The Centers for Medicare and Medicaid Services (CMS) published proposed rules on November 8 under which 90 percent Medicaid Federal financial participation (FFP) will be available on State expenditures for the design, development, installation and enhancement of new Medicaid eligibility systems, and 75 percent FFP will be available on expenditures for the maintenance and operations of new Medicaid eligibility systems. Prior CMS rules offered only 50 percent Medicaid FFP for Medicaid eligibility systems costs (nearly all enhanced Medicaid FFP rates for systems costs have been limited since 1989 to Medicaid provider claims processing, utilization review, and certain other MMIS functions prescribed by CMS). The new, enhanced FFP rates for Medicaid eligibility systems will be important to states because the Affordable Care Act of 2010 (ACA) requires states to invest in new technology to implement new Medicaid eligibility requirements and procedures, to process streamlined applications, to verify income information electronically, and to generate notices to applicants through their Medicaid eligibility systems.
The enhanced Medicaid FFP rates will be available for Medicaid eligibility systems under the proposed rules only if the systems are designed to achieve interoperability with the health information exchanges that states are launching this year under the HITECH provisions of the American Recovery and Reinvestment Act of 2009 (ARRA), and seamless integration with the health insurance purchasing exchanges that must open by January 1, 2014 to implement the ACA. Other prerequisites for the enhanced FFP rates include CMS approval of states’ Advance Planning Documents (APDs) showing a commitment to a modular, flexible approach to systems development as well as cost-effective sharing and reuse of reliable system components within states and among collaborating states (tenets of the Medicaid Information Technology Architecture (MITA) strategy that CMS has championed since 2005).
The 90 percent rates will apply until December 31, 2015 (installations of new Medicaid eligibility systems must be completed before 2014 but enhancements are anticipated through 2014 and 2015). The 75 percent rates for maintenance and operations will remain available after December 31, 2015 if Medicaid eligibility systems continue to meet all requirements under the proposed rules. MMIS FFP rates are unchanged. CMS and the HHS Office of Consumer Information and Insurance Oversight (OCIIO) jointly issued additional guidance to States on November 3 on the information technology that will be necessary to link state Medicaid agencies with health insurance purchasing exchanges. Comments on the proposed rules must be submitted to CMS by January 7, 2011.