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Medicaid Receives Aid, Added Scrutiny

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  • August 13, 2010
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The Centers for Medicare & Medicaid Services (CMS) issued Aug. 10 a final regulation to implement Payment Error Rate Measurement (PERM) improvements for Medicaid and Children’s Health Insurance Program (CHIP); and legislation signed by President Barack Obama Aug. 10 to extend the enhanced federal Medicaid assistance percentage (FMAP) through mid-2011.

State Aid for Medicaid

Under the $26.1 billion bill, states will receive $16.1 billion in additional Medicaid matching funds, according to HomeCare Magazine. Under last year’s economic stimulus law, states received an FMAP increase, but that money was due to expire Dec. 31. The new measure extends the enhanced spending for six months. Enhanced payments would phase down over two quarters in 2011—first to 3.2 percent and finally to 1.2 percent through June, reports Modern Healthcare.
The bill also includes a provision that makes certain inhalation, infusion, and injectable drugs not dispensed through retail community pharmacies subject to the average manufacturer’s price (AMP) scale.

CMS Issues PERM Final Rule

The CMS final regulation implements changes to both Medicaid and CHIP required by the Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009 and makes other operational changes in the program.
PERM measures improper payments in Medicaid and CHIP and produces national-level error rates for each. Conducted in 17 states annually, a state typically participates in the program once every three years.
Just to name a few, the final rule:

  • changes the process for reviewing cases in which states have used simplified enrollment efforts such as self-declaration for eligibility cases;
  • eliminates duplication of effort between eligibility reviews administered in the same fiscal year;
  • extends the timeframe for providers to submit documentation from 60 days to 75 days; and
  • provides states up to 90 days from the date the state’s error rate is posted to the CMS contractor’s website to submit corrective action plans.

These and other changes go into effect 30 days after the final rule appears in the Federal Register.
The final rule and an overview of all the major changes is available on the CMS website.

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