DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid, CHIP and Survey & Certification 
 
CMCS Informational Bulletin 
  
 
DATE:  June 21, 2010 
     
FROM:  Cindy Mann  
  Director 
  Center for Medicaid, CHIP and Survey & Certification (CMCS) 
 
SUBJECT:  Recent Developments in Medicaid Policy  
 
This Informational Bulletin is to inform you of some new developments in Medicaid policy and 
program operations and to share with you our preliminary communications plan as we move 
forward in implementing the many provisions of the Affordable Care Act (ACA) that affect State 
Medicaid and CHIP and survey and certification programs.   
 
State Activity 
 
First, let me congratulate the State of Connecticut on being the first State in the nation to 
receive approval for electing the new option available under the Affordable Care Act (ACA) to 
receive Federal matching funds for covering low-income individuals without children in the 
Medicaid program. Secretary Sebelius contacted Governor Jodi Rell earlier today to let her know 
that Connecticuts State plan amendment to provide Medicaid coverage for individuals with 
incomes up to 56 percent of the federal poverty level has been approved.  We are already 
working with other States interested in pursuing this historic new option. 
 
Federal Guidance 
 
This memo is also to announce the release today of three letters to State Medicaid Directors that 
provide clarification and guidance on Medicaid program operations and financing: 
 
  Political Subdivisions.  This letter provides clarification regarding the provision known 
as the political subdivision requirement in section 5001(g)(2) of the American 
Recovery and Reinvestment Act of 2009 (Recovery Act).  This provision was further 
clarified under section 10201(c)(6) of the ACA to establish the circumstances under 
which a State that requires political subdivisions within the State to contribute toward the 
non-Federal share of expenditures meets the requirements of the Recovery Act. We 
believe this guidance will provide useful information about how States may demonstrate 
compliance with the political subdivision provision in the Recovery Act.   
 
 
   
  Page 2  New Developments in Medicaid Policy 
 
  PARIS.  The second letter provides information about the Public Assistance Reporting 
Information System (PARIS) and the provision in the Qualifying Individual (QI) 
Program Supplemental Funding Act of 2008 that requires States to have eligibility 
determination systems that provide for data matching through the Public Assistance 
Reporting Information System (PARIS) project or any successor system.  PARIS is a 
system for matching data from certain public assistance programs, including State 
Medicaid programs, with selected Federal and State data for purposes of facilitating 
appropriate enrollment and retention in public programs.  
 
  Third Party Liability.  The third letter provides further guidance regarding Medicaid 
Third Party Liability (TPL).  The Deficit Reduction Act of 2005 provided additional tools 
to strengthen States ability to identify and collect payments from liable third parties 
before absorbing the costs into Medicaid.  This letter specifically addresses the DRA 
requirement that the Secretary of HHS specify a manner in which State Medicaid 
agencies and health plans can exchange eligibility and coverage data.   
 
  This guidance announces transmission formats for sharing eligibility and benefit 
  information between the State, or its agent, and health plans.  These recommended 
  formats serve as a tool to enable States to comply with the DRA data exchange 
  requirements.  The transmission formats are: 
 
  Payer Initiated Eligibility/Benefit (PIE) Transaction 
  Accredited Standards Committee (ASC) X12 270/271 Health Care 
Eligibility/Benefit Inquiry and Response Standard Transactions (270/271 
Transactions) 
 
  Use of these formats will help to ensure standardization among plans, particularly those 
  that operate in multiple States, as well as minimize administrative cost and burden on 
  States and plans. The letter also includes a set of questions and answers to further 
  elucidate CMSs policy regarding TPL.  The questions and answers supplement the 
  guidance provided in December 2006, which can be accessed at: 
  http://www.cms.hhs.gov/SMDL/SMD/. 
 
CMCS will be using these Informational Bulletins to transmit guidance to State Medicaid 
Directors and State Health Officials in the future in hopes of offering a more consistent and 
predictable mechanism for sharing information with States and other interested parties.  We will 
also include other items that may be of interest, including new research and data, information 
about State innovations and initiatives that are underway, and updates on federal Medicaid and 
CHIP outreach and enrollment activities.   
 
I hope you will find this information helpful.  Thank you for your continued commitment to the 
success of these critical health coverage programs.  As always, we welcome any feedback on this 
new communications format as well as other policy issues that may arise.  Look for our next 
CMCS Informational Bulletin in early July! 
  
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