families with Dependent Children (AFDC) payment 
levels in the State.
    The amendments would conform the regulations to provisions of the 
Omnibus Budget Reconciliation Acts of 1990 and 1989, the Medicare 
Catastrophic Coverage Act of 1988, the Family Support Act of 1988, the 
Omnibus Budget Reconciliation Acts of 1987 and 1986, and the Homeless 
Eligibility Clarification Act of 1986.

DATES: Written comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on May 23, 
1994.

ADDRESSES: Mail written comments (original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: MB-13-P, P.O. Box 7518, 
Baltimore, Maryland 21207-0518.
    Please address a copy of comments on information collection 
requirements to: Office of Information and Regulatory Affairs, Attn.: 
Laura Oliven, Office of Management and Budget, Room 3002, New Executive 
Office Building, Washington, DC 20503.
    If you prefer, you may deliver your written comments (original and 
3 copies) to one of the following locations:

    Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, 
SW., Washington, DC 20201, or Room 132, East High Rise Building, 6325 
Security Boulevard, Baltimore, Maryland 21207.

    Due to staffing and resource limitations, we cannot accept comments 
by facsimile (FAX) transmission. In commenting, please refer to file 
code MB-13-P. Comments received timely will be available for public 
inspection as they are received, beginning approximately 3 weeks after 
publication, in Room 309-G of the Departmental offices at 200 
Independence Ave., SW., Washington, DC, on Monday through Friday of 
each week from 8:30 a.m. to 5 p.m. (202-690-7890).

FOR FURTHER INFORMATION CONTACT: Marinos Svolos, (410) 966-4452 
(Eligibility) Robert Wardwell, (410) 966-5659 (Coverage of services).

SUPPLEMENTARY INFORMATION:

I. Background

    Under title XIX of the Social Security Act (the Act), generally 
States with Medicaid programs are required to provide Medicaid 
eligibility to individuals, children, and families who are receiving, 
or are deemed to be receiving, cash assistance under the aid to 
families with dependent children (AFDC) program, the supplemental 
security income (SSI) program, and the mandatory State supplement 
program; and to certain other needy pregnant women and children 
(referred to as the mandatory categorically needy eligibility groups). 
At State option, States may provide Medicaid to individuals who meet 
the categorical and financial requirements for the cash assistance 
programs but, for various reasons, are not receiving such assistance--
for example, individuals who are in institutions or have not applied 
for cash assistance benefits--and to certain other specified needy 
groups (referred to as the optional categorically needy eligibility 
groups).
    In addition to categorically needy groups, States, at their option, 
may provide Medicaid to individuals who would be eligible for the cash 
assistance programs except that they have income or resources above 
allowable levels (referred to as the medically needy eligibility 
group). The medically needy are permitted to reduce their income to the 
allowed level by deducting (spending down) incurred medical expenses to 
become eligible for Medicaid.
    In recent years, a number of statutes have been enacted that 
established new eligibility groups, revised existing eligibility 
groups, or expanded services to certain low-income individuals. On 
October 21, 1986, Congress passed provisions of the Omnibus Budget 
Reconciliation Act of 1986 (OBRA '86), Public Law 99-509, that amended 
the Social Security Act to expand the Medicaid eligibility groups. 
States were given the option of providing Medicaid to certain needy 
individuals who had incomes up to a certain specified percentage of 
Federal poverty income guidelines and who previously were not eligible 
for Medicaid as categorically needy. These individuals included 
pregnant women, infants, and children (section 9401) and aged and 
disabled individuals (section 9402). In addition, section 9407 allowed 
States to provide ambulatory prenatal care to pregnant women during a 
presumptive eligibility period on the basis of income eligibility only.
    OBRA '86 also clarified Medicaid eligibility of homeless 
individuals who are residents of a State, regardless of whether or not 
they maintain a home at a fixed address or maintain it permanently 
(section 9405). In addition, section 11005 of the Homeless Eligibility 
Clarification Act (title XI of the Anti-Drug Abuse Act of 1986, Public 
Law 99-570), enacted on October 27, 1986, requires that a State 
Medicaid plan provide for a method of making medical services 
eligibility cards available to Medicaid-eligible individuals who do not 
reside in a permanent dwelling or at a fixed address.
    The Omnibus Budget Reconciliation Act of 1987 (OBRA '87), Public 
Law 100-203, enacted on December 22, 1987, made further changes in the 
Social Security Act to expand the optional eligibility groups of low-
income pregnant women, infants, and children and the mandatory 
eligibility group of qualified children under a certain age. OBRA '87 
also allowed a State to impose a monthly premium on optional 
categorically needy pregnant women and infants with incomes between 150 
and 185 percent of the Federal poverty level. In addition, section 4105 
of OBRA '87 clarified Medicaid coverage of clinic services furnished 
outside of clinic facilities to homeless individuals.
    The Medicare Catastrophic Coverage Act of 1988 (MCCA), Public Law 
100-360, enacted on July 1, 1988, also further amended provisions 
relating to the eligibility groups of individuals with incomes related 
to the Federal poverty income level. MCCA made some of the low-income 
pregnant women and infants mandatory Medicaid eligibility groups (those 
at or below 75 percent of the poverty level and then, a year later, 100 
percent of the poverty level) and amended the eligibility criteria for 
others.
    The Family Support Act of 1988 (FSA), Public Law 100-485, enacted 
on October 13, 1988, made several technical corrections to the Medicaid 
provisions of the Social Security Act. These corrections related to the 
description of the eligibility groups of low-income pregnant women, 
infants, and children.
    The Omnibus Budget Reconciliation Act of 1989 (OBRA '89), Public 
Law 101-239, enacted on December 19, 1989, changed the mandatory 
eligibility groups of low-income pregnant women and infants by 
increasing the income criteria to at or below 133 percent (instead of 
at or below 100 percent) of the Federal poverty income level; and added 
a new mandatory group of low-income children who are age one but have 
not attained age 6 who have incomes at or below 133 percent of the 
Federal poverty level. OBRA '89 mandated a percentage greater than 133 
percent of the Federal poverty level for the pregnant women and infants 
groups if the State had such a greater percentage in its State plan 
(whether approved or not) as of the date of enactment of OBRA '89, or 
established under State authorizing legislation or State appropriations 
as of December 19, 1989, when it covered these pregnant women or 
infants, or both, as optional categorically needy groups. Low-income 
children who are age 6 but have not attained age 7, or at State option, 
age 8 with incomes at or below 100 percent of the Federal poverty level 
remained an optional categorically needy group. These provisions were 
effective on April 1, 1990.
    The Omnibus Budget Reconciliation Act of 1990 (OBRA '90), Public 
Law 101-508, enacted on November 5, 1990, made additional changes to 
both the mandatory and optional groups of pregnant women, infants, and 
children. OBRA '90 created a new group of mandatory categorically needy 
children who are at least age 6 but have not yet reached age 19. These 
are children born after September 30, 1983 with family income at or 
below 100 percent of the Federal poverty level. OBRA '90 made 
corresponding changes to the mandatory eligibility group of qualified 
children to include children born after September 30, 1983 who have not 
attained age 19 and to allow States to use an earlier date of birth in 
order to include older children sooner than is mandated.
    In addition, OBRA '90 mandated that a State provide continuous 
eligibility to pregnant women throughout the pregnancy and postpartum 
period without regard to changes in income. (This had been a State 
option.) OBRA '90 also changed the requirement for newborns who are 
deemed to be eligible as a result of their mothers' eligibility status. 
Previously, a newborn was considered eligible at birth if the newborn's 
mother was eligible for and receiving Medicaid. The newborn could 
remain eligible for as long as a year if the mother remained eligible 
and the infant was a member of the mother's household. With the OBRA 
'90 change, a newborn may still remain eligible for as long as a year 
if the mother loses eligibility but would remain eligible if she were 
pregnant.
    Finally, OBRA '90 made several changes to presumptive eligibility 
for pregnant women by eliminating the existing time limit on the 
presumptive period and allowing a pregnant woman to remain 
presumptively eligible until the State makes a determination on her 
regular application for Medicaid or, if she does not file a regular 
application, the last day of the month following the month in which she 
was determined presumptively eligible. OBRA '90 also provided that the 
application given to a presumptively eligible pregnant woman could be 
the application used by the State to determine the regular Medicaid 
eligibility of low-income pregnant women under section 1902(1)(1)(A).
    This document proposes to incorporate provisions of OBRA '86, '87, 
'89, and '90, the Homeless Eligibility Clarification Act, MCCA, and FSA 
in the Medicaid regulations, as outlined and discussed in the following 
section of this document. (Additional related provisions in these laws 
are being addressed in separate rulemaking documents.)

II. Discussion of Legislative Provisions and Proposed Amendments to 
Regulations

A. Low-Income Pregnant Women, Infants, and Children

    Section 9401 of OBRA '86 amended the Social Security Act by adding 
new sections 1902(a)(10)(A)(ii)(IX) and 1902(1) to establish optional 
categorically needy groups of pregnant women and women during the 60-
day period beginning on the last day of pregnancy, infants, and 
children up to age 5 whose income does not exceed a State-established 
standard that is a specified percentage of the Federal nonfarm poverty 
income guidelines. Under OBRA '86, a State could establish this income 
standard at a level at or below 100 percent of the Federal poverty 
guidelines. A State had to cover both pregnant women and infants (it 
could not cover either group separately) and it had to cover both of 
these groups in order to cover children.
    OBRA '86 also amended section 1902(e) to provide that States that 
have chosen to cover infants and children under section 1902(1) must 
continue to cover those infants and children under certain 
circumstances. Under section 1902(e)(7), if the infants and children 
are receiving covered inpatient services at the time they reach the age 
limits under the State plan, the State must cover them until the end of 
their inpatient stay if they remain otherwise eligible. Also, OBRA '86 
specifically exempted the group of individuals described in section 
1902(a)(10)(A)(ii)(IX) from the limits on family income which affect a 
State's Federal financial participation (FFP) under section 1903(f)(4) 
of the Act.
    Later legislation changed the age limit for children and the 
percentage of the poverty level for the income standard. Specifically, 
section 4101(c) of OBRA '87 raised the maximum age for low-income 
children from age 5 up to age 8. Section 4101(a)(1) of OBRA '87 
increased the percentage of the poverty guidelines at which the income 
standard could be set to 185 percent for pregnant women and infants 
under age 1, effective July 1, 1988. However, for children age 1 up to 
age 8, section 4101 retained the percentage level at no more than 100 
percent of the Federal poverty guidelines (or, if the State had chosen 
to cover pregnant women and infants with a percentage of income below 
100 percent, the percentage for children had to equal the percentage 
used for the pregnant women and infants). Section 4118 of OBRA '87 also 
removed the reference to ``nonfarm'' in the description of the Federal 
poverty income guidelines to be used. In addition, section 4101(d) of 
OBRA '87 amended section 1916 of the Act to allow States to charge a 
premium to optional groups of low-income pregnant women and infants who 
have family incomes above a specified level.
    Section 302 of MCCA added section 1902(a)(10)(A)(i)(IV) to the 
Social Security Act, which required States to provide mandatory 
eligibility to groups of pregnant women and infants up to one year of 
age with incomes at or below 75 percent of the Federal poverty income 
guidelines, effective July 1, 1989. Those States that, as of enactment 
of MCCA, offered eligibility to pregnant women and infants with incomes 
at 100 percent of the poverty level (or at some lower income threshold 
between 75 percent and 100 percent) were required to continue 
eligibility at this level. A State had to provide an income level that 
reflected at least the percentage of poverty specified in an amendment 
to its State plan to cover these groups (whether the amendment had been 
approved or not). Even if there was no percentage specified in the 
State plan, the maintenance of eligibility requirement also applied to 
percentages established under a State's authorizing legislation or 
provided for under the State's appropriations in order to provide 
Medicaid to these individuals before July 1, 1989. MCCA also provided 
that, effective July 1, 1990, mandatory eligibility was required for 
groups of pregnant women and infants under age one with incomes at or 
below 100 percent of the Federal poverty income guidelines. In addition 
to creating mandatory groups of pregnant women and infants, the MCCA 
eliminated the requirement in section 1902(1)(4) that States cover both 
pregnant women and infants in order to cover either group and to cover 
both groups in order to cover children. We have interpreted this MCCA 
amendment to allow States to cover optional groups of pregnant women 
and infants separately and with different income levels. Coverage of 
groups of pregnant women or infants, or both, with incomes above the 
mandatory percentages (75 percent, effective July 1, 1989, and 100 
percent, effective July 1, 1990) but at or below 185 percent of the 
poverty level and children age 1 year to age 8 years with incomes at or 
below 100 percent of the poverty level remained optional under the MCCA 
provisions.
    The MCCA also amended section 1902(e)(7) to provide continued 
coverage to all of the revised groups of children under section 1902(1) 
until the end of their inpatient stays. It also amended section 
1903(f)(4) to exempt from the FFP income limits all of the redefined 
mandatory and optional groups in section 1902(1) and specifically made 
the use of less restrictive income and resource methodologies under 
section 1902(r)(2) apply to several groups, including the mandatory 
groups of women and infants in section 1902(a)(10)(A)(i)(IV), and to 
all optional categorically needy groups, including the optional group 
of women, infants, and children in section 1902(a)(10)(A)(ii)(IX).
    The changes made by section 302 of MCCA applied to payments for 
medical assistance for calendar quarters beginning on or after July 1, 
1989, with respect to eligibility on or after that date. The effective 
date applied whether or not we had promulgated final rules to interpret 
the provisions by that date. However, a State could, under certain 
circumstances, request a delayed implementation date in order to enact 
State legislation.
    Section 6401 of OBRA '89 revised the provisions under MCCA by 
further amending the eligibility groups of low-income pregnant women, 
infants, and children up to age 8. First, section 6401 changed the 
income criteria for the mandatory eligibility groups of low-income 
pregnant women and infants up to age 1 under section 
1902(a)(10)(A)(i)(IV) of the Act by increasing the income level 
criteria from no less than 100 percent of the Federal poverty income 
level to no less than 133 percent of the Federal poverty income level, 
effective April 1, 1990. The law mandates that a State use a percentage 
greater than 133 percent (but no greater than 185 percent) of the 
Federal poverty income level if the State had such a higher percentage 
for optional categorically needy groups of pregnant women and infants 
as of the date of enactment of OBRA '89 in its State plan (whether 
approved or not) or established by State authorizing legislation or 
State appropriations. Second, OBRA '89 established under section 
1902(a)(10)(A)(i)(VI) of the Act a new mandatory eligibility group of 
low-income children age 1 up to age 6. The State was required to 
establish an income level for this group that equaled 133 percent of 
the Federal poverty income level. States could continue to cover as 
optional categorically needy other low-income children age 6 up to age 
7 or, at State option, up to age 8 who are born after September 30, 
1983. The income level for this group of children age 6 up to age 8 
would continue to be established at a level not to exceed 100 percent 
of the Federal poverty income level.
    Section 6401 of OBRA '89 also made conforming changes to section 
1902(a)(10)(A)(ii)(IX) (excluding the mandatory group of children in 
section 1902(a)(10)(A)(i)(VI) from the group of optional categorically 
needy), other parts of section 1902(1) (changed the descriptions of 
low-income groups of pregnant women, infants, and children), section 
1902(e)(7) (added the new group of mandatory children to the 
continuation of inpatient hospital services for infants and children 
who have reached the maximum age for eligibility), section 1902(r)(2) 
(made the use of less restrictive income and resource methodologies 
than cash assistance methodologies apply to the new group of mandatory 
children), and section 1903(f)(4) (exempted the new group of mandatory 
children from the limitations on Medicaid payments). In addition, 
section 6411(i)(3) of OBRA '89 amended section 1925 (a)(3)(C) and 
(b)(3)(C)(i) to require States to determine if children who would cease 
to receive extended Medicaid under section 1925 may be eligible for 
Medicaid under sections 1902(a)(10)(A)(i) (IV) or (VI) or 
1902(a)(10)(A)(ii)(IX) before terminating eligibility based on section 
1925.
    The changes made by section 6401 applied to payments for medical 
assistance for calendar quarters beginning on or after April 1, 1990, 
with respect to eligibility on or after that date. The effective date 
applied whether or not we had promulgated final rules to interpret the 
provisions by that date. However, a State could, under certain 
circumstances, request a delayed implementation date in order to enact 
State legislation. Section 6411(i)(3) was effective as if enacted as 
part of the Family Support Act of 1988.
    Section 4601 of OBRA '90 established a new mandatory group of low-
income children under section 1902(a)(10)(A)(i)(VII) of the Act. This 
group described in 1902(l)(1)(D) of the Act includes children born 
after September 30, 1983 who have attained age 6 but have not attained 
age 19. The State must establish an income standard for this group of 
children which equals 100 percent of the Federal poverty level. Section 
4601 made conforming changes to section 1905(n)(2) of the Act which 
defines qualified children. Children born after September 30, 1983 who 
have not attained age 19 are now included in the mandatory group of 
qualified children. In addition, States have the option to choose an 
earlier date of birth if they wish to phase in this group more quickly. 
Section 4601 made additional conforming changes to (1) section 
1902(r)(2) to allow States to use less restrictive income and resource 
methodologies than those used under the cash assistance programs in 
determining financial eligibility of the new group under section 
1902(a)(10)(A)(i)(VII); (2) section 1903(f)(4) of the Act to exempt the 
new group of mandatory children from the limitations on Medicaid 
payments; and (3) section 1925 of the Act to require that States 
determine whether a child is eligible under this new mandatory group 
before terminating eligibility based on section 1925.
    The changes made by section 4601 applied to payments for medical 
assistance for calendar quarters beginning on or after July 1, 1991. 
The effective date applied whether or not we had promulgated final 
rules to interpret the provisions by that date. However, a State could, 
under certain circumstances, request a delayed implementation date in 
order to enact State legislation.
    Section 1902(l) of the Act, as added by section 9401 of OBRA '86 
and amended by section 4101 of OBRA '87, section 302 of MCCA, section 
608(d)(15) of FSA, section 6401 of OBRA '89, and section 4601 of OBRA 
'90, specifies the eligibility conditions for the mandatory groups of 
pregnant women and infants under section 1902(a)(10)(A)(i)(IV), the 
mandatory group of children age 1 up to age 6 under section 
1902(a)(10)(A)(i)(VI), the mandatory group of children age 6 up to age 
19 under section 1902 (a)(10)(A)(i)(VII), and the optional 
categorically needy groups of pregnant women and infants under section 
1902(a)(10)(A)(ii)(IX).
1. Income Standard
    Eligibility of individuals who fall into one of the mandatory and 
optional groups of low-income pregnant women, infants, and children is 
based on these individuals meeting State-established income standards. 
States must establish their income standards at a level that does not 
exceed the specified percentage of the Federal poverty income 
guidelines for a family equal to the size of the family, including the 
woman, infant, or child. Because the official poverty guidelines are 
revised annually to adjust for inflation, States will be automatically 
increasing the income standards established to keep pace with inflation 
as a result of the changes in the poverty guidelines. (HHS determines 
official Federal poverty income guidelines and issues them in the 
Federal Register annually, usually during the month of February. See, 
for example, 58 FR 8287, February 12, 1993.) For optional groups of 
pregnant women and infants, the agency may establish separate income 
standards or use a single standard.
    Under section 1902(l)(3)(E), as added by OBRA '86 and amended by 
section 4101(e)(3) of OBRA '87, in determining whether the income of 
members of the low-income groups of pregnant women, infants, and 
children meets the established income standards, States must use the 
same methodologies as applied in determining financial eligibility for 
AFDC, or for title IV-E as appropriate, except to the extent that the 
methodologies are inconsistent with section 1902(a)(17)(D) of the Act. 
Section 4101(e)(3) of OBRA '87 clarified that, in determining family 
income, States must not use any AFDC methodologies (such as stepparent, 
grandparent, or sibling deeming) that are inconsistent with the deeming 
policies specific to Medicaid under section 1902(a)(17)(D) of the Act 
(H. Rep. 391, 100th Cong., 1st Sess. 446 (1987)). Section 
1902(a)(17)(D) of the Act provides, in part, that in determining 
financial responsibility of relatives, only the income of spouses may 
be considered as available to spouses, and only the income of parents 
may be considered as available to a child until the child is 21, unless 
the child is blind or disabled. The methodologies include, but are not 
limited to, those used for disregarding income. States also are not 
permitted to allow individuals whose eligibility is determined based on 
membership in these low-income groups to spend down; that is, the State 
may not deduct the costs of incurred medical expenses or any other type 
of remedial care from income, in determining whether an individual's 
income meets the income standard established by the State.
    The requirements for determining financial eligibility of low-
income pregnant women, infants, and children were also affected by 
section 303(e) of MCCA. Section 303(e) established a new section 
1902(r)(2) to permit States, at their option, to use less restrictive 
income and resource methodologies than those used under the cash 
assistance programs (e.g., AFDC or SSI), in determining financial 
eligibility for a number of groups, including the mandatory groups of 
pregnant women and infants in section 1902(a)(10)(A)(i)(IV) and the 
optional groups of pregnant women, infants, and children in section 
1902(a)(10)(A)(ii)(IX). Section 6401 of OBRA '89 specifically made 
section 1902(r)(2) applicable to the mandatory group of low-income 
children age 1 up to age 6 in section 1902(a)(10)(A)(i)(VI). Section 
4601 of OBRA '90 specifically made section 1902(r)(2) applicable to the 
mandatory group of low-income children age 6 up to age 19 in section 
1902(a)(10)(A)(i)(VII).
    We believe that the specific preclusion of a spenddown in section 
1902(l) was not modified by section 1902(r)(2). However, States may use 
other more liberal methodologies to the extent that they are consistent 
with section 1902(r)(2).
    Section 1902(l)(1) of the Act specifically states that the income 
standards established by the State must correlate to a family size that 
includes the woman, infant, or child. The statute does not specifically 
address whether the pregnant woman's unborn child must be counted in 
determining family size. However, the legislative history supports 
counting the pregnant woman as if her child were born and living with 
her. The language of the 1986 House Committee Report that addressed the 
section 1902(l)(1) provision states that ``in determining a pregnant 
woman's family income level, the Committee intends that a State would 
treat the woman as if her child were born and living with her at the 
time she applied for assistance. Thus, a single woman would be treated 
as a family of two, a pregnant woman living with a spouse or child as a 
family of three, and so forth * * *'' (H. Rep. No. 727, 99th Cong., 2d 
Sess. 100 (1986)). The House bill that accompanied this report states 
that the family size should be equal to ``the family including the 
woman or child.'' Even though the language is not specific in section 
1902(l)(1), we believe the legislative history reveals that Congress 
intended that the unborn child be included under this provision.
    We proposed to specify in these proposed regulations that the 
family size includes the ``unborn child and other members of the 
Medicaid budgetary unit.'' Policies relating to the Medicaid budgetary 
unit were addressed in a final rule with comment period published in 
the Federal Register on January 19, 1993 (58 FR 4908), and are, 
therefore, not being addressed in this preamble. The effective date of 
the January 1993 rule has been delayed (58 FR 9120, February 19, 1993; 
58 FR 44457, August 23, 1993; and 59 FR 8138, February 18, 1994). We 
will conform the policies on the Medicaid budgetary unit contained in 
these proposed regulations with whatever policy is in effect at the 
time that we issue these proposed regulations as final.
2. Resource Standard
    The statute allows States, at their option, to apply a resource 
standard to the low-income eligibility groups of pregnant women, 
infants, and children under section 1902(1) of the Act. Section 9401 of 
OBRA '86 establishes a floor for the resource standard that is a 
specific and objective standard. If a State chooses to apply a resource 
standard, the standard may be no more restrictive than that applied 
under SSI for pregnant women, and than that applied under AFDC, for 
infants and children. (If Guam, Puerto Rico, and the Virgin Islands 
elect to apply a resource standard, that standard for pregnant women 
may be no more restrictive than that applied under SSI under section 
1613 of the Act. This is because the reference to the resource standard 
for pregnant women in the statute is to the standard that is applied 
under title XVI (that is, SSI) and not to the standard that is applied 
under the State plan program under title XVI.)
    The amendments regarding the different treatment of income and 
resources for the mandatory and optional groups of low-income pregnant 
women, infants, and children do not require or permit this different 
treatment to be applied to other Medicaid eligibility groups under the 
comparability provisions of section 1902(a)(17) of the Act.
3. Applicability for States With Section 1115 Waivers and for 
Territories
    Section 302(c) of MCCA struck the original section 1902(1)(4)(A) of 
the Act and section 302(d) of MCCA added a new section 1902(1)(4)(A). 
Under the new section 1902(1)(4)(A), as amended by section 6401 of OBRA 
'89 and section 4601 of OBRA '90, States that are providing Medicaid 
under a waiver granted under section 1115 of the Act must provide 
mandatory categorically needy eligibility to pregnant women and infants 
under age 1 with incomes at or below 133 percent of the poverty level 
under section 1902(a)(10)(A)(i)(IV), children age 1 but under age 6 
with incomes at or below 133 percent of the poverty level under section 
1902(a)(10)(A)(i)(VI) and children who have attained age 6 but are 
under age 19 with incomes at or below 100 percent of the poverty level 
under section 1902(a)(10)(A)(i)(VII) in the same manner as other 
States. States operating under a waiver granted under section 1115 of 
the Act must (as all other States must) cover the mandatory groups at 
higher levels if they have already chosen to use those higher levels. 
However, Guam, Puerto Rico, the Virgin Islands, American Samoa, and the 
Northern Mariana Islands retain the option of providing Medicaid to the 
otherwise mandatory groups of low-income pregnant women, infants, and 
children. The Territories may establish separate or identical income 
standards for pregnant women and infants at any percentage of the 
poverty level at or below 185 percent. However, if a Territory chooses 
to cover children from age 1 up to age 6, it must cover all such 
children with incomes at or below 133 percent of the poverty level. 
Also, if a Territory chooses to cover children born after September 30, 
1983 who have attained age 6 but are under age 19, it must cover all 
such children with incomes at or below 100 percent of the poverty 
level.
4. Comparability of Services
    Section 1902(a)(10) of the Act, as amended by section 9401 of OBRA 
'86, section 4101 of OBRA '87, and section 302(a)(1)(C) of MCCA, 
contains an exemption to the comparability of services requirements at 
section 1902(a)(10)(B) for services furnished to pregnant women 
described in section 1902(l)(1)(A) of the Act who are eligible as 
mandatory or optional categorically needy under the provisions of 
sections 1902(a)(10)(A)(i)(IV) and 1902(a)(10)(A)(ii)(IX). The amended 
provision (under clause (VII) following what is currently paragraph (F) 
of section 1902(a)(10)) provides that the services that are available 
to pregnant women under the section 1902(l) low-income eligibility 
groups are limited to services relating to pregnancy (including 
prenatal, delivery, family planning, and postpartum services) and to 
other conditions that may complicate pregnancy. (Section 4101(e)(1) of 
OBRA '87 expanded services related to pregnancy to include ``family 
planning.'')
    The Consolidated Omnibus Budget Reconciliation Act (COBRA), Public 
Law 99-272, enacted an earlier comparability of services requirement 
for all pregnant women covered under the State plan. This requirement 
appears under clause (V) following what is currently paragraph (F) of 
section 1902(a)(10). This provision states that if a State makes 
available ``services relating to pregnancy (including prenatal, 
delivery, and postpartum services) or to any other condition which may 
complicate pregnancy,'' the State is not required to provide these 
services to any other individual, except pregnant women, covered under 
the plan. The State must provide its pregnancy-related services and 
services for any other condition that may complicate pregnancy, in the 
same amount, duration, and scope, to all pregnant women covered under 
the State plan, including pregnant women whose pregnancy is not the 
basis for their Medicaid eligibility (e.g., those receiving AFDC or 
SSI). (See Secs. 440.210 and 440.220).
    We issued a separate document to interpret this and other 
provisions of COBRA. In it, we left to the States the responsibility 
for defining these services listed in the statute within the bounds of 
broad policy guidelines (54 FR 7798, February 23, 1989 and 55 FR 48601, 
November 21, 1990). We believe that the same principles apply for the 
pregnancy-related services and services which may complicate pregnancy 
which are specific to the section 1902(1) group of women. (See 
Sec. 440.250(q).)
    Generally, the State plan includes services identified in section 
1905(a) (1) through (24) of the Act (mandatory and optional services 
that are considered as medical assistance to Medicaid recipients). Many 
of these services can qualify as appropriate components of the areas of 
care required by the statute; that is, prenatal services, delivery 
services, postpartum services, and family planning services, and 
services related to conditions that may complicate pregnancy. For 
example, physicians' services in section 1905(a)(5) can qualify as 
prenatal services, since examinations by a physician are part of 
prenatal care, and as delivery services, since a physician may also 
deliver the woman's baby. Therefore, a State plan must provide pregnant 
women with what the State has decided are enough services identified in 
section 1905(a) to sufficiently cover each of the required areas of 
care. In addition, a State, at its option, may provide services under 
section 1905(a) of the Act (for example, rehabilitative services or 
nutritional supplements) only to pregnant women and not to any other 
categorically needy eligible Medicaid recipient, as long as such 
services qualify as either services related to pregnancy or to other 
conditions that may complicate pregnancy. A State would not be required 
to specifically identify which services it provides to pregnant women. 
However, the State would be required to specify in its plan that it 
covers each of the required areas of care.
    We interpret ``pregnancy-related services'' to mean those services 
which are needed because the woman is or was pregnant, either because 
they are necessary for the health of the pregnant woman or fetus or 
because the services became necessary as a result of the woman having 
been pregnant. These include, but are not limited to, prenatal care, 
delivery, family planning, and postpartum services.
    On the other hand, ``services relating to any other condition which 
may complicate pregnancy'' are not ``pregnancy related'' because they 
do not arise because of the pregnancy. These services include those for 
diagnosis or treatment of illnesses or medical conditions which might 
threaten the carrying of the fetus to full term or the safe delivery of 
the fetus. Because these services are for conditions ``which may 
complicate the pregnancy,'' the services can be provided only while the 
woman is pregnant.
    It is important to note that, unlike the other eligibility groups 
of pregnant women who are entitled to at least the full range of 
services available under a particular State's Medicaid plan to 
recipients of the same eligibility group, these low-income 
categorically needy pregnant women are only entitled to pregnancy-
related services (including family planning services) and services for 
the treatment of conditions that may complicate pregnancy.
    Infants and children in these eligibility groups are eligible for 
all appropriate Medicaid services included in the approved State plan.
5. Premiums for Pregnant Women and Infants
    Section 4101(d) of OBRA '87 redesignated section 1916(c) as 1916(d) 
and created a new section 1916(c) which permits States to impose a 
monthly premium on optional categorically needy low-income pregnant 
women and infants eligible under section 1902(a)(10)(A)(ii)(IX) of the 
Act. States may impose the premium on these individuals if their income 
equals or exceeds 150 percent, but is not more than 185 percent, of the 
poverty level for a family of the size involved. The amount of the 
premium imposed may not exceed 10 percent of the amount by which the 
family's income exceeds 150 percent of the poverty income guidelines. 
Costs for the care of a dependent child must be deducted in determining 
the family's income under this provision. States are prohibited from 
requiring the prepayment of the premium. Eligibility may not be 
terminated for failure to pay this premium unless the premium has been 
unpaid for at least 60 days. In cases of undue hardship, as defined by 
the State, the State may waive the payment of the premium. In addition, 
a State may use State or local funds from other programs to pay the 
premium. Under section 1916(c)(4) of the Act, if these funds are used, 
they may not be counted as income to the individual for whom payment is 
made.
    Although Congress did not specifically address the meaning of the 
term ``costs of care for a dependent child'' (the Conference Report 
refers to these costs as ``child care'' expenses (H. Rep. No. 495, 
100th Cong., 1st Sess. 731 (1987)), we believe that there was no 
Congressional intent to use a broader concept of child care costs for 
this provision than that traditionally used under the AFDC program. 
Therefore, we propose to define child care costs for purposes of this 
provision as costs related to the care of a child necessary to enable a 
member of the family whose income was included in the eligibility 
determination to work or participate in training.
6. Payment Levels Under AFDC
    OBRA '86 added section 1902(1)(4)(A) to the Act, which provided 
that a State plan may not elect to cover the optional groups of low-
income pregnant women, infants, and children up to age 5 described in 
section 1902(a)(10)(A)(ii)(IX) unless the State had in effect AFDC 
payment levels that were not less than those in effect on April 17, 
1986. This provision became effective on April 1, 1987. OBRA '87 
amended this provision, changing the date upon which AFDC levels would 
be measured from April 1 to July 1, 1987. The OBRA '87 amendment was 
effective on December 22, 1987.
    Section 302(c) of MCCA eliminated section 1902(1)(4), but placed a 
comparable provision in a new section 1903(i)(9). This provision states 
that payment will not be made to a State with respect to amounts for 
medical assistance for section 1902(a)(10)(A)(ii)(IX) optional groups 
if the State has in effect AFDC payment levels that are less than those 
in effect on July 1, 1987. In addition, section 302(c) established a 
new, more general maintenance of effort provision in section 
1902(c)(1), which states that the Secretary will not approve any 
Medicaid State plan if the State has in effect AFDC payment levels 
which are less than those in effect on May 1, 1988. Because section 
1116(b) of the Act distinguishes between plans and plan amendments, we 
interpret this provision literally as prohibiting approval of new State 
plans but not prohibiting approval of amendments to a State plan. The 
MCCA provisions were effective on July 1, 1989.
    There have been some questions raised about how we would determine 
if the AFDC payment level has been maintained by a State as specified 
in the law. ``Payment level'' is not an existing term used under AFDC. 
However, for the purposes of sections 1902(c) and 1903(i)(9), payment 
levels are the amounts of the payments for basic needs (according to 
family size) which would be made to families with no income under the 
approved State AFDC plan. Special needs are not included, as we have 
concluded, based on a review of statutory history, that Congress 
intended to include only basic needs. Thus, we propose to find a State 
has not reduced its payment level if it has not reduced the amount of 
the AFDC payment for basic needs made to a family with no other income.
7. Application for AFDC
    Section 4104(e) of OBRA '87 amended section 1902(1)(4) of the Act 
by adding a new paragraph (C) to specify that a State Medicaid plan may 
not provide that any of the low-income pregnant women, infants, and 
children under section 1902(1) must apply for AFDC as a condition of 
applying for or receiving Medicaid. Section 302(c) of MCCA made further 
amendments by removing section 1902(1)(4) and adding a comparable 
provision to section 1902(c)(2) of the Act. Section 1902(c)(2) provides 
that the Secretary must not approve any State plan for Medicaid if the 
State requires low-income pregnant women, infants, and children under 
section 1902(1)(1) to apply for AFDC benefits as a condition of 
applying for or receiving Medicaid.
8. Need for Regulations
    The statutory amendments discussed above are effective without 
regard to whether final regulations to carry them out have been 
published by the applicable effective dates. However, changes in the 
Medicaid regulations are necessary to bring the regulations up to date 
with current statutory requirements.
9. Proposed Regulations
    We propose to amend the Medicaid regulations under 42 CFR parts 
435, 436, 440, and 447 as follows:
     Add a new Sec. 435.118 to specify the mandatory 
eligibility groups of pregnant women, infants under age 1, children age 
1 up to age 6 with incomes at or below 133 percent of the Federal 
poverty income guidelines, and children age 6 up to age 19 with incomes 
at or below 100 percent of the Federal poverty income guidelines.
     Add Sec. 435.228 to specify the optional eligibility 
groups of low-income pregnant women and infants (and low-income 
children in American Samoa and the Northern Mariana Islands) and 
Sec. 436.226 to specify the optional eligibility groups of low-income 
pregnant women, infants, and children and the conditions under which 
they may establish eligibility.
     Add Secs. 435.612 and 436.612 to incorporate the 
requirements for a State to establish income standards, and at State 
option, resource standards for these low-income groups and for applying 
methodologies to determine financial eligibility.
     Revise Secs. 435.608 and 436.608 to specify that the State 
agency must not require low-income pregnant women, infants, and 
children to apply for AFDC benefits as a condition of applying for or 
receiving Medicaid.
     Add a new Sec. 431.60 to specify the maintenance of 
specified AFDC payment levels as a condition of State plan approval. 
Revise Secs. 435.1002 and 436.1002 to specify that FFP is not available 
for expenditures for Medicaid for optional groups of low-income 
pregnant women and infants covered under section 1902(a)(10)(A)(ii)(IX) 
if the State has in effect AFDC payment levels that are less than the 
payment levels in effect under the plan on July 1, 1987.
     Revise Sec. 440.250 on limits on comparability of services 
to provide that services to pregnant women in the mandatory and 
optional categorically needy low-income eligibility groups are limited 
to services related to pregnancy (including prenatal, delivery, family 
planning, and postpartum services) and to other conditions which may 
complicate pregnancy that are included under the approved State plan.
     Add a new Sec. 447.60 to specify the requirements and 
conditions for imposing a monthly premium on the optional eligibility 
groups of low-income pregnant women and infants with family incomes 
between 150 and 185 percent of the poverty level and make conforming 
changes to Secs. 447.50 and 447.51.
    Section 303(e) of MCCA added section 1902(r)(2) of the Act, which 
allows States to elect to use less restrictive income and resource 
methodologies than the cash assistance methodologies for a number of 
eligibility groups, including the mandatory and optional categorically 
needy pregnant women, infants, and children in section 1902(l). On 
January 19, 1993, we published in the Federal Register (58 FR 4908) 
regulations at Secs. 435.601, 435.602, 436.601, and 436.602 to 
interpret section 1902(r)(2). The eligibility groups of low-income 
pregnant women, infants, and children described in this preamble are 
subject to the provisions of Secs. 435.601, 435.602, 436.601, and 
436.602.


    [Note: On February 19, 1993, August 23, 1993, and February 18, 
1994, we published notices in the Federal Register (58 FR 9120; 58 
FR 44457; and 59 FR 8138) to delay the effective dates for the 
January 19, 1993 final rule. If, at the time we issue the final rule 
for these proposed regulations, the January 19, 1993 final 
regulations have been revised or are not in effect, we will make 
appropriate revisions.]


We propose to add new Secs. 435.612 and 436.612 to specify the 
requirements for establishing the income and resource standards for 
these groups and to cross-refer to Secs. 435.601, 435.602, 436.601, and 
436.602 for the methodologies to be used for determining financial 
eligibility. The group of low-income aged and disabled individuals 
discussed in section I.F. of this document also is subject to 
Secs. 435.601, 435.602, 436.601 and 436.602.

B. Continuous Eligibility of Pregnant Women

    Under section 1902(e)(6) of the Act, as added by section 9401(d) of 
OBRA '86 and amended by section 4101(e)(2) of OBRA '87, section 302(e) 
of MCCA, and section 4603 of OBRA '90, States must treat any pregnant 
women who are eligible under section 1902(a)(10) as continuously 
eligible throughout the pregnancy and the postpartum period without 
regard to changes in income.
    Section 9401(d) of OBRA '86 added section 1902(e)(6) to the Act. 
Section 1902(e)(6) allowed States to treat any women who were described 
in sections 1902(a)(10)(A)(ii)(IX) and 1902(1) as continuously eligible 
during the pregnancy and through a 60-day postpartum period, without 
regard to any changes in family income. Women covered under this 
provision consisted of two groups: low-income pregnant women and low-
income women during the 60-day period after the pregnancy ends. 
Therefore, this provision covered women who applied for and became 
Medicaid eligible under section 1902(l) either before or after giving 
birth. Section 4101(e)(2) of OBRA '87 redefined the section 1902(e)(6) 
postpartum period to specify that the period of continued coverage 
extends for 60 days after the pregnancy ends, beginning on the last day 
of pregnancy, plus any remaining days in the month in which the 60th 
day occurs. The remaining days in the month provision was added by OBRA 
'87 for Federal matching payment and quality control purposes because, 
in some States, Medicaid eligibility is not terminated at any time 
other than the end of the month.
    Section 302(e) of MCCA amended section 1902(e)(6) of the Act to 
provide States with the option of treating any pregnant woman who has 
established eligibility under any eligibility group listed in section 
1902(a)(10) and who, because of a change in income, would cease to be 
eligible, as a mandatory eligible low-income pregnant woman throughout 
the pregnancy and for the specified postpartum period, without regard 
to changes in family income. Section 1902(e)(6) now refers to 
``pregnant women'' rather than ``women described in section 
1902(l)(1).'' As a result, we believe it still covers the pregnant 
women described in section 1902(l)(1)(A) but no longer includes those 
women in section 1902(l)(1)(A) who first become eligible only in the 
60-day postpartum period after they have ceased to be ``pregnant 
women.''
    Section 4603(a)(2) of OBRA '90 further amended section 1902(e)(6) 
to require States to provide continuous coverage to any pregnant woman 
eligible under section 1902(a)(10) of the Act who would otherwise lose 
her eligibility due to a change in income. The pregnant woman must be 
``deemed to continue to be'' a mandatory categorically needy individual 
described under sections 1902(a)(10)(A)(i)(IV) and 1902(1)(1)(A) 
through the end of the postpartum period. The OBRA '90 amendment also 
stated that this mandatory coverage would not apply in the case of a 
woman who has received ambulatory prenatal care under section 1920 of 
the Act during a presumptive eligibility period and is then determined 
to be ineligible for regular Medicaid.
    Although section 1902(e)(6) purports to cover all pregnant women 
who, because of a change in family income, would not otherwise continue 
to be eligible for Medicaid, we believe that it does not automatically 
cover all pregnant women who must meet a spenddown. Most pregnant women 
seeking to meet a spenddown would be attempting to establish 
eligibility as medically needy. Section 1902(e)(6) now requires that a 
State deem a pregnant woman (who has established eligibility under any 
eligibility group) to continue to be a pregnant woman under sections 
1902(a)(10)(A)(i)(IV) and 1902(1)(1)(A) if that woman would otherwise 
cease to be eligible due to a change in income.
    A medically needy woman can establish her eligibility during a 
given budget period by spending down her excess income. However, if she 
has the excess income in the following budget period and is ineligible 
because she cannot spend it down, we do not believe that her 
ineligibility has resulted from a ``change'' in income. In fact, her 
income is unchanged for eligibility purposes if it remains in excess of 
the medically needy income level by the same amount as in the previous 
budget period; she has simply not been able to spend down to the 
medically needy income level. We believe that under the statute, a 
medically needy pregnant woman whose family income does not change and 
who cannot meet her spenddown does not qualify as having the ``change'' 
in income contemplated by section 1902(e)(6).
    We are uncertain how to apply section 1902(e)(6) in the context of 
pregnant women who have a spenddown, and whose family incomes increase, 
causing this spenddown amount to increase. We propose to cover under 
this provision any pregnant woman who was eligible (either as 
categorically needy, medically needy without a spenddown, or medically 
needy after meeting a spenddown) at any time during her pregnancy, who 
then experiences a change in family income which either would cause her 
to lose categorically needy Medicaid, medically needy Medicaid without 
a spenddown, or to lose eligibility (be unable to meet the increased 
spenddown although she would have met the earlier spenddown) by virtue 
of an increased spenddown amount.
    We would interpret section 1902(e)(6) so that it will not relieve 
pregnant women who qualify under section 1902(e)(6) of their obligation 
to satisfy their original spenddown amount in each budget period while 
in section 1902(e)(6) status.
    If a pregnant woman who has in the previous budget period met a 
spenddown has an increase in income and qualifies under section 
1902(e)(6), she must be ``deemed to continue to be'' a pregnant woman 
under sections 1902(a)(10)(A)(i)(IV) and 1902(1)(1)(A). These 
provisions describe categorically needy eligibility groups with respect 
to whom the limited Medicaid benefit is available. We believe that the 
phrase ``deemed to continue to be'' is ambiguous. The phrase can mean 
that the woman is to be regarded for all purposes as if she were 
actually categorically needy, or only that she is to be considered as 
categorically needy for the purpose of receiving the restricted service 
package that applies to pregnant women described in section 1902(1) 
without regard to the change in her family's income. If we were to 
regard the woman as though she were actually categorically needy, she 
would no longer have to meet any spenddown, and any subsequent changes 
of income would not affect her eligibility. This would place the 
medically needy pregnant woman whose income has increased in a better 
position than any other medically needy pregnant woman with a spenddown 
who has had no increase in income.
    In order to avoid the anomalous result of only pregnant women with 
higher incomes being relieved of their total spenddown obligations, we 
propose not to interpret section 1902(e)(6) as requiring that a 
medically needy woman be considered as though she were categorically 
needy for all purposes. We propose instead to interpret the phrase 
``deemed to continue to be'' in section 1902(e)(6) to require only that 
a woman who meets her original spenddown amount, but cannot meet the 
increased amount, be deemed to be eligible for the limited service 
package provided to the section 1902(1) pregnant women. The woman can 
maintain this deemed status without having to pay any increased 
spenddown amounts which result from increases in family income. She 
will, however, be required to continue to meet her original spenddown 
while in section 1902(e)(6) status.
    We propose to revise redesignated Sec. 435.918 relating to 
redetermination of eligibility, to provide that the agency must 
consider a pregnant woman eligible under any Medicaid eligibility group 
as an individual who is eligible to receive the services available to 
the mandatory categorically needy low-income group throughout the 
pregnancy and for the specific postpartum period after the pregnancy 
ends without regard to changes in the family income.

C. Qualified Children

    Section 4601(a)(2) of OBRA '90 amended the definition of a 
qualified child in section 1905(n)(2) of the Act, effective July 1, 
1991. Under section 1902(a)(10)(A)(i)(III) of the Act, a State must 
provide Medicaid coverage to the mandatory group of qualified children. 
Effective July 1, 1991, under the new definition of qualified child 
added by OBRA '90, a State must provide Medicaid coverage to children 
under the age of 19 who were born after September 30, 1983, and who 
meet the income and resource requirements of the State plan under title 
IV-A. The option in section 1905(n)(2) for a State to include as 
qualified children those children born after an earlier date than 
September 30, 1983 (as chosen by the State) was retained. As a result, 
effective July 1, 1991, States have the option to provide Medicaid 
coverage to children under the age of 19 who were born after any date 
prior to September 30, 1983 (as chosen by the State) who meet the 
income and resource requirements of title IV-A.
    We propose to amend Sec. 435.116(c) to raise the maximum age of a 
qualified child to under age 19.

D. Deemed Newborn Eligibility

1. OBRA '90 Changes
    Section 4603(a) of OBRA '90 changed the requirements in section 
1902(e)(4) of the Act under which a newborn child remains eligible for 
Medicaid, effective January 1, 1991. Prior to this change, States were 
only required to continue the eligibility of an infant deemed eligible 
at birth for so long as the infant remained a member of the mother's 
household and the mother remained eligible for Medicaid. States must 
now also continue the eligibility of an infant deemed eligible at birth 
if the infant remains a member of the mother's household and the mother 
loses Medicaid eligibility but would remain eligible if pregnant.
    We considered whether the language ``remain eligible if pregnant'' 
meant that the mother should be considered as newly pregnant in each 
month after the postpartum period. Under this interpretation, if the 
mother was regarded as reapplying for Medicaid after the postpartum 
period as though she were newly pregnant, her income might be too high 
for her to be eligible, even under the pregnancy-related eligibility 
categories. (For example, the mother's income may have increased above 
the applicable standard during the pregnancy but she remained eligible 
through the postpartum period by virtue of section 1902(e)(6) of the 
Act.) If she is regarded as newly pregnant, she would not receive the 
continued coverage under section 1902(e)(6) for women whose incomes 
increase after they are already eligible and pregnant. As a result, the 
mother would not be ``eligible'' even if she were considered to be 
pregnant and the infant would lose eligibility under section 
1902(e)(4).
    We decided that a better reading of the provision would be to 
consider a mother as if she had not yet given birth; that is, as if she 
had remained continuously pregnant. A discussion of this provision in 
the House Report of the Committee on Budget to accompany H.R. 5835 (H. 
Rep. No. 881, 101st Cong., 2d. Sess. 103 (1990)) refers to the woman 
remaining eligible for Medicaid or one who ``would be eligible for 
Medicaid were she still pregnant,'' which implies she should be treated 
as if she had not given birth. Therefore, we propose to require States 
to continue the eligibility of an infant deemed eligible at birth who 
is in his or her mother's household and whose mother would still be 
eligible for Medicaid if the infant had not yet been born. Under this 
interpretation, changes in the mother's income will have no impact on 
the infant's eligibility because were the mother still pregnant, she 
would remain eligible without regard to changes in income by virtue of 
section 1902(e)(6) of the Act. A redetermination of the mother's 
eligibility is not required at the end of the postpartum period unless 
information is received that there has been a change in the mother's 
circumstances which might have affected her eligibility even if she 
were still pregnant and the infant had not yet been born.
2. Member of the Mother's Household
    An infant must continue to be a member of his/her mother's 
household to maintain deemed newborn eligibility. We are codifying 
existing policy related to determinations of whether an infant is a 
member of his or her mother's household. An infant is considered a 
member of his or her mother's household as long as he or she is 
continuously hospitalized after birth, unless the mother has legally 
relinquished control of the child or the State has established that she 
has abandoned the child. After the infant's release from the hospital, 
or in situations not involving hospitalization, States must apply the 
AFDC rules for determining whether a child is living with a specified 
relative to determine if an infant (who is not an SSI recipient) is a 
member of his or her mother's household.

E. Inpatient Services to Infants and Children

    Under section 1902(e)(7) of the Act, as added by OBRA '86 and 
amended by section 4101(b) of OBRA '87, section 302(e)(2) of MCCA, and 
section 6401 of OBRA '89, States must extend Medicaid eligibility to a 
low-income infant or child described in section 1902(l) of the Act or a 
qualified child described in section 1905(n)(2) of the Act who is 
receiving covered inpatient services in a hospital or a long-term care 
facility on the date he or she attains the maximum age for Medicaid 
eligibility under the State plan until the end of the inpatient stay if 
the child or infant remains eligible, except that he or she has 
attained that maximum age. This provision applies to the mandatory and 
optional categorically needy eligibility groups of low-income infants 
and children described under section 1902(l) of the Act. Section 6401 
of OBRA '89 extended this provision to the new mandatory categorically 
needy group of low-income children age 1 up to age 6 under section 
1902(l)(1)(C) and section 4601 of OBRA '90 (by changes to section 
1902(l)(1)(D)) to the new mandatory categorically needy group of 
children born after September 30, 1983 who have not attained age 19 
also. (In addition, section 302(b) of MCCA further clarified this 
provision by adding in the matter after paragraph (F) of section 
1902(a)(10) a new paragraph (X) to provide that States that impose 
durational limits on payments for inpatient hospital services must 
establish exceptions to these limits for medically necessary inpatient 
services received by an infant up to age 1 in a hospital designated as 
a disproportionate share hospital under the State's Medicaid plan. 
Regulations to interpret section 302(b) of MCCA are included in a 
separate document that is under development.)
    We propose to amend Secs. 435.520 and 436.520 to require State 
agencies to extend Medicaid eligibility to a low- income infant or 
child described in section 1902(1) of the Act and a qualified child 
described in section 1905(n)(2) of the Act who are receiving covered 
inpatient services on the date they attain the maximum age for Medicaid 
eligibility under the State plan until the end of the inpatient stay if 
the infant or child remains eligible except for attainment of the 
maximum age; and make conforming changes to Secs. 435.500 and 436.500.

F. Low-Income Aged and Disabled Individuals

    Section 9402 of OBRA '86 amended the Social Security Act by adding 
new sections 1902(a)(10)(A)(ii)(X) and 1902(m) to establish an optional 
categorically needy eligibility group of aged and disabled individuals 
with incomes at or below the Federal poverty income level. Section 
1902(m) of the Act, as added by OBRA '86 and amended by section 
4118(p)(8) of OBRA '87 and section 301(e) of MCCA, describes 
individuals in this group as those who are 65 years of age or older or 
are disabled as determined under SSI, whose income does not exceed a 
standard established by the State that is set at a percentage (at or 
below 100 percent) of the Federal poverty income level, and whose 
resources do not exceed the maximum amount of resources allowed under 
SSI. If a State has a medically needy program with a more generous 
resource level, section 1902(m)(2)(B) allows a State to elect to use 
the medically needy resource level instead of the SSI resource level.
    Between July 1, 1987 and June 30, 1989, States were permitted to 
provide eligibility to this optional group of low-income aged and 
disabled individuals only if they also provided Medicaid eligibility to 
the low-income group of pregnant women and infants under the provisions 
of section 1902(a)(10)(A)(ii)(IX) as added by section 9401 of OBRA '86 
discussed earlier. Section 301(e)(2)(D) of MCCA removed the condition 
for providing eligibility to both groups, effective July 1, 1989.
    Income eligibility for this optional group of aged and disabled 
individuals is based on a standard established at a level that is at or 
below 100 percent of the Federal poverty income guidelines for a family 
of the size involved. The term ``family of the size involved,'' as used 
in section 1902(m)(2)(A), is not specifically defined in the statute. 
However, for this optional group of aged and disabled we believe that 
it would be appropriate to adopt for individuals and couples who seek 
eligibility under section 1902(m) of the Act the SSI program's 
distinction between eligible individuals and eligible couples, 
depending on whether the individual alone is eligible or both members 
of the couple are eligible under section 1902(m). Since the statute 
requires that income be determined using the principles of section 
1612, which are SSI program rules, using SSI's individual and couple 
distinction as well as SSI's deeming rules enables States to have a 
clear understanding of the baseline for determining eligibility for 
members of this poverty level-related group. It also avoids potential 
conflicts with section 1902(a)(17)(D) of the Act, which could result if 
eligibility for this group were determined by pooling family income (if 
the family included individuals other than a husband and wife).
    The SSI program determines eligibility for couples, or for 
individuals. If the SSI definition of a couple (i.e., the couple is 
married and they qualify for SSI benefits as an eligible couple) is not 
met, eligibility is determined on an individual basis. We propose to 
apply this principle to determine eligibility for the optional Medicaid 
aged and disabled group. If two individuals are married and are both 
eligible under section 1902(m), both spouses will be considered a 
couple even if only one spouse applied for medical assistance and their 
income will be compared to the Federal poverty level for a family of 
two. If both individuals in a family are not eligible as a couple under 
section 1902(m), their eligibility will be determined as individuals, 
with their incomes being compared to the poverty level for an 
individual, and deeming of income and resources from responsible family 
members using SSI deeming methodologies.
    Section 1902(m) of the Act has always specified that resources of 
individuals under the low-income optional categorically needy group of 
aged and disabled individuals may not exceed the SSI limits, and that 
SSI methodologies must be used to determine countable income and 
resources. However, section 1902(r)(2) of the Act, as added by section 
303(e) of MCCA, does permit States, at their option, to use less 
restrictive requirements than SSI for optional categorically needy 
groups. However, in spite of section 1902(r)(2), we do not believe that 
States are authorized to allow individuals to deduct (spend down) the 
costs incurred for medical care or any other type of remedial care from 
income in order to meet the income standard established, except as they 
are permitted to do so under SSI if the individual is a severely 
disabled person who works. This is because section 1902(m)(3)(B) of the 
Act specifically prohibits the use of an income spenddown, except in 
the case of individuals covered by section 1612(b)(4)(B)(ii) of the 
Act. Under this exception, a severely disabled individual who works is 
allowed to deduct from income the reasonable costs for attendant care 
services, medical devices, equipment, prostheses, and similar items and 
services (generally not including routine drugs or routine medical 
services) that are necessary in order for the individual to work.
    Section 6411(a) of OBRA '89 amended section 1902(f) of the Act to 
eliminate the option to use more restrictive eligibility criteria than 
are used by the SSI program for certain eligibility groups. One of 
those groups is the optional low-income aged and disabled group. 
Therefore, section 1902(f) States that elect to cover the section 
1902(m) group must use SSI eligibility methodologies, and the 
statutorily mandated income and resource standards, in determining 
eligibility for individuals under this group. The only exception is 
that section 1902(f) States can use more liberal criteria under section 
1902(r)(2). (Guam, Puerto Rico, and the Virgin Islands would use the 
SSI disability definition under section 1614 of the Act and the 
methodologies for determining income and resource eligibility applied 
under sections 1612 and 1613, or less restrictive income and resource 
methodologies under section 1902(r)(2), as appropriate. This is because 
the reference in section 1902(m) relating to disability and financial 
methodologies is to those of title XVI (that is, SSI) and not to those 
of the State plan program under title XVI.)
    Section 4501(e)(1) of OBRA '90 amended section 1905(p)(2) of the 
Act by adding paragraph (D) to provide that, in determining income 
eligibility for qualified Medicare beneficiaries (QMBs) who are 
entitled to monthly title II insurance benefits, any cost-of-living 
adjustment (COLA) in these title II benefits received beginning in 
December of the preceding year must be disregarded. We will issue a 
separate regulation incorporating this provision for QMBs. Section 
4501(e)(2) of OBRA '90 made this rule also apply to the income 
eligibility determinations of the aged and disabled individuals covered 
by section 1902(m).
    The disregard applies to all the months from the month the COLA 
increase is effective through the month after the month the revised 
poverty levels are published each year. Since the new poverty levels 
are usually published in February, the disregard normally will be 
effective through March of each year.
    However, for Medicaid purposes, the new poverty levels are 
effective upon publication. This means that, for the period between 
publication of the poverty levels (usually mid-February) and the end of 
the disregard period (usually March), the disregard of the COLA 
increase and the poverty level increase would overlap. As a result of 
this overlap, some individuals would meet the income level for this 
group because the COLA disregard would lower their countable income at 
the same time that the revised poverty level would allow for higher 
income. As soon as the COLA disregard expired, these individuals would 
lose eligibility again.
    We believe that this approach would create an unreasonable 
administrative burden for States. They would have to add these 
individuals to the Medicaid rolls, only to have to remove them again a 
few weeks later. We also believe that the intent of the statutory 
provision is to protect individuals who would lose that status for a 
few weeks because of the COLA increase (but only until the increase in 
the poverty level took effect), and not to permit other individuals to 
achieve eligibility status for a few weeks.
    For these reasons, we are proposing to make the revised poverty 
levels effective for title II recipients with the month after the last 
month in which the COLA disregard is effective. Since the COLA 
disregard normally expires at the end of March, in most years, the new 
poverty levels would be effective for these individuals on April 1. By 
delaying the effective date of the increased poverty level so that it 
coincides with the date on which the COLA increase is first counted, we 
would eliminate the problem discussed above.
    Section 9402 of OBRA '86 does not require or permit the different 
treatment of income and resources allowed for this low-income aged and 
disabled eligibility group to be applied to other Medicaid eligibility 
groups because of the comparability provisions of section 1902(a)(17) 
of the Act. In addition, we propose to require that if a State elects 
to provide Medicaid eligibility to this low-income group, it must cover 
both the aged and disabled and must apply the same income and resource 
standards to both groups and to all family sizes involved. This 
requirement is consistent with the intent of Congress, as expressed in 
the language of the House Committee Report accompanying OBRA '86 (H. 
Rep. 727, 99th Cong., 2d Sess. 103 (1986)).
    Medicaid services provided to the optional group of low-income aged 
and disabled individuals must be the same in amount, duration, and 
scope as the Medicaid services provided to other categorically needy 
individuals under the approved State Medicaid plan.
    The amendments made by section 9402 of OBRA '86 apply to payments 
to States for services for calendar quarters beginning on or after July 
1, 1987, without regard to whether or not final regulations to carry 
them out have been published by that date.
    We propose to incorporate the provisions of sections 
1902(a)(10)(A)(ii)(X) and 1902(m) of the Act and section 9402 of OBRA 
'86 in the Medicaid regulations by adding Sec. 435.238 (Sec. 436.235 
for the Territories) to specify the optional categorically needy 
eligibility group of aged and disabled individuals with incomes at or 
below Federal poverty income guidelines and the conditions under which 
they may establish eligibility. We also propose to add a new 
Secs. 435.615 and 436.615 to specify the requirements for establishing 
the income and resource standards and methodologies for this group and 
for determining financial eligibility.

G. Presumptive Eligibility for Pregnant Women

    Section 9407 of OBRA '86 added a new section 1902(a)(47) to the 
Act, redesignated section 1920 as section 1921, and added a new section 
1920 to allow States to provide ambulatory prenatal care to certain 
needy pregnant women to help ensure that these women receive health 
care early in pregnancy. Section 411(k)(16)(B) of the MCCA and section 
4605 of OBRA '90 amended section 1920. Under section 1920, ambulatory 
prenatal care is available during a presumptive eligibility period on 
the basis of income eligibility only before a woman is formally 
determined to be eligible or ineligible for Medicaid and for a 
specified number of days while a woman is waiting for a Medicaid 
eligibility determination. Under the statutory provisions, a qualified 
provider, who is defined in section 1920(b)(2), determines whether a 
pregnant woman is presumptively eligible for Medicaid. These qualified 
providers make the presumptive eligibility determination on the basis 
of preliminary information about the pregnant woman's family income. 
The qualified provider determines whether the pregnant woman's family 
income appears to meet the income criteria applied to any of the 
eligibility groups specified in the approved State Medicaid plan under 
which the pregnant woman might be eligible. At the time of the 
determination, a qualified provider must refer a pregnant woman to the 
Medicaid agency. The qualified provider must also assist a pregnant 
woman in completing and filing an application for full Medicaid 
services if she wishes to apply for Medicaid at that time. The Medicaid 
agency then would establish whether or not she is eligible for regular 
Medicaid.
    Any provider that is eligible for payment under the State plan for 
services which the State considers to be ambulatory prenatal care can 
furnish these services to presumptively eligible pregnant women during 
the presumptive period. (We note that the purpose of presumptive 
eligibility is to provide temporary, limited coverage to pregnant women 
who are likely to be eligible for Medicaid. Under section 1905(a) of 
the Act, individuals who are inmates in public institutions are 
ineligible for Medicaid. Therefore, because she is not ``likely to be 
eligible for Medicaid,'' any pregnant woman who is an inmate in a 
public institution could not be determined presumptively eligible for 
Medicaid and receive ambulatory prenatal care under section 1920 of the 
Act.)
    In accordance with section 1920(b)(1), as added by OBRA '86 and 
amended by section 4605 of OBRA '90, the presumptive period of 
eligibility for ambulatory prenatal care begins on the day a qualified 
provider makes a presumptive eligibility determination. The pregnant 
woman then has until the last calendar day of the month following the 
month in which the presumptive eligibility determination was made to 
file a regular Medicaid application with the Medicaid agency. If she 
does not file a regular Medicaid application by that last day, 
presumptive eligibility ends on that last day. If she files a regular 
Medicaid application, presumptive eligibility under section 1920 ends 
on the date a decision is made on the regular Medicaid application.
    We are proposing to allow only one presumptive eligibility period 
for any one pregnancy. We believe that this limitation is consistent 
with the intent of Congress as evidenced in the language of the Senate 
Committee Report on OBRA '86 (S. Rep. 348, 99th Cong., 2d Sess. 153 
(1986)). In explaining the provision, the Committee stated that under 
the presumptive eligibility program, States may ``for any one 
pregnancy, grant presumptive eligibility for a period not to exceed * * 
*'' (emphasis added). Congress' use of the underscored phrases leads to 
the conclusion that only one presumptive period was intended. We 
solicit comments on the proposed policy to allow only one presumptive 
eligibility period per pregnancy.
    The new section 1920 specifies that a presumptive eligibility 
determination is to be made if the pregnant woman appears to the 
qualified provider, on the basis of preliminary information supplied by 
her on family income, to meet the applicable income level of 
eligibility only. Resources and other Medicaid eligibility requirements 
that would be considered under the approved State plan if the woman 
were to apply for regular Medicaid benefits are not considered in 
making the presumptive eligibility determination. In addition, section 
1920 provides that a determination of presumptive eligibility be based 
on ``preliminary information'' about family income. Therefore, a 
qualified provider may only request information that is correct based 
upon a pregnant woman's best information and belief and may not require 
exact information under a penalty of perjury. A State may require that 
women reveal what their incomes are or only that their incomes are 
below the applicable level.
    In implementing the provisions of section 1920 that specify that 
presumptive eligibility determinations must be based on family income, 
we would require the qualified provider in all cases to apply to the 
woman's gross family income the highest, most advantageous income 
criteria applicable to the pregnant woman under the approved plan. The 
``applicable'' level would usually be the higher of either the poverty 
level standard or the medically needy income level (without spenddown). 
This means that income disregards are not considered, and in the case 
of blind or disabled individuals in section 1902(f) States, or in 
States that have a medically needy program, the cost of incurred 
medical expenses could not be deducted in order to reduce income to the 
allowed income level (spending down). Consideration of disregards and 
incurred medical expenses would allow some women to have income above 
the ``applicable level'' specified in section 1920(b)(1)(A). We believe 
Congress intended by the use of the term ``applicable level'' to 
require qualified providers only to make simple calculations and not 
complicated adjustments of income such as those involved in applying 
spenddown rules or in disregarding certain types of income. To impose 
detailed calculations and complicated adjustments on providers would be 
administratively burdensome and contrary to efficient administration 
because of the short-term nature of the presumptive eligibility status 
and because no other eligibility requirements (not even resources) are 
considered. We believe that we are not imposing an undue hardship on a 
pregnant woman by not allowing spenddown or not disregarding certain 
income. If the provider makes a decision that the woman does not 
``appear'' to meet the income criteria, the pregnant woman still has 
the right to apply for regular Medicaid within a reasonable period of 
time and have a formal eligibility determination made. Under a formal 
eligibility determination, the agency may find that the pregnant woman 
is retroactively eligible for regular Medicaid during the presumptive 
period under the authority of section 1902(a)(34) of the Act.
    Section 1920(b)(2) of the Act, as added by OBRA '86 and amended by 
section 411(k)(16) of MCCA, specifies the qualifications that a 
provider must meet in order to be allowed to make presumptive 
eligibility determinations. The provider must--
    (1) Be eligible to receive payments under Medicaid;
    (2) Be an entity that provides services of the following type: 
outpatient hospital services as specified in section 1905(a)(2)(A) of 
the Act or rural health clinic services and any other ambulatory 
services offered by a rural health clinic and otherwise included in the 
plan as described in section 1905(a)(2)(B); or be an entity that 
provides clinic services by or under the direction of a physician 
described in section 1905(a)(9) of the Act;
    (3) Be determined by the State agency to be capable of making 
presumptive eligibility determinations on the basis of preliminary 
information on family income; and
    (4) Meet one of the following conditions:

--Be receiving funding from the migrant health centers or community 
health centers programs under sections 329, 330, or 340 of the Public 
Health Service Act; funding from the maternal and child health services 
block grant program under title V of the Social Security Act; or 
funding under title V of the Indian Health Care Improvement Act.
--Be participating in the Special Supplemental Food Program for Women, 
Infants, and Children established under section 17 of the Child 
Nutrition Act of 1966, or in the Commodity Supplemental Food Program 
established under section 4(a) of the Agriculture and Consumer 
Protection Act of 1973.
--Be participating in a State perinatal program.
--Be the Indian Health Service or a health program or facility operated 
by a tribe or tribal organization under the Indian Self-Determination 
Act (Pub. L. 93-638).

    All providers who meet the criteria listed above must be considered 
qualified providers. Therefore, if a State determines that a provider 
is not capable of making presumptive eligibility determinations for 
pregnant women, that provider would not be considered ``qualified'' to 
make these determinations. We would permit States to exclude a provider 
that is qualified only under very narrow circumstances; that is, if a 
State can demonstrate that there is good cause to exclude the provider. 
In addition, we wish to give States maximum flexibility in meeting the 
needs of pregnant women and, therefore, propose to allow States to 
determine whether a program is a ``State perinatal program.''
    In interpreting the provisions of section 1920(b), we would require 
States to provide qualified providers with proper screening forms for 
pregnant women to request a decision of presumptive eligibility. We 
also would require the States to provide instructions to qualified 
providers on how to apply the gross income criteria under the various 
eligibility groups under the State's approved Medicaid plan and how to 
determine the highest income criteria group under which the pregnant 
woman is most likely to be eligible if she applies for regular 
Medicaid. We are not prescribing the specific content and format of the 
screening forms or instructions. However, we expect State instructions 
to be in enough detail to allow a qualified provider (based on 
preliminary information provided by a pregnant woman) to make 
reasonably accurate income eligibility determinations.
    In accordance with section 1920(c)(1), we would require State 
agencies to furnish qualified providers with regular Medicaid 
application forms and train them to assist pregnant women who wish to 
apply in completing and filing these forms. As provided by section 
1920(c)(3) of the Act as amended by section 4605 of OBRA '90, the 
application provided may be an application developed by the State for 
use by pregnant women who wish to apply as low-income pregnant women 
described in section 1902(l)(1)(A) of the Act.
    Section 1920(c)(3) of the Act seems to contemplate an application 
for regular Medicaid that is separate from the screening form for 
presumptive eligibility for ambulatory prenatal care. We believe the 
presumptive eligibility screening form and the regular Medicaid 
application can be combined. However, pregnant women cannot be required 
to provide all of the information necessary for a full-scale Medicaid 
application when applying for only presumptive eligibility. If the 
forms are combined, a State agency can offer the pregnant woman the 
option to complete the entire application but cannot require that she 
do so in order to establish presumptive eligibility. A qualified 
provider must make a presumptive eligibility determination once a 
pregnant woman has provided information about her family income and 
cannot require additional information.
    A presumptive eligibility screening form alone cannot be used to 
establish a filing date for a regular Medicaid application. If a 
combined presumptive eligibility screening form and Medicaid 
application is used and the woman chooses to complete the entire 
application, the completed application form must be forwarded promptly 
to the appropriate State agency for a decision on regular Medicaid 
eligibility under the plan once the qualified provider makes a decision 
on presumptive eligibility. In this situation, the date the completed 
form is received by the State agency is the Medicaid filing date for 
Medicaid eligibility. If the woman is determined to be eligible, this 
date will determine the beginning of the period in which she qualifies 
for the more extensive services under the plan and will establish the 
month used to determine the dates of the 3 months of retroactive 
eligibility, if the woman would have been eligible during the 
retroactive period. Under this latter approach, pregnant women would 
not be required to file another application. However, they would not be 
exempt from meeting with State agency staff as appropriate or from 
providing additional information necessary to determine eligibility 
under the plan.
    A modified approach under this option would be to have State agency 
staff on site at qualified provider locations to supervise or actually 
assist pregnant women in completing the application form. In these 
cases, the application date for regular Medicaid plan services would be 
the date the onsite State agency staff person receives the completed 
form. This would result in an earlier Medicaid filing date. However, 
even though State agency staff who are working at qualified provider 
locations can receive and process applications for regular Medicaid, 
they cannot make presumptive eligibility determinations unless they 
themselves meet the definition of ``qualified provider'' under section 
1920(b)(2).
    Since we are considering pregnant women who apply only for 
presumptive eligibility for ambulatory prenatal care as requesting to 
receive services under a special status (that is, not regular Medicaid 
eligibility), we propose not to apply to a decision on presumptive 
eligibility the notification requirements that a State must meet when 
it makes a decision on a regular Medicaid application. Existing 
regulations under Secs. 435.911 and 435.912 and part 431, subpart E, 
require Medicaid agencies to notify Medicaid applicants within a 
specified period of time of the agency's decision on a regular Medicaid 
application, the reasons for the decision, and an explanation of rights 
to a hearing if the application is denied. Although we propose not to 
apply the requirements of Secs. 435.911 and 435.912 and part 431, 
subpart E, to presumptive eligibility decisions, we are proposing to 
require that the qualified provider inform a pregnant woman in writing 
of the presumptive eligibility decision at the time of the 
determination. In the case of a denial of presumptive eligibility, the 
qualified provider would be required to inform the woman in writing of 
the reason for the denial of this special status and of her right to 
apply to the State agency for an eligibility decision for regular 
Medicaid.
    In accordance with section 1920 of the Act, we propose to require 
the qualified provider to inform, in writing, a pregnant woman who is 
determined presumptively eligible that she is required to file a 
regular Medicaid application by the last day of the month following the 
month in which the presumptive determination is made if she wishes to 
continue to receive ambulatory prenatal care after that date. The 
qualified provider must inform the pregnant woman in writing that if 
she does not file her application for regular Medicaid by the last day 
of the month following the month in which she was determined 
presumptively eligible, her presumptive eligibility will end on that 
date. However, if she files within the deadline, she will remain 
presumptively eligible until she has a regular Medicaid determination. 
Under the provisions of section 1920(c)(2), the qualified provider also 
must notify the State agency within 5 working days after the date on 
which the provider determines that the pregnant woman is presumptively 
eligible.
    While the procedures under Secs. 435.911 and 435.912 for notifying 
individuals of actions on applications would not apply to presumptive 
eligibility decisions for ambulatory prenatal care, they would apply to 
regular Medicaid applications filed after the presumptive eligibility 
determination is made. Because we do not consider presumptive 
eligibility for ambulatory prenatal care to be eligibility for Medicaid 
per se, and because termination of ambulatory prenatal care benefits 
occurs automatically after specified time periods under section 1920 of 
the Act, we also propose not to apply the existing provisions of the 
regulations that require Medicaid agencies to provide timely written 
notice of reduction or termination of Medicaid benefits and rights to 
appeal of an adverse action (part 431, subpart E and Sec. 435.919). As 
indicated earlier, we propose to require a qualified provider to 
provide written notice of the date a pregnant woman can expect 
presumptive eligibility for ambulatory prenatal care to end. However, 
we propose not to grant rights to appeal a denial or termination of 
ambulatory prenatal care services under a presumptive eligibility 
decision. A presumptively eligible pregnant woman who subsequently 
files a regular Medicaid application that is denied would have the 
right to appeal the denial of her regular Medicaid application.
    We do not believe that we are imposing an undue burden on qualified 
providers by requiring that notification by a qualified provider be in 
writing. We do not foresee that this written notice will be individual 
personal letters. We considered requiring States to supply qualified 
providers with preprinted notices. However, we decided to allow States 
the flexibility to determine how to best arrange for this notification 
within each State program. We particularly solicit comments on whether 
the requirement that notification by a qualified provider be in writing 
imposes an undue hardship on qualified providers.
    Existing regulations at Sec. 435.914 permit States to provide 
Medicaid for an entire month when an individual is eligible for 
Medicaid under the plan at any time during the month. We propose not to 
permit States to provide full month eligibility for presumptive 
eligibility periods because by definition a presumptive determination 
is not a determination of Medicaid eligibility but eligibility for a 
special status. Therefore, special status eligibility begins on the 
exact date a presumptive eligibility decision is made and ends on the 
last day of the month following the month in which the presumptive 
decision is made when a Medicaid application has not been filed, or on 
the date a formal decision of Medicaid eligibility is made if an 
application has been filed. However, full month regular Medicaid 
eligibility is available during the approval month of a regular 
Medicaid application in States that have elected full month coverage in 
their approved State Medicaid plan.
    Section 9407 of OBRA '86, as amended by section 411(k)(16) of MCCA, 
provides that, for purposes of Federal financial participation, 
ambulatory prenatal care services that are covered under the plan, are 
furnished by a provider that is eligible for payment under the State 
plan, and are furnished to pregnant women during a presumptive period 
of eligibility, will be treated as expenditures for medical assistance 
under the State plan and thus are regarded as Medicaid plan services. 
If the State makes any payments for ambulatory prenatal care furnished 
by an eligible provider during the presumptive period for women who are 
later determined to be ineligible for Medicaid, these payments will not 
be counted in determining a State's excess erroneous payments for 
purposes of disallowing Federal financial participation. In general, 
Medicaid quality control will not review the accuracy of presumptive 
eligibility determinations in terms of predicting a pregnant woman's 
eligibility for Medicaid, and any erroneous payments made cannot be 
counted in determining the State's erroneous payments for purposes of 
quality control eligibility errors. However, quality control will 
review claims for services furnished to presumptively eligible pregnant 
women to determine whether these claims were, in fact, made for women 
who were pregnant and were for ambulatory prenatal services covered 
under the State plan, were furnished by a provider that is eligible to 
receive payment under the State plan, and were furnished during a 
period of presumptive eligibility. There will be situations in which 
the services furnished by a qualified provider will include 
verification of a woman's pregnancy. The services that are furnished 
for verification will be covered as presumptive eligibility services 
for FFP purposes only if the woman is actually pregnant. Section 1920 
covers only ambulatory prenatal care made available to a pregnant woman 
during a specified period. Services furnished to deliver or remove an 
embryo/fetus from the mother or furnished following that delivery or 
removal will not be covered as presumptive eligibility services for FFP 
purposes. That is because, if the embryo/fetus is no longer viable, the 
woman is no longer considered to be a pregnant woman. Also, we do not 
believe that the services involved in delivering either a viable or 
nonviable fetus constitute prenatal services. In addition, any services 
furnished following removal or delivery would not be furnished to a 
pregnant woman nor would they constitute prenatal care.
    We also expect States to monitor decisions made by specific 
qualified providers to assure the accuracy and integrity of the 
determinations and to take any corrective actions that may be 
necessary. Therefore, we are proposing to require States to monitor 
presumptive eligibility decisions.
    We propose to amend the Medicaid regulations to incorporate the 
provisions of section 9407 of OBRA '86, section 411(k)(16) of MCCA, and 
section 4605 of OBRA '90 as follows:
     Revise Secs. 431.864 and 431.865 to specify that excess 
erroneous payments for purposes of disallowance of Federal financial 
participation do not include erroneous payments for ambulatory prenatal 
care covered under the State plan, and provided to pregnant women 
during a presumptive eligibility period by a provider eligible for 
Medicaid payments.
     Add Secs. 435.250 and 436.250 to specify optional coverage 
of pregnant women during a presumptive eligibility period.
     Amend Sec. 435.907 to clarify what constitutes a formal 
Medicaid application.
     Add a new Sec. 435.911 to specify the screening and 
application requirements and procedures for making presumptive 
eligibility determinations. Existing Secs. 435.911 through 435.914 
would be redesignated as Secs. 435.914 through 435.917, respectively, 
to allow the incorporation of the new Sec. 435.911.
     Add a new Sec. 435.912 to specify the application 
requirements for pregnant women following the presumptive eligibility 
determination.
     Amend Secs. 435.1001 and 436.1001 to clarify that FFP is 
available in the necessary administrative costs the State incurs in 
determining presumptive eligibility for pregnant women and in providing 
ambulatory prenatal care to presumptively eligible women.
     Revise Sec. 440.1 to add the statutory basis for providing 
ambulatory prenatal care to pregnant women during a presumptive 
eligibility period.
     Add Sec. 440.172 to define ambulatory prenatal care and 
qualified provider.
     Add Sec. 447.85 to specify the availability of Federal 
financial participation for payments for ambulatory prenatal care.

H. Enhancement of Pregnancy Outcomes

    As we have discussed earlier in two sections of this document, 
Congress has expanded mandatory and optional Medicaid eligibility for 
pregnant women as part of an overall effort to combat the problem of 
infant mortality and incidences of low-birth weight through provision 
of needed health services to low-income pregnant women. In addition, we 
believe that we must focus State attention on the need for special 
vigilance in cases of high-risk pregnancy in order to maximize the cost 
effectiveness of the increased Medicaid investments. Examples of high-
risk pregnancies include those in which the women have a complicating 
medical condition, complications that may result from genetic factors, 
or a history of adverse pregnancy outcomes. There is much evidence that 
many adverse birth outcomes are preventible through timely and 
appropriate intervention by health and social services agencies, with 
the potential for reducing infant mortality, the use of high-cost 
neonatal intensive care services, and the incidence of long-term care 
services associated with extended or lifelong disabilities.
    We propose to add Sec. 435.935 to the Medicaid regulations to 
require States to define a high-risk pregnancy, to describe the methods 
they will apply to identify high-risk pregnant women, and to specify 
steps that individuals, groups, and organizations involved in the 
service delivery system will take to ensure that these women will 
receive services designed to enhance pregnancy outcomes for both the 
mother and the child. The purpose of defining these terms is to assist 
States in their efforts to see that pregnant Medicaid recipients 
receive the full range of medical and related services appropriate to 
their risk status.
    We are proposing to impose these requirements on States under the 
authority of sections 1902(a) (4) and (19) of the Act. These 
provisions, respectively, require that the Medicaid State plan provide 
for such methods of administration as are found necessary by the 
Secretary for the proper and efficient operation of the plan, and 
provide such safeguards as may be necessary to assure that eligibility 
for care and services under the plan will be determined, and the care 
and services will be provided in a manner consistent with simplicity of 
administration and the best interests of recipients.
    We specially solicit comment on the proposal to require States to 
target potentially high risk pregnant women. Moreover, we are 
interested in comments on the effectiveness of a State plan amendment 
to achieve this goal.

I. Clarification of Medicaid to Homeless Individuals

    Section 9405 of OBRA '86 revised section 1902(b)(2) of the Act to 
prohibit States from imposing any residence requirement that excludes 
from Medicaid an otherwise eligible individual who resides in the 
State, but does not maintain a residence permanently or at a fixed 
address. Before this provision was enacted, some States were requiring 
applicants for Medicaid to furnish a fixed address or evidence of a 
permanent residence in order to qualify for Medicaid, even though this 
was not a Federal requirement. In addition, section 11005 of the 
Homeless Eligibility Clarification Act added section 1902(a)(48) to the 
Act to require, as a State plan requirement, that States establish a 
method for making Medicaid eligibility cards available to an eligible 
individual who does not reside in a permanent dwelling or at a fixed 
address. This provision was effective on January 1, 1987.
    In the interest of affording States maximum flexibility in the 
administration of their Medicaid programs, we are not proposing to 
impose a specific method to be used to issue Medicaid eligibility cards 
to homeless individuals. However, the State would be required to 
describe the method in its State plan. The method, as part of the State 
plan, would be subject to approval by HCFA. HCFA will approve any 
reasonable method that ensures the timely issuance of cards and receipt 
of Medicaid and that does not impose an undue hardship on the homeless 
individual.
    We propose to--
     Amend Secs. 435.403 and 436.403 to add the prohibition 
against requiring otherwise eligible homeless individuals to have a 
fixed address or reside in a permanent dwelling.
     Add a new Sec. 435.932 to specify the State plan 
requirement that a State must establish and specify a method for 
issuing Medicaid eligibility cards to homeless individuals.

III. Response to Public Comments

    Because of the large volume of public comments that we usually 
receive on notices of proposed rulemaking, we cannot acknowledge or 
respond to them individually. However, we will address all public 
comments received on this document in the preamble to the document in 
which these proposed regulations are issued in final form.

IV. Paperwork Burden

    Sections 435.612(f), 435.615(e), 435.907, 435.911, 435.918, 
435.932, 435.935, 436.612(e), 436.615(e), 447.51, and 447.60 contain 
information collection and reporting requirements that are subject to 
review by the Office of Management and Budget under the requirements of 
the Paperwork Reduction Act (44 U.S.C. chapter 35). We have submitted 
these proposed regulations to OMB for review. The reporting burden for 
this collection of information is estimated to be 6 hours per response. 
A notice will be published in the Federal Register when approval is 
obtained. Comments regarding the burden estimate or any other aspect of 
information collection must be addressed to the specified office 
indicated under the ``ADDRESSES'' section of this preamble.

V. Regulatory Analysis

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), unless the Secretary certifies that a proposed regulation 
would not have a significant economic impact on a substantial number of 
small entities. For purposes of RFA, we consider all providers and 
suppliers of health care as small entities. Individuals and States are 
not included in the definition of a small entity. We are not preparing 
a RFA because we have determined, and the Secretary certifies, that 
this proposed regulation would not have a significant economic impact 
on a substantial number of providers and suppliers.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis if a proposed rule may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
603 of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital which is located outside a 
Metropolitan Statistical Area and has fewer than 50 beds. We are not 
preparing a rural hospital impact statement because we have determined, 
and the Secretary certifies, that this proposed regulation would not 
have a significant economic impact on the operations of a substantial 
number of small rural hospitals.
    Although this proposed rule is not an ``economically significant'' 
rule under Executive Order 12866, the statutory changes which are the 
basis of this proposed rule, are substantial. We present below a 
voluntary anaylsis of these effects.
    This proposed rule would incorporate in regulations, and in some 
cases interpret, statutory changes that are already in effect. In cases 
where it was necessary to provide interpretation, we have relied on the 
legislative history of the statutory provisions, when available, for 
the best reading of the provision. The statutory provisions are 
effective on the statutorily established date, regardless of whether or 
not we have issued final regulations. The statutory changes that expand 
eligibility groups and coverage of services will increase Medicaid 
program expenditures independently of the promulgation of this rule. 
Costs associated with these proposed regulations are the result of 
legislation or due to the interpretation of statutory changes already 
in effect. Therefore, these costs have been included in the Medicaid 
budget estimates.
    It is difficult to predict what the fiscal impact will be since 
several provisions provide Medicaid coverage to certain groups at the 
option of States. Another unknown factor is the additional number of 
pregnant women, infants, and children and disabled, elderly, and 
homeless individuals who will be offered services that previously were 
not covered by the States and the type and cost of these specific 
services. We know costs for States will rise as they begin to furnish 
the additional services that will be required if medically necessary. 
The following data reflects our estimate of medical costs attributable 
to expansion of services under the Omnibus Budget Reconciliation Act of 
1987, Public Law 100-203; the Medicare Catastrophic Coverage Act of 
1988, Public Law 100-360; the Family Support Act of 1988, Public Law 
100-485; the Omnibus Budget Reconciliation Act of 1989, Public Law 101-
239; and the Omnibus Budget Reconciliation Act of 1990, Public Law 101-
508. The following estimates are based on data from the census, current 
population survey, and average cost using Medicaid data:

                                             Estimated Federal Costs                                            
                                              [Dollars in millions]                                             
----------------------------------------------------------------------------------------------------------------
               Law                            Provisions                FY93       FY94       FY95        FY96  
----------------------------------------------------------------------------------------------------------------
OBRA-86..........................  MCH*.............................       $250       $285       $325       $370
                                   eld/disab**......................        245        295        355        425
OBRA-87..........................  MCH..............................        380        440        510        590
OBRA-88..........................  MCH..............................        165        180        195        210
OBRA-89..........................  MCH..............................        335        355        380        405
OBRA-90..........................  MCH..............................        280        415        565       730 
                                                                     -------------------------------------------
    Totals.......................  .................................       1655       1970       2330      2730 
----------------------------------------------------------------------------------------------------------------


                                              Estimated State Costs                                             
                                              [Dollars in millions]                                             
----------------------------------------------------------------------------------------------------------------
               Law                            Provisions                FY93       FY94       FY95       FY96   
----------------------------------------------------------------------------------------------------------------
OBRA-86..........................  MCH*.............................       $190       $215       $245       $280
                                   eld/disab**......................        185        220        265        320
OBRA-87..........................  MCH..............................        285        330        380        445
OBRA-88..........................  MCH..............................        125        135        145        160
OBRA-89..........................  MCH..............................        250        265        285        305
OBRA-90..........................  MCH..............................        210        310        425       550 
                                                                     -------------------------------------------
    Totals.......................  .................................       1245       1475       1745      2060 
----------------------------------------------------------------------------------------------------------------
*MCH--Maternal/Child Health                                                                                     
**eld/disab--elderly/disabled                                                                                   

    Several alternatives were considered in the development of these 
proposed regulations and are discussed in detail earlier in the 
preamble: Two of the more significant ones involve continuous 
eligibility of pregnant women and deemed newborn eligibility under 
sections II. B and II. D, respectively, of the preamble. Our proposed 
interpretation of the statutory provisions relating to these two areas 
would have minimal cost effects and will probably save money through 
better management of high risk pregnancies. At most, the proposed 
interpretation of the provision relating to continuous eligibility of 
newborn children would cost $10 million, a very small addition to the 
statutory costs included in the above tables. However, we believe that 
most States have already adopted our proposed interpretation as 
practice.
    In accordance with the provisions of Executive Order 12866, this 
proposed regulation was reviewed by the Office of Management and 
Budget.

List of Subjects

42 CFR Part 431

    Grant programs--health, Health facilities, Medicaid, Reporting and 
recordkeeping requirements.

42 CFR Part 435

    Aid to Families with Dependent Children, Grant program--health, 
Medicaid, Supplemental Security Income (SSI).

42 CFR Part 436

    Aid to Families with Dependent Children, Grant programs--health, 
Guam, Medicaid, Puerto Rico, Supplemental Security Income (SSI), Virgin 
Islands.

42 CFR Part 440

    Grant programs--health, Medicaid.

42 CFR Part 447

    Accounting, Administrative practice and procedure, Grant programs--
health, Health facilities, Health professions, Medicaid, Reporting and 
recordkeeping requirements, Rural areas.

    42 CFR chapter IV would be amended as set forth below:

Subchapter C--Medical Assistance Programs

PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION

    A. Part 431 is amended as follows:
    1. The authority citation for part 431 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

    2. A new Sec. 431.60 is added to subpart B to read as follows:


Sec. 431.60  Maintenance of AFDC efforts.

    Effective July 1, 1989, HCFA will not approve any State plan for 
Medicaid if the State has in effect, under its approved AFDC plan, 
payment levels (that is, the amount of the AFDC payment for basic needs 
made to a family with no other income) that are less than its AFDC 
payment levels in effect on May 1, 1988. However, HCFA will continue to 
approve amendments to a State plan under these conditions.
    3. Section 431.201 is amended by revising the definition of 
``action'' to read as follows:


Sec. 431.201  Definitions.

* * * * *
    Action means a termination, suspension, or reduction of Medicaid 
eligibility or covered services. It does not include a denial of 
presumptive eligibility for ambulatory prenatal care for a pregnant 
woman or a termination of presumptive eligibility at the end of the 
specified period under Sec. 435.911 of this subchapter.
* * * * *
    4. In Sec. 431.864, the introductory text of paragraph (b) is 
republished and the definition of ``erroneous payments'' under 
paragraph (b) is revised to read as follows:


Sec. 431.864  Disallowance of Federal financial participation for 
erroneous State payments (effective January 1, 1984 through June 30, 
1990).

* * * * *
    (b) Definitions. For purposes of this section--
* * * * *
    Erroneous payment means the Medicaid payment that was made for an 
individual or family under review who--
    (1) Was ineligible for the review month or, if full month coverage 
is not provided, at the time services were received;
    (2) Was ineligible to receive a service provided during the review 
month; or
    (3) Had not properly met beneficiary liability prior to receiving 
Medicaid services.

Effective April 1, 1987, the term does not include erroneous payments 
made for ambulatory prenatal care that is included in the care and 
services covered under the State plan and furnished to pregnant women 
by providers that are eligible to receive payments under the State plan 
during a presumptive eligibility period as defined in 
Sec. 435.911(e)(2) of this subchapter.
* * * * *
    5. In Sec. 431.865, the introductory text of paragraph (b) is 
republished and the definition of ``erroneous payments'' under 
paragraph (b) is revised to read as follows:


Sec. 431.865  Disallowance of Federal financial participation for 
erroneous State payments (for annual assessment periods ending after 
July 1, 1990).

* * * * *
    (b) Definitions. For purposes of this section--
* * * * *
    Erroneous payment means the Medicaid payment that was made for an 
individual or family under review who--
    (1) Was ineligible for the review month or, if full month coverage 
is not provided, at the time services were rendered;
    (2) Was ineligible to receive a service provided during the review 
month; or
    (3) Had not properly met beneficiary liability prior to receiving 
Medicaid services.

The term does not include erroneous payments made for ambulatory 
prenatal care that is included in the care and services covered under 
the State plan and furnished to pregnant women by providers that are 
eligible to receive payments under the State plan during a presumptive 
eligibility period as defined in Sec. 435.911(e)(2) of this subchapter.

PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE 
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA

    B. Part 435 is amended as follows:
    l. The authority citation for part 435 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

    2. The heading of subpart B is revised to read as follows:

Subpart B--Mandatory Coverage of the Categorically Needy and Special 
Groups

    3. In Sec. 435.3, paragraph (a) introductory text is republished 
and several entries are added in numerical order to read as follows:


Sec. 435.3  Basis.

    (a) This part interprets the following sections of the Act and 
public laws which state eligibility requirements and standards:
* * * * *
    1902(c)--Conditions of State plan approval--States must maintain 
AFDC payment levels and not require that section 1902(l) low-income 
pregnant women, infants, and children apply for AFDC benefits.
* * * * *
    1902(e)(6)--Mandatory continuation of Medicaid for pregnant women 
without consideration of changes in income up to specified periods 
after pregnancy ends.
    1902(e)(7)--Continuation of Medicaid eligibility for certain 
infants and children receiving inpatient care.
* * * * *
    1902(l)--Description of eligible pregnant women, infants, and 
children with incomes related to Federal poverty income level.
    1902(m)--Description of eligible aged and disabled individuals with 
incomes at or below Federal poverty income level.
    1902(r)(2)--Use of less restrictive income and resource 
methodologies than those for cash assistance programs in determining 
financial eligibility of specified categorically needy and medically 
needy groups.
* * * * *
    1920--Optional presumptive eligibility period for pregnant women.
* * * * *
    4. In Sec. 435.116, paragraph (c) introductory text is republished 
and paragraphs (c) (1) and (2) are revised to read as follows:


Sec. 435.116  Qualified pregnant women and children who are not 
qualified family members.

* * * * *
    (c) The agency must provide Medicaid to children who meet all of 
the following criteria:
    (1) They are born after September 30, 1983, or at State option, an 
earlier designated date;
    (2) They are under 19 years of age; and
* * * * *
    5. Section 435.117 is revised to read as follows:


Sec. 435.117  Newborn children.

    (a) The agency must provide categorically needy Medicaid 
eligibility to a child born to a woman who is eligible as categorically 
needy and is receiving Medicaid on the date of the child's birth. The 
child is deemed to have applied and been found eligible for Medicaid on 
the date of birth and remains eligible as categorically needy for one 
year so long as the woman remains eligible or (with respect to infants 
born on or after January 1, 1991) would have remained eligible if still 
pregnant and the child is a member of the woman's household. If the 
mother's basis of eligibility changes to medically needy, the child is 
eligible as medically needy under Sec. 435.301(b)(1)(iii).
    (b) An infant is considered to be a member of his or her mother's 
household for so long as he or she is continuously hospitalized after 
birth, unless the mother has legally relinquished control of the child 
or the State has established that she has abandoned the child. After 
the infant's release from the hospital, or in situations not involving 
hospitalization, States must apply the AFDC rules to determine if an 
infant (who is not an SSI beneficiary) is a member of his or her 
mother's household.
    6. The undesignated center heading ``Mandatory Coverage of Pregnant 
Women, Children Under 8, and Newborn Children'' appearing before 
Sec. 435.116 is revised and a new Sec. 435.118 is added to read as 
follows:

Mandatory Coverage of Pregnant Women, Children Under 19, and Newborn 
Children


Sec. 435.118  Pregnant women, infants, and children with family incomes 
at a percentage of the Federal poverty income guidelines.

    (a) Pregnant women and infants. The agency must provide Medicaid to 
pregnant women and women during the 60-day period beginning on the last 
day of pregnancy, subject to the limits in Sec. 440.250(q), and to 
infants under one year of age who meet the following criteria:
    (1) Effective April 1, 1990, they have family income, established 
in accordance with Sec. 435.610, that does not exceed 133 percent of 
the Federal poverty income guidelines for a family of the size 
involved, unless, as of December 19, 1989, the agency had elected to 
apply a higher percentage (or percentages) in determining eligibility 
for the optional categorically needy groups of low-income pregnant 
women and infants described under Sec. 435.228. If the agency had 
elected a percentage or percentages greater than 133 percent but no 
more than 185 percent for either pregnant women or infants under 
Sec. 435.228 or both, the percentage or percentages applicable under 
paragraph (a)(1) of this section must be the percentage or percentages 
that the agency specified in that election in--
    (i) The approved State plan;
    (ii) A State plan amendment submitted as of December 19, 1989, 
whether approved or not; or
    (iii) State legislation enacted or State appropriations made as of 
December 19, 1989.
    (2) At State option, they have resources that do not exceed 
standards, established in accordance with Sec. 435.610, that are no 
more restrictive than the SSI standard for pregnant women and no more 
restrictive than the AFDC standard for infants under one year of age.
    (b) Eligibility period for women and infants. The agency must 
provide Medicaid to--
    (1) Women described in paragraph (a) of this section, as long as 
they continue to meet the criteria described in paragraph (a) of this 
section, during their pregnancy and during a post partum period that 
begins on the last day of the pregnancy and continues for 60 days. 
Sections 435.170 and 435.918(c)(2) may also apply to these women.
    (2) Infants described in paragraph (a) of this section, as long as 
they continue to meet the criteria described in paragraph (a) of this 
section, until they reach age 1, except as provided in Sec. 435.520(b). 
Section 435.117 may also apply to these infants.
    (c) Children age 1 up to age 6. The agency must provide Medicaid to 
children who are age 1 but have not attained age 6 who meet the 
following criteria:
    (1) Effective April 1, 1990, they have family income, established 
in accordance with Sec. 435.610, that does not exceed 133 percent of 
the Federal poverty income guidelines for a family of the size 
involved; and
    (2) At State option, they have resources that do not exceed a 
standard, established in accordance with Sec. 435.610, that is no more 
restrictive than the AFDC standard.
    (d) Eligibility period for children up to age 6. The agency must 
provide Medicaid to children described in paragraph (c) of this 
section, as long as they continue to meet the criteria described in 
paragraph (c) of this section, until they reach age 6, except as 
provided in Sec. 435.520(b).
    (e) Children age 6 up to age 19. The agency must provide Medicaid 
to children born after September 30, 1983, who have attained age 6 but 
have not attained age 19 who meet the following criteria:
    (1) Effective July 1, 1991, they have family income, established in 
accordance with Sec. 435.610, that does not exceed 100 percent of the 
Federal poverty income guidelines for a family of the size involved; 
and
    (2) At State option, they have resources that do not exceed a 
standard, established in accordance with Sec. 435.610, that is no more 
restrictive than the AFDC standard.
    (f) Eligibility period for children age 6 up to age 19. The agency 
must provide Medicaid to children described in paragraph (e) of this 
section, as long as they continue to meet the criteria described in 
paragraph (e) of this section, until they reach age 19, except as 
provided in Sec. 435.520(b).
    (g) States with section 1115 waivers. The 50 States and the 
District of Columbia must provide Medicaid to individuals described in 
paragraphs (a) through (e) of this section, regardless of whether or 
not they operate their Medicaid programs under waivers granted under 
section 1115 of the Act.
    (h) Application of rules to Northern Mariana Islands and American 
Samoa. The rules specified in this section do not apply in the Northern 
Mariana Islands and American Samoa. In these two Territories, the rules 
for optional coverage of individuals specified in Sec. 436.226 apply.
    7. The heading of subpart C is revised to read as follows:

Subpart C--Options for Coverage of Individuals as Categorically Needy 
and As Special Groups

    8. A new Sec. 435.228 is added under the undesignated center 
heading ``Options for Coverage of Families and Children'' under subpart 
C to read as follows:


Sec. 435.228  Pregnant women and infants with family incomes at a 
percentage of Federal poverty income guidelines.

    (a) Subject to the conditions specified in paragraphs (b) and (c) 
of this section, effective April 1, 1990, the agency may provide 
Medicaid to any of the following groups of individuals who are not 
otherwise eligible as mandatory categorically needy:
    (1) Pregnant women and women during the 60-day period beginning on 
the last day of pregnancy with family incomes that are above 133 
percent (or any higher percent applicable under Sec. 435.118), but no 
more than 185 percent of the Federal poverty income guidelines for a 
family of the size involved; and
    (2) Infants under 1 year of age with family incomes that are above 
133 percent (or any higher percentage applicable under Sec. 435.118), 
but no more than 185 percent, of the Federal poverty income guidelines 
for a family of the size involved.
    (b) Individuals described in paragraph (a) of this section are 
eligible if--
    (1) Their family income meets the applicable standard in 
Sec. 435.612(c); and
    (2) At State option, their resources meet the applicable standard 
in Sec. 435.612(d).
    (c) If the agency chooses to provide Medicaid to pregnant women 
specified in paragraph (a)(1) of this section, it must cover the women, 
as long as they continue to meet the criteria described in paragraph 
(b) of this section, during the pregnancy and during the 60-day period 
after the pregnancy ends. Sections 435.170 and 435.918(c)(2) may also 
apply to these women. Services for these women are limited to services 
specified in Sec. 440.250(q) of this subchapter.
    (d) If the agency chooses to provide Medicaid to infants described 
in paragraph (a)(2) of this section, it must cover the infants, as long 
as they continue to meet the criteria described in paragraph (b) of 
this section, until they reach age 1, except as provided in 
Sec. 435.520(b). Section 435.117 may also apply to these infants.
    9. A new Sec. 435.238 is added under the undesignated center 
heading ``Options for Coverage of the Aged, Blind, and Disabled'' under 
subpart C to read as follows:


Sec. 435.238  Aged and disabled individuals with incomes at or below 
Federal poverty income guidelines.

    (a) The agency may provide Medicaid to individuals who are not 
eligible as mandatory categorically needy and who--
    (1) Are 65 years of age or older; or are disabled as determined 
under SSI;
    (2) Have family income that meets a standard established by the 
State at a level that is no more than 100 percent of the Federal 
poverty income level in accordance with Sec. 435.615(b); and
    (3) Have resources that meet the standard established in accordance 
with Sec. 435.615(c).
    (b) An agency that elects the option under paragraph (a) of this 
section must provide Medicaid to both aged and disabled groups of 
individuals.
    10. A new undesignated center heading and Sec. 435.250 are added at 
the end of subpart C to read as follows:

Option for Coverage of Special Groups


Sec. 435.250   Pregnant women eligible for a presumptive eligibility 
period.

    (a) The agency may provide pregnant women with eligibility for 
ambulatory prenatal care services based on a presumptive eligibility 
determination made by a qualified provider if--
    (1) The woman's estimated gross family income appears to meet the 
highest applicable income criteria under the State plan that are most 
likely to be used if the woman applied for regular Medicaid;
    (2) The provider making the determination meets the requirements of 
Sec. 440.172(c) of this subchapter; and
    (3) The agency has established procedures to ensure that the 
screening and application requirements and procedures of Sec. 435.911 
of subpart J of this part are met.
    (b) Pregnant women who are determined eligible for ambulatory 
prenatal care services under this section are eligible during a 
presumptive period in accordance with Sec. 435.911.
    11. In Sec. 435.301, paragraphs (b) introductory text and (b)(1) 
introductory text are republished and paragraph (b)(1)(iii) is revised 
to read as follows:


Sec. 435.301   General rules.

* * * * *
    (b) If the agency chooses this option, the following provisions 
apply:
    (1) The agency must provide Medicaid to the following individuals 
who meet the requirements of paragraph (a) of this section:
* * * * *
    (iii) All newborn children born to a woman who is eligible as 
medically needy and is receiving Medicaid on the date of the child's 
birth. The child is deemed to have applied and been found eligible for 
Medicaid on the date of birth and remains eligible as medically needy 
for one year so long as the woman remains eligible or (with respect to 
infants born on or after January 1, 1991) would have remained eligible 
if still pregnant and the child is a member of the woman's household 
(as determined in accordance with Sec. 435.117(b)). If the woman's 
basis of eligibility changes to categorically needy, the child is 
eligible as categorically needy under Sec. 435.117.
* * * * *
    12. Section 435.403 is amended by redesignating paragraphs (j) (1), 
(2), and (3) as paragraphs (j) (2), (3), and (4), respectively, and 
adding a new paragraph (j)(1) to read as follows:


Sec. 435.403  State residence.

* * * * *
    (j) Specific prohibitions.
    (1) The agency may not deny Medicaid eligibility to an otherwise 
qualified resident of the State because the individual's residence is 
not maintained permanently or at a fixed address.
* * * * *
    13. Section 435.500 is revised to read as follows:


Sec. 435.500  Scope.

    This subpart prescribes categorical requirements for determining 
the eligibility and continuing eligibility of both categorically and 
medically needy individuals specified in subparts B, C, and D of this 
part.
    14. Section 435.520 is revised to read as follows:


Sec. 435.520  Age requirements for the aged and children.

    (a) In determining or redetermining eligibility, the agency must 
not impose an age requirement of more than 65 years.
    (b) The agency must continue eligibility until the end of the 
inpatient stay for infants and children who are eligible under 
Sec. 435.116, 435.118, or 435.228, who are receiving covered inpatient 
services on the date they reach the age limit for inclusion under the 
State plan, and who would remain eligible under Sec. 435.116, 435.118, 
or 435.228 but for attainment of that maximum age.
* * * * *
    15. The heading of subpart G is revised to read as follows:

Subpart G--General Financial Eligibility Requirements and Options 
for the Categorically Needy and Special Groups

    16. Section 435.601 (as published on January 19, 1993 (58 FR 4929)) 
is amended by revising paragraph (b) and paragraph (d)(1)(ii) (the text 
of paragraph (d)(1) introductory text is republished) to read as 
follows:


Sec. 435.601  Application of financial eligibility methodologies.

* * * * *
    (b) Basic rule for use of cash assistance methodologies. Except as 
specified in paragraphs (c), (d), and (e) of this section and in 
Secs. 435.121, 435.610, and 435.615, in determining financial 
eligibility of individuals as categorically and medically needy, the 
agency must apply the financial methodologies and requirements of the 
cash assistance program that is most closely categorically related to 
the individual's status.
* * * * *
    (d) Use of less restrictive methodologies than those under cash 
assistance programs.
    (1) At State option, and subject to the conditions of paragraphs 
(d)(2) through (d)(5) of this section, the agency may apply income and 
resource methodologies that are less restrictive than the cash 
assistance methodologies in determining eligibility of the following 
groups:
* * * * *
    (ii) Low-income pregnant women, infants, and children under 
Secs. 435.118 and 435.228 and in section 1902(a)(10)(A)(i)(IV), section 
1902(a)(10)(A)(i)(VI), section 1902(a)(10)(A)(i)(VII), and section 
1902(a)(10)(A)(ii)(IX) of the Act;
* * * * *
    17. Section 435.608 is amended by adding a new paragraph (c) to 
read as follows:


Sec. 435.608  Applications for other benefits.

* * * * *
    (c) The agency may not require any pregnant woman, infant, or child 
eligible under Sec. 435.118 or Sec. 435.228 to apply for AFDC benefits 
as a condition of applying for or receiving Medicaid.
    18. A new Sec. 435.612 is added under subpart G to read as follows:


Sec. 435.612  Income and resource standards and methodologies: Pregnant 
women, infants, and children with family incomes at a percentage of 
Federal poverty income guidelines.

    (a) General rules.
    (1) The agency must determine income and resource eligibility of 
women, infants, and children under Secs. 435.118 and 435.228 in 
accordance with the requirements of this section.
    (2) For purposes of this section, family size includes the unborn 
child and other members of the Medicaid budgetary unit.
    (b) Establishing the income standard: mandatory groups. (1) For 
mandatory groups of low-income pregnant women, infants under age 1, and 
children age 1 up to age 6 under Sec. 435.118, the agency must 
establish and apply an income standard, based on family size, at a 
level that is 133 percent of the Federal poverty income guidelines for 
a family of the size involved, unless it is required to establish a 
higher level (not to exceed 185 percent) by virtue of 
Sec. 435.118(a)(1).
    (2) For the mandatory group of low-income children age 6 up to age 
19 under Sec. 435.118, the agency must establish and apply an income 
standard, based on family size, at a level that is 100 percent of the 
Federal poverty income guidelines for a family of the size involved.
    (c) Establishing the income standard: optional groups. (1) For 
optional groups of pregnant women and infants under Sec. 435.228, the 
agency may establish separate income standards or use a single income 
standard.
    (2) The standards must be based on family size, at a level that 
is--
    (i) For pregnant women, above 133 percent and no more than 185 
percent of the Federal poverty income guidelines for a family of the 
size involved; and
    (ii) For infants up to 1 year of age, above 133 percent and no more 
than 185 percent of the Federal poverty income guidelines for a family 
of the size involved.
    (d) Establishing the resource standard. At State option, the agency 
may apply resource standards in determining financial eligibility that 
are no more restrictive than the SSI standard for pregnant women, and 
no more restrictive than the AFDC standard for infants and children.
    (e) Methodologies for determining income and resources. (1) Except 
as specified in paragraphs (e)(2) through (5) of this section, in 
determining family income and resources, the agency must use the 
methodologies established in accordance with Sec. 435.601.
    (2) In determining family income, the agency must use the income 
methodologies of the approved AFDC plan or the State's title IV-E 
adoption assistance and foster care plan as appropriate, or it may 
instead use any less restrictive methodologies specified in the State 
plan which conform with Sec. 435.601(d). Methodologies include, but are 
not limited to, those used for disregarding income.
    (3) In determining countable income, the agency may not deduct 
costs incurred for medical care or any other type of remedial care to 
reduce income to the level of the standard established.
    (4) The resource methodologies used in determining financial 
eligibility of pregnant women must not be more restrictive than the 
methodologies applied under SSI. The resource methodologies used in 
determining financial eligibility of infants and children must not be 
more restrictive than the methodologies applied under the State's 
approved AFDC plan.
    (5) In determining the financial responsibility of relatives, the 
State must use the requirements of Sec. 435.602.
    (f) State plan requirements. The State plan must--
    (1) Specify the income standards; and
    (2) If the State elects to apply resource standards, specify those 
resource standards.
    19. A new Sec. 435.615 is added to subpart G to read as follows:


Sec. 435.615  Income and resource standards and methodologies: Aged and 
disabled individuals with incomes at or below Federal poverty income 
guidelines.

    (a) General rule. If the agency provides Medicaid to aged and 
disabled individuals under Sec. 435.238, it must determine financial 
eligibility in accordance with the requirements of this section.
    (b) Establishing the income standard. (1) The agency must establish 
and apply an income standard at a level that does not exceed 100 
percent of the Federal poverty income guidelines applicable to a family 
of the size involved.
    (2) For purposes of this section, ``family of the size involved'' 
is based on the SSI concept of eligibility for an individual as an 
individual or as part of a couple. If two individuals in a family are 
married and eligible under section 1902(m), their income will be 
compared to the Federal poverty income level for a family of two. In 
all other situations, eligibility will be determined on an individual 
basis, using the poverty level for one, with deeming of income as 
appropriate (under SSI deeming rules that do not conflict with title 
XIX of the Act).
    (c) Establishing the resource standard. The agency must establish 
and apply a resource standard that is either--
    (1) The SSI resource standard; or
    (2) If the State has a medically needy program that uses a higher 
resource standard, at State option, the resource standard applied to 
the medically needy.
    (d) Methodologies for determining income and resources. (1) Subject 
to the provisions of paragraph (d) (2) through (4) of this section, in 
determining financial eligibility, the agency must use the income and 
resource methodologies applied under SSI, or it may instead use any 
less restrictive income and resource methodologies than SSI as 
specified in the approved State plan in accordance with Sec. 435.601.
    (2) The agency may not deduct from income the costs incurred for 
medical care or any other type of remedial care in order to reduce the 
individual's income to the established income standard, except as 
specified in paragraph (d)(3) of this section.
    (3) For severely disabled individuals who work, the agency may 
deduct the reasonable costs for attendant care services, medical 
devices, equipment, prostheses, and similar items and services 
(generally not including routine drugs or routine medical services) 
that are necessary in order for the individual to work.
    (4) In determining the financial responsibility of relatives, the 
State must use the requirements of Sec. 435.602.
    (5) In determining eligibility under this section for an individual 
entitled to monthly social security cash benefits, Title II COLA 
increases must be disregarded from December of each year through the 
month after the month in which the Federal poverty guideline for the 
next year is published. During that period, the poverty level for the 
previous year will be used for these individuals.
    (e) State plan requirement. The State plan must specify the income 
standard and the resource standard by the family size involved.
    20. The heading of subpart J and Sec. 435.907 are revised to read 
as follows:

Subpart J--Eligibility in the States, the District of Columbia, the 
Northern Mariana Islands, and American Samoa


Sec. 435.907  Written application.

    (a) The agency must require a written application from the 
applicant, an authorized representative, or, if the applicant is 
incompetent or incapacitated, someone acting responsibly for the 
applicant.
    (b) The application must be on a form prescribed by the agency and 
signed under a penalty of perjury.
    (c) [Reserved]
    (d) The application form must solicit sufficient information to 
allow the agency to reasonably make a decision of eligibility or 
ineligibility.


Sec. 435.916  [Redesignated]

    20a. Section 435.916 is redesignated as Sec. 435.918 under the 
undesignated center heading ``Redeterminations of Medicaid 
Eligibility''.
    21. Sections 435.911, 435.912, 435.913, and 435.914 are 
redesignated as Secs. 435.914, 435.915, 435.916, and 435.917, 
respectively, and new Secs. 435.911 and 435.912 are added under the 
undesignated center heading ``Application'' under subpart J to read as 
follows:


Sec. 435.911  Screening and application procedures for pregnant women 
for presumptive eligibility determinations.

    (a) If the agency elects to provide presumptive Medicaid 
eligibility for pregnant women under the provisions of Sec. 435.250, 
the requirements and conditions under paragraphs (b) through (e) of 
this section must be met.
    (b) A pregnant woman may be determined eligible for only one 
presumptive eligibility period during any one pregnancy.
    (c) The presumptive eligibility determination must be made by a 
qualified provider who meets the requirements of Sec. 440.172(c) of 
this subchapter.
    (d) The agency must provide qualified providers with--
    (1) Screening forms and guidelines for determining presumptive 
eligibility under the plan and the eligibility group under which a 
pregnant woman is most likely to be eligible under regular Medicaid if 
she applies.
    (2) Information on how to assist a pregnant woman in completing and 
filing the screening form for presumptive eligibility for ambulatory 
prenatal care services available to eligible pregnant women.
    (3) Application forms for Medicaid under the plan, which forms may 
be those developed for use by women described in section 1902(l)(1)(A) 
of the Act, and instructions on how to help women complete and file 
these forms.
    (e) The agency must establish procedures to ensure that qualified 
providers--
    (1) Notify the agency in writing that a pregnant woman is 
presumptively eligible within 5 working days after the date the 
determination is made;
    (2) Inform the woman in writing at the time the determination is 
made that she has until the last day of the month following the month 
in which the determination is made to file a Medicaid application if 
she wishes to continue her presumptive eligibility beyond that date. 
Providers also must inform the woman that if she files a Medicaid 
application by that date, her presumptive eligibility will end on the 
day a decision is made on her Medicaid application.
    (3) In writing, inform any pregnant woman who is determined not 
presumptively eligible of the reason why she was determined ineligible 
and that she may file a Medicaid application with the agency if she 
wishes to have a determination made on a regular Medicaid application. 
A determination of ineligibility for ambulatory prenatal care is not 
subject to appeal under part 431 of this subchapter.
    (f) The agency must establish methods for monitoring the 
presumptive eligibility determinations made by qualified providers to 
ensure the integrity of the determinations and to take any corrective 
action that may be necessary.


Sec. 435.912  Application for Medicaid by pregnant women following a 
presumptive eligibility determination.

    A pregnant woman who is determined by a qualified provider to be 
presumptively eligible for ambulatory prenatal care services must file 
an application for Medicaid with the agency by the last day of the 
month following the month in which the presumptive eligibility 
determination is made in order to extend the period of presumptive 
eligibility until her eligibility for regular Medicaid has been 
determined.
    22. Redesignated Sec. 435.918 is amended by revising paragraph (c) 
to read as follows:


Sec. 435.918  Periodic redeterminations of Medicaid eligibility.

* * * * *
    (c) Agency action on information about changes.
    (1) Except as provided for in paragraph (c)(2) of this section--
    (i) The agency must promptly redetermine eligibility when it 
receives information about changes in a recipient's circumstances that 
may affect his or her eligibility.
    (ii) If the agency has information about anticipated changes in a 
recipient's circumstances, it must redetermine eligibility at the 
appropriate time based on those changes.
    (2) Effective January 1, 1991, the agency must consider any 
pregnant woman who has established eligibility for Medicaid under this 
part and who, because of a change in family income, would no longer be 
eligible, to be eligible to receive services as mandatory categorically 
needy under Sec. 435.118 throughout the pregnancy and the 60-day period 
after pregnancy ends and for any remaining days in the month in which 
the 60th day falls, without regard to any changes in income that may 
occur during this period.
    (i) This provision does not apply to women who are determined to be 
presumptively eligible under Sec. 435.250 but are subsequently 
determined to be ineligible for regular Medicaid.
    (ii) A woman who is eligible for continued coverage under this 
section retains her existing status as a mandatory categorically needy, 
optional categorically needy, or medically needy recipient, even though 
she is entitled to the services that are available to a mandatory 
categorically needy pregnant woman described in Sec. 435.118. As a 
result, she must continue to meet eligibility requirements associated 
with her status (for example, she may have to meet a spenddown if she 
is medically needy), except that any increase in income will have no 
effect on her eligibility.
    23. New Secs. 435.932 and 435.935 are added under undesignated 
center heading ``Furnishing Medicaid'' under subpart J to read as 
follows:


Sec. 435.932  Issuance of eligibility cards to homeless individuals.

    (a) The agency must establish a method for making available to 
individuals who do not reside at a permanent dwelling or at a fixed 
address cards that evidence Medicaid eligibility.
    (b) The State plan must describe the method.


Sec. 435.935  Enhancing pregnancy outcomes.

    The State plan must--
    (a) Define a high-risk pregnancy;
    (b) Describe the process the State uses to identify, during the 
pregnancy, high-risk women; and
    (c) Specify the steps that providers and other organizations and 
agencies involved in the delivery of services to pregnant women will 
take to ensure that these high-risk Medicaid recipients receive 
appropriate services designed to enhance the probability of a healthy, 
full-term pregnancy, uncomplicated delivery, and a healthy outcome for 
both mother and child.
    24. Section 435.1001 is amended by revising paragraph (a) to read 
as follows:


Sec. 435.1001  FFP for administration.

    (a) FFP is available in the necessary administrative costs the 
State incurs in--
    (1) Determining and redetermining Medicaid eligibility and in 
providing Medicaid to eligible individuals; and
    (2) Determining presumptive eligibility for pregnant women and in 
providing ambulatory prenatal care to presumptively eligible women.
* * * * *
    25. Section 435.1002 is amended by revising paragraph (a) and 
adding new paragraphs (c) and (d) to read as follows:


Sec. 435.1002  FFP for services.

    (a) Except for the limitations and conditions specified in 
paragraphs (c) and (d) of this section and in Secs. 435.1007 and 
435.1008, FFP is available in expenditures for Medicaid services for 
all recipients whose coverage is required or allowed under this part.
* * * * *
    (c) FFP is available in expenditures for ambulatory prenatal care 
services covered under the plan (as defined in Sec. 440.172) that are 
furnished to pregnant women who are determined by a qualified provider 
to be presumptively eligible when these services are furnished during a 
presumptive eligibility period by a provider that is eligible for 
payment under the State plan, regardless of whether or not the women 
are determined eligible for regular Medicaid following the presumptive 
eligibility period.
    (d) FFP is not available in expenditures for services provided to 
low-income pregnant women and infants covered as optional categorically 
needy under Sec. 435.228 if the State has in effect under its AFDC plan 
payment levels (that is, the amount of the AFDC payment for basic needs 
made to a family with no other income) that are less than those in 
effect under its AFDC plan on July 1, 1987.

PART 436--ELIGIBILITY IN GUAM, PUERTO RICO, AND THE VIRGIN ISLANDS

    C. Part 436 is amended as follows:
    1. The authority citation for part 436 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

    2. The heading of subpart C is revised to read as follows:

Subpart C--Options for Coverage of Individuals as Categorically 
Needy and as Special Groups

    3. In Sec. 436.2, paragraph (a) introductory text is republished 
and several entries are added in numerical order to read as follows:


Sec. 436.2  Basis.

    (a) This part interprets the following sections of the Act and 
public laws which state eligibility requirements and standards:
* * * * *
1902(c)  Conditions of State plan approval--States must maintain AFDC 
payment levels and not require that section 1902(1) low-income pregnant 
women, infants, and children apply for AFDC benefits.
* * * * *
1902(e)(6)  Mandatory continuation of Medicaid for pregnant women 
without consideration of changes in income up to a specified period 
after pregnancy ends.
1902(e)(7)  Continuation of Medicaid eligibility for certain infants 
and children receiving inpatient care.
1902(l)  Description of pregnant women, infants, and children with 
incomes related to the Federal poverty income level.
1902(m)  Description of aged and disabled individuals with incomes at 
or below the Federal poverty income level.
* * * * *
1902(r)(2)  Use of less restrictive income and resource methodologies 
than those under the cash assistance programs in determining financial 
eligibility for specified categorically needy and medically needy 
groups.
* * * * *
1920  Optional presumptive eligibility period for pregnant women.
* * * * *
    4. In Sec. 436.120, paragraph (c) introductory text is republished 
and paragraphs (c) (1) and (2) are revised to read as follows:


Sec. 436.120  Qualified pregnant women and children who are not 
qualified family members.

* * * * *
    (c) The agency must provide Medicaid to children who meet all of 
the following criteria:
    (1) They are born after September 30, 1983, or at State option, an 
earlier designated date;
    (2) They are under 19 years of age; and
* * * * *
    5. Section 436.124 is revised to read as follows:


Sec. 436.124  Newborn children.

    (a) The agency must provide categorically needy Medicaid 
eligibility to a child born to a woman who is eligible as categorically 
needy and is receiving Medicaid on the date of the child's birth. The 
child is deemed to have applied and been found eligible for Medicaid on 
the date of birth and remains eligible as categorically needy for one 
year so long as the woman remains eligible or (with respect to infants 
born on or after January 1, 1991) would have remained eligible if still 
pregnant and the child is a member of the woman's household. If the 
mother's basis of eligibility changes to medically needy, the child is 
eligible as medically needy under Sec. 436.301(b)(1)(iii).
    (b) An infant is considered to be a member of his or her mother's 
household for so long as he or she is continuously hospitalized after 
birth, unless the mother has legally relinquished control of the child 
or the State has established that she has abandoned the child. After 
the infant's release from the hospital, or in situations not involving 
hospitalization, States must apply the AFDC rules to determine if an 
infant (who is not an SSI beneficiary) is a member of his or her 
mother's household.
    6. A new Sec. 436.226 is added under the undesignated center 
heading ``Options for Coverage of Families and Children and the Aged, 
Blind, and Disabled, Including Pregnant Women'' (as published on 
January 19, 1993 (58 FR 4935)) under subpart C to read as follows:


Sec. 436.226  Pregnant women, infants, and children with family incomes 
at a percentage of Federal poverty income guidelines.

    (a) Groups of pregnant women, infants and childen. Subject to the 
conditions specified in paragraphs (b) and (c) of this section, the 
agency may provide Medicaid to any of the following groups of 
individuals who are not eligible as mandatory categorically needy:
    (1) Pregnant women and women during the 60-day period beginning on 
the last day of pregnancy with family incomes that are at or below 185 
percent of the Federal poverty income guidelines for a family of the 
size involved, or at or below any lesser percentage that the agency 
chooses.
    (2) Infants under 1 year of age with family incomes that are at or 
below 185 percent of the Federal poverty income guidelines for a family 
of the size involved, or at or below any lesser percentage that the 
agency chooses.
    (3) Children with family incomes at or below 133 percent of the 
Federal poverty income guidelines who are age 1 but have not attained 
age 6.
    (4) Children with family incomes at or below 100 percent of the 
Federal poverty income guidelines who are born after September 30, 1983 
and who are age 6 but have not attained age 19.
    (b) Conditions of eligibility. Individuals described in paragraph 
(a) of this section may be eligible if they--
    (1) Have family income that meets the applicable standard 
established in accordance with Sec. 436.610(b); and
    (2) At State option, have resources that meet the applicable 
standard established in accordance with Sec. 436.610(c).
    (c) Eligibility period for women. If the agency chooses to provide 
Medicaid to women specified in paragraph (a)(1) of this section, it 
must provide Medicaid to such women, as long as they continue to meet 
the criteria described in paragraph (b) of this section, during the 
pregnancy and during a postpartum period that begins on the last day of 
the pregnancy and continues for 60 days. Sections 436.122 and 
435.918(c)(2) of this subchapter may also apply to these women. 
Services to these women are limited to services specified in 
Sec. 440.250(q) of this subchapter.
    (d) Eligibility period for infants under age 1. If the agency 
chooses to provide Medicaid to infants specified in paragraph (a)(2) of 
this section, it must provide Medicaid to such infants, as long as they 
continue to meet the criteria described in paragraph (b) of this 
section, until they reach age 1. Section 436.124 may also apply to 
these infants.
    (e) Eligibility period for children age 1 up to age 6. If the 
agency chooses to provide Medicaid to children specified in paragraph 
(a)(3) of this section, it must provide Medicaid to such children, as 
long as they continue to meet the criteria described in paragraph (b) 
of this section, until they reach age 6.
    (f) Eligibility period for children age 6 up to age 19. If the 
agency chooses to provide Medicaid to children specified in paragraph 
(a)(4) of this section, it must provide Medicaid to such children, as 
long as they continue to meet the criteria described in paragraph (b) 
of this section, until they reach age 19.
    (g) The provisions of this section apply to Guam, Puerto Rico, the 
Virgin Islands, the Northern Mariana Islands, and America Samoa.
    7. A new Sec. 436.235 is added under the undesignated center 
heading ``Options for Coverage of the Aged, Blind, and Disabled'' under 
subpart C to read as follows:


Sec. 436.235  Aged and disabled individuals with incomes at or below 
Federal poverty income guidelines.

    (a) The agency may provide Medicaid to individuals who are not 
eligible as mandatory categorically needy and who--
    (1) Are 65 years of age or older, or are disabled as determined 
under section 1614 of the Act;
    (2) Have family income that meets a standard established by the 
State at a level that is no more than 100 percent of the Federal 
poverty income level in accordance with Sec. 436.615(b); and
    (3) Have resources that meet the standard established in accordance 
with Sec. 436.615(c).
    (b) An agency that elects the option under paragraph (a) of this 
section must provide Medicaid to both aged and disabled groups of 
individuals.
    8. A new undesignated center heading and Sec. 436.250 is added at 
the end of subpart C to read as follows:

Options for Coverage of Special Groups


Sec. 436.250  Pregnant women eligible during a presumptive eligibility 
period.

    (a) The agency may provide pregnant women with eligibility for 
ambulatory prenatal care services on the basis of a presumptive 
eligibility determination made by a qualified provider if--
    (1) The woman's estimated gross family income appears to meet the 
highest applicable income criteria under the State's approved plan that 
are most likely to be used if the woman applied for regular Medicaid;
    (2) The provider making the determination meets the requirements of 
Sec. 440.172(c) of this subchapter; and
    (3) The agency has established procedures to ensure that the 
screening and application requirements and procedures of Sec. 435.911 
of this subchapter are met.
    (b) Pregnant women who are determined eligible for ambulatory 
prenatal care services under this section are eligible during a 
presumptive period in accordance with Sec. 435.911(e).
    9. In Sec. 436.301, paragraphs (b) introductory text and (b)(1) 
introductory text are republished and paragraph (b)(1)(iii) is revised 
to read as follows:


Sec. 436.301  General rules.

* * * * *
    (b) If the agency chooses this option, the following provisions 
apply:
    (1) The agency must provide Medicaid to the following individuals 
who meet the requirements of paragraph (a) of this section:
* * * * *
    (iii) All newborn children born to a woman who is eligible as 
medically needy and is receiving Medicaid on the date of the child's 
birth. The child is deemed to have applied and been found eligible for 
Medicaid on the date of birth and remains eligible as medically needy 
for one year so long as the woman remains eligible or (with respect to 
infants born on or after January 1, 1991) would have remained eligible 
if still pregnant and the child is a member of the woman's household 
(as determined in accordance with Sec. 436.124(b)). If the woman's 
basis of eligibility changes to categorically needy, the child is 
eligible as categorically needy under Sec. 436.124.
* * * * *
    10. Section 436.403 is amended by redesignating paragraphs (i) (1), 
(2), and (3) as paragraphs (i) (2), (3), and (4), respectively, and 
adding a new paragraph (i) (1) to read as follows:


Sec. 436.403  State residence.

* * * * *
    (i) Specific prohibitions.
    (1) The agency may not deny Medicaid eligibility to an otherwise 
qualified resident of the State because the individual's residence is 
not maintained permanently or at a fixed address.
* * * * *
    11. Section 436.500 is revised to read as follows:


Sec. 436.500  Scope.

    This subpart prescribes categorical requirements for determining 
the eligibility and continuing eligibility of both categorically needy 
and medically needy individuals specified in subparts B, C, and D of 
this part.
    12. Section 436.520 is revised to read as follows:


Sec. 436.520  Age requirements for the aged and children.

    (a) In determining or redetermining eligibility, the agency must 
not impose an age requirement of more than 65 years.
    (b) The agency must continue eligibility until the end of the 
inpatient stay for infants and children who are eligible under 
Sec. 436.120 or Sec. 436.226, who are receiving covered inpatient 
services on the date that they reach the age limit for inclusion under 
the State plan, and who would remain eligible under Sec. 436.120 or 
Sec. 436.226 but for attainment of that maximum age.
    13. Section 436.601 is amended by revising paragraph (b), the 
heading of paragraph (d), and paragraph (d)(1)(ii) (the text of 
paragraph (d)(1) introductory text is republished) to read as follows:


Sec. 436.601  Application of financial eligibility methodologies.

* * * * *
    (b) Basic rule for use of cash assistance methodologies. Except as 
specified in paragraphs (c), (d), and (e) of this section and in 
Secs. 436.610, and 436.615, in determining financial eligibility of 
individuals as categorically and medically needy, the agency must apply 
the financial methodologies and requirements of the cash assistance 
program that is most closely categorically related to the individual's 
status.
* * * * *
    (d) Use of less restrictive methodologies than those under cash 
assistance programs.
    (1) At State option, and subject to the conditions of paragraphs 
(d)(2) through (d)(5) of this section, the agency may apply income and 
resource methodologies that are less restrictive than the cash 
assistance methodologies in determining eligibility of the following 
groups:
* * * * *
    (ii) Low-income pregnant women, infants, and children under 
Secs. 436.226 and in section 1902(a)(10)(A)(i)(IV), section 
1902(a)(10)(A)(i)(VI), section 1902(a)(10)(A)(i)(VII), and section 
1902(a)(10)(A)(ii)(IX) of the Act;
* * * * *
    14. Section 436.608 is amended by adding a new paragraph (c) to 
read as follows:


Sec. 436.608  Applications for other benefits.

* * * * *
    (c) The agency may not require any pregnant woman, infant, or child 
eligible under Sec. 436.226 to apply for AFDC benefits as a condition 
of applying for or receiving Medicaid.
    15. A new Sec. 436.612 is added to subpart G to read as follows:


Sec. 436.612  Income and resource standards and methodologies: Pregnant 
women, infants, and children with family incomes at a percentage of the 
Federal poverty income guidelines.

    (a) General rules.
    (1) The agency must determine income and resource eligibility of 
women, infants, and children under Sec. 436.226 in accordance with the 
requirements of this section.
    (2) For purposes of this section, family size includes the unborn 
child and other members of the Medicaid budgetary unit.
    (b) Establishing the income standard.
    (1) For optional groups of pregnant women and infants under 
Sec. 436.226(a)(1) and (2), the agency may establish separate income 
standards or use a single income standard.
    (2) For the optional groups of children under Sec. 436.226(a) (3) 
and (4), the agency must establish separate income standards.
    (3) The standards must be based on family size--
    (i) For pregnant women, at a level that covers family incomes that 
are at or below 185 percent (or at or below some lesser percent that 
the agency chooses) of the Federal poverty income guidelines for a 
family of the size involved;
    (ii) For infants under 1 year of age, at a level that covers family 
incomes that are at or below 185 percent (or at or below some lesser 
percent that the agency chooses) of the Federal poverty income 
guidelines for a family of the size involved;
    (iii) For children age 1 up to age 6, at a level that covers family 
incomes that are at or below 133 percent of the Federal poverty income 
guidelines for a family of the size involved;
    (iv) For children born after September 30, 1983 who are 6 years of 
age up to age 19 years of age, at a level that covers family incomes 
that are at or below 100 percent of the Federal poverty income 
guidelines for a family of the size involved.
    (c) Establishing the resource standard. At State option, the agency 
may apply resource standards in determining financial eligibility that 
are no more restrictive than the SSI standard for pregnant women and no 
more restrictive than the AFDC standard for infants and children.
    (d) Methodologies for determining income and resources. (1) Except 
as specified in paragraph (d) (2) through (4) of this section, in 
determining family income and resources, the agency must use the 
methodologies established in accordance with Sec. 436.601.
    (2) In determining family income, the agency must use the income 
methodologies of the approved AFDC plan or the State's title IV-E 
adoption assistance and foster care plan as appropriate, or it may use 
any less restrictive methodologies specified in the State plan which 
conform with Sec. 436.601(d). Methodologies include, but are not 
limited to, those used for disregarding income.
    (3) In determining countable income, the agency may not deduct 
costs incurred for medical care or any other type of remedial care to 
reduce income to the level of the standard established.
    (4) The resource methodologies used in determining financial 
eligibility of pregnant women must not be more restrictive than the 
methodologies applied under SSI. The resource methodologies used in 
determining financial eligibility of infants and children must not be 
more restrictive than the methodologies applied under the State's 
approved AFDC plan.
    (5) In determining the financial responsibility of relatives, the 
State must use the requirements of Sec. 436.602.
    (e) State plan requirements. The State plan must--
    (1) Specify the income standards; and
    (2) If the State elects to apply resource standards, specify those 
resource standards.
    16. A new Sec. 436.615 is added to subpart G to read as follows:


Sec. 436.615  Income and resource standards and methodologies: Aged and 
disabled individuals with incomes at or below Federal poverty income 
guidelines.

    (a) General rule. If the agency provides Medicaid to aged and 
disabled individuals under Sec. 436.235, it must determine financial 
eligibility in accordance with the requirements of this section.
    (b) Establishing the income standard. (1) The agency must establish 
and apply an income standard at a level that does not exceed 100 
percent of the Federal poverty income guidelines applicable to a family 
of the size involved.
    (2) For purposes of this section, family of the size involved is 
based on the SSI concept of eligibility for an individual as an 
individual or as part of a couple. If two individuals are married and 
eligible under section 1902(m), their income will be compared to the 
Federal poverty income level for a family of two. In all other 
situations, eligibility will be determined on an individual basis, 
using the poverty level for one, with deeming of income as appropriate 
(under SSI deeming rules that do not conflict with title XIX of the 
Act).
    (c) Establishing the resource standard. The agency must apply a 
resource standard that is either--
    (1) The SSI resource standard; or
    (2) If the State has a medically needy program that uses a higher 
resource standard, at State option, the resource standard applied to 
the medically needy.
    (d) Methodologies for determining income and resources. (1) Subject 
to the provisions of paragraph (d) (2) through (4) of this section, the 
agency must use the methodologies applied under sections 1612 and 1613 
of the Act in determining countable income and resources or may instead 
use any less restrictive income and resource methodologies specified in 
the State plan in accordance with Sec. 436.601. Methodologies include, 
but are not limited to, those used in disregarding income.
    (2) The agency may not deduct from income the costs incurred for 
medical care or any other type of remedial care to reduce the 
individual's income to the established income standard, except as 
specified in paragraph (d)(3) of this section.
    (3) For severely disabled individuals who work, the agency may 
deduct the reasonable costs for attendant care services, medical 
devices, equipment, prostheses, and similar items and services 
(generally not including routine drugs or routine medical services) 
that are necessary in order for the individual to work.
    (4) In determining the financial responsibilities of relatives, the 
agency must apply the requirements of Sec. 436.602.
    (5) In determining eligibility under this section for an individual 
entitled to monthly social security cash benefits, Title II COLA 
increases must be disregarded from December of each year through the 
month after the month in which the Federal poverty guideline for the 
next year is published. During that period, the poverty level for the 
previous year will be used for these individuals.
    (e) State plan requirement. The State plan must specify the income 
standard and the resource standard by the family size involved.
    17. Section 436.1001 is amended by revising paragraph (a) to read 
as follows:


Sec. 436.1001  FFP for administration.

    (a) FFP is available in the necessary administrative costs the 
State incurs in--
    (1) Determining and redetermining Medicaid eligibility and in 
providing Medicaid to eligible individuals; and
    (2) Determining presumptive eligibility for pregnant women and in 
providing ambulatory prenatal care to presumptively eligible women.
* * * * *
    18. Section 436.1002 is amended by revising paragraph (a) and 
adding new paragraphs (c) and (d) to read as follows:


Sec. 436.1002  FFP for services.

    (a) Except for the limitations and subject to the conditions 
specified in paragraphs (c) and (d) of this section, FFP is available 
in expenditures for Medicaid services for all recipients whose coverage 
is required or allowed under this part.
* * * * *
    (c) FFP is available in expenditures for ambulatory prenatal care 
services covered by the plan that are furnished to pregnant women who 
are determined by a qualified provider to be presumptively eligible, 
when these services are furnished during a presumptive eligibility 
period by a provider that is eligible for payment under the State plan, 
regardless of whether or not the women are determined eligible for 
Medicaid following the presumptive eligibility period.
    (d) FFP is not available in expenditures for services provided to 
low-income pregnant women and infants covered under Sec. 436.226(a) (1) 
and (2) if the State has in effect under its AFDC plan payment levels 
(that is, the amount of the AFDC payment for basic needs made to a 
family with no other income) that are less than those in effect under 
its AFDC plan on July 1, 1987.

PART 440--SERVICES: GENERAL PROVISIONS

    D. Part 440 is amended as follows:
    1. The authority citation for part 440 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).

    2. Section 440.1 is revised to read as follows:


Sec. 440.1  Basis and purpose.

    (a) This subpart interprets--
    (1) Section 1905(a) of the Act, which lists the services included 
in the term ``medical assistance'';
    (2) Sections 1905 (c), (d), (f) through (i), (l), (m), and (p)(3) 
of the Act, which define services or specify conditions for provision 
of some of those services; and
    (3) Section 1915(c) of the Act, which lists as ``medical 
assistance'' certain home and community-based services provided under 
waivers under that section to individuals who would otherwise require 
institutionalization.
    (b) This subpart also interprets--
    (1) Section 1905(a)(3) of the Act with respect to laboratory 
services (Secs. 447.10 and 447.342 also contain related provisions on 
laboratory services);
    (2) Section 1913 of the Act with respect to ``swing-bed'' services 
(Sec. 447.280 of this subchapter and Sec. 482.66 of this chapter also 
contain related provisions); and
    (3) Section 1920 of the Act which specifies that a State plan may 
provide for making ambulatory prenatal care available to presumptively 
eligible pregnant women during a prescribed presumptive period. The 
care must be covered under the State plan and be furnished by providers 
who are eligible for payments under the State plan.
    3. A new Sec. 440.172 is added to read as follows:


Sec. 440.172  Ambulatory prenatal care.

    (a) Ambulatory prenatal care means services covered under the plan 
that--
    (1) Are related to pregnancy or to any other condition that may 
complicate pregnancy;
    (2) Are furnished to pregnant women who have been determined 
presumptively eligible by a qualified provider;
    (3) Are furnished during the presumptive eligibility period;
    (4) Are furnished by a provider that is eligible to receive payment 
under the State plan; and
    (5) Are furnished to pregnant women as outpatients as defined in 
Sec. 440.2.
    (b) Ambulatory prenatal care does not include procedures to deliver 
or remove an embryo or fetus from the mother or any procedures 
following that delivery or removal.
    (c) For purposes of paragraph (a) of this section, qualified 
provider means a provider who--
    (1) Is eligible to receive payment under the approved plan;
    (2) Furnishes such types of services as outpatient hospital 
services as defined in Sec. 440.20(a), rural health clinic services (if 
provided for in the State plan) as defined in Sec. 440.20(b), or clinic 
services as defined in Sec. 440.90;
    (3) Is determined by the agency to be capable of making presumptive 
eligibility determinations for pregnant women based on family income; 
and
    (4) Meets one of the following conditions:
    (i) Receives funds for migrant health centers or community health 
centers under sections 329, 330, or 340 of the Public Health Service 
Act; receives funds for the maternal and child health services block 
grant program (title V of the Act); or receives funds under title V of 
the Indian Health Care Improvement Act.
    (ii) Participates in the Special Supplemental Food Program for 
Women, Infants, and Children under section 17 of the Child Nutrition 
Act of 1966 or the Commodity Supplemental Food Program under section 
4(a) of the Agriculture and Consumer Protection Act of 1973.
    (iii) Participates in a State perinatal program; or
    (iv) Is the Indian Health Service or is a health program or 
facility operated by a tribe or tribal organization under the Indian 
Self-Determination Act.
    4. Section 440.250 is amended by adding new paragraph (q) to read 
as follows:


Sec. 440.250  Limits on comparability of services.

* * * * *
    (q) Services to pregnant women with incomes related to the Federal 
poverty income guidelines who are eligible under Secs. 435.l18, 
435.228, and 436.226 must be limited to services related to pregnancy 
(including prenatal, delivery, family planning, and postpartum 
services) and to services for the treatment of conditions which may 
complicate pregnancy. Any different treatment provided under this 
section for pregnant women does not require or permit such treatment 
for other Medicaid-eligible individuals.

PART 447--PAYMENT FOR SERVICES

    E. Part 447 is amended as follows:
    1. The authority citation for part 447 continues to read as 
follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).


Sec. 447.59  [Redesignated]

    2. Part 447 is amended by redesignating Sec. 447.59 as Sec. 447.80 
under subpart A.
    3. Section 447.50 is revised to read as follows:


Sec. 447.50  Cost sharing: Basis and purpose.

    (a) Basis. Sections 1902(a)(14) and 1916 of the Act permit States 
to require certain recipients to share some of the costs of Medicaid by 
imposing upon them such payments as enrollment fees, premiums, 
deductibles, coinsurance, copayments, or similar cost-sharing charges.
    (b) Purpose. For States that impose cost sharing payments, 
Secs. 447.51 through 447.85 prescribe State plan requirements and 
options for cost sharing, specify the standards and conditions under 
which States may impose cost-sharing, set forth minimum amounts and the 
methods for determining maximum amounts, and prescribe conditions for 
FFP that relate to cost-sharing requirements.
    4. Section 447.51 is revised to read as follows:


Sec. 447.51  Requirements and options.

    (a) The plan must provide that the Medicaid agency does not impose 
any enrollment fee, premium, or similar charge upon categorically needy 
individuals, as defined in Secs. 435.4 and 436.3 of this subchapter, 
for any services available under the plan, except as specified in 
paragraph (b) of this section.
    (b) The plan may impose a monthly premium on optional categorically 
needy poverty level pregnant women and infants under age 1, as defined 
in Secs. 435.228 and 436.226 of this subchapter, if the requirements of 
Sec. 447.60 are met.
    (c) The plan may impose an enrollment fee, premium, or similar 
charge on medically needy individuals, as defined in Secs. 435.4 and 
436.3 of this subchapter, for any services available under the plan.
    (d) For each charge imposed under paragraph (c) of this section, 
the plan must specify--
    (1) The amount of the charge;
    (2) The period of liability for the charge; and
    (3) The consequences for an individual who does not pay.
    (e) The plan must provide that any charge imposed under paragraph 
(c) of this section is related to total gross family income as set 
forth under Sec. 447.52.
    5. In Sec. 447.52, the cross-reference in the introductory text to 
``Sec. 447.51(d)'' is revised to read ``Sec. 447.51(e)''.
    6. A new Sec. 447.60 is added to read as follows:


Sec. 447.60  Imposition of premium on low-income pregnant women and 
infants under age 1.

    (a) Basic option. The plan may provide for imposing a monthly 
premium on either the optional group of pregnant women or the optional 
group of infants under age 1, or both, who are eligible for and 
receiving Medicaid under Secs. 435.228 and 436.226 of this subchapter 
if their family income equals or exceeds 150 percent of the Federal 
poverty income guidelines for a family of the size involved. Family 
income is determined in accordance with Secs. 435.612 and 436.612 of 
this subchapter.
    (b) Premium limits. If a monthly premium is imposed under the 
option under paragraph (a) of this section, the premium amount may not 
be more than 10 percent of the amount by which the family income, after 
deducting expenses for the care of a dependent child, exceeds 150 
percent of the Federal poverty income guidelines.
    (c) Prepayment prohibited. The agency must not require prepayment 
of the premium imposed under this section.
    (d) Termination for nonpayment of premium. The agency may terminate 
the eligibility of an individual for Medicaid if the individual fails 
to pay the premium for a period of at least 60 calendar days from the 
date due. The agency must comply with the requirements of part 431, 
subpart E, of this subchapter before terminating an individual.
    (e) Waiver of premium payment. The agency may waive payment of the 
premium if it determines that requiring the payment of the premium 
would create an undue hardship on the individual.
    (f) Method of paying premium. The agency may use State or local 
funds under other programs to pay for premiums imposed under this 
section. These funds do not count as income to the individual for whom 
the payment is made.
    (g) State plan requirement. For premiums imposed under this 
section, the plan must specify--
    (1) The method by which premiums are determined;
    (2) The period of time in which an individual has to pay a premium 
before Medicaid is terminated;
    (3) The consequences for an individual who does not pay the premium 
timely; and
    (4) Whether the agency will waive payment of premiums because of 
undue hardship on an individual.
    7. Under the undesignated center heading ``Federal Participation,'' 
a new Sec. 447.85 is added to read as follows:


Sec. 447.85  FFP for ambulatory prenatal care.

    If a State plan provides for coverage of ambulatory prenatal care, 
as defined in Sec. 440.172 of this subchapter, to pregnant women during 
a presumptive eligibility period, FFP is available for payments made on 
the woman's behalf for services covered under the plan that are 
furnished during that period, regardless of whether the pregnant woman 
is determined to be eligible for Medicaid after the presumptive 
eligibility period ends.

(Catalog of Federal Domestic Assistance Program No. 93.778 Medical 
Assistance Programs)

    Dated: August 27, 1993.
Bruce C. Vladeck,
Administrator, Health Care, Financing Administration.

    Dated: November 28, 1993.
Donna E. Shalala,
Secretary.
[FR Doc. 94-6540 Filed 3-22-94; 8:45 am]
BILLING CODE 4120-01-P