DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
SHO # 16-008 
 
Re: Medicaid Family Planning Services 
and Supplies 
June 14, 2016 
 
Dear State Health Official:  
 
The purpose of this letter is to clarify previous guidance on the delivery of family planning 
services and supplies to all Medicaid beneficiaries, as well as to highlight approaches states may 
take to ensure timely access to this benefit.  Specifically, this letter provides guidance on family 
planning services provided under both fee-for-service and managed care delivery systems; 
clarifies the purpose of the family planning visit; offers strategies to reduce barriers to receiving 
family planning services and supplies; and suggests ways to increase access to contraceptive 
methods.  The guidance in this letter is effective immediately.   
 
Background  
 
Under section 1905(a)(4)(C) of the Social Security Act (the Act), family planning services and 
supplies must be included in the standard Medicaid benefit package and in alternative benefit 
plans (ABPs).  The mandatory family planning benefit provides coverage for services and 
supplies to prevent or delay pregnancy and may include: education and counseling in the method 
of contraception desired or currently in use by the individual, a medical visit to change the 
method of contraception, and (at the states option) infertility treatment.  For expenditures for 
family planning services and supplies, states receive an enhanced Federal Financial Participation 
(FFP) of 90 percent. 
 
In addition, section 1902(a)(10)(G) of the Act, as amended by section 2303(a)(3) of the 
Affordable Care Act, added an optional family planning eligibility group.  While full benefit 
Medicaid eligible individuals receive a wide array of care under other Medicaid coverage 
categories, individuals in this optional eligibility group are covered only for family planning 
services and family planning related services.  Family planning related services are medical, 
diagnostic, and treatment services provided pursuant to a family planning visit that address an 
individuals medical condition and may be provided for a variety of reasons including, but not 
limited to: treatment of medical conditions routinely diagnosed during a family planning visit, 
such as treatment for urinary tract infections or sexually transmitted infection; preventive 
services routinely provided during a family planning visit, such as the HPV vaccine; or treatment 
of a major medical complication resulting from a family planning visit.  Expenditures for family 
planning related services are matched at the states regular Federal Medical Assistance 
Percentage (FMAP).  The clarifications in this letter supplement all earlier guidance.   
 
The Centers for Medicare & Medicaid Services (CMS) issued a State Medicaid Directors letter 
on July 2, 2010 (SMDL #10-013), which provided guidance on the new optional family planning 
state plan eligibility group created by section 2303 of the Affordable Care Act. In a subsequent  Page 2  State Health Official and State Medicaid Director 
letter issued on April 16, 2014 (SMDL #14-003), CMS provided additional clarification on 
coverage of family planning-related services provided to individuals eligible under the new 
optional family planning state plan group.   
 
Applying Family Planning Policy to Fee-for-Service and Managed Care 
 
In accordance with section 1902(a)(23)(B) of the Act, an individual has free choice of a family 
planning provider regardless of the states delivery system (i.e., fee-for-service or managed care) 
and cannot be required to obtain a referral prior to choosing a provider for family planning 
services.  In managed care, enrollees can select any qualified family planning provider from in- 
network or out-of-network without referral.  
 
In addition to a beneficiarys free choice of provider, beneficiaries are free to choose the method 
of family planning as provided for in 42 C.F.R.  441.20.  States must provide that individuals 
are free from coercion or mental pressure and free to choose the method of family planning to be 
used.  States cannot have requirements that would place an undue burden, coercion, or mental 
pressure that would impinge on access to family planning services.   
 
While states and managed care plans have the ability to apply medical necessity or utilization 
control criteria for a beneficiarys request for family planning services, such processes cannot 
interfere with a beneficiarys freedom to choose the method of family planning or the services or 
counseling associated with choosing the method. For example, a state or managed care plan 
cannot require that a particular method be used first (e.g., step therapy) or have in place policies 
that restrict a change in method (which may involve removal of an implanted or inserted 
method). The only permissible prior authorization requirement would be the determination that 
the method is medically necessary and appropriate for the individual, using criteria that may 
include considerations such as severity of side effects, clinical effectiveness, differences in 
permanence and reversibility of contraceptives, and ability to adhere to the appropriate use of the 
item or service.  States and managed care plans should avoid practices that delay the provision of 
a preferred method or that impose medically inappropriate quantity limits, such as allowing only 
one long acting reversible contraceptive (LARC) insertion every five years, even when an earlier 
LARC was expelled or removed.  To the extent that states elect to employ utilization practices, 
they should pursue only those practices that ensure beneficiaries choice in family planning 
providers and method of contraception.   
 
Clarification of the Purpose of the Family Planning Visit   
 
CMS is clarifying that, when family planning services and supplies are delivered during a 
medical visit in which family planning and non-family planning services are furnished, 
expenditures for such family planning services and supplies are eligible for 90 percent FFP.  
Therefore, if an individual presents at a medical visit for any reason, such as an annual physical 
exam, and obtains a family planning service or supply for a family planning purpose during that 
visit, an expenditure for the family planning service or supply, if properly identified on the claim, 
is eligible for the 90 percent FFP.  The family planning purpose must be for the purpose of 
preventing or delaying pregnancy (or at the states option, for treating infertility).  In order for 
the state to claim the 90 percent FFP for that family planning service, states must ensure that 
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  Page 3  State Health Official and State Medicaid Director 
provider claims are appropriately documented to reflect the provision of family planning services 
and supplies.  
 
Assuring Access to Family Planning Services and Supplies 
 
Coverage of specific family planning services and supplies is one key to ensuring access to 
family planning for Medicaid beneficiaries.  However, family planning benefit requirements 
differ depending on whether a beneficiary has coverage under the traditional state plan benefit 
package or under an Alternative Benefit Plan (ABP.)1   In general, ABPs allow states flexibility 
in defining benefit packages that are different from the Medicaid state plan.  ABPs must include 
all Essential Health Benefits (EHBs).  Under the Preventive Services EHB category, coverage 
must include all U.S. Food and Drug Administration (FDA) approved methods of contraception 
prescribed for women by a health care practitioner.  ABPs must cover at least one form of 
contraception within each method approved by the FDA.  For a list of approved methods, see 
FDA Office of Womens Health Birth Control Guide available at 
http://www.fda.gov/downloads/ForConsumers/ByAudience/ForWomen/FreePublications/UCM3
56451.pdf.    
 
For Medicaid beneficiaries whose coverage is governed by the state plan rather than the ABPs, 
states may determine the specific services and supplies that will be covered as Medicaid family 
planning services and supplies so long as those services are sufficient in amount, duration, and 
scope to reasonably achieve the purpose of preventing or delaying pregnancy and permit 
beneficiary choice of the method of family planning.  Although it is not required, CMS 
recommends that states cover all FDA-identified contraceptive methods for beneficiaries, 
including both prescription and non-prescription methods.  Because not all forms of 
contraception are appropriate for all beneficiaries, in the absence of contraindications, patient 
choice and efficacy should be the principal factors used in choosing one method of contraception 
over another.  One pathway for states to accomplish this would be to align ABP and state plan 
coverage for these services.  
 
Under both ABP and state plan coverage, whether provided through a fee-for-service or a 
managed care delivery system, family planning services and supplies, including contraceptives 
and pharmaceuticals, must be provided without cost sharing pursuant to 42 C.F.R.  
447.56(a)(2)(ii) and 42 C.F.R.  438.108.  Additionally, existing timely claims payment 
provisions specified in 42 C.F.R.  447.45 and 447.46 apply to claims for family planning 
services and supplies.  For managed care plans, these provisions apply to claims from in-network 
and out-of-network providers, unless a mutually agreed to alternative payment schedule is in 
place.  
 
Other confidentiality requirements protect individuals seeking family planning services.  State 
Medicaid programs and managed care plans are covered entities under the Health Insurance 
Portability and Accountability Act (HIPAA) Privacy Rule.  Under 45 C.F.R.  164.522(b)(ii), the 
                                                 
1 States are required to provide Medicaid benefits through an ABP for the Medicaid expansion population.  The state 
has the option of providing benefits through an ABP for other populations, otherwise individuals receive traditional 
state plan benefits. 
 
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  Page 4  State Health Official and State Medicaid Director 
state Medicaid program and managed care plans must accommodate a beneficiarys reasonable 
request to receive communications, including explanation of benefits, by alternative means or at 
an alternative location when the individual clearly states that disclosure could endanger the 
individual.  For example, a beneficiary may request that a plan communicate with her/him via 
cell phone instead of paper mail.  States and managed care plans are responsible for ensuring that 
beneficiaries are informed of this option. In addition, under 45 C.F.R. 164.522(b)(i), health care 
providers must accommodate an individuals reasonable request for alternative means of 
communication in all circumstances.  All states and Medicaid managed care plans (and health 
care providers) should already be ensuring confidentiality as part of their compliance with the 
HIPAA Privacy Rule.   
 
Strategies for Improving Access to Long Acting Reversible Contraceptives (LARCs) 
 
LARCs, including IUDs and contraceptive implants, are an extremely effective form of 
contraception.  LARCs are administered by physicians and other providers who may administer 
them within their scope of practice.  LARCs may also be cost effective (and when expenditures 
are federally matched at the 90 percent rate, the costs to states are extremely low).  For Medicaid 
eligible individuals, reimbursement to providers for LARCs should be reasonable and must 
include not only the insertion and removal of the LARC, but also the LARC itself, even if the 
service and device are billed and paid separately.  CMS issued an informational bulletin on April 
8, 2016, highlighting emerging payment approaches that several state Medicaid agencies have 
used to optimize access to and use of LARCs.2  
 
States may cover LARCs through their pharmacy benefit.  Covering LARCs through the 
pharmacy benefit means that dispensing pharmacies bill the state for the LARCs and applicable 
dispensing fees, then deliver the LARCs to providers for insertion or administration.  The 
provider then bills the state for the furnished insertion or implantation service.  These steps may 
present barriers to access since this process requires the woman to see the provider twice: once to 
obtain the LARC prescription and then again for insertion or administration.   Another challenge 
is that, absent permissible state policies or prior manufacturer arrangements, providers may not 
return un-inserted or un-administered LARCs, resulting in waste and financial loss for the state.   
 
Issues have also arisen when states cover LARCs through the medical benefit.  In these states, 
providers can stock the array of LARCs and implant or administer the most appropriate one 
during the patients visit, which helps improve access by reducing the need for a second visit. It 
could also reduce the waste from unused LARCs.  High upfront costs required to maintain a 
stock of LARCs, however, may deter providers from implementing this approach, resulting in 
barriers to access due to a potential unwillingness of providers to furnish LARCs.   
 
CMS encourages states to explore and pursue the following models, some of which are already 
being used by states, to overcome administrative and logistical barriers to the provision of 
LARCs: 
 
                                                 
2 State Medicaid Payment Approaches to Improve Access to Long-Acting Reversible Contraception. April 8, 2016. 
https://medicaid.gov/federal-policy-guidance/downloads/CIB040816.pdf 
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  Page 5  State Health Official and State Medicaid Director 
First, states are encouraged to implement measures that facilitate immediate postpartum LARC 
insertion, when a woman chooses this option.  As a result of the global or bundled pregnancy and 
delivery payment arrangements, some states have established policies of not covering additional 
services provided immediately following delivery.  These policies have the effect of deterring 
providers from inserting LARCs immediately after delivery.  In addition, when multiple 
procedures are performed during a single hospital stay and submitted as a single inpatient claim, 
if those costs attributable to family planning services are separately identified, the state can 
receive federal matching funds at the 90 percent rate.  To the extent that there are shared costs 
between family planning services and other services, the state should develop a methodology for 
allocating these costs.  CMS strongly recommends that states establish payment policies that, 
when a woman chooses, permit and encourage insertion of LARCs immediately following a 
vaginal delivery or surgical procedure as a separately identified service that is eligible for the 90 
percent FFP.  CMS also recommends similar policies with respect to coverage of free standing 
birth center services, which are generally reimbursed at the states regular FMAP unless the free 
standing birth center provides family planning services.  These services would then be eligible 
for the 90 percent FFP. 
 
Another approach to ensure same-day access, to the extent permissible, is for publicly funded 
providers of family planning services who also serve Medicaid patients to pre-purchase and 
stock their inventories with LARC methods and bill Medicaid or the pertinent third-party payer 
for the LARC when it is used.  
 
Additionally, states are encouraged to direct pharmacies and providers to utilize programs 
already established by manufacturers that facilitate stocking providers with LARCs for medical 
benefit coverage, as well as those that facilitate the return of, and reimbursement by 
manufacturers to states for unused LARCs dispensed under the pharmacy benefit. Or states can 
seek to establish new arrangements with LARC manufacturers to increase Medicaid beneficiary 
access to their LARCs.  In one such arrangement piloted in a number of states, the LARC 
manufacturer proactively furnishes providers with its LARCs without upfront costs.  At a 
reasonable time post-implantation or administration, the manufacturer bills the provider for the 
cost of the LARC to ensure providers have had the time to be reimbursed by third party payers, 
including state Medicaid programs.  With this approach, providers can be stocked with a supply 
of LARCs without incurring upfront costs.  Providers funds which would otherwise be invested 
in inventory could be used in other ways to improve the range and quality of services provided.  
Beneficiaries would also receive LARCs in a more timely and efficient manner.  Lastly, 
providers may be able to focus more on the provision of healthcare and not the administrative 
duties related to stocking and being reimbursed for LARCs.  This approach is consistent with 
existing Medicaid policy, including the availability of manufacturer rebates on the drugs. 
 
CMS is also interested in exploring with states the use of section 1115(a) demonstration 
authority to make available administrative funding at the 90 percent federal matching (authorized 
by section 1903(a)(5) of the Social Security Act) for states to maintain an inventory of LARCs 
for providers who furnish covered medical assistance for eligible individuals.  The 90 percent 
federal matching is available for costs related to the states administration of family planning 
services and supplies.  CMS envisions that, under a section 1115(a) demonstration, the state 
would incur an administrative expense to purchase a stock for a Medicaid provider for use by 
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  Page 6  State Health Official and State Medicaid Director 
Medicaid beneficiaries.  Once the entire stock is used, the state Medicaid agency would re-stock 
the provider with the same number of LARCs.  To be a reasonable administrative cost, the stock 
would be expected to be used in the course of a period of time, such as a month, and would be 
replenished as a stock consisting of the same number of items.  To account for the costs, states 
would claim the cost of the stock as a family planning administrative cost, make the stock 
available without cost to providers, prohibit any further claim by the provider for the cost of 
LARCs taken from stock for Medicaid use (the provider would bill for insertion or removal of 
the LARC, but not for the LARC itself), and provide for replenishment of the stock when 
LARCs are used.  CMS will consider other state ideas like this, related to all types of family 
planning services, subject to the regular process for review, approval, and evaluation of section 
1115(a) demonstrations.   
 
Clarifying Policies Regarding Sterilization and Delivery 
 
Federal funds are available for sterilizations as a family planning service, including when the 
sterilization is provided immediately following delivery with the informed consent of the patient 
as an add-on procedure.  When provided with the informed consent of the patient, postpartum 
sterilization is an effective form of contraception that provides convenience for the woman, 
reduces costs, and reduces unplanned pregnancies.  All sterilization services require informed 
consent in accordance with 42 C.F.R., Part 441, Subpart F.  The Federally required consent form, 
without alteration, must be used and consent must be obtained at least 30 days before the 
sterilization, but not more than 180 days before the date of the sterilization.  The only exception 
is in the case of procedures performed post-premature delivery or following emergency 
abdominal surgery.  Under those exceptions, the informed consent must be given no less than 72 
hours prior to the sterilization and, in the case of premature delivery, the informed consent must 
have been given at least 30 days before the expected date of delivery.   
 
CMS encourages states to develop appropriate policies and procedures that eliminate barriers to 
requested postpartum sterilization while ensuring informed consent.  Providers should be 
encouraged to discuss postpartum sterilization with interested patients early in the course of 
treatment to ensure that the requirements for informed consent and for completion of the consent 
form are met pursuant to 42 C.F.R., Part 441, Subpart F, to avoid payment disallowances.  When 
a postpartum sterilization is performed that does not comply with the requirements for informed 
consent described in 42 C.F.R., Part 441, Subpart F, FFP is not available for costs related to the 
sterilization.   
 
CMS is committed to assuring that all Medicaid beneficiaries have access to and receive vital 
family planning services and supplies without limitations on their choice of provider or their 
choice of contraception method.  CMS hopes that states find the information and clarifications 
provided within this letter useful in administering the Medicaid family planning benefit.  If you 
have any questions regarding this information, please contact, Kirsten Jensen, Director, Division 
of Benefits and Coverage, at 410-786-8146. 
  
                   
 
 
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            Sincerely,   
                  /s/  
  
                     Vikki Wachino   
                  Director   
 
cc:  
National Association of Medicaid Directors  
National Academy for State Health Policy  
National Governors Association  
American Public Human Services Association  
Association of State Territorial Health Officials  
Council of State Governments  
National Conference of State Legislatures  
AcademyHealth 
 
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