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State Plan Medicaid Service Reimbursement CMS reviews State plan amendment reimbursement methodologies for services provided under the State plan for consistency with Section 1902(a)(30)(A) of the Social Security Act (the Act) and other applicable federal statutes and regulations. Section 1902(a)(30)(A) of the Act requires that States "assure that payments are consistent with efficiency, economy and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area." The Code of Federal Regulations (CFR) at 42 CFR 430 and 447 offers regulatory guidance to States in implementing Medicaid State plan payment rates consistent with the Act. To change reimbursement methods and standards used to pay Medicaid providers, a State must submit a State plan amendment (SPA) for CMS to review and approve. Prior to the effective date of the amendment, a State is also required to issue a public notice of any change in the methods and standards for setting the State plan payment rates for services. The notification is intended to widely inform providers and other affected parties of changes to Medicaid payment rates. In general, CMS reviews State payment methodologies and supporting documentation to ensure that the State plan methodology may be audited and is comprehensively described and that payment rates are economic, efficient and sufficient to attract willing and qualified providers. In addition, the CFR requires that Medicaid payments to qualified hospitals, nursing facilities, ICF/MRs, and clinics not exceed a reasonable estimate of the amount that Medicare would pay for equivalent services in the aggregate within State owned or operated, non-State owned or operated and private facilities. State Share Funding for Medicaid Services Section 1902(a)(2) of the Act provides that the State must assure adequate funding for the non-Federal share of expenditures from State or local sources for the amount, duration, scope, or quality of care and services available under the State plan. Recognized sources of the State share of Medicaid payments include: legislative appropriations to the single State agency, inter-governmental transfers (IGTs), certified public expenditures (CPEs), and permissible taxes and provider donations. Prior to approval of a State plan amendment, CMS must verify that the source of the State share meets applicable statutory and regulatory requirements in order to authorize federal financial participation (FFP) for the covered services. Medicaid Administrative Claiming Section 1903(a) of the Social Security Act directs payment of Federal financial participation (FFP), at different matching rates, for amounts "found necessary by the Secretary for the proper and efficient administration of the State plan." The Secretary is the final arbiter of which activities fall under this definition. Claims held under this authority must be directly related to the administration of the Medicaid program. In addition, payment may only be made for the percentage of time spent which is actually attributable to Medicaid eligible individuals. CMS has approved cost allocation plans from States which include the following types of administrative costs necessary for the proper and efficient administration of the State plan: • Medicaid eligibility determinations; • Medicaid outreach; • Prior authorization for Medicaid services; • Medicaid Management Information System development and operation; • Early and Periodic Screening, Diagnostic and Treatment administration; • Third Party Liability activities; and • Utilization review. Medicaid Financial Operations and Reporting CMS ensures that Federal financial participation for the Medicaid program is paid consistently with Federal requirements by adjudicating State funding requests and claims. In accordance with applicable federal regulations and statute, CMS provides consistent interpretation of national Medicaid financial policy. In addition, CMS has developed and maintained the Medicaid Budget and Expenditure System (MBES) and State Children's Health Insurance Budget and Expenditure System (CBES). The MBES/CBES allows states to electronically submit their Form CMS-64 directly to the CMS Data Center and the Medicaid data base. Form CMS-64 is a statement of expenditures for which states are entitled to Federal reimbursement under Title XIX and which reconciles the monetary advance made on the basis of Form CMS-37 filed previously for the same quarter.
Page Last Modified: 08/04/2009 4:09:41 PM
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