CMS: States can keep IT funds for Medicaid, exchanges without implementation

States can earn money for IT to expand Medicaid and build health insurance exchanges, even if they don't follow through on the projects, Centers for Medicare & Medicaid Services Acting Administrator Marilyn Tavenner said in a letter sent Friday to Virginia Gov. Bob McDonnell, chairman of the Republican Governors Association (RGA).

The letter, which also was sent to the National Governors Association (NGA) and the Democratic Governors Association (DGA), according to Health Data Management, was in response to a letter McDonnell sent to President Obama on July 10 that asked about the future of Medicaid and insurance exchanges in light of the Supreme Court's ruling last month upholding the Affordable Care Act.

In his letter, McDonnell was critical of the ruling, saying that the RGA did not understand "how the federal government can begin to afford to implement" reform. He added that the governors still need as much information as possible in order to move forward wisely.

He asked 13 questions about Medicaid expansion and 17 about the implementation of insurance exchanges, including whether funding outlined by the Health Information Technology for Economic and Clinical Health (HITECH) Act for improving eligibility systems for Medicaid would continue. The government, according to the rule, must pay 100 percent of the cost to upgrade IT systems with regard to HIEs and Medicaid expansion for three years, and at least 90 percent after that.

Tavenner responded by saying that there's no deadline for a state to tell CMS its Medicaid expansion plans.

"A state can receive extra funding for Medicaid IT costs and exchange implementation costs even if it has not yet decided whether to expand Medicaid eligibility or to run its own exchange," Tavenner wrote. "And if a state ultimately decides not to do so, it will not have to pay those resources back."

To learn more:
- read the Health Data Management article
- here's Tavenner's letter (.pdf)
- check out McDonnell's letter

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