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Medicaid and Children’s Health Insurance Program (CHIP)

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The National Academy for State Health Policy (NASHP) compiled a comprehensive list of state healthcare policies to address lead poisoning prevention and treatment.1 The resource highlights policies specific to Medicaid. Below is an overview of the primary Medicaid levers that can be utilized to address lead.

EPSDT Benefit

All children enrolled in Medicaid are eligible for the Early Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit,2 which mandates the provision of blood lead screening tests to all children at 12 and 24 months of age. Also, any child between 24 and 72 months who has not previously received a blood lead screening test must receive one.3 According to the specific guidelines, as noted on the Medicaid website for EPSDT, “state Medicaid agencies are required to:

  • Inform all Medicaid-eligible individuals under age 21 that EPSDT services are available and of the need for age-appropriate immunizations;
  • Provide or arrange for the provision of screening services for all children;
  • Arrange (directly or through referral) for corrective treatment as determined by child health screenings; and
  • Report EPSDT performance information annually via Form CMS-416.” If states have data to support discontinuing blood lead screening for every child covered by Medicaid, states may request approval from the Centers for Medicare and Medicaid services (CMS) to implement “targeted lead screening programs.” CMS and the Centers for Disease Control and Prevention have provided guidance for states interested in making this transition.4

Managed Care

Coverage for lead screening and treatment services beyond the EPSDT benefit varies across specific state plans and these services are often overseen or provided by managed care organizations (MCOs). Contracting directly with state Medicaid agencies, MCOs are health plans that receive per member per month capitation payments to provide health benefits and manage its membership’s healthcare utilization, quality, and costs. MCOs can directly provide case management services or contract out for them. Some states such as Rhode Island and Missouri offer Medicaid-reimbursable case management services for children with elevated blood lead levels.5

MCOs increasingly participate in incentive programs to meet performance goals. One of the primary performance-based strategies for states is Performance Improvement Projects (PIPs), which help MCOs better track and report quality metrics. Many states use a common measurement system known as the Healthcare Effectiveness Data and Information Set (HEDIS). Some states require HEDIS reporting from MCOs, for which they can receive incentive payments for surpassing certain measures or penalties for failing to meet goals. One of the approved HEDIS measures targets lead screening in children so states in which HEDIS reporting is required may have more participation from MCOs in supporting lead screening services.6 New Jersey is an example of a state with a more aggressive approach to lead prevention and treatment efforts through managed care. Its MCO contracts require lead case management7, monitoring of providers’ screening rates, outreach to caregivers for unscreened children, and an action plan for MCOs with low HEDIS screening rates.8 9

Section 1115 Waivers

There are a number of Medicaid delivery system and payment reform initiatives currently underway across the country, some of which are unlocking additional resources for lead poisoning prevention. Medicaid Section 1115 Waivers enable states to deviate from the standard classifications of allowable medical costs to run pilot programs that are reasonably likely to improve healthcare quality and outcomes. Several states are running Delivery System Reform Incentive Payment (DSRIP) programs, which are enabled through 1115 Waivers, that direct significant funding to help healthcare payers and providers improve the quality and efficiency of care provision. DSRIP programs are performance-based initiatives in which states implement changes that are expected to produce savings that they can then reinvest in further delivery system reform.10 Some DSRIP programs specifically include incentives to address lead—New York’s DSRIP program, for example, has a performance metric for lead screening that provider networks can obtain bonus payments for meeting.


A noteworthy example of an 1115 Waiver used to address lead poisoning is in Michigan. In response to the water crisis that attracted national attention to lead poisoning in Flint, the state submitted an 1115 Waiver proposal to CMS expanding Medicaid services for Flint residents over five years. The waiver was approved in March 2016 and, according to a summary by the Kaiser Family Foundation,11 it includes:

  1. “An expansion of Medicaid and Children’s Health Insurance Program (CHIP)12 eligibility for children and pregnant women with incomes up to 400% of the federal poverty level (FPL, $80,640 per year for a household of three in 2016) served by the Flint water system;
  2. A waiver of cost-sharing and premiums for Flint beneficiaries, and
  3. An expansion of the Medicaid Targeted Case Management benefit to coordinate health and related community support services for all Medicaid-eligible children and pregnant women served by the Flint water system.”

The targeted case management includes “services such as comprehensive assessment; development and management of individualized care plans; communication with beneficiaries’ primary care physicians and health plans; coordination of physical and behavioral health-related services, nutritional supports, and early education programs; and referrals to and assistance with obtaining additional social supports, such as financial, housing and transportation assistance and lead assessment and abatement resources.”

Lead abatement activities in the original waiver proposal were not approved, but CMS subsequently approved a CHIP Health Services Initiative to provide $119 million in funding for these services over five years (see CHIP Health Services Initiatives section). The following states currently have in place Health Services Initiatives addressing lead and other health and safety hazards in housing: Maryland, Michigan, Ohio, Rhode Island, Indiana, Missouri, New York, and Oregon. More information available here. Rhode Island is a noteworthy waiver example because its expanded Medicaid benefits include the cost of leaded window replacements for homes of lead-poisoned children.13

Value-Based Purchasing

Medicaid value-based purchasing (VBP) programs link payments from healthcare payers to the quality and value of provider services. There are various types of VBP contracts, but they all focus on the Centers for Medicare and Medicaid Services’ (CMS) three-part aim of improving individual care, improving population health, and lowering healthcare costs. Shifting away from the traditional fee-for-service (FFS) model, VBP allows for more flexibility in the types of services Medicaid will reimburse.

One application of VBP is through managed care organizations (MCOs) that have ample flexibility since the passage of the 2016 Managed Care Final Rule. 14 This regulation allows states to permit MCOs to enter into value-based arrangements in which they provide Medicaid payments based on the value of services rather than the volume or cost of those services. There are specific requirements as to how value is determined, but they align with standards and practices to which MCOs are accustomed. As an over-simplified example of this breakthrough opportunity with VBP, an MCO would be allowed to retrospectively pay a provider for producing a 10% reduction in the MCO’s total cost of care, regardless of the underlying services that led to the savings.

Using VBP to address lead poisoning would be achievable with innovative partnerships and clear federal- and state-level Medicaid support. One of the main challenges in using VBP for lead poisoning lies in the fact that the value produced by preventing and treating lead poisoning accrues across multiple sectors over a long timeframe. In contrast, there is a clearer path for investment in asthma-related housing interventions through VBP because asthma interventions are linked directly to reductions in Emergency Departments utilization, hospitalizations and other medical costs. GHHI is working with partners nationally to explore opportunities around VBP investment in housing interventions.

Theoretically, community-based organizations or local government agencies that provide lead screening, preventive education, or follow-up services could partner with Medicaid providers and payers in a VBP contract that bases a portion or all of payments on medical savings or other valued outcomes. Due to the nature of Medicaid populations often moving between health plans, a flexible model allowing for multiple MCOs to track outcomes for transitory enrollees across several years would likely be required. VBP models to date have primarily focused on one MCO contracting with one provider or provider network, but states are gradually becoming more innovative. CMS’s State Innovation Models (SIM) initiative could be an appropriate instrument for developing a model of this sort. Through the SIM program, CMS “partners with states to advance multi-payer health care payment and delivery system reform models.”15 The SIM initiative has helped over 30 states transition to value-based models, aligning MCOs and providers on VBP methodologies. A partnership model in which multiple MCO payers coordinate under a shared contract and agree to pay for value created by a targeted intervention over multiple years has yet to be developed. To advance to this level of coordination would likely necessitate clear incentives and guidance from CMS and state Medicaid agencies.

The value of lead poisoning prevention and treatment extends beyond healthcare, so a VBP model would only capture a portion of the benefits. Pay for Success financing could be an effective mechanism to entice other government agencies, particularly at the federal level, to contract as back-end payers and pay for non-medical outcomes. See the Pay for Success Financing section for more information.

CHIP Health Services Initiatives

The Children’s Health Insurance Plan (CHIP) uses federal and state funds to provide health coverage to over 9 million eligible children through Medicaid and other CHIP-specific programs.16 Originally created in 1997, CHIP is administered at the state level through the state Medicaid program, as a standalone program, or as a combination of the two. States partially fund CHIP out of their state budgets and receive a federal match that varies by state. The eligible federal match is based on the Medicaid Federal Medical Assistance Percentage (FMAP) formula that has ranged from 65 percent to 81 percent, compared to 50 percent to 73% for children in Medicaid. However, federal spending in CHIP is capped and states must provide matching funds to get their full federal funding allotment.

CHIP presents an excellent opportunity for states to address lead because, through Health Services Initiatives (HSIs), they can launch public health initiatives and take advantage of a match rate for federal funds that is significantly higher than the rate for general Medicaid programs. The enhanced CHIP match rate minimum is set at 88% through September 30, 2019 CHIP, meaning states can leverage significant federal funding with a relatively small allocation, though total expenditures for non-coverage services must not exceed 10% of the state’s total amount spent on CHIP health benefits.17 Another benefit of HSIs are that they do not require a Medicaid waiver, but only a state plan amendment (SPA). The SPA submission and approval process is generally less burdensome and time-consuming than it is for a waiver. HSIs are designed by states and must directly improve the health of low-income children under age 19 who are eligible for CHIP or Medicaid.

CMS specifically calls out lead poisoning screening and prevention services as a suitable application for HSIs in its HSI FAQ document.18 The FAQ document states the following regarding lead abatement activities, among other requirements, “Any state pursuing a lead abatement HSI would need to demonstrate the need for the initiative and must meet the following criteria: individuals performing abatement service must be properly certified by the state; performance of the abatement must be demonstrated to be effective in removing all lead hazards; the program must be time limited; and the state must work with CMS to develop metrics to measure the effectiveness of the lead abatement activities. Any HSI focused on water-based lead abatement must demonstrate how the strategies, either alone or in combination with other resources or state and local efforts, ensure complete and not partial abatement of service lines and other related fixtures.”

Several states have obtained approval for HSIs to provide lead abatement or follow-up services. In 2016, Michigan was approved for an HSI focused on lead abatement in relation to the Flint water crisis and the state’s Medicaid 1115 Waiver (see Section 1115 Waivers section) for $119 million in funding over five years. Maryland, Indiana, and Ohio were approved in 2017 to fund lead abatement activities through CHIP HSIs as well. In Maryland’s CHIP-funded $14.4 million program, eligible children (those with blood lead levels greater than 5) are identified by the Maryland Department of the Environment (MDE) through the state’s childhood lead registry. Patients are then matched to Maryland Medicaid and CHIP enrollees. Once confirmed, the state or local health departments then refer the family to self-enroll in the program that is administered by the state’s Department of Housing and Community Development (DHCD). Maryland DHCD then completes the housing repairs through its pool of approved lead hazard reduction contractors. For more information this program, click here.

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