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.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.
Frequently Asked Questions
If a state is reusing a system or module already certified in another state, do they still need to go through certification review and decision?
Certification is required for any new implementation, whether it is a custom- developed module that is transferred from another state, or a commercial off-the-shelf module that is being configured and integrated. The certification process looks at the state’s implementation of the solution to ensure the state has met all federal requirements.
States may reuse system documentation and other supporting evidence from a previous state certification if it is available and applicable to their systems and has been reconfirmed by independent verification and validation.
What aspects of reuse do states need to be aware of when developing advance planning documents (APDs)?
APDs must demonstrate a reuse-friendly design that includes the sharing of systems, modules, code, and any other developed artifacts. States could include language describing their efforts to find and learn from or reuse components from similar systems, or efforts the state is making to ensure that other states more easily can reuse the proposed system once it is developed.
What is the Centers for Medicare & Medicaid Services (CMS) policy regarding ownership rights?
From an intellectual property standpoint, reuse is supported by the general grant conditions for Federal Financial Participation (FFP) under 45 CFR 95.617, which require states to "include a clause in all procurement instruments that provides that the State or local government will have all ownership rights in software or modifications thereof and associated documentation designed, developed, or installed with FFP under this subpart."
Further, according to 42 CFR 433.112(6), CMS has "a royalty free, non-exclusive, and irrevocable license to reproduce, publish, or otherwise use and authorize others to use, for Federal Government purposes, software, modifications to software, and documentation that is designed, developed, installed or enhanced with 90 percent FFP."
In practice, this means that vendors retain ownership rights to software and other products they have developed under their own initiative and funding, while states and CMS have ownership rights to and may share any software, customizations, configurations, or add-ons funded with FFP.
What is the Office of Management and Budget (OMB) Circular A -87 Exception?
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 .
When does the OMB A-87 Exception expire?
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.
What is the impact of the OMB A-87 expiration for states utilizing the exception for system integration development?
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.
How should states account for OMB A-87 exception in their Advance Planning Documents (APD)
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.
What is the Precertification Pilot?
The Precertification Pilot was an experiment conducted from October 2017-March 2018 designed to streamline certification and attract new vendors. Unfortunately, the pilot was found to be unscalable across Medicaid. However, key learnings from the pilot will be incorporated into current processes and future experiments around vendor engagement, certification, scalability, and sustainability. The goals the Centers from Medicare & Medicaid Services (CMS) identified at the beginning of the Precertification Pilot process remain the same: reduce the level of effort of certification; shorten the certification timeline; promote modularity and interoperability; reduce risk of system failure; and attract new vendors to the Medicaid IT market. Contact CMS with your ideas for experiments to achieve those goals at MES@cms.hhs.gov.
Can you explain the difference between a prospective Upper Payment Limit (UPL) and a retrospective UPL?
The difference between a prospective and retrospective UPL is in the relationship between the UPL demonstration period and the date when the UPL is submitted. For a UPL demonstration period of 7/1/2018 to 6/30/2019, a UPL is considered retrospective when it is submitted on or after the start of the demonstration period (on or after 7/1/2018). Using the same UPL demonstration period (7/1/2018 to 6/30/2019), a UPL is considered prospective if it is submitted prior to 7/1/2018.
When a state pays a provider at reconciled cost using Certified Public Expenditures during the period covered by the Upper Payment Limit (UPL) demonstration, how should the provider's data be treated?
The UPL limits payment to the Medicare rate or cost. Providers paid at reconciled cost may receive no more than their reconciled amount. As a result, states cannot attribute the “UPL room” from other providers to pay additional amounts to any provider paid at reconciled cost. Due to this payment limitation, states should not include any provider paid at reconciled cost in their UPL demonstrations; however, they must account for these providers. Specifically, states must include with their UPL submissions documentation of those providers paid at reconciled cost and confirm by provider use of either a Medicare cost report or Centers for Medicare & Medicaid Services-approved cost report template to identify allowed cost. Further, states must document the ownership status (state owned, non-state government owned, or private) of each provider.