CMS Issues Proposed Rule on Medicaid Eligibility, FMAP - August 17, 2011

The federal Centers for Medicare & Medicaid Services (CMS) on Aug. 12 released a proposed rule implementing the Medicaid expansion and other eligibility changes under the Affordable Care Act, as well as the related enhanced Federal Matching Assistance Percentage (FMAP) provisions. The rule defines in regulation the newly eligible category for adults up to 133% FPL, and optional category for adults above 133% FPL. In addition, CMS proposes to simplify eligibility for existing Medicaid populations by consolidating certain mandatory and optional eligibility groups into three categories: (1) parents and caretaker relatives, (2) pregnant women, and (2) children. The rule also sets outs proposed methodologies to implement the requirement that Modified Adjusted Gross Income (MAGI) be used to determine income eligibility for all but certain exempted beneficiaries. In conjunction with another proposed rule related to the Exchanges, CMS proposes efforts to streamline eligibility and enrollment processes between Medicaid, CHIP and the Exchanges, including among other provisions a proposal for annual Medicaid eligibility determinations. Finally, the rule defines the calculation of the various FMAPs that will apply under the 2014 expansion, i.e., the enhanced FMAP for the newly eligible, the 2.2% increase in the base FMAP for expansion states that already covered adults up to 100% FPL when ACA was passed, and the transitional FMAP for populations who would otherwise be newly eligible adults in expansion states. To ease the burden on states in determining the applicable FMAP for each beneficiary beginning in 2014, CMS proposes several potential methodologies to approximate the percentage of beneficiaries, and the services provided to those beneficiaries, that would fall into the newly-eligible versus existing eligibility categories. Comments on the proposed rule will be due 75 days after its publication in the Federal Register, which is anticipated to be Aug. 17.