CMS has posted a final rule regarding increased federal medical assistance percentage (FMAP) changes for payments for certain Medicaid populations and is simultaneously seeking comment on selected provisions of the final rule through Monday, June 3, 2013.  The final rule implements provisions of the Patient Protection and Affordable Care Act of 2010 (ACA) and the Health Care and Education Reconciliation Act of 2010 relating to increased FMAP rates available for certain adult populations under state Medicaid programs beginning January 1, 2014. 

Under the final rule, an increased FMAP rate is available to states that expand their Medicaid programs in accordance with ACA to cover the expenditures of the “newly eligible” individuals enrolled in the new adult group who are under the age of 65 and have incomes at or below 133 percent of the federal poverty level.  The newly eligible FMAP rate for the newly eligible population is 100 percent in calendar years 2014–2016, 95 percent in calendar year 2017, 94 percent in calendar year 2018, 93 percent in calendar year 2019, and 90 percent in calendar years 2020 and beyond.  Under the U.S. Supreme Court’s decision, a state’s determination whether to expand Medicaid to the newly eligible adult population is voluntary. 

An increased FMAP rate is also available for expenditures for nonpregnant, childless individuals in the new adult eligibility group in a defined “expansion state.”  As defined in the final rule, an “expansion state” for FMAP purposes means a state that, as of March 23, 2010, offered health benefits coverage statewide to parents and nonpregnant, childless adults whose income is at least 100 percent of the Federal Poverty Level.  While the “expansion state” FMAP is initially lower than the “newly eligible” FMAP described above, beginning in 2019, the expansion state FMAP will be equal to the newly eligible FMAP.  The final rule also clarifies that if a population covered by a state that qualifies as an expansion state meets the criteria for the newly eligible matching rate, the state will receive the newly eligible matching rate for expenditures for that population. The expansion state match is intended to help states that expanded coverage to adults prior to enactment of ACA if a particular expansion population does not qualify as newly eligible.

The final rule, which also describes the methodology for determining the appropriate matching rates, will be published in the Federal Register on April 2, 2013, but a pre-publication version is available here.  A CMS Fact Sheet is also available here. 

Reporter, Christina A. Gonzalez, Houston, +1 713 276 7340, cagonzalez@kslaw.com.