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

No, an upper payment limit demonstration considers all Medicaid payments (base and supplemental). States must conduct UPL demonstrations for the applicable services described in State Medicaid Director Letter (SMDL) 13-003 regardless of whether a state makes supplemental payments under the Medicaid state plan for the services.

FAQ ID:92191

No, the template does not include variables to report clinical diagnostic laboratory services.

FAQ ID:92371

Section 2001(a)(5)(B) of the Affordable Care Act (implemented through regulations for the Medicaid program at section 435.118) increased the minimum income limit applicable to Medicaid eligibility for the mandatory group for poverty-level related children aged 6-18 from 100 to 133 percent of the FPL under section 1902(a)(10)(A)(i)(VII) of the Act. Therefore, if a state is currently covering uninsured children up to 133 percent of the FPL under a separate CHIP, these children must be transitioned to the Medicaid state plan under this children's group effective January 1, 2014. CMS is available to work with states individually on their transition plans for this population.

Supplemental Links:

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

FAQ ID:92606

No. For the purposes of eligibility, these children are considered a mandatory Medicaid group for poverty-level related children under section 1902(a)(10)(A)(i)(VII) of the Act. As described below, states will continue to receive the CHIP matching rate for this population.

Supplemental Links:

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

FAQ ID:92611

Yes. Under the Medicaid mandatory group for poverty-level related children under section 1902(a)(10)(A)(i)(VII) of the Act, insured children must be covered in addition to uninsured children (please also see applicable match rate questions below). This is different from the rules governing a separate CHIP program, which preclude coverage for insured children.

Supplemental Links:

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

FAQ ID:92616

No. States continue to have the option to cover children above 133 percent of the FPL either under a Medicaid expansion or separate program. States must maintain CHIP "eligibility standards, methodologies, and procedures" for children that are no more restrictive than those in effect on March 23, 2010 as specified under the "maintenance of effort" provision at 2105(d)(3) of the Act. A parallel requirement in Medicaid can be found at sections 1902(a)(74) and 1902(gg) of the Act. These provisions are effective through September 30, 2019.

Supplemental Links:

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

FAQ ID:92621