To help states address the coronavirus (COVID-19) pandemic, the Families First Coronavirus Response Act (FFCRA) provides all states and territories with a temporary and retroactive 6.2 percentage-point increase in Medicaid’s federal medical assistance percentage (FMAP) — which determines the federal government’s share of Medicaid expenditures. Last week, the Centers for Medicare & Medicaid Services (CMS) released guidance on the implementation of the increased FMAP. This Q&A highlights some of its main points.

For what time period is the 6.2 percentage-point FMAP increase in place?

The increased FMAP is retroactive to Jan. 1, 2020. Because the Secretary of the Department of Health and Human Services (HHS) declared a public health emergency for COVID-19 on Jan. 31, 2020, the increased FMAP is available for qualifying expenditures that were incurred on or after Jan. 1, 2020. The guidance indicates that expenditures are considered to be incurred not based on the date of service, but instead on when the state makes a payment to a provider. The increased FMAP will continue through the last day of the calendar quarter in which the public health emergency ends.

Do states have to meet certain requirements to receive the FMAP increase?

Yes. States must meet the following conditions to receive the FMAP increase:

• States need to maintain Medicaid eligibility standards, methodologies, and procedures that are no more restrictive than those that were in place as of Jan. 1, 2020;
• States cannot charge higher premium amounts than those in place as of Jan. 1, 2020;
• States must continue to provide Medicaid coverage to all individuals enrolled on or after March 18, 2020, until the last day of the month when the emergency period ends, regardless of any changes in individuals’ circumstances that otherwise would result in termination (unless an individual voluntarily dis-enrolls or moves out of state); and
• States must provide Medicaid coverage without cost sharing for COVID-19 testing and treatment, such as vaccines, equipment, and therapies, during the emergency period.

States are also not permitted to require political subdivisions of the state to pay a greater amount of the non-federal share of expenditures than what was required as of March 11, 2020.

How will CMS verify state compliance with the requirements for receiving the increased FMAP?

Rather than having to submit a demonstration of compliance prior to drawing down the funds associated with the increased FMAP, CMS is asking states to attest to their compliance with the requirements. By virtue of drawing down the funds, states will be considered as “attesting” that their state is eligible for the increased FMAP. A state will be required to return the funds if CMS finds that a state’s attestation is incorrect.

What types of Medicaid expenditures qualify for the FMAP increase?

The FMAP increase applies to all Medicaid expenditures that use the regular FMAP rates. The guidance indicates that the increased FMAP is available for Medicaid Disproportionate Share Hospital (DSH) expenditures as well as any Medicaid waivers or demonstrations that use the regular FMAP.

What types of Medicaid expenditures do not qualify for the FMAP increase?

Some of the key Medicaid expenditures that the increased FMAP does not apply to include:

• Administrative expenditures;
• Expenditures related to the Affordable Care Act’s Medicaid expansion population; and
• Other expenditures that are matched at a higher rate than the regular FMAP, such as family planning services, health home services, etc.

For a full list of Medicaid expenditures that the FMAP increase does not apply to, see pages 1-2 of the guidance.

What must states do to document which expenditures they are claiming are at the increased FMAP rate, and which are matched at other rates?

CMS is requiring that states document expenditures in ways that isolate the expenditures that are eligible for the increased FMAP. CMS is in the process of modifying reporting forms (e.g., CMS-64 and CMS-37) to accommodate FFCRA changes and will be offering states additional guidance and training related to reporting requirements.

Does the FMAP increase apply to the Children’s Health Insurance Program (CHIP)?

Yes, but not as a direct 6.2 percentage-point increase added onto states’ current enhanced CHIP federal matching rates (called the EFMAP). States’ EFMAPs for CHIP are calculated by using the regular FMAP as a base, and therefore because the FFCRA increases the FMAP, the EFMAPs increase accordingly. Given this, all states’ EFMAPs will increase by 4.34 percentage points through the public health emergency period, in addition to the 11.5 percentage-point increase in the EFMAP that is currently in place for federal fiscal year (FFY) 2020 and was provided for by the 2018 CHIP reauthorization law.

Below is an example of how the increase will apply (with the inclusion of the FFY 2020 11.5 percentage-point increase). In this case, a state’s federal CHIP match rate will increase from 76.5 percent to 80.84 percent:

Example of the impact of the 6.2 percentage-point FMAP increase on CHIP’s EFMAP

This is a modified version of the table included on page 3 of the CMS guidance. The EFMAP without the 11.5 percentage-point increase will be used for optional breast and cervical cancer expenditures.

Do the requirements to maintain coverage to receive the increased FMAP apply to CHIP?

No — states are not required to maintain coverage in CHIP to receive the increased FMAP. However, states are required to comply with the maintenance of effort provisions within the 2018 CHIP reauthorization law.

Can states continue to conduct Medicaid eligibility redeterminations or address enrollees’ changes in circumstances that may affect eligibility during the emergency period?

Yes, states are permitted to do so, however, to receive the increased FMAP, states are not allowed to terminate coverage for any individual who was enrolled in Medicaid on or after March 18, 2020, until the last day of the month in which the emergency period ends (unless the individual requests a voluntary termination or is no longer a state resident). Also, if a state receives information during the emergency period that would make an individual eligible through a different eligibility category, the state could move that individual to another eligibility group, if it provides additional benefits. However, states would not be able to do this if such a change would result in reduced benefits for the enrolled individual.

How and when will CMS provide the FMAP increase?

CMS will automatically provide the FMAP increase, and states do not need to submit a state plan amendment to receive the increase. The guidance indicates that CMS is in the process of providing the funds, and that states should have received them in their Payment Management System accounts by March 25, 2020 for the Jan. 1-March 31, 2020 time period. For the quarter that begins April 1, CMS intends to provide the funding for the increased match as close to that date as possible.