Frequently Asked Questions

In order to ensure a smooth transition of children from a separate CHIP to Medicaid state plan coverage, we encourage states to consider the following points as they prepare for this transition. CMS will work with states on these issues as part of the CHIP SPA review process:

• Proper and timely notification to families, including detailed information on changes related to managed care plans, providers, benefits and cost sharing and what families can expect and need to do in preparation for the transition.
• Education and notification to key stakeholders, including providers, managed care plans, and carve outs, such as mental health or dental services.
• Establishment of a help line to address questions from families during the transition.
• Continuity of care for children in treatment, such as the transfer of prior authorization requests from CHIP to Medicaid providers.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 295.71 KB)

FAQ ID:92636

Yes. While coverage of children protected by 2101(f) is mandated through a separate CHIP, states may instead continue to provide coverage of these children in the state's Medicaid program, thereby eliminating the need to provide coverage in a separate CHIP in accordance with section 2101(f).

If a state chooses this option, children in the state would not lose Medicaid eligibility due to the elimination of disregards under the new "modified adjusted gross income" (MAGI) based methodologies. A Medicaid SPA could cover such children as an optional reasonable classification of children under 42 CFR section 435.222, with a disregard of all income (so that there would be no required determination of income).

The state will need to accurately identify the population of children who otherwise would lose Medicaid eligibility effective January 1, 2014 due to the elimination of income disregards as the new optional reasonable classification of children covered under this group. Children covered under this classification would remain categorically eligible based on their enrollment in Medicaid on December 31, 2013.

In order to limit the protection afforded under this strategy to the same timeframe as the protection which otherwise would be afforded to each affected child under a separate CHIP, the state may define this group as "children who would lose Medicaid eligibility on the initial redetermination of income using MAGI-based income determination due to the elimination of income disregards." The classification would thus not include individuals whose income is being redetermined after that time. This would be parallel to the treatment of this population in a separate CHIP, as automatically eligible in CHIP only when initially losing Medicaid eligibility.

For SPA page S52 for optional reasonable classifications of children that will be submitted for Medicaid state plan eligibility in 2014, the state should enter information for this new reasonable classification of children, just like it will enter information for any other reasonable classification covered by the state. The state would define this reasonable classification using the approved state plan language and would enter that no income test is used for this classification because there was no income test (i.e., all income was disregarded) in 2013.

In addition, once the Medicaid SPA has been approved, interested states should also submit a CHIP SPA (CS14) and check the first option indicating that: "The state has received approval from CMS to maintain Medicaid eligibility for children who would otherwise be subject to Section 2101(f) such that no child in the state will be subject to this provision."

A state interested in covering children protected by section 2101(f) of the ACA should indicate its interest to CMS on its next State Operations and Technical Assistance (SOTA) call.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 295.71 KB)

FAQ ID:92641

No. The 75%/25% matching rate for eligibility systems is limited by the statute to activities directly related to an eligibility determination. A level of care assessment is not directly related to the eligibility determination. Although the assessment itself is not eligible for the 75% match, the entry of the level of care result into the eligibility system may be matched at 75%.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 295.71 KB)

FAQ ID:92646

Yes, 75 percent FFP is available for ongoing costs of operating approved eligibility determination systems, often referred to as "E&E" systems, that meet the Standards and Conditions for Medicaid IT and critical success factors. (See: State Medicaid Director Letter on APD Requirements dated June 27, 2016 (SMD# 16-009), to be found at https://www.medicaid.gov/federal-policy-guidance/federal-policy-guidance.html.

Section 1903(a)(3)(B) of the Social Security Act provides 75 percent FFP for costs associated with operating an approved Medicaid management information system (MMIS). The Medicaid manual further clarifies at Section 11276.3 A. MMIS Operations, "FFP at 75 percent is available for direct costs directly attributable to the Medicaid program for ongoing automated processing of claims, payments, and reports. Included are forms, use of system hardware and supplies, maintenance of software and documentation, and personnel costs of operations control clerks, suspense and/or exception claims processing clerks, data entry operators, microfilm operators, terminal operators, peripheral equipment operators, computer operators, and claims coding clerks if the coded data is used in the MMIS, and all direct costs specifically identified to these cost objectives. Report users, such as staff who perform follow-up investigations, are not considered part of the MMIS."

States may claim 75 percent FFP for the costs of certain personnel closely associated with operating claims processing and related systems under MMIS. As noted in our final rule, Medicaid Program; Federal Funding for Medicaid Eligibility Determination and Enrollment Activities (CMS-2346-F), in response to comments, "enhanced funding is available for staff time spent on mechanized eligibility determination systems in the same manner that they apply to all mechanized claims processing and information retrieval systems, since mechanized eligibility determination systems are now considered to be part of such systems, assuming the requirements of this section are met." (See: https://www.federalregister.gov/articles/2011/04/19/2011-9340/medicaid-program-federalfunding-for-medicaid-eligibility-determination-and-enrollment-activities ).H59 Additional information on FFP rates, including tables delineating specific covered costs, is available in the State Medicaid Director Letter on Enhanced Funding dated March 31, 2016 (SMD# 16-004), to be found at https://www.medicaid.gov/federal-policy-guidance/federal-policy-guidance.html.

States should work closely with CMS during the APD process to provide appropriate documentation concerning their cost allocation and claiming plans. In states where workers determine eligibility or provide customer service for multiple health and human service programs, costs should be allocated across programs, as discussed further in FAQ# 40811.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93696

Eligibility for the enhanced FFP will be based on state systems being compliant with the Standards and Conditions for Medicaid IT, including meeting minimum critical success factors for accepting the new single streamlined application, making MAGI-based determinations and coordinating with Marketplaces. The 75 percent FFP will generally be available when the approved system becomes operational. The 75 percent FFP will not expire.
The start date for the 75 percent FFP for maintenance and operations is the actual start of the operations of the approved eligibility determination system (also referred to as "E&E" system).

We recognize states may be phasing in system upgrades that implement modified adjusted gross income (MAGI)-based eligibility determinations first, with subsequent releases to include non-MAGI and/or other human services programs eligibility. We will allow the 75 percent FFP to begin with the start of the approved MAGI shared eligibility service, based upon an approved Operations APD, that meets the critical success factors. Further, states with challenges in meeting critical success factors at the expected service level must have approved mitigation strategies in order to qualify.

In order to begin claiming, states should submit an Operations APD to CMS that clearly identifies the functions, staff and costs to be charged at the 75 percent FFP level, and it must be approved by CMS before a state can begin claiming the enhanced match.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93701

Costs associated with the training of eligibility workers directly engaged in the operation of the new eligibility system may be eligible to be matched at the enhanced rate during the three months (or less) prior to the start of operations. An APD update would be required to document the costs, scope and timing of the training period, which will be reviewed and approved by CMS prior to a state being eligible to claim the enhanced match. States must be able to demonstrate their eligibility determination (also known as "E&E") system will be operationally ready, comply with the Standards and Conditions for Medicaid IT, and meet minimum critical success factors in order to claim the enhanced funding during this training period.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93706

Yes. Certain types of personnel costs are eligible for the 75 percent matching rate, subject to current MMIS maintenance and operations claiming rules. The State Medicaid Manual delineates which types of personnel costs can be claimed at enhanced match, including staff direct labor and fringe benefit costs. Only direct costs allocable to the development or operation of an MMIS (including Medicaid eligibility determination system) are eligible for reimbursement at enhanced FFP rates. Such costs include: utilities, rent, telephone service, etc., necessitated by either the development or operation of an MMIS or eligibility determination system. Costs which cannot be specifically identified with the development or operation of an MMIS (including Medicaid eligibility determination system) are matched at 50 percent FFP.

Such costs are usually indirect costs including the staff costs associated with agency-wide functions such as accounting, budgeting, and general administration.

The state must submit an Operations APD which includes an allocation or distribution plan showing the breakout of direct and indirect costs for equipment, supplies, and non-personnel resources it intends to claim, and justification for those.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93711

In situations where eligibility workers determine eligibility for multiple programs, all costs must be distributed to the appropriate programs and governing FFP rates (90/75/50) based on approved time study methodologies and/or cost allocation plans consistent with OMB Circular A-87 cost allocation principles. These costs must also clearly differentiate between resources needed for direct data and systems-related activities and resources needed for MMIS and eligibility determination systems versus program management and oversight activities, which are only eligible for 50 percent FFP. State agencies performing eligibility determination currently develop and maintain methodologies for allocating costs among different health and human services programs. CMS does not anticipate the additional reporting required to obtain 75 percent FFP will add a significant amount of time to that process. From 45 CFR section 95.507, Plan requirements, the cost allocation support should include the following:

• A description of the procedures used to identify, measure, and allocate all costs to each of the programs
• Conform to the accounting principles and standards prescribed in Office of Management and Budget Circular A-87, and other pertinent Department regulations and instructions;
• Contain sufficient information in such detail to make an informed judgment on the correctness and fairness of the state's procedures for identifying, measuring, and allocating the costs
• The cost allocation plan shall contain the following information:
  • An organizational chart showing the placement of each unit whose costs are charged to the programs operated by the state agency
  • A listing of all federal and all non-federal programs performed, administered, or serviced by these organizational units.
  • A description of the activities performed by each organizational unit and, where not self-explanatory an explanation of the benefits provided to federal programs.
  • The procedures used to identify, measure, and allocate all costs to each benefiting program and activity (including activities subject to different rates of FFP).

States should consult with their CMS cost allocation leads to determine whether any change to their approved cost allocation plan is needed and work with their counterparts at human services agencies as necessary. The methods of cost allocation should be documented in the state operations APD update submission to support the proposed budget.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93721

As noted earlier, states must submit an Operations APD to request this funding. CMS will monitor state implementation of the enhanced 75 percent FFP through ongoing review of state eligibility system implementation and operations, as well as through revised claims reporting. Specifically, CMS is revising the CMS-64-10 and 37-10 forms to separately capture eligibility determination system related maintenance and operations costs. We will separately track costs related to IT systems and eligibility determination staff as follows:

• For the IT and systems maintenance and operations, costs will be reported on the CMS-64-10 and 37-10 on line 28C - Operation of an approved Medicaid eligibility determination system/cost of in-house activities - 75 percent FFP and 28D - Operation of an approved Medicaid eligibility determination system/cost private sector contractors- 75 percent FFP.
• For the Eligibility Determination workers staffing eligible for enhanced match, costs will be reported on the CMS-64-10 and 37-10 on line 28E - Eligibility Determination staff - cost of in-house activities - 75 percent FFP and 28F- Eligibility Determination staff - cost of private sector contractors - 75 percent FFP.
• For the Eligibility Determinations workers staffing eligible for regular administrative match, costs will be reported on the CMS-64-10 and 37-10 on line 28G - Eligibility Determination staff - cost of in-hour activities - 50 percent FFP and 28 H - cost of private sector contractors - 50 percent FFP.

As this enhanced match is implemented, CMS will closely monitor implementation and reporting, and if necessary, will revise how this data is collected on the estimate and expenditure reporting forms to ensure states and CMS have the proper break out to track these activities and their related claims.

Furthermore, CMS will continue to work with states over time to ensure that their systems continue to remain compliant with the Seven Conditions and Standards. For example, under the Reporting Condition, state systems should be able to produce accurate data that are necessary for oversight, administration, evaluation, integrity and transparency. CMS has recently provided technical specifications for the Transformed Medicaid Statistical Information System (TMSIS) data file to states following more than a year of collaboration with states participating in the T-MSIS pilot. CMS envisions that the T-MSIS data file will be submitted on a monthly basis. We anticipate releasing additional guidance on this subject in the coming weeks.

As with all expenditures, federal match must be properly claimed and is subject to review and approval. Again, CMS will work closely with the each state to review and approve costs covered and will use the APD process to confirm with states specific implementation details, before states start to submit claims.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93726

Section 2101(f) of the Affordable Care Act (implemented through regulations for the CHIP program at 42 CFR section 457.310) provides that states maintain coverage under a separate CHIP for children who lose Medicaid eligibility (including eligibility under a Medicaid expansion or M-CHIP program) due to the elimination of disregards under the new "modified adjusted gross income" (MAGI) based methodologies, which will be effective on January 1, 2014. This provision was intended to create a mechanism to ensure a smooth transition and continuity of coverage for children as the new income counting rules take effect.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 105.59 KB)

FAQ ID:93761