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FAQ on FMAP Penalty for Medicaid Redeterminations

Julie Kozminski
July 5, 2023

The Centers for Medicare & Medicaid Services (CMS) on June 30 released FAQ to help states understand how CMS will apply the new enforcement authority in the Consolidated Appropriations Act, 2023 (CAA, 2023) related to states’ federal medical assistance percentage (FMAP).

The CAA, 2023 requires states to submit to CMS monthly data about activities related to Medicaid eligibility redeterminations conducted between April 1, 2023, and June 30, 2024. Should a state not satisfy the reporting requirements during any fiscal quarter of this time frame, the CAA, 2023 requires CMS to reduce the FMAP by 0.25 percentage points for each fiscal quarter that state does not comply. However, CMS does not plan to enforce this reduction if the state makes good-faith efforts to follow the guidance in the FAQ document.

The FAQ outline what data states need to report and reporting deadlines and data issues that might result in FMAP reduction. The guidance also clarifies for which quarters the FMAP reduction might apply and which data CMS reviews for purposes of a reduction. Additionally, the FAQ explain how CMS will account for and apply a FMAP reduction should a state fail to comply for one month in a quarter. CMS will not restore lost federal financial participation should the required data be submitted after an FMAP reduction has been taken.

Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.

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