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HHS to Provide Funding and Guidance for States to Improve Medicaid/Exchange IT Systems

Cooperative Agreements to Support Innovative Exchange Information Technology Systems

On October 29, 2010, the US Department of Health and Human Services (HHS) announced[1] competitive funding opportunities for states to design and implement the information technology (IT) that will be critical in the successful operation of Health Insurance Exchanges beginning in 2014.  Up to five “early innovator” states that demonstrate leadership in developing cutting-edge and cost effective technologies will receive two-year grants to develop exchange eligibility and enrollment IT models, which have universally essential components that can be adapted by other states.  The systems developed through these Cooperative Agreements will complement the health information on HealthCare.gov, with the intention of developing consumer-friendly, cost-effective IT systems to help all states, as well as the federal government.

The deadline for this grant[2] is December 22, 2010, and will be awarded by February 15 of next year.  Funding will vary based on states’ proposals and will provide necessary resources to develop and establish the most innovative, cost-effective systems.  All recipients of this award will be eligible for any future funding opportunities to support Exchange implementation efforts.

Notice of Proposed Rules Making on Enhanced Funding for Medicaid Eligibility and Enrollment and Guidance for Exchange/Medicaid IT Systems

On November 3, 2010, HHS announced two additional steps to help states provide seamless enrollment for consumers who either qualify for Medicaid or are shopping for insurance through the Exchanges.

The first is a Notice of Proposed Rulemaking (NPRM) which proposes[3] that Medicaid eligibility determination IT systems will be eligible for an enhanced Federal matching rate of 90 and 75 percent for development and maintenance respectively. The 90 percent match will be available until December 31, 2015 and the 75 percent match will be available beyond that date if states continue to meet certain criteria.  This marks a significant increase from the current 50 percent match rate.  States must meet a set of standards and conditions to be eligible to receive enhanced federal financial participation (FFP), This notice proposes to foster integrated business and IT transformation across the Medicaid enterprise.[4]

The second is a new IT guidance[5] to help states design and implement the IT needed to simplify/streamline enrollment in the Exchanges, Medicaid and CHIP. This document will be updated, pending collaboration with states.


[1] The full news release is available at http://www.hhs.gov/news/press/2010pres/10/20101029a.html

[2] https://www.grantsolutions.gov/gs/preaward/previewPublicAnnouncement.do?id=12017

[3] The full NPRM is available at http://www.federalregister.gov/articles/2010/11/08/2010-27971/medicaid-federal-funding-for-medicaid-eligibility-determination-and-enrollment-activities

[4] The Medicaid enterprise is comprised of the federal government, the states and any trading partners who exchange Medicaid transactions with either the states or the federal government.

[5] IT guidance available at http://www.hhs.gov/ociio/regulations/joint_cms_ociio_guidance.pdf

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