Frequently Asked Questions

OMB Circular A-87requires costs associated with building shared state-based Information Technology (IT) systems that support multiple health and human service programs be allocated across all benefitting programs in proportion to their use of the system. The OMB A-87 Exception revised this approach by allowing human service programs (e.g. SNAP, TANF, LIHEAP, etc.) and others to utilize a wide range of IT components, needed by Medicaid but also of use to these other programs, at no additional cost except for interfaces or other uniquely required services specific to those programs. The A-87 Exception applies only to design, development, and implementation. Maintenance and operations work should continue to be allocated in accordance with the A-87 Circular. OMB Circular A-87  – Cost Principles for State, Local, and Indian Tribal Governments, has been Relocated to 2 CFR, Part 225 .

FAQ ID:93611

On July 20, 2015, the U.S. Department of Health and Human Services and the U.S. Department of Agriculture announced a three-year extension of the Exception to the OMB A-87 cost allocation requirements from December 31, 2015 to December 31, 2018. We are currently making plans for the OMB A-87 exception to end.

FAQ ID:93616

States will need to incur costs for goods and services furnished no later than December 31, 2018 to make use of this Exception. Therefore, if work is completed by December 31, 2018, it can be funded under the OMB A-87 Exception and states should follow typical invoicing and claiming processes. However, if an amount has been obligated by December 31, 2018, but the good or service is not furnished by that date, then such expenditure must be cost allocated by program in proportion to their use of the system in accordance with OMB A-87.

FAQ ID:93621

For FFY2019 annual APDs and budget tables, including the Medicaid Detailed Budget Table (MDBT), must be completed as follows:

• For Q1 FFY2019, states can allocate costs in accordance with the OMB A-87 Exception
• For Q2-Q$ FFY2019, and all APDs going forward, states should allocate costs as required under the OMB A-87 Circular

If a state has already submitted their annual APDs without providing separate budgets they will need to complete an APDU with a revised MDBT and cost allocation plan. The update should address how cost allocation will be done prior to, and after, December 31, 2018. Budget tables should be completed as described above.

The Data and Systems Group (DSG) that approves APDs does not approve cost allocation methodology. States working to develop their new methodologies should send operational cost allocation plans to Cost Allocation Services  and the regional office fiscal staff for all benefiting programs.

FAQ ID:93626

The Regional Office will continue to review state UPL demonstrations and states will continue to work with the CMS Regional Offices as a first point of contact concerning their UPL demonstrations.

FAQ ID:92256

The Notes tab should include any and all information to fully support the state's UPL demonstration. CMS expects states to provide clarifying information in the Notes tab. For example, this information would provide details for the adjustments to Medicare as input in variables 212.1 and 212.2, various supplemental payments in variables 313.1, 313.2, and 313.3, and adjustments to Medicaid in variables 314.1 and 314.2. In addition to reporting through the notes tab, the state also has the option of using the guidance document or narrative to fully support its UPL demonstration.

FAQ ID:92376

No one loses coverage as a result of converting to MAGI rules, but, in states that don't adopt the new adult eligibility group, it is possible that some individuals will lose coverage.

The Affordable Care Act ensured that no one would lose health coverage--if they were not eligible under the new MAGI standards either they would be covered under the new Medicaid adult coverage group or they would be able to purchase insurance through the Marketplace with the benefit of a premium tax credit and likely cost sharing reductions. Following the Supreme Court's decision, the Medicaid expansion is voluntary for states, and in states that do not adopt the new coverage group some individuals may lose coverage at the time of their renewal when the new rules are applied.

FAQ ID:92501

No, the change to MAGI does not affect the size of CHIP Programs.

The number of children in CHIP does not change as a result of MAGI because the new standards have the same value as the old standards; they simply translate the state's pre-MAGI two-step policies into a simpler one-step calculation. For example, if the state under old rules covers children in Medicaid with incomes up to 150% of the Federal Poverty Limit (FPL) and CHIP from 150% to 200% of the FPL, and under MAGI the new Medicaid income standard is 160% of the FPL, that doesn't mean that children between 150% and 160% are losing CHIP coverage--it means that many children between 150% and 160% of the FPL using net income standards were already eligible for Medicaid because of the use of disregards.

FAQ ID:92506

No, the number of children moving from CHIP to Medicaid is not affected by the change to MAGI.

Under the law, those states that cover children ages 6-18 with incomes between 100% and 133% of the FPL in CHIP will be transitioning these children to Medicaid so that children under 133% of the FPL, regardless of their age, are eligible for the same coverage program (some states will continue to have different, higher income standards for younger children). The change to MAGI standards does not change the number of children who will move from CHIP to Medicaid.

FAQ ID:92511

Yes. The new converted standards are based on the state's current income eligibility standards and their pre-2014 disregards. So if children in different age groups have different effective eligibility levels under a state's pre-2014 rules, the children will have different converted standards. For example, if a state has been covering children aged 1-5 to 133% FPL and children aged 6-18 to 100% FPL, the state's MAGI eligibility standard in 2014 may be 139% FPL for children aged 1-5 and 133% FPL for older children.

FAQ ID:92516