Frequently Asked Questions

Yes. We remind states that the requirement that the final capitation rate be specified in the contract is not a new requirement, see section 438.6(c)(2)(ii) of the 2002 final rule. The amount of payment for performance-in this context, the final capitation rate-is a primary component of any contract and must be included for purposes of verifying claims for Federal Financial Participation (FFP) on the CMS-64. In the Final Rule at page 27595, in the context of risk adjustment, CMS suggested that the payment terms under the contract could be identified in an appendix, or additional supporting documentation, to the contract for ease of updating the information when risk adjustment is applied. The state must submit a formal contract amendment when the final capitation rates differ from the payment terms in an approved contract.

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Yes. CMS acknowledges that states may have legitimate reasons to set capitation rates for a time period that differs from 12 months and will take unusual circumstances into account when reviewing compliance with the rating period duration requirements. CMS will approve a rating period other than of 12 months when a state transitions the contract term and rating period from a calendar year to a state fiscal year basis and setting capitation rates for a 6 month or 18 month period would facilitate that transition. There may be other reasonable justifications for such variations in the rating period that CMS would be open to considering. The rationale for a rating period that differs from 12 months as defined in the regulation in section 438.2 should be specified in the rate certification required in section 438.7 for such consideration.

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The implementation date for non-risk PIHPs and PAHPs, PCCMs, and PCCM entities for provisions tied to a rating period is the earliest date that a risk-based MCO, PIHP, or PAHP would need to comply. For example, the provisions in subpart F relating to appeals and grievances have an implementation date for risk-based contracts of the rating period for contracts starting on or after July 1, 2017. Non-risk PIHPs and PAHPs would need to implement those provisions by July 1, 2017.

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The regulation at section 438.3(m) has a general reference to "generally accepted accounting principles" and "generally accepted auditing principles." This means that states have the flexibility to specify the applicable generally accepted accounting and auditing principles for the audited financial reports in the managed care plan contracts. The federal regulation does not endorse a particular standard.

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CMS released an Informational Bulletin (CIB) discussing the change in federal financial participation (FFP) for EQR that was effective May 6, 2016. The CIB includes revised claiming instructions for the CMS-64 and a sample form. It is available at Medicaid.gov on the EQR webpage, under Technical Assistance Documents, and available at https://www.medicaid.gov/federal-policy-guidance/downloads/cib061016.pdf.

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As contained in the MECT standard RFP/contract language required by CMS, CMS does not cover activities that the state may require of the IV&V contractor during ongoing O&M. However, as Medicaid is moving away from monolithic single applications, it is expected that states will continuously update and replace modules in their enterprise. Therefore, IV&V should always have a role to ensure successful integration and testing.

If an organization is performing another role (such as systems integrator, PMO, quality assurance, etc.) on the MMIS or E&E project, it may not perform the IV&V function on the same project. A state may contract the same vendor to perform the IV&V role for both its E&E and MMIS projects.

To reduce potential conflict of interest, CMS is ensuring that states are arranging IV&V services through contracts that should be owned outside of the agency that owns the MMIS or E&E project. The oversight organization for the IV&V contractor should not be involved in oversight of the development effort, a stakeholder in the business implementation, or the DDI contractor. The IV&V contract monitor should be aware of system development problem solving, reporting, and contractor management. This contract oversight provides true independence between the IV&V contractor and system development teams. This requirement is consistent with other HHS agencies' practices and industry best practices.

CMS encourages states to reuse modular solutions as much as possible. If a state can reuse a modular solution from another state with minimal changes or customization, CMS will work with the state to streamline the certification process as much as possible to leverage knowledge of the reused solution. However, CMS will still require a certification decision for each state implementation of reused solutions to ensure compliance with federal regulations.

All the criteria in the checklists (MITA, MMIS or Custom) are the same. The difference between checklists is the criteria organization within the checklists. If the services solution is innovative, unique, or an unconventional approach, then the custom checklist approach might be appropriate. The RO will work with the state and vendors to decide which checklist set is best suited for the state's certification. Both service and traditional-type solutions need to meet all certification criteria to ensure compliance with federal regulations.