Federal Funding for State Medicaid HIT Activities

CMS Letter Outlines State Requirements for Medicaid Directors

On Tuesday, CMS issued a letter to Stated Medicaid Directors. This is an update to the State Medicaid HIT Plan (SMHP) Overview from 2009. In July, the ONC issued a PIN (Program Information Notice) to State HIEs entitled “Requirements and Recommendations for the State Health Information Exchange Cooperative Agreement Program.” It outlined responsibilities under the program, recommended roles for the HIT Coordinators, and elements of the state strategic and operational plans.

The Recovery Act provides 100 percent Federal financial participation (FFP) to States for incentive payments to eligible Medicaid providers to adopt, implement, upgrade, and meaningfully use certified EHR technology, and 90 percent FFP for State administrative expenses related to the program.

Section 4201 of the ARRA provides 90% FFP HIT Administrative match for three activities to be done under the direction of the SMA:
1. Administer the incentive payments to eligible professionals and hospitals;
2. Conduct adequate oversight of the program, including tracking meaningful use by providers; and
3. Pursue initiatives to encourage the adoption of certified EHR technology to promote health care quality and the exchange of health care information.

Enclosure A outlines CMS’ expectations and provides examples of potentially allowable activities and reasonable costs related to State administration of the program.

Enclosure B provides additional information about CMS’ initial expectations for States’ auditing and oversight of their Medicaid EHR Incentive Program.

Enclosure C outlines the CMS guiding principles for the availability of the 90 percent FFP administrative matching funds for basic administration and oversight of the Medicaid EHR Incentive Program, as well as efforts to promote its success among eligible Medicaid providers.

Enclosure D outlines the CMS process for reviewing the SMHP and associated funding request documents (HITECH and MMIS).

Initial guidance on section 4201 of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Pub. L. 111-5 which establishes a program for payment to providers who adopt and become meaningful users of electronic health records was issued in September 2009.  The initial SMHP provided State Medicaid Agencies (SMAs) and CMS with a common understanding of the activities the SMA will be engaged in over the next 5 years relative to implementing Section 4201 Medicaid provisions of the American Recovery and Reinvestment Act (ARRA).

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