CNMI became a territory in 1978 and its Medicaid program was established in 1979. It is a 100% fee-for-service delivery system with one hospital servicing the territory. There are no deductibles or co-payments under the CNMI Medicaid program and the territory does not administer a Medicare Part D Plan. Instead, the Medicaid program receives an additional grant through the Enhanced Allotment Plan (EAP) which must be utilized solely for the distribution of Part D medications to dual-eligible.

Medicaid operates differently in CNMI than in the states.  The territory is the only U.S. jurisdiction to participate in the Supplemental Security Income (SSI) program and Medicaid eligibility is based on SSI requirements. All individuals receiving SSI cash payments are eligible for Medicaid simply by filing an application.

The framework for Medicaid financing in the CNMI resembles that of the fifty states: the cost of the program (up to a point) is shared between the federal government and the Territory and the federal government pays a fixed percentage of the CNMI Medicaid costs. However, unlike the states, rather than having an open-ended financing structure, Medicaid for the CNMI is constrained by an annual ceiling on federal financial participation, referred to as the Section 1108 cap or Section 1108 allotment. This means that the CNMI, as do other US territories, receive a set amount of federal funding each year regardless of changes in the number of enrollees and the use of services. In contrast, states received federal matching funds for each state dollar spent with no cap.

The second difference is that the federal assistance percentage (FMAP) is statutorily set at 55 percent rather than being based on per capita income. 

It was estimated by the Medicaid and CHIP Payment and Access Commission (MACPAC) that if the methodology for calculating the FMAP for the states would be applied to the CNMI, the CNMI would qualify for the statutory maximum in Title XIX set at 83%. This economic disparity is clear in the 2010 Census data: the median household income for a family of four in the CNMI was $19,958, while the U.S. national median household income was nearly 2.5 times that amount $63,179. Pre-PPACA, the CNMI and other territories were statutorily capped at 50 percent. In 2011, the rate increased to 55 percent FMAP and jumped again to 57.20 percent until December of 2015, and has dropped again to 55 percent FMAP. In contrast, some states receive over 80 percent FMAP.

The limit on federal Medicaid funding implement for the territories places huge risks in coverage for patients and creates financial strain in the CNMI’s healthcare system and providers that serve Medicaid patients. These limitations have resulted in chronic underfunding of the program in the CNMI and has required US congress to intervene at multiple times to provide additional resources to prevent the health systems in the US territories from collapsing.

Recent supplemental federal funds have been made to the CNMI, beginning with the FY2020 appropriations package (PL 116-94, the Further Consolidated Appropriations Act of 2020), signed into law in December 2019 and then the Families First Coronavirus Response Act (FFCRA), effective March 2020.

These supplemental funds raised the CNMI’s FY2020 Medicaid funding allotments from $6.9 million to $63.1 million and its FY 2021 allotment from approximately $7.1 million to $62.3 million and provided the CNMI and FMAP rate of 83 percent. In October 2021, the CNMI FMAP rate reverted to 55 percent. However, the CNMI will continue to qualify for the temporary 6.2 percent point increase under section 6008 of the Families First Coronavirus Response Act (FFCRA) through the end of the quarter in which the public health emergency ends.

The table below, with information provided by the Medicaid and CHIP Payment and Access Commission (MACPAC), illustrates a comparison of Medicaid funding allotments for Fiscal Years 2019-2022 (millions) for the US territories.

Source: Medicaid and CHIP Payment and Access Commission

Congress has, over time, provided increases in federal funds to the CNMI for response to disasters and other specific emergency events. These temporary actions can provide short-term relief but also creates what has been called “funding cliffs” that require ongoing congressional action. To note that in FY 2019, an additional $36 million in federal funding was provided to the CNMI as a result of the disaster caused by Super Typhoon Yutu.

Towards the end of Fiscal Year 2021, H.R. 5376 – Build Back Better Act was introduced which includes permanent funding for the CNMI and other territories. Should H.R. 5376 be signed into law, the CNMI Medicaid Program is expecting over $70 million federal dollars annually with only 17% of the local matching requirement[1].

On September 24, 2021, six days before the end of FY2021, the CNMI Medicaid program was provided notice that CMS would be applying flush language following section 1108(g)(2)(E) in calculating the territorial federal allotments for FY 2022 and beyond. This resulted in FY2021 used as the base year for the calculation used to determine the allotment in FY2022.

In recent years, the CNMI Medicaid program submitted the following State Plan Amendments:

• May 20, 2020: State Plan Amendment in response to the COVID-19 national emergency. The amendment allowed less strict income methods for determining eligibility, allow the SMA, hospital and public health centers to make presumptive eligibility (PE) decisions, and allow 12 months’ continuous eligibility for children under age 19.
• May 20, 2020: Amendment to cover the new optional group for COVID testing, continue to consider residents who leave the Territory due to the disaster residents of the Territory, extend the reasonable opportunity period, allow 90-day supplies of drugs and early refills, extend all prior authorizations for medications without clinical review, or time/quantity extensions, allow exceptions to the Territory's preferred drug list in case of shortages, and allow use of telehealth methods in lieu of face-to-face reimbursed at 80% of the face-to-face rate.
• June 09, 2020: The amendment allows hospital services provided by Commonwealth Healthcare Corporation (CHCC) using telehealth to be cost-reimbursed using the existing state plan cost protocol.
• May 28, 2021: Effective January 1, 2021, the amendment adopts the option to provide Medicaid eligibility without a 5-year waiting period to otherwise eligible individuals who lawfully reside in the Commonwealth of the Northern Mariana Islands in accordance with the Compacts of Free Association (COFA) between the Government of the United States and the Governments of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. 

Additional funding coupled with state plan amendments, such as Presumptive Eligibility has resulted in significant increases in Medicaid enrollment in the CNMI through FY 2020.

CNMI Medicaid Program Enrollment by month - FY2020

Source: CNMI State Medicaid Agency

In FY 2019, the CNMI had a little over 14,000 individuals enrolled in the Medicaid program. By the end of FY 2020, the CNMI had a total of 36,637 Medicaid program enrollees, out of a total estimated population size of 47,329[2]. Medicaid Presumptive Eligibility had been extended into FY2022 and will continue until the Public Health Emergency is ended.

The partnership between the MCH program and the CNMI Medicaid program, as indicated in an interagency agreement, includes referrals, Medicaid reimbursement for services eligible under the Medicaid State Plan, data sharing, and training. The Medicaid program provides eligibility and enrollment information to the MCH program on an annual basis. Additionally, the Medicaid program allows for the processing and expediting of MCH client applications and provides training to MCH program staff on Medicaid eligibility and application processing. The CNMI Medicaid program is operated under a 100% fee for service model. When needed health services are not available within the CNMI, the Medicaid program, through a medical referral review board, provides coverage for off-island medical care to those enrolled.

[1] Commonwealth Medicaid Agency. (2021). 2021 Citizen-Centric Report. Retrieved on July 27, 2022 from CMA-FY-2021-CCR.pdf (opacnmi.com)

[2] US Census Bureau. (2021). 2020 Island Areas Censuses: Commonwealth of the Northern Mariana Islands. Retrieved on July 27, 2022 from https://www.census.gov/data/tables/2020/dec/2020-commonwealth-northern-mariana-islands.html