Medicaid and the State Children's Health Insurance Program (CHIP) play significant roles in our health care system. In fiscal year (FY) 2011, Medicaid financed care for an estimated 70 million people, over a fifth of the U.S. population, at a cost of $432 billion.1 CHIP served 8 million children in FY 2011 with spending of $12 billion. As part of its statutory charge, each March the Commission reports on the results of its review of policies affecting the Medicaid and CHIP programs. Using the analytic foundation established in our 2011 inaugural Reports to the Congress, the Commission's March 2012 Report to the Congress on Medicaid and CHIP focuses on several key Congressional priorities including Medicaid enrollees with disabilities, access to care for children, state approaches for financing Medicaid, federal CHIP financing, and Medicaid program integrity. The Commission is charged with making recommendations to the Congress, the Secretary of the U.S. Department of Health and Human Services (the Secretary), and the states on a wide range of issues affecting Medicaid and CHIP. This report includes four recommendations to improve these programs. Two recommendations address the Commission's work on Medicaid enrollees with disabilities and the need for program innovations that promote high-quality, cost-effective care and appropriate quality measurement tools for this population. Two other recommendations are designed to improve federal and state program integrity efforts in Medicaid. These recommendations are intended to foster higher-quality and cost-effective care for program enrollees and generate greater efficiency and administrative simplification in Medicaid program management. Consistent with its statutory charge, MACPAC consulted with the appropriate federal and state-focused organizations to examine the federal and state budget consequences of its recommendations.