California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Calif. Among 28 States Needing To Upgrade Medicaid Systems

CMS has published a final rule that will maintain billions of dollars in funding to help California and other states upgrade their Medicaid eligibility and enrollment systems, Modern Healthcare reports.


According to Modern Healthcare, about 25% of states are seeking to modernize their Medicaid technology systems.

In 2011, CMS increased its matching rate from 50% to:

  • 90% for funds spent on developing Medicaid eligibility and enrollment systems; and
  • 75% for money spent maintaining and operating those systems.

The matching increase was scheduled to expire this month.

Rule Details

The final rule makes the funding bump permanent. CMS first notified Medicaid directors in an October 2014 letter that it intended to make the funding match increase permanent.

In the final rule, CMS said, "We believe that most states have not had sufficient time to complete the total system replacement for ... eligibility functionality," adding, "Without ongoing enhanced federal funding, state Medicaid eligibility and enrollment systems are likely to become out of date and would not be able to coordinate with, and further the purposes of, the overall mechanized claims processing and information retrieval systems."

CMS said that nine states have fairly new technology and do not need replacements, while 28 states -- including California -- will require upgrades to their outdated systems. CMS said those 28 states likely will act quickly to replace their old technology.

Initial CMS estimates pegged the cost of making the funding bump permanent at about $1.1 billion over four years. In a revised projection, CMS said it now expects to spend $3 billion between fiscal years 2016 and 2025 to implement the rule (Dickson, Modern Healthcare, 12/3).

This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.