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Tobacco quitlines that follow the evidence-based protocols set forth in the Public Health Service (PHS) Guideline are considered an allowable Medicaid administrative activity for the "proper and efficient" administration of the Medicaid state plan, to the extent that the quitline provides support to Medicaid beneficiaries under the auspices of the state Medicaid agency.

States can claim Federal Financial Participation (FFP) for quitline expenditures in accordance with the applicable cost principles under OMB Circular A-87. In order for states to claim expenditures related to quitlines as an administrative cost at the 50 percent Federal Medicaid matching rate, such claims may not duplicate costs that have been, or should have been, paid through another source. States can only claim FFP for the quitline to the degree that the quitline serves Medicaid beneficiaries. Allowable costs must also be allocated in accordance with the relative benefits received by the Medicaid program. For more information, see State Medicaid Director Letter #11-007, "New Medicaid Tobacco Cessation Services (PDF, 273.85 KB)."

How to Obtain Federal Medicaid Funding for Tobacco Quitlines

Steps will vary state by state, but here is an example of how a state can proceed:

  • Create agreements between the state tobacco control program and the State Medicaid Agency to clarify how the funding will flow. A memorandum of understanding (MOU) between the agencies may be needed if the quitline operator has a contract with an agency that is not the Medicaid agency.
  • Document the extent to which the quitline provides services to Medicaid beneficiaries. States can use a variety of methods, including, but not limited, to:
    • Survey callers to determine Medicaid eligibility; or
    • Calculate a Medicaid eligibility ratio to determine the approximate percentage of Medicaid-eligible callers in the total universe of callers served by the quitline; or
    • Use an existing plan from the State Medicaid Agency as a model. For example, Maryland used an existing cost allocation plan that was accepted by Medicaid for a Poison Control Center.
  • Ensure that there is no duplication of funds.