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 and CHIP Services          November 19, 2012
 
  
 
Medicaid/CHIP Affordable Care Act Implementation 
Answers to Frequently Asked Questions 
 
Availability of Enhanced Funding for IT Systems (90/10) 
 
Q1:  CMS has advised states that the 90/10 matching funds for modernization of Medicaid 
eligibility and enrollment systems is not related to a states decision about whether to 
proceed with the Medicaid expansion for the new adult group.  Is 90/10 funding contingent 
on a state complying with other aspects of the Affordable Care Act related to eligibility?  
Must a state that uses 90/10 funding build into its design and development support for the 
new adult group, even if it does not plan now to proceed with the expansion? 
 
A:  The 90/10 funding is not contingent on a states decision to proceed with its Medicaid 
expansion.  As the preamble to the final regulation makes clear, the enhanced funding was not 
solely for eligibility determination systems that support the Medicaid expansion.  (76 Fed Reg 
21950-21975 (April 19, 2011) and 42 CFR Part 433.   
 
CMS was clear in the final rule that enhanced funding could be available for eligibility 
determination systems that determine eligibility for traditional eligibility groups.  However, such 
systems must meet all requirements, standards and conditions included in the final rule, 
including the seven conditions and standards that ensure modernized and efficient eligibility 
systems that produce accurate and timely eligibility determinations and that can interface 
seamlessly with the Exchange operating in that state.  In all states, including those that do not 
proceed with the expansion, state eligibility systems must be able to electronically pass accounts 
between the Exchange (whether state-based or federally-facilitated) in order to facilitate 
seamless coordination.  In addition, the systems must be able to support a single streamlined 
application for coverage among insurance affordability programs, support Modified Adjusted 
Gross Income (MAGI)-based eligibility determinations; and must support new renewal processes 
and connections for data-driven, electronic verifications as described in the Medicaid eligibility 
final rule issued March 23, 2012 (available at  http://www.gpo.gov/fdsys/pkg/FR-2012-03-
23/pdf/2012-6560.pdf). 
 
States are not required to build in programming for the new adult group.  However, a state that 
conforms to the seven standards and conditions (particularly modular design and separation of 
business rules from core programming) will be able to quickly and efficiently support enrollment 
for the expansion population regardless of whether a state proceeds in 2014 or at some later 
point.  In addition, enhanced funding is available for states that wish to explicitly build in 
placeholder programming for the new adult group now to provide for future flexibility.  Page 2 
We remind states that the 90/10 funding for systems development is only available for costs 
incurred for goods and services furnished on or before December 31, 2015; subsequently, 
development expenditures are matched at 50 percent.   There is no time limit on the enhanced 
operations and maintenance funding for the systems that received the enhanced developmental 
funding.  This funding is set at 75 percentas long as the system continues to meet all standards 
and conditions of the final rule. 
 
Q2:  What technical guidance and deliverables can CMS offer to states that are getting a 
late start on their modernized eligibility system builds? 
 
A:  Risk assessment and contingency planning are necessary and required components of any 
significant IT project or state systems build. We are encouraging every state to formulate 
contingency plans, which by necessity must take into account current state operational and 
technical realities.  We have and will continue to make available a series of policy and technical 
accelerators that can help states achieve readiness for the October 1, 2013 open enrollment 
period.   These include multi-state partnership models to jumpstart states design and 
development timelines and recommendations about how to reflect these strategies and an 
expectation of reuse in states request for proposals and contract language. CMS is providing 
states with targeted technical assistance, as well as multiple examples, templates and sample 
documents to support these strategies.  
 
To support reuse as a means to accelerate system builds, as states develop their own artifacts in 
support of operational and technical progress, they are posting that information in a shared 
environment accessible to all Exchange, Medicaid and CHIP programs for reuse by others.  
Detailed information about CMS System Accelerators can be found in the CMS Application 
LifeCycle Tool (CALT) Medicaid Community in the Accelerators Folder: 
https://calt.cms.gov/sf/docman/do/listDocuments/projects.medicaid_state_collaborative_com/doc
man.root.system_accelerators.multi_state_model?_message=1342007963543. 
 
In addition, every state has an eligibility and enrollment systems lead (as well as a policy lead) 
through the State Operations and Technical Assistance (SOTA) teams. The E & E leads are 
available to assist states in pursuing the most appropriate options for their particular situation. 
 
Q3:  How can state staff gain access to the CALT? 
 
A:  The CALT is indeed an important learning environment for both systems and policy staff in 
the states.  State staff can email calt_support@cms.hhs.gov to request the electronic application 
packet and then will need to secure approval from their designated CALT access contact in their 
state.  CALT access is open to an unlimited number of state staff. 
  
 
 
 
 
 
 
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FFE Interactions with Medicaid and CHIP 
 
Q1:  When does CMS need to know states intention to proceed with the Medicaid 
expansion for purposes of the FFE build?  What if a State adopts the expansion too late to 
have the change accommodated by the FFE (at least for some period of time); how would 
the coordination provisions of the law be accommodated? 
 
A:  There is no deadline by which states need to decide on the Medicaid expansion. We 
understand that there are many considerations involved in this decision, and CMS stands ready to 
work with states on their individual timetables.  Regardless of the expansion, every state that 
uses the Federally Facilitated Exchange will need to support coordination between the Medicaid 
and CHIP programs and the FFE and otherwise comply with the new MAGI rules as well as the 
application, renewal and verification procedures described in the Medicaid eligibility final rule 
issued March 23, 2012 (available at http://www.gpo.gov/fdsys/pkg/FR-2012-03-23/pdf/2012-
6560.pdf).  We will be working with each state to ensure that the appropriate business rules are 
accommodated and tested, and the necessary electronic account handoffs are in place, before the 
FFE is operational and the new Medicaid rules are in effect.  We are continuing to provide more 
guidance and information on these issues as part of the FFE manual and MOU process as well as 
through our SOTA calls.  We are also establishing a state- to- FFE change process to help 
manage changes in policies that a state may make over time; a state that decides later to proceed 
with expansion will be accommodated within that process.   
 
Q2: How will the Supreme Court Decision affect CMSs ability to ensure other aspects of 
the law such as those affecting interactions with the Federally-facilitated Exchange?  For 
example, if a state does not want to exchange electronic accounts with the FFE, what will be 
required and what, if any, penalties could be imposed?   
 
A: As previously stated in a letter from the Secretary to the nations governors, the Supreme 
Court held that a state may not lose federal funding for its existing Medicaid program if the state 
chooses not to participate in the expansion of Medicaid eligibility for low-income adults.  The 
Court's decision did not affect other provisions of the law.  State Medicaid and CHIP programs 
will need to coordinate with the Federally-facilitated Exchange, regardless of a states decision to 
proceed with expansion.  States will need to be part of the seamless system for people to apply 
for all coverage programs; and will need to coordinate eligibility with the new insurance 
affordability programs.  These provisions have relevance regardless of whether a state chooses to 
participate in the expansion for low-income adults. 
 
Q3:  What will be the role of the FFE in reviewing applications from individuals with 
incomes below 133% of the FPL in states that do not implement the Medicaid expansion?   
 
A:  The FFEs role is the same whether or not a state implements the Medicaid expansion for 
low-income adults.  The FFE will still make MAGI-based determinations or assessments of 
eligibility for Medicaid and CHIP and will assess eligibility for premium tax credits and cost 
sharing.  The FFE will apply the states eligibility levels for Medicaid/CHIP when it makes the 
Medicaid determination or assessment. In addition, as established in the Exchange and 
Medicaid/CHIP eligibility final rules, the FFE will electronically transfer accounts for 
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individuals who are either determined or assessed as eligible for Medicaid and CHIP (it is a state 
option whether to have the FFE determine or assess eligibility) for further evaluation/action.   
 
Q4:  How would a states decision not to expand their Medicaid programs eligibility affect 
their ability to get information from the federal HUB under a state-based exchange model?  
 
A:  The federal hub will provide data verification services to any state-based exchange and to the 
Medicaid and CHIP program without regard to whether a state has adopted the low-income adult 
expansion.  Consistent with the regulations issued on March 23, 2012, state Medicaid and CHIP 
programs must rely on the HUB for certain information; this provision applies without regard to 
whether a state has adopted the Medicaid expansion for low-income adults. 
 
 
Federal Data Services Hub  
 
Q1.  What verification services will be available from the Federal data services hub on 
October 1, 2013 (Day 1)? 
 
A: The Federal data services hub will provide the following services on Day 1. CMS is also 
pursuing data sources for additional verifications through the Federal data services hub and will 
keep states updated as they are confirmed: 
  Social Security Number (SSN) verification via the Social Security Administration 
(SSA) 
  Citizenship verification via SSA or the Department of Homeland Security (DHS) 
when relevant 
  Incarceration verification via SSA 
  Title II benefit income information via SSA (monthly and annual amounts) 
  Quarters of coverage information via SSA 
  MAGI income information from the Internal Revenue Service (IRS) 
  Max APTC from IRS 
  Immigration status verification via DHS, as well as a translation to indicators for 
lawful presence, qualified non-citizen, and five year bar status. 
  Public minimum essential coverage (MEC) verification from Federal agencies 
	
Q2.  Will CMS charge state-based exchanges (SBEs) or Medicaid/CHIP agencies for any of 
the Federal data hub services or underlying data? If so, which ones and how much? 
 
A: No. We will not charge state-based exchanges (SBEs) or Medicaid/CHIP agencies for the 
Federal data hub services or underlying data.  
 
Q3.  Are all of the Federal data hub services separate (atomic), such as SSN validation, 
and citizenship, or will they be wrapped into a single, composite service? 
 
A: Some services will be composite, and others atomic. For instance, it will be possible to invoke 
individual SSA services in a single composite service, although not all services in the composite 
will	always	need	to	be	invoked.		If	the	Exchange	is	seeking	Title	II	income	information	for	a	member	
  Page 5 
of	a	household	who	is	not	the	applicant,	then	the	citizenship	and	incarceration	services	would	not	
be	invoked.		In	contract,	public	MEC	verification	services	will	be	separate,	atomic	services.	
 
Q4.  What will a State need to do to invoke the Federal data hub services? 
 
A: All transactional requests to the Federal data services hub shall be performed via web 
services. These services shall be invoked by State IT systems via application programming 
interfaces (API) or Web APIs that are accessed via secure Hypertext Transfer Protocol (HTTP) 
and shall be executed on the system hosting the requested services. The CMS web services shall 
accept requests from trusted sources, perform the function based on the request, and return a 
response to the State system. CMS shall publish these web services in the CMS Service Catalog, 
which shall contain all services available to the states and the definitions of the standards that 
must be met to request the service and standard data format for the data provided when making 
the request and the data that shall be returned.  
 
CMS is still determining the best mechanism for how batch and bulk data transactions will be 
designed and implemented. At this stage, CMS believes that there shall be a need to establish 
both web services and possibly alternate interfaces to meet batch and bulk data transaction 
requirements.  
 
Q5.  How do I learn which data elements and definitions will be available for each Federal 
data hub service?  
 
A: Information about the known data elements, definitions for the Federal data hub services are 
contained in Business Services Description (BSD) documents. The best way to access the BSDs 
and to avoid version control problems, is to request access to the CMS Service Catalog. States 
may do so by contacting dsh.support@qssinc.com and requesting the CMS Services Catalog 
User Intake Form. Please note that as the information published on the repository is quite 
technical in nature, state users should ideally have a technical background.  
 
Q6.  Will each Federal agency conduct its own audits of safeguards? 
 
A: The Federal agencies involved in data verifications are currently involved in discussions of 
the overall approach to oversight and audits of safeguards.  Certain agencies are expected to 
conduct their own independent audits.  
 
 
Q7.  Will the DHS data available through the Federal data services hub include the same 
data elements as is currently provided directly to states?  
 
A: The Federal data services hub is utilizing the same Department of Homeland Security (DHS) 
SAVE verification service currently available to states.  States will receive both the verification 
data received from SAVE as well as the Federal data services hub-derived indicators of lawful 
presence, qualified non-citizen status, and whether the five year bar has been met where 
applicable.   
 
 
  Page 6 
Q8.  Can states use the data verified through the Federal data services hub for other 
programs, aside from Medicaid/CHIP eligibility? 
 
A: Each federal agency has the authority to define use of its data. Therefore CMS defers to IRS, 
DHS and SSA who are partnering with us to provide data via the Federal data services hub.  
Please refer to the CMS Services Catalog to review the Business Service Description (BSD) for 
the verification of income service to identify the Federal tax information data elements and 
definitions that will be made available to states through the Federal data services hub.  
 
Q9. Will there be any automatic updates coming through the Federal data services 
hub?  Or will we always need to make a call to the Federal data services hub in order to get 
any information back?  If a change is likely will the state need to send ongoing, frequent 
requests through the Federal data services hub? 
 
A: Generally, information from the Federal data services hub will only be sent in direct response 
to a call from the requesting entity.  However, in the case of verifications conducted by DHS, 
there can be up to three steps to a verification, the second and third of which will not be in real 
time. If the step 1 query fails, the Federal data services hub will automatically invoke step 2, and 
the response may take up to several days. If step 2 fails, the Federal data services hub will notify 
the requesting entity which will need to submit additional documentation from the applicant for 
step 3. The step 3 response can take weeks. During this time, the Federal data services hub will 
regularly poll DHS to see if the response has come back. 
 
 
Eligibility and Enrollment Systems 
Q1: How can States access information about leveraging business processes and 
borrowing/sharing information from other States systems?  What is the CALT?  
A:  The Collaborative Application Lifecycle Tool (CALT) is available for all states to 
collaborate among State Medicaid Communities to leverage existing business processes, turn-
key solutions, document artifacts in the planning and designing an Exchange and Medicaid 
Eligibility & Enrollment solutions.  As States upload Medicaid IT Gate Review artifacts to the 
CALT, states can view other States artifacts with respect to Medicaid and Exchange 
development. 
The CALT has the ability to notify users of new information that is posted to the collaboration 
platform.  For more information about the CALT, including how to access it, benefits of the 
CALT environment, and training opportunities please refer to: 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-
Systems/Downloads/CALT_factsheet.pdf  
There is also a similar portal environment where information about health insurance Exchange 
development is being shared among states.  That information is available at https://calt.cms.gov. 
  Page 7 
Q2:  What is the effective date for enhanced Medicaid funding and for how long is it 
available? 
A:  Enhanced Medicaid funding for Eligibility & Enrollment activities is available prospectively 
from the approval of an Advanced Planning Document (APD).  An ongoing Medicaid 
administrative match at the 50% rate is available for activities that take place prior to an 
approved Eligibility & Enrollment APD, as long as the activities fall within the purview of 
administering the Medicaid program (42 CFR 433.15). 
Enhanced funding at the 90% rate is available for costs of goods and services incurred by 
December 31, 2015 for design, development and implementation (DDI) that comply with certain 
defined standards and conditions.  Enhanced funding at the 75% rate is available for maintenance 
and operations (M&O) of systems that were built using enhanced funding during the DDI phase.  
The December 2015 time limit on the availability of 90/10% matching funds does not apply to 
activities that qualify for the 75/25% matching rate.  More information on this issue is available 
in our final rule, issued in April 2011 (available at http://www.gpo.gov/fdsys/pkg/FR-2011-04-
19/html/2011-9340.htm). 
Q3:   What are the seven conditions and standards that are required for purposes of 
receiving the enhanced funding? 
A:  In accordance with the regulations issued in April 2011, Eligibility & Enrollment projects 
funded with enhanced funding will have to be: (1) modular; (2) advance the Medicaid Information 
Technology Architecture (MITA) principle; (3) meet specified industry standards; (4) promote 
sharing, leverage and reuse of Medicaid technologies of systems within and among States; (5) support 
business results; (6) meet program reporting; and (7) ensure seamless coordination and integration 
with the Health Insurance Exchange and allow interoperability with health information exchanges, 
public health agencies, human services programs, and community organizations providing outreach 
and enrollment assistance services.  Please refer to CMS Guidance on Seven Conditions and 
Standards available in the CALT (see information in Question 1 about how to access the CALT) 
and also on www.medicaid.gov at 
http://www.medicaid.gov/AffordableCareAct/Provisions/Information-Technology-Systems-and-
Data.html.   
 
Q4:  What cost allocation requirements apply to E&E projects and how can States use the 
temporary exception to OMB-A-87? 
A:  The requirements of Circular OMB-A-87 apply to the allocation of costs for design, 
development and implementation (DDI) and maintenance and operations (M&O) of eligibility 
and enrollment systems including the respective benefiting health insurance affordability 
programs: Medicaid, CHIP (for States that have separate Title XXI programs or for portions of 
separate CHIP programs in States that operate a combination CHIP/Medicaid program) and to 
CCIIO Grant Funding if the project will include functionality for Health Insurance Exchanges. 
States can request the temporary exception to Circular OMB-A-87 requirements to use Medicaid 
enhanced funding for design, development and implementation (DDI) costs of shared eligibility 
services that will benefit other human service programs (SNAP, TANF, childcare and child 
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welfare).   The exception does not apply to maintenance and operations (M&O) costs and 
therefore States must cost allocate to benefiting programs for these costs.  For more information, 
please see two Tri-Agency Letters, available at 
http://www.medicaid.gov/AffordableCareAct/Provisions/Information-Technology-Systems-and-
Data.html.  
  
Q5: What information is available for States to reuse and where can it be accessed? 
A:  In the CALT, States can find business process models, templates for concepts of operations 
and other planning and development  artifacts, business and technical requirements, Requests for 
Proposals (RFPs), Statements of Work (SOWs), system design documents, etc.  CMS Eligibility 
& Enrollment State leads are available to discuss and assist States in finding the right artifacts in 
the CALT collaboration spaces.  Your SOTA team and your E & E State lead are available to 
answer specific questions about what might be available soon that is not already in the CALT. 
 
Q6:  Do Eligibility & Enrollment projects need to have Independent Validation and 
Verification (IV&V)? 
A:  An assessment for IV&V analysis of a States system development effort will be required for 
APD projects that meet any of the criteria contained in federal regulations at 45 CFR 95.626(a). 
If CMS determines that the IV&V analysis is required for a States system development effort, 
the provisions contained in federal regulations at 45 CFR 95.626(b) and (c) apply. 
 
Q7:   How are Medicaid and the Exchanges coordinating their systems work at the Federal 
level? 
A:  The Center for Medicaid and CHIP Services (CMCS) and the Center for Consumer 
Information and Insurance Oversight (CCIIO) are working closely together to develop business 
processes supporting the concepts of a Shared Eligibility Service.  This includes collaboration 
on guidance to States, design of the single, streamlined application, and technical assistance 
efforts more broadly.  Additionally, CMCS and CCIIO are engaged in the review of Grant 
Applications, Advanced Planning Document submissions, and in assessing Establishment 
Reviews and the Medicaid IT Gate Reviews involving State artifacts.   
 
Q8:  How should States report expenditures in the CMS-64 for approved enhanced funding 
for Eligibility & Enrollment Advanced Planning Documents? 
A:  Medicaid Budget Expenditure System/Children's Budget Expenditure System (MBES/CBES) 
has been modified to add new Medicaid Eligibility Determination System lines to the 64.10 
Form series beginning with Quarter Ending March 31, 2011:   
  28A  DDI of Medicaid E&E systems/cost of in house activities - 90% FFP 
  28B  DDI of Medicaid E&E systems cost of private sector contractors   
90% FFP  
  28C  Operation of an approved Medicaid E&E system/cost of in-house activities 
 75 % FFP 
  28D  Operation of an approved Medicaid E&E system/cost private sector 
contractors 75% FFP 
  Page 9 
Q9:  Will CMS certify new Eligibility & Enrollment systems post-implementation as it does 
with MMIS? 
A: We are currently using the Enterprise Life Cycle framework to review each of the DDI stages 
of States projects. We will be establishing, after notice and comment, a series of data 
requirements that will help States and CMS assess the functionality and compliance of the E&E 
systems post-implementation. CMS is committed to providing the individualized assistance that 
each State needs to accelerate progress toward achieving this goal.   
 
Q10:  What are the requirements for submitting a MITA State Self-Assessment? 
A: MITA 3.0 State Self-Assessments will be due 12 months after CMS finalizes the Eligibility & 
Enrollment supplement of MITA 3.0.  CMS will provide additional information to States 
regarding how assessments should be submitted.  
 
Q11:  What will happen if a State Medicaid and CHIP Agency cannot successfully interface 
with the Federal data services hub by January 2014? 
A: CMS is working with States to identify strategies and technical assistance resources that 
States can use to accelerate their implementation to meet the statutory deadlines. States should 
reach out to their SOTA team and their E & E State lead for individualized consultation and 
assistance.