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Frequently Asked Questions

Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.

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What was the traditional Medicaid Eligibility Quality Control (MEQC) program based on and how has it changed?

The traditional MEQC program at 42 CFR § 431.810 through 431.822 was originally designed to implement sections 1902(a)(4) “Administration Methods for Proper and Efficient Operation of the State Plan” and 1903(u) “Limitation of FFP for Erroneous Medical Assistance Expenditures” of the Social Security Act (the Act). The program required annual state reviews of Medicaid cases identified through a statistically valid statewide sample of cases selected from the state’s eligibility files. The reviews were conducted to determine whether the sampled cases meet applicable Medicaid eligibility requirements. The program evolved over time to allow states the option of selecting specific areas of focus within the Medicaid program for their annual MEQC reviews.

On July 5, 2017, CMS published a final regulation entitled “Changes to the Payment Error Rate Measurement (PERM) and Medicaid Eligibility Quality Control (MEQC) Programs (CMS-Medicaid Coordination of Benefits8- F).” This final rule updated the MEQC and PERM programs based on the changes to Medicaid and Children’s Health Insurance Program eligibility requirements under the Patient Protection and Affordable Care Act. The new regulation has restructured the MEQC program into an ongoing series of pilots that states are required to conduct during the two off-years between triennial PERM review years. The MEQC portions of the regulation are now covered by 42 CFR §§ 431.800-820.

FAQ ID:93416

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What deliverables must states furnish to the Centers for Medicare & Medicaid Services (CMS) per the new Medicaid Eligibility Quality Control (MEQC) regulation?

The regulation requires states to submit a pilot planning document to CMS by November 1 of the year in which each state’s PERM review year ends. The pilot planning document must describe how states will conduct their active and negative case reviews and must be approved by CMS before the MEQC pilots can begin. In addition, the regulation requires states to submit case-level reports and corrective action plans to CMS by August 1 of the year after the MEQC review period ends. The specifications for the MEQC pilot planning documents are provided in the MEQC sub-regulatory guidance effective August 29, 2018. More details on the specifications of the case-level reports and corrective action plans are included in a second round of guidance, MEQC sub-regulatory guidance effective October 22, 2018.

FAQ ID:93421

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How will the Medicaid Eligibility Quality Control (MEQC) program be realigned under the final regulation issued July 5, 2017?

As reconfigured under the final regulation of July 5, 2017, MEQC will work in conjunction with the Payment Error Rate Measurement (PERM) program. In those years when states undergo their triennial PERM reviews, the states will not conduct MEQC pilots. The latter will only be required in the two off-years between PERM review years. CMS has restructured the MEQC program so that it more effectively complements the PERM program and provides states with the necessary flexibility and opportunity to target specific problems or high-interest areas during the two off-years of the PERM cycle.

FAQ ID:93146

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How does Medicaid Eligibility Quality Control (MEQC) differ from Payment Error Rate Measurement (PERM)?

The MEQC requirements on active case reviews generally mirror the requirements of the eligibility component of PERM reviews. The regulation requires that states perform reviews of a sample of active Medicaid and Children’s Health Insurance Program (CHIP) cases to identify new eligibility approvals and renewals that were made in error. As in PERM, states will be required to submit case-level reports on the sampled cases they review and corrective action plans that describe steps taken to remediate the errors found.

However, in contrast to PERM, when states identify errors in their active Medicaid and CHIP cases, they will be required to undertake a payment review. This will consist of a review of all claims paid over the first three months after an erroneous eligibility determination was made, and a summary of the overstated or understated liability. States will in turn be required to submit adjustments to the amount of federal financial participation (FFP) claimed through the CMS-64 reporting process for Medicaid and the CMS-21 reporting process for CHIP. The adjustments are required for identified claims in which too much or too little FFP was received. There is no payment review or re-crediting requirement in PERM, although disallowance of FFP can be taken in states whose PERM error rate exceeds the national threshold of 3% based on a formula described at 42 CFR 431.1010. MEQC contains no such disallowance provision.

The MEQC program also contains one other significant element that is not found in PERM. Besides the requirement that states review at least 400 cases in their active case universe (including a minimum of 200 cases), MEQC requires states to review at least 400 negative case actions. At least 200 of these must be Medicaid and 200 must be CHIP. Negative case actions involve erroneous denials of Medicaid or CHIP eligibility or erroneous terminations from Medicaid or CHIP. This is an area with no PERM counterpart in which states will be developing case-level reporting and corrective actions. Negative case action reviews will not be triggered by PERM findings. Largely for this reason, the regulation requires that states pull their sample of these from the entire Medicaid and CHIP universe of cases. By sampling from the full range of Medicaid and CHIP cases, states should be able to obtain an overview of those sectors in their programs that may be especially vulnerable to improper denials or terminations.

FAQ ID:93196

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Is there a simplified Payment Error Rate Measurement (PERM)/Medicaid Eligibility Quality Control (MEQC) timeline with milestone dates/cycles that can be provided to states (all cycles)?

The PERM/MEQC dates/cycles are as follows:

PERM Cycle* PERM Review Period MEQC Planning Document Due to CMS MEQC Review Period MEQC Case-Level Report on Findings and CAP Due to CMS
Cycle 1 July 1, 2017 – June 30, 2018 November 1, 2018 January 1 – December 1, 2019 August 1, 2020
Cycle 2 July 1, 2018 – June 30, 2019 November 1, 2019 January 1 – December 1, 2020 August 1, 2021
Cycle 3 July 1, 2019 – June 30, 2020 November 1, 2020 January 1 – December 1, 2021 August 1, 2022

*??
CMS = Centers for Medicare & Medicaid Services
CAP = ??

FAQ ID:95156

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How does section 2001(a)(5)(B) of the Affordable Care Act impact states currently covering children 6-18 up to 133 percent of the FPL under a separate CHIP?

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.

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FAQ ID:92606

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Are these children who are being transferred from CHIP to the Medicaid state plan considered optional targeted low-income children under section 1902(a)(10)(A)(ii)(XIV) of the Act?

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.

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FAQ ID:92611

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Will new applicants/children ages 6-18 with incomes between 100 and 133 percent of the FPL with other health insurance qualify for coverage under the Medicaid state plan?

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.

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FAQ ID:92616

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Does 2001(a)(5)(B) of the Affordable Care Act impact children eligible in a separate or Medicaid expansion that are currently covered at income levels above 133 percent of the FPL?

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.

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FAQ ID:92621

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Will states continue to receive the CHIP enhanced FMAP for children currently enrolled in a separate CHIP up to 133 percent of the FPL after the transition to coverage of these children under the Medicaid mandatory group for poverty-level related children?

Yes. The CHIP enhanced FMAP will continue to be available for children whose income is greater than the Medicaid applicable income level (defined in section 457.301 and based on the 1997 Medicaid income standard for children) after these children transition to Medicaid. This includes children who previously qualified for CHIP in a separate program and uninsured children whose family incomes are up to 133 percent of the Federal poverty level, and therefore will be eligible for Medicaid in 2014. Regular Medicaid matching rates will apply for all other children covered under the mandatory group for children aged 6-18-children with income no more than 100 percent FPL and insured children with income above 100 percent to 133 percent FPL.

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FAQ ID:92626

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