DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
SMD # 16-009 
Re: Mechanized Claims Processing  
and Information Retrieval Systems  
APD Requirements 
June 27, 2016 
Dear State Medicaid Director: 
This letter provides guidance concerning Advance Planning Document (APD) requirements, 
specifically around the conditions and standards required for receipt of enhanced funding for 
Mechanized Claims Processing and Information Retrieval Systems, including both Medicaid 
eligibility and enrollment (E&E) systems and Medicaid Management Information Systems 
(MMIS).   
On December 4, 2015 the Centers for Medicare & Medicaid Services (CMS) published a final 
rule, Mechanized Claims Processing and Information Retrieval Systems (90/10), which 
became effective January 1, 2016.  This final rule extended enhanced federal funding for 
Medicaid E&E systems and revised the conditions and standards state Medicaid IT systems must 
meet to qualify for enhanced federal funding to better support Medicaid eligibility, enrollment, 
and delivery systems.  This final rule also supported existing requirements for modular systems 
development.  This guidance reflects input from commenters in the rulemaking process, our state 
partners and other stakeholders.   
Background 
The recently issued final rule made permanent the applicability of enhanced federal matching 
rates under section 1903(a)(3) of the Social Security Act (Act) to support the design, 
development and installation (DDI) and maintenance and operations (M&O) of E&E systems 
that are streamlined, interoperable with other systems and that provide a consumer-friendly 
experience.  The enhanced federal matching rate is applicable under section 1903(a)(3) to 
mechanized claims processing and information retrieval systems.  The final rule amended the 
regulatory definition of such systems at 42 CFR 433.111(b) to include E&E systems.  The 
broadened definition of such systems, and additional changes made in the applicable 
requirements for such systems, supported an enterprise approach where individual processes, 
modules, sub-systems, and systems are interoperable and work together seamlessly to support a 
unified enterprise. 
The final rule modified  433.112(b) to establish new conditions that states must meet in order to 
receive approval for enhanced federal funding of E&E and MMIS information technology (IT) 
projects.  The final rule also expanded two of the Medicaid Information Technology Architecture 
(MITA) conditions and standards that were established with the April 19, 2011 final rule (Refer 
to Appendix A).  States must meet these conditions in order to receive approval for enhanced 
funding for DDI and M&O activities relating to Medicaid IT systems.  Page 2  State Health Official and State Medicaid Director 
CMS expects that states will continue to submit APDs to support improvement of their Medicaid 
E&E systems now that enhanced federal matching funds are available on a permanent basis.  
Going forward, any APD that requests enhanced federal matching funds for Medicaid IT systems 
must describe how the proposed systems will meet these conditions.  Unless otherwise noted, the 
new conditions apply to both MMIS and Medicaid E&E systems.   
 
Expanded Conditions 
 
This final rule expands on two of the MITA conditions and standards originally established in 
the April 19, 2011 final rule.  For the industry standards condition, the final rule revises 42 CFR 
433.112(b)(12) to include industry standards adopted by the Office of the National Coordinator 
for Health Information Technology (ONC) in accordance with 45 CFR Part 170, Subpart B.  
These industry standards relate to electronic health records (EHRs) and the creation, storage, and 
exchange of electronic health information.   
States and CMS are increasingly investing in health IT infrastructure. These investments are 
leading to new opportunities to improve program operations, care coordination, and cost 
efficiency.  The MITA framework specifically addresses and supports the use of clinical data, in 
Medicaid business processes.  We expect that states will continue to pursue systems that 
integrate with health information exchanges and take advantage of available clinical data to 
improve care coordination.  This condition will promote a standardized, interoperable Medicaid 
IT landscape that will leverage other federal and state investments.  States can reference the 
ONC document, 2016 Interoperability Standards Advisory1 as a resource for considering the 
standards contained in 45 CFR Part 170, Subpart B, as well as other standards and 
implementation specifications that help meet specific interoperability needs including the use of  
more promising standards such as those regarding provider directories, segmentation of sensitive 
data, or unique device identification. 
CMS expects that states will describe how their plans comply with the 2016 Interoperability 
Standards Advisory (ISA) both in their APD and in relevant artifacts submitted to the 
Collaborative Application Lifecycle Tool (CALT), or a successor system, throughout the system 
lifecycle.  System development that does not include plans to include clinical data need not 
reference the ONC standards.  
For the interoperability condition and Medicaid E&E systems, the final rule revises 42 
CFR 433.112(b)(16) to specify that the system must support seamless coordination and 
integration with the Marketplace, whether the Federally-facilitated Marketplace (FFM) or a 
State-based Marketplace (SBM), as well as the Federal Data Services Hub (FDSH). 
Interoperability with the FDSH requires that states develop systems and technology that will 
efficiently exchange data with the FDSH to enable electronic verifications, exchange electronic 
accounts (FFM states only) and a better overall application process for consumers.  CMS expects 
that states will develop systems with the appropriate architecture and standards that will 
communicate with the FDSH on an ongoing basis and in conformance with published Business 
Service Descriptions (BSDs).  States must ensure the security and privacy of sensitive data, 
which includes meeting the requirements of the respective federal agency (e.g., the Internal 
                                                 
1 https://www.healthit.gov/sites/default/files/2016-interoperability-standards-advisory-final-508.pdf  
 
  Page 3  State Health Official and State Medicaid Director 
Revenue Service (IRS)) as well as MARS-E 2.0 (required for E&E systems only but a best 
practice for MMIS).  
CMS expects that when states are requesting additional enhanced match for relevant, new 
activities, they will describe their interoperability approach in Medicaid E&E systems APDs as 
well as in relevant artifacts submitted to CMS along the system lifecycle, as they have in the past 
for MITA conditions and standards.   
 
New Condition - Modified Adjusted Gross Income (MAGI)-based System Functionality 
 
The condition described at  433.112(b)(17) requires that Medicaid E&E systems be able to 
adequately process MAGI-based Medicaid applications with limited mitigations and 
workarounds.  This condition requires that states demonstrate MAGI-based functionality by 
meeting critical success factors (CSFs) that we outlined in the final rule at 80 FR 75819.  CMS 
will require states to use CSFs to document system development progress on an ongoing basis, 
where items remain incomplete and workarounds are still in place (e.g., an online, fillable PDF 
instead of a dynamic online application).  When evaluating state submissions under this 
condition, CMS will consider the frequency and length of the proposed mitigation, the degree of 
manual intervention required, and the impact on beneficiaries access to benefits. 
The MAGI-based system functionality condition primarily applies to states Medicaid E&E 
systems.  This condition would seldom impact states MMIS, and is therefore generally not 
applicable to those systems.  MAGI-based system functionality could be relevant to an MMIS, 
for interoperability with the Medicaid E&E system for certain functions, for example, to carry 
out cost sharing requirements, or changes related to Medicaid expansion.  CMS expects that 
states will demonstrate their satisfaction of this condition in the APD as well as in relevant 
artifacts submitted to CMS along the system lifecycle.   
 
New Condition  Mitigation Plan 
The condition described at  433.112(b)(18) requires that states submit mitigation plans 
addressing strategies to reduce the consequences of failure for all major milestones and 
functionality.  Maintaining a mitigation plan is an industry standard best practice for any major 
IT build; CMS expects that states will identify potential risks and develop strategies to address 
those risks throughout the system lifecycle.   
Mitigation plans for major Medicaid E&E system or MMIS projects should address minimum 
expected functionality, critical success factors, and risk factors as tied to major milestones 
identified in the APD.  The mitigation plans should also reflect key events and dates that would 
trigger the mitigation, and projected timeframe for the mitigation sunset.  States should consider 
strategies to address risks for the M&O phase of the project, such as staffing issues and software 
upgrades.   
CMS expects states to revise and resubmit their plans to CMS as risks and mitigations change 
along the system lifecycle.  States proposed mitigations should be commensurate with the nature 
and scope of the identified risks.  We also expect that states will submit their mitigation plans 
with the APDs to demonstrate compliance with this condition. 
 
  Page 4  State Health Official and State Medicaid Director 
 
New Condition  Key Personnel 
 
The condition described at  433.112(b)(19) requires that states identify their key state personnel 
assigned to each major project by name, role, and time commitment.  Before we approve a state 
to launch a major IT initiative, CMS wants to ensure that the state team is adequately resourced.  
States do not need to provide key vendor personnel for this requirement. 
As stated in the provision, this information must be included in the APD.  For changes to key 
personnel that occur after an APD is approved, states should notify their CMS points of contact 
in writing (including by email) and formally reflect the change in the next planned APD update.   
This condition refines and strengthens the existing APD requirements regarding personnel 
resource statements as required under 45 CFR 95.610.  For Medicaid E&E APDs, states should 
include this information in the Medicaid Eligibility and Enrollment (EE) Implementation 
Advance Planning Document (IAPD) Template (OMB Approval Number: 0938-1268).  
Although there is currently no APD template for MMIS APDs, states must include this 
information in all MMIS APDs for major IT initiatives. 
 
New Condition  Documentation 
 
The condition described at  433.112(b)(20) requires that states maintain documentation for 
certain software such that the software could be operated by contractors and other users.  This 
condition is limited to software that is developed using federal funds; it does not apply to 
Commercial Off-the-Shelf (COTS) software, Software-as-a-Service, or Business-Solutions-as-a-
Service.  Adequate documentation means that other users could operate the software with 
reasonable alterations for a specific hardware or operating system.  CMS is neutral as to the 
specific hardware or operating system that the software uses.  Documentation must follow 
industry standards and best practices, and must include components, procedures, layouts, 
interfaces, inputs, outputs, and other necessary information so that the systems could be installed 
and operated by a variety of contractors or other users. 
While the APD should address how the state plans to maintain documentation, such 
documentation is not required to be submitted along with the APD.  It is the states responsibility 
to make the documentation available upon request and to upload documentation to CALT or 
successor systems as needed for gate reviews or for reuse.  Submission to other repositories may 
be required as CMS explores other options. 
 
New Condition  Minimization of Cost for Operation on an Alternate System 
 
The condition described at  433.112(b)(21) requires that states consider strategies to minimize 
the costs and difficulty of operating the software on alternate hardware or operating systems.  
This condition recognizes the significant federal and state investments that are involved with 
major Medicaid IT projects and requires that states consider options beyond software that will 
reduce costs or promote reuse. 
States should describe in the APD the strategies that were considered when deciding which 
solution was the most economical and efficient.  States are not required to adopt a particular 
 
  Page 5  State Health Official and State Medicaid Director 
strategy, but CMS must have sufficient description to evaluate the extent to which the state 
looked at other solutions.  States should consider, at a minimum, the options that offer more 
opportunities for reuse, lower development costs, lower long-term operating costs, and shorter 
development time as well as the extent to which the solutions can be readily implemented with 
alternate hardware and operating systems. 
States should consider this new condition in conjunction with existing APD requirements 
regarding cost benefit analyses required at 45 CFR 95.605 or  95.610.   
 
Formal Process for Determining New Conditions 
 
The final rule at  433.112(b)(22) allows the Secretary to establish other conditions to implement 
statutory and regulatory systems requirements in the future, subject to certain limitations.  This 
flexibility will allow CMS to evaluate states progress as well as evolving business processes on 
an ongoing basis and add additional conditions as necessary.  Importantly, any new conditions 
established under this provision will be limited to ensuring that states properly develop their 
systems in accordance with the existing statutory and regulatory framework.  New conditions 
that go beyond the scope of existing statutory and regulatory systems requirements would be 
established through formal rulemaking. 
New conditions established under this provision would be formally issued in a State Medicaid 
Director Letter (SMDL).  Furthermore, CMS will consult states and other stakeholders for input 
on any proposed conditions prior to implementing any new conditions.  This process will ensure 
that any new conditions are fully vetted prior to publication and that states will be properly 
notified before any new conditions take effect. 
 
Acquisition Threshold for Prior Approval 
 
The final rule amends the prior written approval requirements at 45 CFR 95.611(a)(2) by adding 
an acquisition threshold for requests for federal financial participation (FFP) at the enhanced 
matching rate authorized by 42 CFR part 433, subpart C.  States will now be required to submit 
acquisition documents (such as requests for proposals (RFPs) or contracts) for prior approval 
only if the total cost is anticipated to or will exceed $500,000.  This change aligns the prior 
approval requirements for Medicaid E&E system acquisitions with the existing policy for MMIS.  
We still expect APDs to include all relevant information about planned acquisitions in order to 
justify the funding. This threshold applies only to RFP and contract requests, not prior funding 
approval.  We strongly encourage states to still share the URLs for any open RFPs for Medicaid 
IT development or services with their CMS point of contact so that we can add them to the 
Medicaid.gov site on state IT procurements: https://www.medicaid.gov/medicaid-chip-program-
information/by-topics/data-and-systems/procurement-opportunities.html  
We have provided a chart at Appendix C that outlines the approval requirements for requests for 
FFP at the enhanced matching rate, including the changes made in the final rule.  
 
 
  Page 6  State Health Official and State Medicaid Director 
APD Template 
 
CMS published an Implementation APD template that states are required to use when requesting 
prior approval for Medicaid E&E system activities.  The template, Medicaid Eligibility and 
Enrollment (EE) Implementation Advance Planning Document (IAPD) Template (OMB 
Approval Number: 0938-1268), covers the requirements of 45 CFR 95.610 and can be found at 
https://www.medicaid.gov/affordablecareact/provisions/downloads/medicaid-eligibility-and-
enrollment-iapd-template.pdf.  While the template is not required for other APDs, we 
recommend that states use it to help standardize their APD submissions. 
 
In accordance with the regulations at 45 CFR Part 95 Subpart F, states must submit APDs to 
CMS for review and prior approval to receive FFP at the enhanced matching rate for MMIS and 
Medicaid E&E systems.  With this final rule, CMS did not change the APD requirements 
described at 45 CFR 95.610.  A chart outlining the elements for all APD types is included for 
your convenience at Appendix D.  The state must include information regarding how the 
system(s) meet the MITA conditions and standards at 42 CFR 433.112(b)(10)-(16) and the new 
conditions at  433.112(b)(17)-(22).  Please see Appendix B for frequently asked questions on 
other APD topics. 
  
This SMDL supersedes and takes precedence over previous guidance in the State Medicaid 
Manual (SMM) 11100 through 11281 (https://www.cms.gov/Regulations-and-
Guidance/guidance/Manuals/Paper-Based-Manuals-Items/CMS021927.html) with respect to 
Medicaid systems and certain other reimbursement rules.  The appendices to this letter include 
additional detail on these topics.   
 
If you have additional questions, please contact Martin Rice at 410-786-2417 or at 
martin.rice1@cms.hhs.gov.  Additional SMDLs will be issued in the coming months to address 
other aspects of this final rule.  We look forward to working with states to facilitate state system 
builds, to ensure compliance with this regulation, and to provide assistance implementing these 
requirements. 
 
 
Sincerely, 
/s/ 
Vikki Wachino 
Director 
 
 
 
 
 
 
  Page 7  State Health Official and State Medicaid Director 
cc: 
Jessica Kahn, Director of the Data and Systems Group, CMS  
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 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Page 8  State Health Official and State Medicaid Director 
Appendix A 
 
Changes to the Conditions under 42 CFR 433.112(b) 
 
Description of Change  New Provision 
The agency ensures alignment with, and incorporation of, industry standards 
adopted by the Office of the National Coordinator for Health IT in accordance 
with 45 CFR part 170, subpart B: The HIPAA privacy, security and transaction 
standards; accessibility standards established under section 508 of the 
Expand  433.112(b)(12) 
Rehabilitation Act, or standards that provide greater accessibility for individuals 
New language underlined 
with disabilities, and compliance with Federal civil rights laws; standards adopted 
by the Secretary under section 1104 of the Affordable Care Act; and standards 
and protocols adopted by the Secretary under section 1561 of the Affordable 
Care Act. 
The system supports seamless coordination and integration with the 
Marketplace, the Federal Data Services Hub, and allows interoperability with 
Expand  433.112(b)(16) 
health information exchanges, public health agencies, human services programs, 
New language underlined 
and community organizations providing outreach and enrollment assistance 
services as applicable. 
For E&E systems, the State must have delivered acceptable MAGI-based system 
New  433.112(b)(17)  functionality, demonstrated by performance testing and results based on critical 
success factors, with limited mitigations and workarounds. 
The State must submit plans that contain strategies for reducing the operational 
New  433.112(b)(18)  consequences of failure to meet applicable requirements for all major milestones 
and functionality.  
The agency, in writing through the APD, must identify key state personnel by 
New  433.112(b)(19) 
name, type and time commitment assigned to each project. 
Systems and modules developed, installed or improved with 90 percent match 
New  433.112(b)(20)  must include documentation of components and procedures such that the 
systems could be operated by a variety of contractors or other users. 
For software systems and modules developed, installed or improved with 90 
New  433.112(b)(21)  percent match, the State must consider strategies to minimize the costs and 
difficulty of operating the software on alternate hardware or operating systems. 
Other conditions for compliance with existing statutory and regulatory 
requirements, issued through formal guidance procedures, determined by the 
New  433.112(b)(22) 
Secretary to be necessary to update and ensure proper implementation of those 
existing requirements. 
 
  Page 9  State Health Official and State Medicaid Director 
Appendix B 
 
Frequently Asked Questions and Answers 
 
Q1:  When do the changes to the conditions at 45 CFR 433.112(b) need to be included 
in APD submissions?  
 
A1:  The new conditions described at 45 CFR 433.112(b), as well as the revisions to the 
previously existing conditions, will not be applied to APDs that were approved before 
the effective date of the regulation, January 1, 2016.  As discussed in the final rule at 
80 FR 75825, these changes will apply to APDs pending as of January 1, 2016 or 
submitted after that date.  States must meet the new and revised conditions under the 
final rule for any requests for enhanced federal funding of IT initiatives after the 
effective date of the rule.  Some states have submitted APDs since January 1, 2016, 
but prior to the issuance of this guidance.  No additional information is required for 
those APDs that were approved prior to the issue date of this letter.  CMS will work 
with states that have submitted APDs after the effective date of the rule but prior to 
the issue date of this letter to determine if additional information or clarifications are 
needed for approval of the APD.  For APDs submitted after the issue date of this 
letter, states should comply with the guidance included herein to facilitate the review 
and approval process. 
    
   In the case of the documentation condition, states may be required to include 
documentation for prior IT activities if it is necessary to complete the documentation 
for a future IT activity.  For example, a major new enhancement to a Medicaid E&E 
system might require documentation from the existing Medicaid E&E system to be 
considered complete. 
 
   The new and revised conditions generally do not apply to legacy systems, especially 
as such systems are funded at the regular match rate.  If a component of a legacy 
system is incorporated into a major new IT system or activity, then that component 
would need to meet all of the new and revised conditions in order to be eligible for 
funding at the enhanced match rate. 
 
Q2:   If an APD was approved prior to the effective date of this rule, will the 
provisions of this rule be applicable to related RFPs, contracts and other 
 
  Page 10  State Health Official and State Medicaid Director 
procurement documents that are submitted to CMS for approval after the 
effective date of this rule? 
 
A2:   All RFPs, contracts and other procurement documents that are submitted to CMS for 
approval after the effective date of this rule will be reviewed against the conditions 
and standards contained in this rule and supporting sub-regulatory guidance, as well 
as all other applicable regulations and guidance.   
   
  For example, an APD approved prior to January 1, 2016 may have been submitted 
and approved without having incorporated modularity into the systems design.  
Modularity and competition are underlying principles of this rule.  When reviewing 
procurement documents submitted on or after January 1, 2016, CMS will consider 
whether or not the procurement is consistent with these principles.  In this example, 
the regulation at 45 CFR 95.613 requires all procurements to facilitate competition 
and minimize risk of failure and increased cost.  A procurement for a large, non-
modular, monolithic systems build could not be approved because it would not be 
in compliance with regulation at 45 CFR 95.613, due to its high risk of failure, and 
because such a procurement would substantially limit competition.   
 
 
Q3:  How should states submit E&E APDs that request funding from multiple federal 
programs?  
 
A3:  The APD submission process differs depending on which federal programs are 
included in the request:  
 
 E&E APDs and procurement documents that request only Medicaid (Title XIX) 
        
funding should be submitted to the mailbox at MedicaidE&E_APD@cms.hhs.gov 
as well as to the Medicaid E&E analyst assigned to the state. 
 
 State Multi-Program APDs and procurement documents that include funding for 
       
two or more of the following HHS programs: Titles IV-B/E (Childrens Bureau), 
IV-D (Office of Child Support Enforcement) and Title XIX (Medicaid) are to be 
submitted to the mailbox at HHSMulti-ProgramAPDSubmissions@acf.hhs.gov as 
well as to the respective states federal analysts. 
  
 APDs and procurement documents that request funding from Food and Nutrition 
       
Service (FNS) and Medicaid are to be submitted separately to each program.  FNS 
 
  Page 11  State Health Official and State Medicaid Director 
guidance on APD submission can be found at http://www.fns.usda.gov/apd/fns-
oversight-state-systems-advance-planning-document-process. 
 
 
For any questions regarding the APD submission process, we encourage states to 
reach out to the federal analysts assigned to their state.
 
 
 
Q4:  Should states include Childrens Health Insurance Program (CHIP) amounts in 
APDs? 
 
A4:  If CHIP funding is included in the project, States should include CHIP amounts in the 
APD budget table to illustrate the sources of funding, other than the Medicaid 
enhanced match that will support the project.  States must include the total project 
cost and total proposed budget as part of the APD, including CHIP amounts.  States 
must also include a cost allocation methodology between CHIP and Medicaid to 
demonstrate the distribution of costs between these programs. Because the CHIP 
funding is independent of the APD process and Medicaid funding, CMS does not 
include CHIP amounts in the APD approval letter. 
 
 
Q5:  Are states required to submit APDs and acquisitions that are funded at the 
regular matching rate, i.e., 50/50 federal and state funds? 
 
A5:  There are two types of activity that are matched at the 50 percent rate. Administrative 
activities, and automated data processing (ADP) equipment or services.    
 
If administrative funding is included in a project for which an APD is submitted, 
States should include the administrative amounts in the APD budget table to illustrate 
the sources of funding, other than the enhanced match that will support the project.  
States must include the total project cost and total proposed budget as part of the 
APD, including administrative amounts.  Since administrative costs matched at 50 
percent do not require approval through the APD process, nor prior approval, these 
will not be included in the APD approval letter sent back to the state. 
 
   Regulations at 45 CFR 95.611 describe the prior approval requirements for ADP 
acquisitions that are funded at the regular matching rate.  States must submit APDs for 
approval when requesting FFP at the 50 percent matching rate for ADP projects, 
subject to certain thresholds.  Acquisitions for ADP equipment or services must be 
 
  Page 12  State Health Official and State Medicaid Director 
submitted for prior approval if the total acquisition cost is $5,000,000 or more.  For 
sole source or non-competitive acquisitions, the threshold is $1,000,000 or more.  For 
Planning and Implementation APDs, the requirements are described at  95.611(b)(1).  
For APD Updates, the requirements are described at  95.611(c)(1). Accordingly, 
CMS must review and prior approve any ADP projects and procurements matched at 
the 50 percent matching rate (e.g., an asset verification system (AVS)) subject to these 
thresholds.  CMS will include FFP at the 50 percent match rate in the APD approval 
letters when required under  95.611. 
 
Q6:    When states are implementing a project in phases, must mitigation plans be 
submitted for functionalities that have already been successfully implemented? 
 
A6:  No, it is not necessary to submit mitigations for functionalities that have already been 
successfully implemented.   
 
 
  Page 13  State Health Official and State Medicaid Director 
Appendix C 
 
Approval Requirements for Medicaid Enhanced Match Funding under 45 CFR 95.611 
 
General Acquisition Requirements 
Enhanced FFP Requests  Prior Approval Needed:  CFR Reference 
Acquisition documents (e.g. Requests for Proposals or    If authorized by 42 CFR part 433, subpart   95.611(a)(2)(ii)  
vendor contracts) for automated data processing (ADP)  C (i.e., Medicaid), if the contract is 
 
equipment or services   expected to be > $500,000, or 
  Sole source/non-competitive acquisition 
 
 
with a total cost  $1,000,000 
 95.611(b)(1)(iv)  
Operational APDUs  
 
Specific Prior Approval Requirements 
Enhanced FFP Requests  Prior Approval Needed:  CFR Reference 
Planning APD     All Planning APDs    95.611(b)(2) 
Implementation APD     All Implementation APDs    
Requests for proposals (RFPs) and contracts    > $500,000     
Contract amendments    > $500,000 increase, or    
  > 60-day extension 
  
 
Specific Approval Requirements 
Enhanced FFP Requests  Approval Needed:  CFR Reference 
Annual APDU    One year after last approval     95.611(c)(2) 
Note: An Annual APDU should be submitted within 10    
months of the date of the previous Annual APDU 
approval letter. 
 
  Page 14  State Health Official and State Medicaid Director 
As Needed APDU    A projected cost increase of $300,000 or 
10% of the project cost, whichever is less; 
Note: An As Needed APDU should be submitted no later 
     A schedule extension of more than 60 
than 60 days after the occurrence of the project 
days for major milestones; 
changes.                                                                                                                                                     
     A significant change in procurement 
approach; 
  A change in scope of procurement 
activities beyond that approved in the 
APD; 
     A change in system concept or scope of 
the project; 
     A change to the approved cost  allocation 
methodology; or 
     A change of more than 10% of estimated 
costs or benefits; 
  Severing a vendor contract. 
 
 
  Page 15  State Health Official and State Medicaid Director 
Appendix D 
 
Required Medicaid APD Elements under 45 CFR 95.610 
 
APD Type  APD Elements 
Planning APD  1.  Statement of Need 
2.  Project Management Plan 
 95.610(a)(2) 
3.  Budget for planning phase 
4.  Estimated total project cost for planning and implementation phases, including 
state/federal allocation 
5.  Commitment to conduct problem needs assessment, feasibility study, alternatives 
analysis, cost/benefit analysis, and to develop a functional requirements specification 
and/or general systems design 
6.  Commitment to define functional requirements 
7.  Acquisition summary 
Implementation APD  1.  Results of Planning APD activities 
 95.610(b)  2.  Statement of needs and objectives 
  3.  Requirements analysis, feasibility study, and statement of alternative considerations 
Note: see approved  4.  Cost/benefit analysis 
5.  Personnel resource statement 
template 
6.  Description of nature and scope of activities 
7.  Proposed project schedule 
8.  Proposed budget 
9.  Statement of expected duration 
10. Cost allocation 
11. Statement of security and interface requirements and disaster recovery   
12. Additional APD content requirements in 42 CFR 433.112, i.e. the conditions and 
standards   
Annual APDU   1.  Reference to the APD and all approved changes 
2.  Project activity report 
 95.610(c)(1) 
3.  Report of all completed and unfinished project deliverables  
4.  Updated project activity schedule and expected period of operations 
 
5.  Revised overall project cost, with new additional costs and the associated FFP request 
6.  Project expenditures report 
7.  Revised cost allocation 
8.  Acquisition summary 
As Needed APDU  Description of significant changes to the project approach/scope, project schedule, 
procurement, or budget 
 95.610(c)(2) 
Operational APDU  1.  Summary of activities 
2.  Acquisitions 
 95.610(c)(3) 
3.  Annual budget