90% Funding Match Available to States for Improved Medicaid Eligibility Systems

June 17, 2011, 1:22 PM

The Centers for Medicare & Medicaid Services (CMS) enacted a rule, effective April 19, 2011, that increases federal funding for states for certain Medicaid activities. Under the rule, states may receive 90% federal matching for the design and development of claims and information retrieval systems that improve the compatibility of state plans with federal Medicaid administration. The rule also provides that states may receive 75%, instead of previously 50%, federal matching for operating expenditures related to running the new systems. According to CMS, overall commentator feedback supports the increased federal funding match as an incentive for states to modernize Medicaid eligibility systems. Some commentators believe that such increased federal funding at the outset of integration efforts will lower overall state and federal costs in the long term.

Qualification for federal matching depends on meeting performance standards, which include integration with Health Insurance Exchanges established through the Affordable Care Act, improving efficiency in handling claims, sharing technologies among the states, producing reports, and implementing flexible systems and open interfaces.

Availability for the 90% match will sunset December 31, 2015, while the 75% match may continue past 2015 if states meet certain criteria. According to CMS, the 90% match is available only through 2015 to encourage states to modernize Medicaid eligibility systems as early as possible. For more information, the CMS news release may be found here. --Aaron J. Ambrose