Care Management and Catastrophic Health Care for Children Act of 1987

Care Management and Catastrophic Health Care for Children Act of 1987 - Amends title V (Maternal and Child Health Services) of the Social Security Act to authorize appropriations for new programs under which: (1) the Secretary of Health and Human Services makes payments on behalf of children with high cost catastrophic health care needs and establishes special projects designed to enhance the delivery of health care and health care management services to such children; and (2) each State provides health care management services to children with anticipated annual medical expenditures in excess of $5,000.

Defines "care management" as advocacy on the child's and family's behalf to secure needed services and entitlements in accordance with a written care management plan which is: (1) developed in collaboration with the child's parents or legal guardians and at least one attending physician; (2) subject to the approval of such parent or legal guardian; and (3) updated annually and whenever there is a significant change in the child's condition. Sets the Federal share of care management costs at 80 percent of the total amount expended by States in providing health care management.

Defines "children with high cost catastrophic health care needs" as children under age one suffering from a condition, illness, or disability which results in medical charges of $50,000 or more in the first year of the child's life. Makes such children eligible for payments under this Act if their family income is below the Federal poverty level and the medical charges paid by the family exceed ten percent of the family's gross income. Continues such payments after the child's first year for so long as the family satisfies such eligibility requirements.

Provides payment for the items and services which are considered "medical assistance" under title XIX (Medicaid) of the Act, but prohibits payments for items and services covered under a third-party plan for which payment has been made in full. Bases payments for inpatient hospital services on hospital specific departmental ratios of costs to charges for services provided and payments for other items and services on Medicare (title XVIII of the Act) payment levels. Directs the Secretary to develop, and report to the Congress by December 31, 1988, regarding, a prospective payment system for inpatient hospital services provided to children.