- 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
- 45 CFR Part 75 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards
- Section 1903 of the Social Security Act-Payment
- 42 CFR Part 433 – State Fiscal Administration
- OMB Circular A-87 - Cost Principles for State, Local, and Indian Tribal Governments
- OMB Circular A-133 - Audits of State, Local Government, and Non-Profit Organizations
- ASMB C-10 - Cost Principles and Procedures for Developing Cost Allocation Plans and Indirect Cost Rates for Agreements with the Federal Government
Title XIX of the Social Security Act (the Act) authorizes federal grants to states for a proportion of expenditures for medical assistance under an approved Medicaid state plan, and for expenditures necessary for administration of the state plan. This joint federal-state financing of expenditures is described in section 1903(a) of the Act, which sets forth the rates of federal financing for different types of expenditures.
Under section 1903(a)(7) of the Act, federal payment is available at a rate of 50 percent for amounts expended by a state “as found necessary by the Secretary for the proper and efficient administration of the state plan,” per 42 Code of Federal Regulations (CFR) 433.15(b)(7). The Secretary is the final arbiter of which administrative activities are eligible for funding.
Certain administrative costs may be matched at higher federal financial participation (FFP) rates. (See 42 CFR 433.15(b)(1)-(6) for higher matching rates). Claims for Medicaid administrative FFP must come directly from the single state Medicaid Agency. In addition, the state must ensure that permissible, non-federal funding sources are used to match federal dollars.
In order for Medicaid administrative expenditures to be claimed for federal matching funds, the following requirements must be met:
- Costs must be “proper and efficient” for the state’s administration of its Medicaid state plan (Section 1903(a)(7) of the Act).
- Costs related to multiple programs must be allocated in accordance with the benefits received by each participating program (OMB Circular A-87, as revised and now located at 2 CFR 200). This is accomplished by developing a method to assign costs based on the relative benefit to the Medicaid program and the other government or non-government programs.
- Costs must be supported by an allocation methodology that appears in the state’s approved Public Assistance Cost Allocation Plan (42 CFR 433.34).
- Costs must not include funding for a portion of general public health initiatives that are made available to all persons, such as public health education campaigns.
- Costs must not include the overhead costs of operating a provider facility.
- Costs must not duplicate payment for activities that are already being offered or should be provided by other entities, or paid through other programs.
- Costs may not supplant funding obligations from other federal sources.
- Costs must be supported by adequate source documentation.
For guidance on specific Medicaid administrative funding and claiming topics, please refer to the list below.
- The Public Assistance Cost Allocation Plan must reference methodologies, claiming mechanisms, interagency agreements, and other relevant issues that will be used when claiming and appropriately allocating costs.
- Costs must be supported by an allocation methodology that includes a narrative description of the procedures that the state agency will use in identifying and measuring costs.
- The school setting provides a unique opportunity to enroll eligible children in the Medicaid program, and to assist children who are already enrolled in Medicaid to access the benefits available to them.
Medicaid Administrative Claiming for Activities Performed by State Long-Term Care Ombudsman (LTCO) Programs
Each state’s LTCO Office conducts activities such as identifying, investigating, and resolving complaints made by, or on behalf of, residents of LTC facilities, providing services to assist such residents in protecting their health, safety, welfare and rights, and representing the interests of such residents before governmental agencies, as well as seeking administrative, legal, and other remedies to protect residents. For additional information, visit the State Long-Term Care Ombudsman (LTCO) Programs page.
Translation and Interpretation Services
CMS policy permits reimbursement at the standard 50% federal matching rate for translation and interpretation activities that are claimed as an administrative expense, so long as they are not included and paid for as part of the rate for direct services. With the enactment of CHIPRA in 2009, States were given the option to claim a higher matching rate for translation and interpretation services that are claimed as administration and are related to enrollment, retention and use of services under Medicaid and CHIP for certain populations. For additional information, visit the Translation and Interpretation Services page.
Medicaid Administrative Claiming for Activities Performed by State No Wrong Door Systems
CMS, the Administration for Community Living (ACL), and the Veterans Health Administration (VHA) have partnered for several years to support states’ efforts to develop coordinated systems of access to make it easier for consumers to learn about and access Long-Term Service and Supports (LTSS). Federal matching funds under Medicaid are available for the cost of administrative activities that directly support efforts to identify and enroll potential eligibles into Medicaid and that directly support the provision of medical services covered under the state Medicaid plan. To the extent that NWD/ADRC employees perform administrative activities that are in support of the state Medicaid plan, federal reimbursement may be available. For additional information, visit the No Wrong Door System and Medicaid Administrative Claiming Reimbursement Guidance page.