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From Health Law Daily, December 4, 2015

CMS to pay 90 percent for updated eligibility and enrollment systems

By Bryant Storm, J.D.

CMS released a Final rule extending the availability of 90 percent federal matching funds to support states’ Medicaid eligibility and enrollment (E&E) systems. In addition to updating the funding by expanding the definition of mechanized claim processing and information retrieval system—systems for which state expenditures already receive the higher level of federal contribution—the Final rule updates conditions and standards for such systems. The changes are intended to improve states’ efforts related to customer service, eligibility, enrollment, and delivery of care (Final rule, 80 FR 75817, December 4, 2015).

Federal funds for Medicaid computer systems. The majority of state Medicaid expenditures are matched at 50 percent by the federal government. However,Soc. Sec. Act Sec. 1903(a)(3) provides for federal financial participation (FFP) of 90 percent for the design, development, and implementation (DDI) of mechanized claims processing and information retrieval systems. The same section provides for FFP at the rate of 75 percent for state expenditures for maintenance and operations (M&O) activities of such systems.

ACA. Under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), states were obligated to make major changes in their eligibility and enrollment systems to apply the modified adjusted gross income (MAGI) eligibility standards to families with children, pregnant women, and nondisabled adults, whose eligibility was no longer tied to eligibility for cash assistance programs. The state Medicaid agencies also were required to coordinate eligibility determinations with the health insurance exchanges, or marketplaces. To help states meet those obligations, CMS adopted a Final rule (76 FR 21950, April 19, 2011) that made the 90 percent FFP available for E&E systems through December 31, 2015.

Proposed rule. On April 16, 2015, CMS released a Proposed rule proposing to expand the definition of mechanized claim processing and information retrieval system to include eligibility determination and enrollment systems. Thus, the changes were intended to extend the enhanced funding of claims processing systems to E&E systems as well, allowing the higher level of federal compensation to continue beyond the end of 2015. The ultimate goal of the proposal was to move states away from outdated systems and toward a unified system (see CMS proposes more federal funds for state Medicaid computer system makeovers, April 16, 2015).

Changes. CMS adopted all of the major provisions of the Proposed rule into the Final rule. Specifically, the regulatory changes brought on by the Final rule provide for 90 percent federal matching funds for the DDI of E&E systems by making it equivalent to the matching for the DDI of mechanized claim processing systems. The changes will allow states to do away with older systems and “complete fully modernized E&E systems and will support the dynamics of national Medicaid enrollment and delivery system needs.” Additionally, the Final rule updates 45 C.F.R. Part 95 by aligning “all Medicaid IT requirements with existing policy for Medicaid Management Information Systems (MMIS) pertaining to prior approvals when states release acquisition solicitation documents or execute contracts above certain threshold amounts.”

MainStory: TopStory FinalRules CMSNews HITNews MedicaidNews EligibilityNews ProgramIntegrityNews

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