Frequently Asked Questions

No. There is no Federal Financial Participation (FFP) available for Health Insurance Providers Fee payments made outside of actuarially sound capitation rates, per the requirements of section 1903(m)(2)(A(iii) of the Social Security Act and implementing regulations at 42 CFR 438.6(c)(2). Therefore, any payment for the fee-whether on a prospective or retrospective basis-must be incorporated in the health plan capitation rates and reflected in the payment term under the contract.

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FAQ ID:91151

There are reasonable ways to account for the Health Insurance Providers Fee as an adjustment to the states' capitation rates under either approach. In either approach, the amount of the fee should be incorporated as an adjustment to the capitation rates and the resulting payments should be consistent with the actual or estimated amount of the fee.

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FAQ ID:91161

No. Since the fee due in 2014 is based on the health plan's 2013 book of business, the adjustment should only apply to the capitation rates for populations that the state covered under the managed care contract in 2013. For example, states that chose to expand Medicaid eligibility starting January 1, 2014, should not adjust the capitation rates for the new adult eligibility group to account for the fee due in 2014, because they were not covered by the managed care plans in 2013. In future years, the Health Insurance Providers Fee will continue to be based on the book of business for the immediately preceding year, so this concept will apply in calculating the fee if any new populations are added to a state's managed care program.

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FAQ ID:91181

The potential effect of the fee may be considered in the development of the capitation rates. If the state's actuary takes these potential effects into account in developing the non-benefit component of the capitation rate attributable to the Health Insurance Providers Fee, the assumptions underlying that analysis will be documented in the rate certification.

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FAQ ID:91196

Section 9010(h)(3) of the Affordable Care Act and the IRS Health Insurance Providers Fee regulations (78 FR 71476, 71483, November 29, 2013; available at www.irs.gov/businesses/corporations/affordable-care-act-provision-9010) exclude long-term care from the definition of health insurance for purposes of calculating a health plan's fee liability. Where long- term care services are paid a capitation rate separate from other services, these payments can be easily identified and should be excluded by the health plan when reporting premiums subject to the fee to the IRS. However, where long-term care services are not easily identified within the health plan's capitation rates, the health plans may need to consult with the state and their actuaries to determine the appropriate premium receipts to report to the IRS.

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FAQ ID:91391

CMS believes that the process for reimbursing a health plan for the Health Insurance Providers Fee that was contracted with the state in 2013, but not in 2014, is primarily a matter to be negotiated between the state and the health plan. It is reasonable for a state to make a retroactive adjustment to the 2013 contract year rates for that health plan as it is possible that the state's actuary did not take the Health Insurance Providers Fee into consideration when developing the 2013 rates. In that case, the state may treat the fee in the same manner as it would an error in the development of the rates, and submit any necessary adjustment to CMS for approval.

However, there may be barriers to such adjustments under the contract or applicable state laws. Retroactive rate adjustments for a health plan that has left the market must be made under the contract and within the federal two-year period for timely claims. See Question 3 for more information. Going forward, states that account for the fee on a retroactive basis may want to address rate adjustments due to market exit in the contract. States that account for the fee on a prospective basis will not encounter this issue.

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• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB)

FAQ ID:91396

Information on when states intend to reimburse contracted health plans for the Health Insurance Providers Fee is established in the contract. States that elect to reimburse health plans for the fee once the amount is known should establish a timeframe for payment, typically between 30 to 90 days, after receipt and review of the health plan's assessment from the Internal Revenue Service.

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FAQ ID:91401

It is reasonable to consider the Health Insurance Providers Fee in these arrangements as they may exist in the contract between the state and the health plan. While CMS does not have specific requirements as to how the Health Insurance Providers Fee should be considered under these arrangements, CMS does recommend that the Health Insurance Providers Fee is generally treated in the same way as other taxes and fees for these purposes.

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• This FAQ was released as part of a larger set. View the full set. (PDF, 159.2 KB)

FAQ ID:91386

In qualifying states, certain United States Preventive Services Task Force (USPSTF) grade A or B preventive services and vaccine administration codes are eligible for a one percent FMAP increase under section 4106 of the Affordable Care Act (which amended sections 1902(a)(13) and 1905(b) of the Act). Some of these services may also qualify as a primary care services eligible for an increase in the payment rates under section 1202 of the Affordable Care Act. For these services the federal matching rate is 100 percent for the difference between the Medicaid rate as of July 1, 2009 and the payment made pursuant to section 1202 (the increase). The federal matching payment for the portion of the rate related to the July 1, 2009 base payment would be the regular Federal Medical Assistance Percentage (FMAP) rate, except that this rate would be increased by one percent if the provisions of section 4106 of the Affordable Care Act are applicable.

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FAQ ID:91076

Effective for dates of service on and after January 1, 2013 through December 31, 2014, states are required by law to reimburse qualified providers at the rate that would be paid for the service (if the service were covered) under Medicare. Most states and the District of Columbia will need to submit a Medicaid state plan amendment (SPA) to increase Medicaid rates up to this level. The Centers for Medicare & Medicaid Services (CMS) has issued a state plan amendment (SPA) preprint for the purpose of expediting review and approval of the primary care payment increase.

For dates of service starting January 1, 2013 qualified providers are entitled to receive the higher payment in accordance with the approved Medicaid state plan amendment. States may not have attestation procedures or higher fee schedule rates in place on January 1, 2013. In that event, providers will likely continue to be reimbursed the 2012 rates for a limited period of time. Once attestation procedures are in place and providers are identified as eligible for higher payment, the state will make one or more supplemental payments to ensure that providers receive payment for the difference between the amount paid and the Medicare rate. Qualified providers should receive the total due to them under the provision in a timely manner.

A state may draw federal financial participation for the higher payments only after the SPA methodology is approved.

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FAQ ID:91271