Frequently Asked Questions

Individuals who assist applicants by facilitating their applications, who perform outreach activities, or who enter application data on behalf of the applicant are not eligible for the 75% match. Only individuals who are authorized by the single state agency to enter data other than application elements into the eligibility system, who have responsibility for evaluating data in order to make an eligibility determination, who are authorized to exercise discretion in the evaluation of data, who are authorized to make an eligibility determination and who are accountable to the single state agency for such determinations are eligible the 75% match for those activities. This includes eligibility workers, whether in house or out-stationed, as long as there is a formal, written agreement with the single state agency that authorizes their eligibility activities and specifies direct lines of accountability to the single state agency. Both intake workers and on-going eligibility workers who meet these requirements may be claimed at 75%, based on appropriate cost allocations.

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

FAQ ID:92656

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.

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• 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.

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• 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.

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• 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.

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• 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

No. As stated in the past, the Affordable Care Act does not provide for a phased-in or partial expansion. States that wish to take advantage of the enhanced federal matching funds for newly eligible individuals must extend eligibility to 133% of the federal poverty level (FPL) by adopting the new adult group. Arkansas has initiated discussions about "premium assistance" options for Medicaid beneficiaries; partial expansion is not part of these discussions.

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• This FAQ was released as part of a larger set. View the full set. (PDF, 40.01 KB)

FAQ ID:93836

The Medicaid statute provides several options for states to pay premiums for adults and children to purchase coverage through private group health plans, and in some case individual plans; in most cases, the statute conditions such arrangements on a determination that they are "cost effective." Cost effective generally means that Medicaid's premium payment to private plans plus the cost of additional services and cost sharing assistance that would be required would be comparable to what it would otherwise pay for the same services. Similar provisions also apply in the Children's Health Insurance Program (CHIP).

Under all these arrangements, beneficiaries remain Medicaid beneficiaries and continue to be entitled to all benefits and cost-sharing protections. States must have mechanisms in place to "wrap-around" private coverage to the extent that benefits are less and cost sharing requirements are greater than those in Medicaid. In addition under the statutory options in the individual market beneficiaries must be able to choose an alternative to private insurance to receive Medicaid benefits.

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FAQ ID:93841

Some states have expressed interest in section 1115 demonstrations to provide premium assistance for the purchase of QHPs in the Exchange. Under section 1115 of the Social Security Act, the Secretary may approve demonstration projects that she determines promote the objectives of the Medicaid program. HHS will consider approving a limited number of premium assistance demonstrations since their results would inform policy for the State Innovation Waivers that start in 2017. As with all such demonstrations, HHS will evaluate each proposal that is submitted and consider it on a case by case basis relative to this standard.

With regard to premium assistance demonstrations, HHS will consider states' ideas on cost effectiveness that include new factors introduced by the creation of Health Insurance Marketplaces and the expansion of Medicaid. For example, states may quantify savings from reduced churning (people moving between Medicaid and Exchanges as a result of fluctuating incomes) and increased competition in Marketplaces given the additional enrollees due to premium assistance. As with all demonstration proposals, the actuarial, economic, and budget justification (including budget neutrality) would need to be reviewed and, if approved, the program and budgetary impact would need to be carefully monitored and evaluated.

To ensure that the demonstrations further the objectives of the program and provide information in a timely way, HHS will only consider proposals that:

• Provide beneficiaries with a choice of at least two qualified health plans (QHPs).
• Make arrangements with the QHPs to provide any necessary wrap around benefits and cost sharing along with appropriate data; this would be done within the context of premium assistance, for example through a supplemental premium. This ensures that coverage is seamless, that cost sharing reductions are effectively delivered and that there is accountability for the payments made.
• Are limited to individuals whose benefits are closely aligned with the benefits available on the Marketplace, that is, individuals in the new Medicaid adult group who must enroll in benchmark coverage and are not described in SSA 1937(a)(2)(B)(an example of a population that is described in SSA 1937(a)(2)(B) is the medically frail). Marketplace plans were not designed to offer broader benefits and could experience unexpected adverse selection due to enrollment of groups that are described in SSA 1937(a)(2)(B).
• End no later than December 31, 2016. Starting in 2017, State Innovation Waiver authority begins which could allow a range of State-designed initiatives.

In addition, a state may increase the opportunity for a successful demonstration by choosing to target within the new adult group individuals with income between 100 and 133 percent of FPL. Medicaid allows for additional cost-sharing flexibility for populations with incomes above 100 percent of FPL; this population is more likely to be subject to churning and would be eligible for advance premium tax credits and Marketplace coverage if a state did not expand Medicaid to 133 percent of FPL.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 40.01 KB)

FAQ ID:93846