The Centers for Medicare & Medicaid Services (CMS) issued guidance on managed care payment and coverage of emergency Medicaid services (PDF). Under the Medicaid statute, the federal government provides federal financial participation (FFP) to cover emergency services for noncitizens ineligible for full Medicaid by virtue of their immigration status. The agency now interprets that only payments made for care and services actually furnished to treat an emergency medical condition are eligible for FFP, and that managed care payments — including risk-based capitation and state directed payments — do not qualify. The CMS asserts this change is intended to safeguard program and fiscal integrity by preventing Medicaid cross-subsidization of nonemergency services or state-only benefits.
Under this updated interpretation, states have two paths for covering emergency care for this population. First, they can use fee-for-service models and claim FFP solely for the actual rendered emergency care. Second, states may contract with prepaid inpatient or ambulatory health plans on a non-risk basis but only reimburse for actual emergency services — not administrative or prospective payments. States must also ensure these individuals are excluded from their regular managed care rate-setting, state directed payments, and capitation calculations.
To comply, states must maintain documentation to support any claim for FFP, revise their managed care contracts and state directed payment preprints, and update reporting practices and rate certification processes. States seeking FFP should segregate any state-funded benefits and ensure transparent claims on the CMS-64 form. While states have a year before enforcement begins (e.g., starting with the first rating period after publication), the CMS expects them to act promptly to align with this new policy.
- Washington Highlights