SALT LAKE CITY — For the first time since federal legislation created financial incentives to encourage enrollment of children in health insurance programs nationwide, Utah is cashing in.

The state Wednesday was awarded about $10.2 million as a bonus from the Children's Health Insurance Program Reauthorization Act, which makes more than $300 million available each year to states that simplify enrollment processes and sign up and retain more children.

It is the first time Utah is collecting an award since the legislation took effect in 2009.

"We are trying to make the process as efficient as possible so people who are eligible for the programs can navigate the programs easily and find what they need and maintain their enrollment," said Utah Medicaid director Michael Hales.

The award will go directly to the state's general fund, where lawmakers will decide how to distribute it. As most of the changes to the Medicaid and CHIP programs were administrative, the money wasn't expected to cover the small increases in enrollment in the past year.

In Utah, 74.3 percent of eligible children are enrolled in Medicaid and CHIP programs, whereas the national average is nearly 85 percent, according the U.S. Centers for Medicare and Medicaid Services, an office of the Department of Health and Human Services.

The agency, which announced bonus awards Wednesday, reports that continued increases in Medicaid and CHIP enrollment are "driving the nation's steady progress of increasing the number of children with health insurance coverage."

The number of uninsured children has declined from nearly 5 million in 2008 to 4.4 million in 2010.

To qualify for the bonuses, states must implement five of eight specific program features aimed at streamlining their enrollment procedures and reducing barriers to improve children's health insurance coverage programs. They also must increase enrollment in Medicaid above a baseline level for the fiscal year.

The changes have to be in effect for at least six months.

Utah had already eliminated its in-person interview requirement, which allowed more individuals in rural areas of the state to apply. It coordinated its application and renewal procedures, adopted administrative renewal, as well as presumptive eligibility for children in foster care, which extended eligibility to a child's siblings upon going back to their parents.

While Utah retains an asset test for some families, the state simplified the process by no longer requiring families to submit verification of their assets. An electronic system replaced an otherwise cumbersome paper process, making it more efficient, Hales said.

The number of children insured in Utah under Medicaid increased from 165,795 in 2011, to 168,895 this year. CHIP enrollment in the state dropped slightly in the past year, from 37,464 to 35,544, but Hales said that was expected with a gradually improving economy.

"Economic factors determine eligibility for the program," he said.

Enrollment had been declining in Utah since 2009.

In Utah, a child is CHIP-eligible if the household income is at least 200 percent of the Federal Poverty Level. Federal minimums vary for Medicaid eligibility in the state, depending on a child's age.

Other possible program features that could still be implemented in Utah include using the same application for Medicaid and CHIP programs, since individuals must first be screened for Medicaid to be approved for CHIP; a process that would utilize findings from other public benefit programs to determine eligibility for health insurance; and premium assistance.

In previous years, Hales said, the state did not vie for the awards because of unclear expectations. Upon clarification, he found that simple administrative fixes and slight modifications to policy would qualify Utah for the bonus money.

The state intends to seek another bonus next year, which is the final year it will be available under the current legislation.

This year, 23 states qualified for the performance bonuses. The awards ranged from just less than $1.5 million for Idaho to nearly $43 million for Colorado, which received a bonus for the third straight year.

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