Changes in Medicaid, Balanced Budget Act of 1997

• Residents of rural areas can be restricted to one plan, though not less than 2 physicians or case managers

• Requirement for private enrollment is eliminated

• Payment reductions for Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs)

  • 95 percent of reasonable cost during FY 2000
  • 90 percent of reasonable cost during FY 2001
  • 85 percent of reasonable cost during FY 2002
  • 70 percent of reasonable cost during FY 2003

• CONSEQUENCE: Easier to implement managed care for Medicaid beneficiaries in rural areas, and opportunities for local providers

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