DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
Center for Medicaid and CHIP Services 
                SMD# 13-002 
 ACA #25   
 
 RE: Affordable Care Act Section 4106    
 (Preventive Services) 
February 1, 2013 
Dear State Medicaid Director: 
This letter provides guidance to states on section 4106 of the Affordable Care Act.  Section 
4106(b) establishes a one percentage point increase in the federal medical assistance percentage 
(FMAP) effective January 1, 2013, applied to expenditures for adult vaccines and clinical 
preventive services to states that cover, without cost-sharing, a full list of specified preventive 
services and adult vaccines.  In that circumstance, the increase would apply to such expenditures 
whether the services are provided on a fee-for-service (FFS) or managed care basis, or under a 
benchmark or benchmark-equivalent benefit package (referred to as an alternative benefit plan).   
 
The specified preventive services are those assigned a grade of A or B by the United States 
Preventive Services Task Force (USPSTF), and approved vaccines and their administration, 
recommended by the Advisory Committee on Immunization Practices (ACIP).  The services 
remain optional with one exception: effective January 1, 2014, the law requires that alternative 
benefit plans cover preventive services described in section 2713 of the Public Health Service 
Act as part of essential health benefits.  Section 2713 includes, among others, the same services 
as those authorized for increased match under section 4106 of the Affordable Care Act.   
 
The federal Agency for Healthcare Research and Quality supports the USPSTF, an independent 
panel of experts in prevention that makes recommendations on clinical preventive services on a 
graded scale.  The Centers for Disease Control and Prevention supports the ACIP, a group of 
medical and public health experts that develops recommendations on how to use vaccines to 
control diseases in the United States.  Both groups publish their recommendations.  A list of the 
services that are eligible for the increased FMAP can be found on the following websites:  
 
http://www.uspreventiveservicestaskforce.org/uspstf/topicsprog.htm http://www.cdc.gov/vaccine
s/schedules/hcp/adult.html   
 
In order for states to claim the one percentage point FMAP increase for these services, states 
must cover in their standard Medicaid benefit package all the recommended preventive services 
and adult vaccines, and their administration, and must not impose cost-sharing on such services.  
States utilization review and approval procedures should conform to USPSTF and ACIP  Page 2  State Medicaid Director 
 
periodicity or indications where specified.  States should ensure that they have appropriate codes 
or modifiers available for providers to utilize a crosswalk from those codes and modifiers to the 
USPSTF and ACIP recommendations, and a financial monitoring procedure to ensure proper 
claiming for federal match.   
 
The one percentage point increase to the FMAP under section 4106 applies only to certain 
federal matching rates specified in section 1905(b) and section 1905(y) of the Social Security 
Act (the Act).  Specifically, for eligible services, section 4106 of the Act only applies to the 
following FMAP rates, as long as the FMAP does not exceed 100 percent: 
 
  Regular FMAP rates calculated in the first sentence of section 1905(b) of the Act. 
  FMAP rates specified in the first sentence of section 1905(b) of the Act for the District of 
Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and 
American Samoa. 
  The enhanced FMAP specified in section 1905(b) of the Act relating to services provided 
to certain breast or cervical cancer patients. 
  The increased FMAP rates for Medical Assistance for newly eligible mandatory 
individuals specified at section 1905(y) of the Act.  We note, that although the FMAP 
indicated in section 1905(y)(1)(A) of the Act for calendar quarters in 2014, 2015, and 
2016 is 100 percent, as indicated above, this FMAP may not exceed 100 percent. 
 
We are adding new lines to the CMS-64 report to capture state expenditures incurred in the 
provision of services authorized under section 4106.  States should use these new line items to 
reflect expenditures eligible for the additional one percentage point.  As with all services 
reimbursed under Medicaid, states are required to maintain documentation supporting 
expenditures claimed under these new line items. This documentation must contain the coding, 
crosswalk, and controls procedures discussed above and must be made available to the Centers 
for Medicare & Medicaid Services (CMS) upon request. 
 
Overlap with Other Services 
 
We recognize that provision of the preventive services described in section 4106 may occur at 
the same time as other services eligible for enhanced or increased FMAP rates not identified 
above.  For example, family planning services may include USPSTF preventive services and 
ACIP approved adult vaccines, and their administration, furnished during a family planning visit. 
Family planning services can be reimbursed at a 90 percent rate.  In these cases, states should 
claim on the family planning line of the CMS-64 form, which is reimbursed at the 90 percent 
rate.  If a state ordinarily claims these preventive services and adult vaccines as a separate 
service from the family planning service, it should continue to do so.   
 
Certain USPSTF grade A or B preventive services and vaccine administration codes eligible for 
the one percentage point FMAP increase under section 4106 may also qualify as primary care 
services eligible for a temporary increase in the payment rates matched at 100 percent federal 
financial participation (FFP) for calendar years (CY) 2013 and 2014 per section 1202 of the 
Affordable Care Act.  Under section 1202, the Medicaid rate in CYs 2013 and 2014 for such 
primary care services by or under the direction of an eligible physician will be the lower of the 
providers charges or the 2013 and 2014 Medicare rate respectively.  FFP is available for 100  Page 3  State Medicaid Director 
 
percent of the difference between the Medicaid rate as of July 1, 2009 and the increased rate.  
Under section 1202, the states regular FMAP rate will be available for the portion of the rate 
related to the July 1, 2009 base payment.  An additional one percentage point will be available 
on that base amount under section 4106 of the Affordable Care Act.  The following example 
illustrates the interaction of these two Affordable Care Act provisions. 
 
Example.  A states regular FMAP is 60 percent and under section 4106 of the 
Affordable Care Act, the FMAP would be increased to 61 percent for certain affected 
preventive services effective January 1, 2013.  The portion of the states rate related to 
the July 1, 2009 base payment for certain affected primary care preventive services is 
$70.  In 2013 the state increases the rate to $80 in accordance with section 1202 of the 
Affordable Care Act.  The $10 difference between the $70 July 1, 2009 Medicaid rate 
and the increased rate of $80 is eligible under section 1202 of the Affordable Care Act for 
100 percent FMAP.  Prior to the application of the Affordable Care Act provisions, the 
total federal funding for the $70 provider payment rate would have been $42 (60 percent 
FMAP of $70).  With the application of section 4106 and 1202 of the Affordable Care 
Act, the total federal funding available would be $52.70, calculated as $42.70 (61% (60 
percent FMAP plus one percentage point) of the $70 regular provider rate) plus $10 (100 
percent of the difference between $80 (the increased provider rate) and $70 (the July 1, 
2009 rate)).        
 
Claiming the Increased FMAP in Managed Care 
 
In order to be eligible for the one percentage point increased FMAP, states must make these 
services available to those enrolled in a managed care delivery system as well as those in a FFS 
setting, and must ensure that beneficiaries have no cost-sharing liability for these services.  States 
have the authority to claim an increased FMAP for preventive services whether provided in a 
FFS setting or in a managed care program that is reimbursed through capitation rates that meet 
the requirements for actuarial soundness in 42 CFR 438.6(c).   
 
The portion of the capitated rate that is attributable to preventive services and upon which an 
increased match may be claimed, may be determined prospectively based upon historical FFS 
data or data from the managed care plans (if available). The portion of the capitation rate claimed 
at the increased FMAP must be attributable only to services meeting the definition for preventive 
services under this section.  The data used to establish the portion of the capitation rate that can 
be claimed at the increased FMAP rate should be the most recent complete and validated 
historical data available, whether from FFS or the managed care plans.  In order to claim the 
increased FMAP states may need to amend their managed care contracts to require delivery of 
these services in accordance with the statute.   
 
State Plan Modifications 
 
States seeking the one percentage point FMAP increase should amend their state plans to reflect 
that they cover and reimburse all USPSTF grade A and B preventive services and approved 
vaccines recommended by ACIP, and their administration, without cost-sharing.  States should 
provide an assurance in the state plan indicating that they have documentation available to 
support the claiming of federal match for such services, as described earlier in this letter.  States  Page 4  State Medicaid Director 
 
should provide an additional assurance stating that they have a method to ensure that, as changes 
are made to USPSTF or ACIP recommendations, they will update their coverage and billing 
codes to comply with those revisions.  Please refer to the previously mentioned websites for 
USPSTF and ACIP updates.   
 
Additional Policy Development 
 
Certain preventive services listed by the USPSTF when provided by non-licensed practitioners 
have traditionally not been covered by Medicaid due to regulatory requirements limiting 
practitioners of preventive services to either physicians or licensed professionals.  Although 
section 1905(a)(13) of the Act contains broad language authorizing payment for preventive 
services recommended by a physician or other licensed practitioner, the implementing regulation 
at 42 CFR 440.130(c) currently limits preventive services to those provided by a physician or 
other licensed practitioner of the healing arts (within the scope of practice under state law). 
Consistent with 4106(a), CMS proposed revisions to this regulation in the Notice of Proposed 
Rulemaking which went on display in the Federal Register on January 14, 2013, giving states the 
ability to recognize unlicensed practitioners in the delivery of these services.  Should this policy 
be finalized, states would be able to claim the one percentage point match for preventive services 
delivered by practitioners other than physicians or other licensed practitioners.  Until that time, 
however, the increased match is available only for those services that are delivered in accordance 
with existing Medicaid regulations. 
   
We are eager to work with states to facilitate the implementation of these preventive services that 
can improve the health of beneficiaries.  As you continue to consider and implement measures 
aimed at strengthening prevention, we are available to provide technical assistance on prevention 
related topics if you email us at:  MedicaidCHIPPrevention@cms.hhs.gov. If you have any 
questions regarding this letter, please contact Barbara Edwards, Director of the Disabled and 
Elderly Health Programs Group, at 410-786-0325.  
 
 
 
            Sincerely,  
 
                /s/ 
 
            Cindy Mann  
            Director  Page 5  State Medicaid Director 
cc:  
 
CMS Regional Administrators  
 
CMS Associate Regional Administrators  
Division of Medicaid and Childrens Health Operations 
 
Matt Salo  
Executive Director  
National Association of Medicaid Directors  
 
Alan R. Weil, J.D., M.P.P.  
Executive Director  
National Academy for State Health Policy  
 
Ronald Smith  
Director of Legislative Affairs  
American Public Human Services Association  
 
Joy Wilson  
Director, Health Committee  
National Conference of State Legislatures  
 
William Garner 
Legislative Director 
National Governors Association  
 
Debra Miller  
Director for Health Policy  
Council of State Governments  
 
Christopher Gould  
Director, Government Relations  
Association of State and Territorial Health Officials