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, CHIP and Survey & Certification   
 
                    SHO # 10-007 
CHIPRA # 18 
 
July 1, 2010 
 
Re: Increased Federal Matching Funds for Translation 
and Interpretation Services under Medicaid and CHIP 
 
Dear State Medicaid Director: 
Dear State Health Official: 
 
This letter is part of a series of guidance to States regarding implementation of the Childrens 
Health Insurance Program Reauthorization Act of 2009 (CHIPRA), Pub. L. No. 111-3, which 
was enacted on February 4, 2009.  CHIPRA contains provisions that affect both the Childrens 
Health Insurance Program (CHIP) and Medicaid.  The purpose of this letter is to provide detailed 
guidance on the implementation of section 201(b) of CHIPRA, which provides increased 
administrative funding for translation or interpretation services provided under CHIP and 
Medicaid in connection with the enrollment, retention, and use of services by children of families 
for whom English is not their primary language.   
 
This provision of CHIPRA will facilitate States ability to enroll and provide services to eligible 
individuals and to meet some of their responsibilities to individuals who are protected from 
discrimination under Title VI of the Civil Rights Act of 1964 and Section 504 of the 
Rehabilitation Act of 1973.  In addition to the guidance provided in this letter, we have enclosed a 
series of questions and answers to address implementation of the CHIPRA section 201(b) provision 
in more detail. 
 
Background 
 
Prior to CHIPRA, States could claim Federal matching funds for translation or interpretation 
costs as either an administration expense or as a medical assistance-related expense.  If the 
translation or interpretation service was provided by a Medicaid agency employee, a contractor 
of the Medicaid agency, or by the provider of the medical service using a separate unit or 
separate employees performing solely translation or interpretation functions, then such costs may 
be claimed at the standard administrative rate of 50 percent.  If, however, the State builds the 
cost of translation or interpretation services into the rate paid for the covered benefit, then the 
expenditure is matched at the States applicable Federal medical assistance percentage (regular 
FMAP) rate. Under CHIP, these expenditures may be claimed as administrative expenditures at 
the enhanced CHIP Federal medical assistance percentage (enhanced FMAP) but are subject to 
the statutory 10 percent cap on administrative expenditures under section 2105(a)(1)(D)(iv) of 
the Social Security Act (the Act).  The expenditures may also be claimed in CHIP as child health 
assistance either through provider rates or under the enabling services benefit, at the enhanced 
FMAP under CHIP (and then not subject to the 10 percent cap on administrative expenditures).  Page 2  State Medicaid Director 
  State Health Official 
 
 
States may continue to claim for these costs as either administrative or benefit-related, in either 
Medicaid or CHIP.  However, as explained below, section 201(b) of CHIPRA provides for 
Federal matching at an increased rate (the increased translation/interpretation match) under either 
Medicaid or CHIP when States claim translation or interpretation services as administrative 
costs. 
 
Discussion 
 
Section 201(b) of CHIPRA added subparagraph (E) to section 1903(a)(2) of the Act and 
amended section 2105(a)(1) of the Act to provide increased Federal funding for translation or 
interpretation services provided to eligible individuals for whom English is not their primary 
language.  Specifically, CHIPRA provides for the increased translation/interpretation match for 
administrative expenditures for translation or interpretation services in connection with the 
enrollment of, retention of, and use of services under CHIP and Medicaid.  The increased 
match is available for expenditures for translation or interpretation services for any individual 
whose primary spoken or written language is not English.  This includes individuals whose 
primary spoken or written language is American Sign Language or Braille, since these languages 
are considered distinct and separate languages from English. 
 
The increased Federal match for translation or interpretation services differs for Medicaid and 
CHIP.  For Medicaid, the increased match is 75 percent of allowable expenditures.  For CHIP, 
the increased match is 75 percent, or the States enhanced FMAP plus 5 percent, whichever is 
higher.  However, the increased translation/interpretation match is only available for eligible 
expenditures claimed as administration of the Medicaid or CHIP plan, not expenditures claimed 
for benefits.  Therefore, under CHIP, the expenditures that qualify for the increased match are 
subject to the 10 percent cap on administrative expenditures.  Historically, the vast majority of 
States have not reached their CHIP administrative cap; therefore, CMS does not believe this will 
be an issue for States. 
 
In order to obtain the increased translation/interpretation match, States and providers may: 
 
  Enter into a contract or employ staff that provide solely translation or interpretation 
functions and claim related costs as administration; and/or 
  Pay for translation or interpretation activities to assist the medical provider of record for 
the service separately as administrative expenditure, in addition to the rate paid for the 
medical service itself (subject to managed care payment requirements discussed below).    
 
CMS intends to amend existing Medicaid and CHIP regulations to reflect the CHIPRA increased 
matching rates for administrative expenditures for translation or interpretation services set forth 
in CHIPRA section 201(b) and explained in this guidance. 
    Page 3  State Medicaid Director 
  State Health Official 
 
Managed Care 
 
Under Medicaid or CHIP, if translation or interpretation services are provided by a contracted 
managed care entity (MCE) and funded through a capitated payment from the State, related costs 
in that rate are not eligible for the increased translation/interpretation match rate because the 
capitated payment is a benefit expenditure, not an administrative expenditure.  This is consistent 
with Medicaid managed care regulations at 42 CFR 438.812(a), which specify that payments 
made under a managed care contract are considered medical assistance services and are 
matchable only at the FMAP rate.  States have the option, however, to carve out translation or 
interpretation services from the capitated rate and contract separately for such services as an 
administrative activity.   
 
Claiming the Increased Translation/Interpretation Match 
 
Activities for which the increased translation/interpretation match is available include translating 
forms, web sites, and enrollment and outreach materials into languages other than English, and 
making translation/interpretation services available in order for beneficiaries to enroll in the 
program, maintain eligibility, and access covered services.  However, this list is not intended to 
be all-inclusive.   
 
Any expenditures claimed by the State as Medicaid/CHIP administration, including translation or 
interpretation services, must be deemed by the Secretary of the Department of Health and 
Human Services (HHS) to be proper and efficient for the administration of the State plan as 
specified in section 1903(a)(7) of the Act.  CMS Regional and Central Office staff are available 
to help States determine if proposed translation or interpretation activities would be reimbursable 
at the increased translation/interpretation administrative match.  
 
In order to assist States in obtaining the additional translation/interpretation matching funds 
authorized by CHIPRA, CMS has added new line items to the CMS-64.10 and CMS-21 
expenditure reporting forms (MBES-CBES) to capture allowable expenditures.  States may use 
these forms to claim the increased translation/interpretation administrative match for allowable 
expenditures dating back to the February 4, 2009, effective date of the law. 
 
Administrative costs that serve multiple programs or objectives must be allocated based on 
Office of Management and Budget (OMB) Circular A-87 cost allocation principles.  
Administrative costs are not codified in the State plan; rather, they are normally charged to 
Federal grant awards pursuant to the States public assistance Cost Allocation Plan (CAP).  
Federal regulations require that the single State agency have an approved CAP on file with the 
Division of Cost Allocation in HHS that meets certain regulatory requirements, which are 
specified at Subpart E of 45 CFR Part 95 and referenced in OMB Circular A-87, Attachment D.   
 
 
 
    Page 4  State Medicaid Director 
  State Health Official 
 
Conclusion 
 
Eliminating language barriers is one key component of a broader strategy for promoting better 
access to coverage and care.  This increased translation/interpretation matching rate is an 
important new source of Federal support to help States eliminate these barriers.  More 
information is provided in the enclosed set of questions and answers.  If you have any additional 
questions, please contact Ms. Dianne Heffron, Director, Financial Management Group, who may 
be reached at 410-786-3247. 
 
Sincerely, 
 
/s/ 
 
Cindy Mann  
Director 
 
Enclosure 
cc:  
 
CMS Regional Administrators  
 
CMS Associate Regional Administrators  
Division of Medicaid and Childrens Health  
 
Ann C. Kohler  
NASMD Executive Director  
American Public Human Services Association  
 
Joy Wilson  
Director, Health Committee  
National Conference of State Legislatures  
 
Matt Salo  
Director of Health Legislation  
National Governors Association  
 
Debra Miller  
Director for Health Policy  
Council of State Governments  
 
Christine Evans, M.P.H. 
Director, Government Relations  
Association of State and Territorial Health Officials  
 
Alan R. Weil, J.D., M.P.P.  
Executive Director  
National Academy for State Health Policy  Page 5  State Medicaid Director 
  State Health Official 
 
Enclosure 
QUESTIONS & ANSWERS 
Increased Administrative Match for  
Translation or Interpretation Services 
 
 
Question 1.  Would all of the following listed below qualify for the increased 
administrative match on translation or interpretation services? 
 
  Translation and printing costs for applications and all forms associated with the 
application and renewal process.   
 
  Translation of brochures and other promotional material.  
 
  Translation of commercial, radio, and newspaper advertisements. 
 
  Costs associated with translation services offered by the Medicaid and CHIP hotlines that 
provide assistance to consumers applying for coverage.   
 
  Salary costs associated with staff that provide application assistance in languages other 
than English.      
 
  Costs associated with setting up a language line for local Departments of Social  
Services so they can assist consumers who speak languages other than English.  
 
  Costs of interpretation services to assist providers in delivering care to their non-English 
speaking patients, and where appropriate, their families.   
 
Answer:  Yes.  All of the provided examples potentially qualify for reimbursement at the 
increased translation/interpretation administrative match if they are proper and efficient for the 
administration of the State plan (section 1903(a)(7) of the Social Security Act) and if related 
costs are allocated based on OMB Circular A-87 cost allocation principles.  
 
For example, costs associated with setting up a language line for local Departments of Social 
Services, as listed above, would be matchable at the increased translation/interpretation match 
rate if those costs were allocated amongst all programs in accordance with the relative benefits 
received. 
 
Question 2.  Are there other services in addition to those listed above for which the 
increased translation/interpretation administrative match rate may be claimed? 
 
Answer:  Yes.  Because this list of activities is not exhaustive, CMS Regional and Central Office 
staff is available to help States determine, on a case-by-case basis, if proposed translation or 
interpretation activities are properly allocated in either Medicaid or CHIP and therefore are 
reimbursable at the increased translation/interpretation administrative match rate. 
  Page 6  State Medicaid Director 
  State Health Official 
 
Question 3.  States have a variety of ways they fund translation/interpretation services. Are 
there any restrictions on the sources of funds States can use for the non-Federal share?   
 
Answer:  States may fund the non-Federal share of increased translation or interpretation 
administrative payments in a variety of ways consistent with existing statutory requirements and 
Federal regulations at 42 CFR 433.50 through 433.74 regarding funding of the non-Federal 
share.  These regulations apply to both Medicaid and CHIP.  Consistent with current practice, 
CMS will review non-Federal share funding sources on an individual basis using information 
provided by the State and gathered by CMS Staff.   We are available to provide technical 
assistance as States consider particular arrangements. 
 
Question 4.  What documentation do States need to have to support the costs of the 
translation or interpretation services? 
 
Answer:   As always, documentation for administrative activities must clearly demonstrate that 
the activities directly relate to covered services and support the administration of the 
Medicaid/CHIP programs.  In accordance with statute (Title XIX and XXI of the Act), 
regulations and the State plan, the State is required to maintain and retain adequate source 
documentation to support payments.   
 
For example, if a State conducts time studies to capture and allocate the cost of allowable 
translation activities, the time study forms would need to be retained to document the claimed 
amounts. 
 
Question 5.   Is there a supplemental form that States should complete and submit with the 
Statement of Expenditures? 
 
Answer:  No.  CMS has added a new line item to the CMS-64.10 and CMS-21.10 expenditure 
reporting forms (MBES-CBES) to capture allowable Medicaid and CHIP expenditures claimed 
at the increased translation/interpretation administrative matching rate. 
 
Question 6.  Are the costs for translation or interpretation services included in the CHIP 
10 percent administrative cap? 
 
Answer:  Yes.  The increased translation/interpretation administrative match is only available 
for CHIP expenditures claimed as administration, which are subject to the statutory 10 percent 
administrative cap (section 2105(a)(1)(D)(iv) of the Act).  However, most States remain well 
below this cap throughout the year.  Furthermore, to the extent there are joint Medicaid/CHIP 
expenditures (e.g., costs that are shared amongst both programs), the expenditures attributable to 
Medicaid would not fall under the cap and would therefore not count against the 10 percent 
limit. We do not anticipate this will be an issue for most States.  Page 7  State Medicaid Director 
  State Health Official 
 
Question 7.  If the single State agency has an employee on staff devoted to translation or 
interpretation, can that person's salary now be matched at 75 percent instead of 50 percent 
Federal financial participation? 
 
Answer:  Yes, as long as the personnel costs are properly allocated between:  (1) staff time spent 
on translation activities matchable at the increased translation/interpretation administrative match 
rate; and (2) staff time spent on all other administrative activities that are only matchable at the 
regular, 50 percent Medicaid administrative matching rate. 
 
Question 8.  Can the costs of a media buy associated with a translation or interpretation 
effort be claimed at the increased administrative match rate? 
 
Answer:  No.  Only costs directly related to translation or interpretation services provided in 
connection with the "enrollment of, retention of, and use of services" under CHIP and Medicaid 
are eligible for the increased translation/interpretation matching rate.  Therefore, the translation 
of outreach materials, including Public Service Announcements, can be claimed at the increased 
match rate.  However, associated costs, such as media placements or media buys, would only be 
eligible for reimbursement at the regular 50 percent administrative matching rate under 
Medicaid, and at the enhanced CHIP FMAP, but subject to the 10 percent cap.   
 
Question 9.  Is the increased administrative match available for the portion of a managed 
care organizations (MCO) monthly capitated payment that represents costs incurred by 
the MCO for: 
  Printing notices and materials, such as subscriber contracts in multiple languages? 
  Salary expenses for a full-time translator? 
  Making oral interpreters available to provider offices? 
  Making a translation service (e.g., language line) available for customer service or 
provider office staff?  
 
Answer:  MCO capitation payments are considered expenditures for benefits that are matched in 
their entirety at the rate for medical or child health assistance (in Medicaid or CHIP, 
respectively), and therefore cannot be reallocated to be an expenditure for administration of the 
State plan for purposes of claiming the increased translation/interpretation matching rate.  This 
would not preclude States from carving out the responsibility for translation or interpretation 
from the scope of a managed care contract and instead contracting for such services separately as 
an administrative activity. 
 
Question 10.  Does Section 201(b) of CHIPRA impact any of the policies outlined in CMS 
August 31, 2000, State Medicaid Director letter on Limited English Proficiency? 
Answer:  Not directly, but the new matching rate will help States and other entities meet some of 
their obligations, which were a focus of that letter.  CMS issued a State Medicaid Director letter 
on August 31, 2000, that informed States of the policy guidance that the Office for Civil Rights 
(OCR) had issued on the prohibition against national origin discrimination as it affects persons 
with Limited English Proficiency (LEP) pursuant to Title VI of the Civil Rights Act of 1964 
(Title VI).  That guidance and subsequently updated guidance from OCR reminded health and 
human services agencies and providers who receive Federal financial assistance from the U.S.  Page 8  State Medicaid Director 
  State Health Official 
 
Department of Health and Human Services (HHS) of their responsibilities under Title VI and its 
implementing regulation to provide meaningful access to their programs by LEP persons.  All 
entities that receive Federal Medicaid and or CHIP funds are covered by Title VI, and the 
guidance is still relevant under CHIPRA. 
Recipients of Federal funds also have an obligation to communicate effectively with individuals 
with impaired hearing, vision, or speech under Section 504 of the Rehabilitation Act of 1973.    
The new increased matching rate for translation or interpretation services will provide additional 
Federal support to States and other entities in meeting these responsibilities. 
 
Question 11:  Is the increased match available for translation or interpretation services for 
individuals with LEP and for sign language and Braille services? 
 
Answer:  Yes.  Section 201(b) of CHIPRA provides for increased Federal funding for translation 
or interpretation services for persons for whom English is not their primary language.  CMS has 
determined that this increased funding level includes, but is not limited to, translation or 
interpretation services for LEP individuals and also for individuals whose primary spoken or 
written language is American Sign Language or Braille, since these languages are considered 
distinct and separate languages from English.  States will not be required to differentiate 
translation and interpretation services provided to individuals with LEP from those provided to 
individuals for whom English is not their primary language.