Home » Blog, Health Financing » The Search for CPEs

The Search for CPEs

California’s new section 1115 waiver allows counties to secure a federal match for care to their medically indigent adult (MIA) population, those adults with incomes less than 133% of the federal poverty level (FPL).  While this federal match is uncapped, the limiting factor is the availability of certified public expenditures (CPEs).

CPEs are the required match under the waiver for coverage of MIAs. CPEs can come from a county, city, special purpose district, Indian tribe or other governmental unit that has taxing authority and direct access to revenues.[1] This also includes state university teaching hospitals with direct appropriations from the state.[2] The funds must be “certified,” meaning that the public contributing agency certifies them as expenditures eligible for federal financial participation (FFP).[3] A match can also include philanthropic donations and provider assessments to the extent they fully comply with federal requirements.[4] In general, federal funds cannot be used to match federal funds; in other words, a hospital that receives federal DSH funds cannot then turn around and use those funds as the match for the federal waiver.[5]

State, county and local funds currently pay for care to the uninsured in myriad ways. Counties should review what these funds are and how they are currently being spent to see whether they qualify for matching under the waiver. Potential CPEs include:

  • County health, mental health, public health and substance abuse unmatched funds spent on care to indigent adults – Counties operate health, mental health, public health and substance abuse programs. Some portions of each of these program expenditures are for care to low-income uninsured adults.[6] To qualify for FFP, the expenditures must be for a particular segment of the uninsured — low income (below 133% of FPL) uninsured adults (18-64) who are US citizens or legal permanent residents.
  • UC and District Hospitals Care to MIAs – UC and District hospitals each provide inpatient, outpatient and emergency hospital care to uninsured low-income adults. Those expenditures could qualify for a federal match assuming they are for the target population.
  • City public health departments’ preventive health services – The public health departments in the cities of Long Beach, Berkeley and Pasadena provide preventive health services to county residents. Those expenditures could be certified as public expenditures and qualify for a federal match assuming they are linked to the target population.
  • SB 12 (Maddy) and Emergency Medical Services (EMS) funds that reimburse care to indigent uninsured adults – SB 12 (Maddy) and EMS funds pay for uninsured, uncompensated emergency care to private hospitals and doctors. While the programs are limitedin the amount of revenues, [7] their expenditures could be certified if the patients go through a process of assessing their income, age and citizenship or lawful immigration status necessary to qualify for a federal match.
  • CSU, UC, community college and K-12 health care to low-income students over 18 – Public funds pay for student health services in public college settings. Most college students are over 18 years of age, and many are sufficiently low income to qualify to the extent they are uninsured either in part or in whole.[8] Student health services would need to have a process in place to determine patient income eligibility and certify costs of treating qualified patients. There are a few high school students over age 18 whose medical care in school health settings may qualify as a CPE for purposes of the waiver.
  • Victims of violent crime funds that reimburse care to indigent adults – California has a victim of violent crimes fund that pays for medical expenses of uninsured victims of violent crimes; to be covered, the medical expenses must be related to the crime.[9] While the program is limited, many of the victims may meet the income, age and citizenship or residency requirements to qualify for a federal match.
  • Fire department paramedic and medical transportation care to indigent adults – Fire departments provide medical care to the uninsured in the form of paramedic and medical transportation services during serious, often life threatening emergencies. These local public expenditures could be certified and eligible for a federal match for patients who meet the age, income, citizenship or legal residency requirements of the waiver.
  • Hospital funds from state, counties, cities or philanthropies that reimburse care to indigent adults – Private hospitals patch together funds from a variety of sources, including federal DSH, the private cost shift, county, state, local and philanthropic[10] revenues to help defray the costs of care to the uninsured. Hospitals may wish to review these finances, determine which may qualify for a federal match and work with their county to secure the match.
  • Provider fees – California hospitals and health plans have agreed to assessments approved by the Department of Health and Human Services that help support the Medi-Cal program.[11] The terms and conditions of the waiver[12] are explicit in allowing the use of the hospital assessment to subsidize increased reimbursement rates for emergency services under the waiver to qualified individuals.

  • Clinic funds from the state, county or cities used for care to indigent adults – Clinics patch together funds from a variety of sources, including federal 330 grants, county, state, local and philanthropic[13] revenues to help defray the costs of care to the uninsured. Clinics may wish to review these finances, determine which may qualify for a federal match and work with their county to secure the match.
  • Sheriff and correctional facility funds that pay for health care to indigent adult detainees – Medicaid generally excludes coverage of health care for prison inmates.[14] There is an exception for individuals who have been detained as material witnesses or pending a trial.[15]
  • Indian health services to indigent adults – Indian health services paid for by Indian tribes to low income adults may be eligible for a match to the extent that there are unmatched tribal, state, county or local funds for care to qualifying individuals.

[1] 42 CFR 433.50

[2] Ibid.

[3] 42 CFR 433.51

[4] 42 CFR 433.54 and 433.55

[5] Ibid.

[6] In some programs, like the small CMSP county health programs or the Orange and San Diego indigent health programs, all the expenditures appear to qualify as CPE. In others, counties will need to distinguish between care to insured and uninsured, between care to US citizens and most legal residents that are eligible for the match and care to the undocumented that are ineligible for the match.

[7] In Los Angeles, the physician component was roughly $30 million.

[8] Students with private health insurance may be ineligible, depending on the scope of covered services.

[9] http://www.vcgcb.ca.gov/victims/

[10] See 42 CFR 433.54 and 433.52 for the rules on securing a match for donations, which include, if properly structured, provider donations. Hospitals typically report their philanthropic donations for indigent care under the OSHPD reporting category for “other indigent”. Hospitals may wish to use the county as aggregator and certifier of these expenses.

[11] See 42 CFR 433.55, 433.56, 433.68 and 433.72 for the rules on heath care related taxes/assessments/fees.

[12] Center for Medicaid and Medicare Services, California Department of Health Care Services, Bridge to Reform Demonstration, 11-W-00193/9 (November 2, 2010) Section 63.

[13] See 42 CFR 433.54 and 433.52 for the rules on securing a match for donations. Clinics typically report their philanthropic donations for indigent care under the OSHPD reporting category for “donations”. Their county, state and local funds may be reported as “other county”, “other state”, and “county/local grants and contracts,” respectively. Clinics may wish to use the county as aggregator and certifier of these expenses.

[14] See 42 CFR 435.1008 and 42 USC 1396d(a)(27).

[15] 42 CFR 435.1009

Full text download
The Search for CPEs The Search for CPEs.pdf