August 19, 2008

Dear Partners,

We wanted to update you on the latest news concerning the August 17th Directive.

CMS did not issue an official letter to Medicaid Directors last week regarding the enforcement of the August 17th Directive. Instead, they released a statement to the press asserting that "at this time" states will not be penalized for failing to comply with the Directive's requirements. In their brief statement (see below), CMS made no mention of overturning the Directive itself, only of lifting the deadline for states to meet its terms.

CMS Statement

"HHS and CMS continue to work with States that are already providing coverage under the SCHIP program to children in families with effective family income levels above 250 percent of the federal poverty level. At this time, we are not taking compliance action. Additionally, as we clarified in the August 17th, 2007 letter to State Health Officials (SHO), even under the compliance strategies discussed there, no currently enrolled children will be disenrolled. We are determining whether the relevant states are in compliance with the existing requirements, as also clarified in the August 17th, 2007 letter. Moreover, we will continue to assist the States in developing policies that will ensure that the most vulnerable, low- income children are covered first, without moving them from private to public coverage."

On Friday, Senate Finance Committee Chair Max Baucus (D - MT) and Senator Jay Rockefeller (D - WV) appealed to CMS to withdraw the Directive, which had been set to take effect on Monday.

Even though states do not have to meet these requirements at the present time, we know that the existing Directive language is prohibiting some states from covering children and could be enforced at any point. For these reasons, this issue will remain a top priority for the Alliance. We encourage you to continue conversations with your Congressional Members about the need to withdraw the Directive so that states can move forward without concern that it will be enforced at a later time.

Thank you for your continued support. We will continue to keep you informed as we receive more information. And as always, please feel free to contact me (617-275-2929, arosenthal@communitycatalyst.org) directly with questions.

Sincerely,

Amy Rosenthal
Project Director