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Enhanced Medicaid Matching Rate for Maintenance Covers More Than Expected

By Rebecca Adams, CQ HealthBeat Associate Editor

April 30, 2013 -- States that operate and maintain upgraded Medicaid eligibility systems as the health law calls for can expect a 75 percent match from the federal government for more of those costs than local officials originally expected.

A "Frequently Asked Questions" document released by the Centers for Medicare and Medicaid Services (CMS) details the type of work that will garner the higher 75 percent matching rate for using and maintaining the updated systems. The usual matching rate for such costs is 50 percent.

Whether or not a state decides to expand Medicaid under the health law, states will be eligible for the 75 percent matching rate once they have redesigned their Medicaid eligibility determination systems as called for in the health care law (PL 111-148, PL 111-152), something which carries a 90 percent reimbursement. All states have to update their systems so that they have the ability to consider applicants' modified adjusted gross income when determining eligibility. States also have to change their systems so that they coordinate coverage with the new marketplaces that will start enrolling people in October.

States can get the 75 percent funding once they update their systems and the changes—which must meet Medicaid IT standards—take effect. The authority for this match does not expire.

The FAQs document explains what kinds of costs qualify for the rate.

States can get the rate for the operation and maintenance of system hardware and supplies, forms, software maintenance and documentation, and personnel costs related to eligibility determinations, including renewals. That includes customer service. The higher funding is also available for initial verification of eligibility, but not for audits or later verifications.

States can also get the higher rate for some costs to run call centers that help people apply for coverage. But not all of the call centers' activities are eligible for the higher rate, so administering that could be complicated. States can get the 75 percent match for call center work that helps with eligibility determinations. But answering questions about plan choices, benefits, and civil rights complaints will only get them the regular 50 percent match.

The FAQs include a chart spelling out which types of work will draw the 75 percent match and which activities (including outreach and marketing, policy development, staff development, appeals of eligibility determinations and audits) will only be eligible for the 50 percent match.

"This announcement is especially good news for state budgets," Tricia Brooks, senior fellow at the Georgetown University Health Policy Institute Center for Children and Families wrote in a blog post. She said that state officials should be especially happy that personnel costs are included.

"While this was greatly needed and hugely appreciated, it is interesting how creative they can get about the statute when they so desire," Matt Salo, executive director of the National Association of State Medicaid Directors, wrote in an email.

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