Medicaid Program; Federal Funding for Medicaid Eligibility Determination and Enrollment Activities, 21950-21975 [2011-9340]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 76, Number 75 (Tuesday, April 19, 2011)]
[Rules and Regulations]
[Pages 21950-21975]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9340]



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Vol. 76

Tuesday,

No. 75

April 19, 2011

Part II





Department of Health and Human Services





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 Centers for Medicare & Medicaid Services



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42 CFR Part 433



 Medicaid Program; Federal Funding for Medicaid Eligibility 
Determination and Enrollment Activities; Final Rule

Federal Register / Vol. 76 , No. 75 / Tuesday, April 19, 2011 / Rules 
and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 433

[CMS-2346-F]
RIN 0938-AQ53


Medicaid Program; Federal Funding for Medicaid Eligibility 
Determination and Enrollment Activities

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule will revise Medicaid regulations for 
Mechanized Claims Processing and Information Retrieval Systems. We are 
also modifying our regulations so that the enhanced Federal financial 
participation (FFP) is available for design, development and 
installation or enhancement of eligibility determination systems until 
December 31, 2015. This final rule also imposes certain defined 
standards and conditions in terms of timeliness, accuracy, efficiency, 
and integrity for mechanized claims processing and information 
retrieval systems in order to receive enhanced FFP.

DATES: Effective Date: These regulations are effective on April 19, 
2011.

FOR FURTHER INFORMATION CONTACT: Richard Friedman, (410) 786-4451.

SUPPLEMENTARY INFORMATION: 

I. Background

A. The Current State of the Medicaid Management Information System 
(MMIS)

    A Medicaid management information system (MMIS) is a mechanized 
system of claims processing and information retrieval used in State 
Medicaid programs under title XIX of the Social Security Act (the Act). 
The system is used to process Medicaid claims from providers and to 
retrieve and produce utilization data and management information about 
medical care and services furnished to Medicaid recipients. The system 
also is potentially eligible to receive enhanced administrative funding 
from the Federal government under section 1903(a)(3) of the Act. 
Specifically, section 1903(a)(3)(A)(i) of the Act provides that Federal 
financial participation (FFP) is available at 90 percent of 
expenditures for the design, development, or installation of mechanized 
claims processing and information retrieval systems as the ``Secretary 
determines are likely to provide more efficient, economical and 
effective administration of the plan and to be compatible with the 
claims processing and information retrieval systems utilized in the 
administration of title XVIII [Medicare].'' In addition, section 
1903(a)(3)(B) of the Act provides for the availability of FFP at 75 
percent of expenditures attributable to operating the ``systems * * * 
of the type described in [section 1903(a)(3)] subparagraph (A)(i),'' 
which are approved by the Secretary and meet certain other requirements 
(including requirements relating to explanations of benefits). For 
purposes of this final rule, we refer to 90 percent and 75 percent FFP 
as ``enhanced'' FFP since it is greater than the 50 percent FFP 
available for most Medicaid administrative expenses. In addition, 
section 1903(r) of the Act places conditions on a State's ability to 
receive Federal funding for automated data systems in the 
administration of the State plan.
    To receive an enhanced match, the Secretary must find that the 
mechanized claims and information retrieval system is adequate to 
provide more efficient, economical, and effective administration of the 
State plan. The Patient Protection and Affordable Care Act of 2010 
(Pub. L. 111-148, enacted on March 23, 2010), as amended by the Health 
Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted 
on March 30, 2010) (collectively referred to as the Affordable Care 
Act) also made additional changes to the requirements within section 
1903(r) of the Act relating to the reporting of data to the Secretary; 
guidance on these requirements will be issued in a separate rulemaking 
document. Our Federal regulations concerning mechanized claims 
processing and information retrieval systems are at 42 CFR part 433, 
subpart C. A State that chooses to develop, enhance, or replace its 
required system or subsystems must first submit for approval an 
Advanced Planning Document (APD). The general Health and Human Services 
(HHS) requirements for approval of APDs are found at 45 CFR part 95, 
subpart F.

B. Availability of Enhanced FFP for Automated Eligibility Systems

    Historically, Medicaid eligibility for many applicants and 
recipients was determined by an agency other than the State Medicaid 
agency. Under section 1902(a)(10)(A)(i) of the Act, States were 
required to provide Medicaid to recipients under the Aid to Families 
with Dependent Children (AFDC) program, as well as recipients of the 
Supplemental Security Income (SSI) program. In these cases, eligibility 
determinations were derived from the cash welfare-assistance 
determination. As a result, States that maintained a Medicaid 
eligibility determination system usually integrated these systems into 
the public welfare systems. In the October 13, 1989 Federal Register 
(54 FR 41966, effective November 13, 1989), we published a final rule 
excluding eligibility determination systems from the enhanced funding 
that was available under section 1903(a)(3) of the Act, reasoning that 
the close interrelationship between these cash assistance programs and 
Medicaid eligibility rendered such enhanced assistance redundant and 
unnecessary (54 FR 41966 through 41974). As a result, we revised the 
definition of mechanized claims processing and information retrieval 
systems to exclude eligibility determination systems.
    We also indicated in the 1989 final rule that to receive any FFP 
for Medicaid purposes for an eligibility determination system after 
November 13, 1989, a State must submit an APD for funding in accordance 
with the requirements of 45 CFR Part 95, Subpart F. If we approved the 
APD, the State agency would receive 50 percent FFP for administrative 
costs under section 1903(a)(7) of the Act for the system's design, 
development, and installation, and operation.

C. Changes in Medicaid Eligibility Policies

    Since we issued the October 13, 1989 final rule, a series of 
statutory changes have dramatically affected eligibility for Medicaid 
and how Medicaid eligibility is determined. Among other things, new 
eligibility coverage groups were created and expanded, and in 1996, 
Medicaid eligibility was ``de-linked'' from the receipt of cash 
assistance when the AFDC program was replaced by the Temporary 
Assistance to Needy Families (Pub. L. 104-193, enacted on August 22, 
1996) (TANF) program created by the Personal Responsibility and Work 
Opportunity Reconciliation Act (PRWORA) (Pub. L. 104-193, enacted on 
August 22, 1996).
    With the passage of the Balanced Budget Act of 1997 (Pub. L. 105-
33, enacted on August 5, 1997) (BBA), States were required to 
coordinate eligibility for and enrollment in Medicaid with the new 
Children's Health Insurance Program (CHIP) to ensure enrollment of 
children in the appropriate program. With passage of the ``Express Lane 
Eligibility'' provisions in section 203 of the Children's Health

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Insurance Program Reauthorization Act of 2009 (Pub. L. 111-3) (CHIPRA), 
States were provided with the option, and are encouraged, to coordinate 
and expedite eligibility for children in Medicaid and CHIP by using 
findings regarding income and other eligibility criteria made by other 
agencies, such as the Supplemental Nutrition Assistance Program (SNAP), 
as the basis for Medicaid and CHIP eligibility adjudications.
    With the passage of the Affordable Care Act, we expect that changes 
to Medicaid eligibility policies and business processes need to be 
adopted. States will need to apply new rules to adjudicate eligibility 
for the program; enroll millions of newly eligible individuals through 
multiple channels; renew eligibility for existing enrollees; operate 
seamlessly with newly authorized Health Insurance Exchanges (see 
section 1311 of the Affordable Care Act) whether run by the State or 
the U.S. Department of Health and Human Services (HHS) if the State 
chooses not to operate a State Exchange (hereafter referred to as 
``Exchanges''); participate in a system to verify information from 
applicants electronically; incorporate a streamlined application used 
to apply for multiple sources of coverage and health insurance 
assistance; and produce notices and communications to applicants and 
beneficiaries concerning the process, outcomes, and their rights to 
dispute or appeal. We further anticipate, following consultation with 
States and other stakeholders, additional standard Federal requirements 
for more timely and detailed reporting of eligibility and enrollment 
status statistics, including breakdowns by eligibility group, 
demographic characteristics, enrollment in managed care plans, and 
participation in waiver programs.
    System transformations will be needed in most States to accomplish 
these changes. These systems transformations should be undertaken in 
full partnership with Exchanges in order to meet coverage goals, 
minimize duplication, ensure effective reuse of infrastructure and 
applications, produce seamless enrollment for consumers, and ensure 
accuracy of program placements (see sections 1413 and 2201 of the 
Affordable Care Act). Extensive coordination and collaboration will be 
required between Exchanges and Medicaid, including on oversight and 
evaluation of the interoperability of the Exchange and Medicaid 
systems. In addition, States may consider how to coordinate systems 
changes with the eligibility determination systems used for other 
health and human services programs, such as SNAP, because a large share 
of individuals who are eligible for Medicaid also are eligible for 
other programs as well.

II. Provisions of the Proposed Regulations

    In the November 8, 2010 Federal Register (75 FR 68583), we 
published a proposed rule that revised the Medicaid regulations for 
Mechanized Claims Processing and Information Retrieval Systems. 
Specifically, we proposed to amend the definition of Mechanized Claims 
Processing and Information Retrieval Systems to include mechanized 
eligibility determination systems, which would include the enrollment 
and eligibility reporting activities associated with such systems. We 
also proposed that the enhanced FFP would be available for design, 
development and installation or enhancement of eligibility 
determination systems until December 31, 2015.

III. Analysis of and Responses to Public Comments

    We received 40 timely comments on the November 8, 2010 proposed 
rule (75 FR 68583 through 68595).
    Commenters expressed general support for the policies outlined in 
the proposed rule. Specifically, commenters agreed that providing 
enhanced matching funds for Medicaid eligibility systems is appropriate 
and necessary. Commenters expressed almost universal agreement that 
this enhanced match is critical to support State efforts to modernize 
their eligibility systems, and will allow States to bring these systems 
into the 21st Century so that they can provide cost-effective, 
accurate, reliable, and beneficiary-friendly assessments of eligibility 
for the Medicaid program. In light of the substantial changes made by 
the Affordable Care Act, commenters agreed that it is more important 
than ever to ensure that eligibility determination systems are designed 
and operated using the most up-to-date technological and business 
process solutions. With States expected to enroll millions of newly 
eligible individuals into Medicaid and to ensure seamless coordination 
with the new Exchanges, it is essential that States have modern and 
cost-effective eligibility systems that will accurately enroll eligible 
individuals, without unnecessarily cumbersome processes or delays. 
Commenters also believed that such initial investments would ultimately 
lower ongoing maintenance and operational expenses, driving savings for 
both States and the Federal government.
    Commenters also noted that HHS had released additional documents at 
approximately the same time as the November 8, 2010 proposed rule, 
which reinforced our strategic direction and received their support. 
Specifically, commenters acknowledged the joint guidance released by 
CMS and the Office of Consumer Information and Insurance Oversight (now 
CMS' Center for Consumer Information and Insurance Oversight (CCIIO)) 
entitled, ``Exchange/Medicaid Information Technology Guidance, version 
1.0,'' and the Funding Opportunity Announcement for Cooperative 
Agreements to Support Early Innovator Grants for Exchanges. Commenters 
indicated that they greatly appreciated the foresight of CMS and CCIIO, 
and are supportive of the guidance providing direction towards a 
service-oriented IT infrastructure based on interoperable systems and 
that they fully support the concept of a collaborative IT development 
approach among States, CMS and CCIIO.
    A summary of additional major issues and our responses follow. 
Since many of the comments were general in nature and not specific to 
any particular regulatory provision, we have identified the comments by 
nine categories:
     Requests for enhanced Federal funding.
     Requests for additional guidance.
     Public feedback and suggestions related to the seven 
standards and conditions.
     Public feedback and suggestions related to the APD 
process.
     Issues related to the transition period for compliance.
     Comments regarding CMS' strategy for monitoring and 
oversight, including performance reviews.
     Issues related to partial systems improvements or 
modernizations.
     Specific issues by regulatory provision.
     Issues related to the Regulatory Impact Analysis including 
the cost estimates, and information collection.

A. Requests for Enhanced Federal Funding

    Comment: Numerous commenters requested that the enhanced FFP for 
design, development, and installation or enhancement of eligibility 
determination systems be extended beyond the December 31, 2015 
deadline. Commenters indicated that new and significant enhancements 
may be needed beyond December 31, 2015, particularly in order to affect 
future legislative changes to Medicaid eligibility or to keep pace with 
technological innovations. The

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commenters noted that State budgets continue to be in a state of crisis 
and State revenues may not fully recover until 2016 or later; 
consequently, the Federal government must take responsibility for 
ensuring adequate funding of the program infrastructure to ensure 
compliance by January 1, 2014. Commenters recommended several different 
options in this regard. Some commenters indicated that CMS should 
consider that the requirement apply to funds allocated rather than 
expended. Other commenters believed that CMS could allow for the 
possibility of a continued enhanced match beyond the deadline in 
specified circumstances (many outside the control of State 
governments), such as new Federal requirements or major advances in 
computer technology. Other exception categories suggested by commenters 
included unforeseen issues in implementation and/or new opportunities 
for interoperability with other health and human services programs. 
Other commenters indicated that CMS should extend funding if States 
have approved APDs on or before December 31, 2015 and the project has 
not been completed or if States are planning to leverage improvements 
from other State Medicaid eligibility systems. The commenters further 
indicate that they are concerned that they will be unable to receive 
legislative approval to begin their project, develop an APD, receive 
Federal approval, and then complete work on the project while meeting 
the standards and conditions before the enhanced FFP ends on December 
31, 2015. Still other commenters believed the date should be changed to 
coincide with the end of the Federal fiscal year 2015 and 2016, so that 
enhanced funding would expire September 30, 2016. One commenter 
suggests that the deadline should be interpreted to apply to costs for 
projects receiving enhanced funding and obligated by that date rather 
than expended by December 31, 2015. One commenter expressed concern 
that a requirement for States to maintain existing eligibility 
processes for pregnant women and children until September 30, 2019 will 
mean States have to maintain dual eligibility systems during this time 
period. At the end of 2019, the IT systems will need to be updated to 
remove this function and that enhanced funding should be extended for 
States to make changes to eligibility systems when this requirement 
ends.
    Response: We appreciate the significant number of comments we 
received on this aspect of our proposed rule and the view of commenters 
that we should eliminate, extend, or modify the deadline for expiration 
of the enhanced match for eligibility systems. Nonetheless, while we 
appreciate the opinions of commenters, we continue to believe that the 
deadline we established in the proposed rule is appropriate and proper. 
We believe it is within our authority to determine that by a certain 
date, additional investments in eligibility determination systems will 
no longer continue to result in ``more'' efficient, effective or 
economical administration of the State Plan, as required by section 
1903(a)(3)(A)(i) of the Act. Further, we continue to believe that 
December 31, 2015 is a reasonable and proper end-point for when 
investments cease to result in acceptable increases in efficiency, 
economy, or effectiveness. Our reason is threefold: First, changes 
imposed by the Affordable Care Act will require immediate attention and 
commitment to new technologies for eligibility and enrollment systems. 
Second, once appropriate systems are deployed to support the coverage 
expansions and other eligibility changes required by the Affordable 
Care Act, we anticipate significant efficiencies in both application 
maintenance and business operations. Third, the additional 2 years we 
provided to States after the Medicaid expansion goes into effect allows 
ample time for States to refine and enhance the capability of the 
systems, and to capitalize on the efficiencies of these investments.
    We articulated in the proposed rule that additional investments are 
unlikely to yield similar rates of improvement and a regular 
administrative match should be sufficient for efficient and effective 
administration of State Medicaid programs. We anticipate that the 
improved underlying infrastructure supporting both Medicaid and 
Exchanges will be strongly leveraged in support of a State's person-
centric outreach, eligibility and enrollment activities across the 
health and human services spectrum.
    With respect to the request made by some commenters to establish an 
exceptions process, we believe this is already sufficiently provided 
for through our extension of enhanced FFP for an additional 2 years 
beyond the date for operation of the Exchanges. We are concerned that 
broadening or codifying exceptions to the deadline in the way suggested 
by the commenters would effectively render the deadline moot for many 
purposes and projects.
    The September 30, 2019 date noted by one commenter is the end-date 
for maintenance of effort (MOE) provisions for children (not pregnant 
women). Because of these MOE provisions, States must not have more 
restrictive ``eligibility standards, methodologies, or procedures'' for 
children than those in effect on March 23, 2010. The MOE requirement 
does not mean that States must maintain identical standards, 
methodologies or procedures as those in effect on March 23, 2010, and 
it does not mean that the same IT system or IT system processes be 
used. Rather, the MOE requires that the eligibility standards, methods, 
and procedures be no more restrictive than those in effect on March 23, 
2010.
    We are not certain of what the commenter is concerned about in 
terms of States' needing to maintain dual eligibility processes, but we 
assume he or she may be concerned about the interaction of the MOE 
requirements and the requirement under section 2002 of the Affordable 
Care Act. The conversion to a MAGI-equivalent income standard required 
under section 2002 of the Affordable Care Act is designed in the 
statute to ensure that individuals who meet the eligibility 
requirements in effect as of March 23, 2010 do not lose eligibility as 
a result of the shift to MAGI. Guidance will be provided by the 
Secretary regarding how States can accomplish the required conversion, 
and once the new MAGI-equivalent income standard has been determined, 
the MOE requirements will be applied to such converted standard, using 
the MAGI methodologies to determine an individual's income, as required 
under the Affordable Care Act. Therefore, the MOE requirements will not 
require operating dual eligibility systems.
    After consideration of the public comments received, we are 
maintaining the December 31, 2015 deadline in our regulations for 
eligibility determination systems.
    Comment: One commenter requested that CMS consider interpreting the 
deadline of December 31, 2015 for projects receiving enhanced Federal 
funding to requiring the funds be obligated by that date rather than 
expended.
    Response: We indicated in the proposed rule (75 FR 68589) that 
States would need to incur costs for goods and services furnished no 
later than December 31, 2015 to receive 90 percent FFP for design, 
development, installation, or enhancement of an eligibility system. For 
further clarification, this means that States must ensure that goods 
and services (for example, eligibility and enrollment modules, 
applications, systems, etc.) are provided to States no later than close 
of

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business December 31, 2015. Thus, for example, if an amount has been 
obligated by December 31, 2015, but the good or service has not yet 
been furnished by that date, then such expenditure would not be 
eligible for enhanced FFP.
    As a result of this comment, we are adding language to the 
regulations text to clarify this point.
    Comment: Numerous commenters asked whether enhanced funding is 
available for subsystems that interface with and/or are part of the 
eligibility process since such subsystems will require modifications to 
meet the requirements of the Affordable Care Act. Additionally, 
commenters sought enhanced FFP for projects that meet Medicaid 
Information Technology Architecture (MITA) guidance, yet still may need 
to integrate with legacy systems, with the understanding that, where 
feasible, open rules and specifications developed for programs will be 
used to read, insert, or update data into systems that currently do not 
have the functionality of being interoperable. The commenters agreed 
that APDs would need to be put in place and approved to modernize the 
legacy systems/subsystems.
    Response: We agree that enhanced funding can be available for 
subsystems that meet the standards and conditions outlined in this 
final rule. However, to the extent that such subsystems are reliant on 
or tied to a larger legacy system or suite of systems that introduce 
performance risk or ongoing costs to the operation of the subsystem, we 
may find that the system as a whole is not meeting the standards and 
conditions of this final rule and decline to approve enhanced match on 
that basis. It is our desire to acknowledge that subsystem 
modernization may be an entirely appropriate pathway to a high 
performing Medicaid program, while at the same time not binding 
ourselves to approve enhanced match for minor components of a large, 
fragmented legacy system that has little chance of delivering to 
expected business results. CMS will review APDs and make determinations 
regarding such subsystems, and to the extent that such subsystems meet 
with the standards and conditions outlined in this final rule and 
States can document that there is no performance risk or ongoing 
unnecessary costs, as a result of the subsystem being a part of larger 
legacy system, CMS will make determinations regarding enhanced funding 
accordingly.
    Comment: Several commenters want to ensure that enhanced FFP is 
available to States that are not completely MITA compliant, but rather 
to States that can demonstrate efficiencies are being achieved, 
redundancy is being decreased/eliminated, and system integration is 
being realized through application programming interfaces (API). States 
could demonstrate that APIs, in which a particular set of rules and 
specifications for services and resources have been developed by one 
software program that can be accessed and used by another software 
program implementing the API, can be used and serve as an interface 
between different software programs and facilitating their interaction, 
and thus, leading to efficiencies. Commenters added that with an 
approved APD reasonable and measureable milestones of system compliance 
can be demonstrated.
    Response: Enhanced FFP is available for those systems that comply 
with the standards and conditions of this final rule. Aligning to, and 
advancing increasingly, in MITA maturity for business, architecture, 
and data is one of the standards and conditions that must be met. We 
did not use the term ``MITA compliant'' in our proposed rule because 
MITA maturity is by definition, a matter of degree. We agree that 
achieving increasing levels and degrees of MITA maturity is likely to 
happen in stages. Recognizing this, we will be requiring a MITA roadmap 
that delineates how the proposed system enhancements for eligibility 
and enrollment functions will fit into the States' greater MITA 
framework. Such requirement will align with our expectations to see 
States continuing to make measurable progress in implementing their 
MITA roadmaps. We believe it is critical to build on and accelerate the 
modernization we have collectively begun under MITA, so that States 
achieve the final vision of MITA and have a comprehensive framework 
with which to meet the technical and business demands required by an 
environment that will increasingly rely on health information 
technology and the electronic exchange of healthcare information to 
improve health outcomes and lower program costs.
    Comment: One commenter requested clarification as to whether 
enhanced FFP will be available where a project has some components that 
meet the standards and guidelines required for enhanced FFP, but may 
include other components that do not.
    Response: We believe it is entirely appropriate to accomplish 
system modernization through phasing. In cases such as the one raised 
by the commenter, the changes being made to various system components 
will need to be reviewed through submission of an APD and review. We 
will need to ensure that component-based development is on a path 
toward an entire system or subsystem coming into compliance with the 
standards and conditions of this final rule. We would expect that if 
the components that do not meet the standards and conditions are 
essentially preventing the entire system or subsystem from meeting the 
standards and conditions, then the State would have a plan for updating 
such components, even if all components are not updated at the same 
time. For example, we do not expect that we would offer enhanced FFP 
for improvements to just the reporting aspect of the traditional, 
legacy eligibility system, if the State does not have a plan for 
bringing this entire legacy system into compliance with the standards 
and conditions. In addition, to receive enhanced FFP, States may not 
ignore any single standard or condition regardless of the level or 
breadth of their compliance with the remaining standards, although if a 
State is weaker or more at risk with certain standards or conditions, 
the State should include a roadmap in their APD demonstrating how they 
intend to come into compliance. We intend to carefully track progress 
against approved roadmaps when determining if system updates continue 
to meet the standards and conditions for enhanced match.
    Comment: One commenter suggests that CMS clarify that enhanced 
funding is also available for ``traditional'' eligibility 
determinations, such as those made on behalf of medically needy 
clients, buy-in, elderly, disabled, long-term care and home and 
community-based individuals.
    Response: To the extent that eligibility systems meet all 
requirements, standards, and conditions contained in this final rule, 
States will be eligible for enhanced FFP, and such enhanced funding is 
not dependent upon the eligibility group using the system.
    Comment: One commenter recommended that CMS clarify that enhanced 
funding is available for personnel costs, as well as the costs of 
physical systems. Specifically, the commenter notes that Federal 
regulations at Sec.  432.50(b) provide for enhanced funding at 75 
percent for the costs of staff ``engaged directly in the operation of 
mechanized claims processing and information retrieval systems'' and 
for enhanced funding at 90 percent for staff costs related to the 
design, development, and installation of these systems. FFP is provided 
at 50 percent for the costs of training personnel when new systems are 
developed.

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    Response: We did not propose amendments to the regulations at Sec.  
432.50(b); thus, enhanced funding is available for staff time spent on 
mechanized eligibility determination systems in the same manner that 
they apply to all mechanized claims processing and information 
retrieval systems, since mechanized eligibility determination systems 
are now considered to be part of such systems, assuming the 
requirements of this section are met.
    Comment: One commenter asked that we extend the enhanced funding to 
encompass the testing of the effectiveness of the eligibility systems, 
including testing beneficiary experience such as allowing States to 
receive reimbursement for conducting focus groups with community-based 
workers and/or beneficiaries who rely on the system to apply for and 
renew Medicaid coverage.
    Response: Again, to the extent these costs would be reimbursable 
under Sec.  432.50(b), they would be eligible for reimbursement under 
this rule as well (assuming all standards and conditions are met). 
States would need to ensure that the expenditures are tied to the 
mechanized eligibility determination system and follow all procedures 
for seeking approval.
    Comment: Several commenters requested that CMS require States to 
pass enhanced match through to counties. The commenters stated that CMS 
should ensure that if a State requires counties to contribute to the 
non-Federal share of Medicaid and Medicaid administrative costs, and 
that receives enhanced FFP; the State should be required to share the 
enhanced FFP in proportion to the counties' contribution. The 
commenters stated that this requirement would reflect the clear 
Congressional intent as expressed in the enhanced Federal Medical 
Assistance Percentage (FMAP) requirements for certain States in section 
5001(g)(2) of the American Recovery and Reinvestment Act (Pub. L. 111-
5, enacted on February 17, 2009) and strengthened by section 
10201(c)(6) of the Affordable Care Act.
    Response: The commenters cite section 10201(c)(6) of the Affordable 
Care Act, which added section 1905(cc) to the Act. Under this 
provision, a State may not be eligible for certain increased FMAPs 
associated with health care reform and disaster recovery if the State 
``requires that political subdivisions pay a greater percentage of the 
non-Federal share * * * than the respective percentages that would have 
been required by the State under the State plan under this title, State 
law, or both, as in effect on December 31, 2009.'' Since the level of 
Federal funding available for the costs of the eligibility and 
enrollment determination systems under this final rule will increase 
and the level of the non-Federal share specific to such expenditures 
will decrease, there could be an effect on the level of required 
political subdivision contributions that would be subject to this 
limitation. We already issued guidance on how the political subdivision 
contribution limitations under section 1905(cc) apply in an SMD letter 
issued November, 9, 2010 (see https://www.cms.gov/smdl/downloads/SMD10023.pdf). Rather than reiterate what is already in that guidance, 
we refer States and counties to such guidance. States and counties may 
also work with CMS to determine whether any required contributions by 
political subdivisions toward the non-federal share of these 
expenditures would be in compliance with political subdivision 
contribution provision.
    Comment: One commenter urged CMS to encourage States to consider in 
establishing actuarially sound Medicaid managed care rates, the 
additional systems-related investments by Medicaid health plans that 
are likely to be needed to interface with new State systems.
    Response: We believe this commenter is asking about managed care 
rates, and not the proposal we issued with regard to mechanized claims 
processing and information retrieval systems, and when they will be 
eligible for enhanced FFP. As our proposed rule did not address 
Medicaid managed care rates, we believe this comment is outside the 
scope of the proposed rule.
    Comment: One commenter asked for clarification on whether the 
addition of eligibility determination and enrollment systems is limited 
to stand-alone systems administered directly by the single State 
Medicaid Agency. The commenter indicates that some State eligibility 
systems are a joint venture with the HHS and the United States 
Department of Agriculture and are used to determine eligibility for 
financial assistance programs in addition to medical assistance 
programs.
    Response: The enhanced funding can apply to ``stand alone'' systems 
or ``integrated eligibility'' systems, assuming they meet the standards 
and conditions specified in this final rule. Many States are 
considering ways to coordinate Medicaid, CHIP and Exchange eligibility 
with other health and human services programs. However, we will only 
provide enhanced funding for the portion of the costs that can be 
directly attributed to Medicaid eligibility and enrollment functions. 
We also direct the commenter to the discussion on cost-allocation in 
OMB Circular A-87 (https://www.whitehouse.gov/omb/circulars_a087_2004) 
specifying appropriate allocation of costs when the system includes 
various benefiting programs.
    Comment: Other commenters have asked whether the enhanced funding 
can be used to support updating and completing the MITA assessment and 
roadmap, and performance measurement.
    Response: We agree with the commenters that it is appropriate to 
request enhanced funding for updating the MITA assessment and the 
roadmap, since one of the standards and conditions listed in Sec.  
433.112 speaks directly to MITA maturity. Enhanced funding is available 
assuming that updates are related to the standards and conditions and 
the State's plan for meeting them. We are making no further additions 
to the rule in response to this comment.
    Comment: Some commenters believed the timeframes related to the 
enhanced funding for the development of eligibility solutions seems to 
be extremely aggressive. Many of the activities related to the 
planning, design, development, and deployment of eligibility solutions 
will be new activities for both State and vendor staff. States will 
need to consider how they will integrate and leverage eligibility 
solutions into their Health Insurance Exchanges, their integrated human 
services eligibility solutions, their MMIS, and other points of 
intersection. Just the planning phase leading up to an approved APD and 
FFP release could easily consume more than a year. The commenters 
suggested that CMS should consider lengthening the timeframes for the 
completion of these efforts related to eligibility components.
    Response: We recognize that the timelines for developing new 
eligibility systems, and for submitting and approving new APDs, must be 
greatly accelerated from historical and traditional experiences and 
approaches in order to meet the timelines in the Affordable Care Act 
and to take advantage of enhanced match prior to December 31, 2015. We 
emphasize that we expect to operate efficiently in processing APDs and 
work collaboratively with States to implement these changes, and we 
expect States to operate quite differently in how they pursue new 
development, share and reuse assets, and take advantage of 
``lightweight'' applications and new technologies to meet these needs. 
We

[[Page 21955]]

noted in our proposed rule that dramatic systems transformations would 
be necessary and while the timeframes may appear aggressive to some, 
the Department is committed to providing leadership, technical 
assistance, and financial support to produce the IT infrastructure 
necessary to accomplish the tasks required by the Affordable Care Act 
according to the timelines specified in the law. We note that the 
Affordable Care Act requires that States be able to enroll the newly 
eligible individuals and coordinate with Health Insurance Exchanges by 
January 1 of 2014. Thus, our timeline accounts for this statutory 
deadline, while still maintaining a period of two years (through 
December 31, 2015) to account for potential delays or unforeseen 
obstacles in developing new or improved eligibility determination 
systems.
    We are making no further revisions to the rule as a result of this 
comment.

B. Requests for Additional Guidance

    Comment: One commenter requested that CMS produce and make 
available to the States a project planning template illustrating key 
entry points to major phases of the projects.
    Response: We will be providing a whole series of artifacts and 
supporting tools, documentation, diagrams to States as part of our 
technical assistance, collaboration, and governance. We will consider 
the usefulness of a template for project planning as we develop and 
publish these materials.
    Comment: Several commenters requested additional guidance on the IT 
enterprise.
    Response: We will issue additional Guidance for Exchange and 
Medicaid Information Technology Systems (IT guidance). We issued IT 
guidance version 1.0 on November 30, 2010, and expect to issue, expand 
and renew that guidance over time. These guidance documents will help 
States with the business rules necessary to design, develop, and 
implement State eligibility systems that can meet the requirements of 
the Affordable Care Act.
    Comment: Several commenters inquired about future guidance on MITA, 
the MITA alignment process, and whether the process for certifying and/
or validating MITA alignment will be detailed in the final rule.
    Response: We have provided continued guidance and artifacts 
associated with MITA since the MITA Initiative began. We will continue 
to provide that guidance and related toolsets and details. We will 
consider a number of elements in reviewing states' alignment with MITA 
and increasing MITA maturity, including States' self-assessments and 
MITA roadmaps.
    Comment: Several commenters inquired about the ``modular, flexible 
approach to systems development'' and increasing MITA alignment 
requirements, as well as whether such requirements apply to all MMISs 
or only eligibility determination systems. The commenters believed that 
to promote the feasibility of a ``modular, flexible approach to systems 
development'' of Medicaid systems, CMS should continue to fund and 
aggressively develop necessary interfaces and technical standards that 
are required to facilitate MMIS interoperability.
    Response: As stated in the above responses, we intend to issue a 
series of tools for States to use in ensuring the facilitation of 
interoperability. It should be noted that the requirements of this 
final rule apply to all MMISs, not just eligibility determination 
systems (which will now be considered part of the MMIS). We are making 
no further additions to the rule as a result of this comment.
    Comment: Several commenters urged CMS to develop stronger Federal 
guidelines for enrollment and renewal procedures to accompany new 
eligibility systems, including guidance on acceptable data matches 
creating safe harbors for data sources used in electronic income 
verification, to allow States to move to paperless income verification 
with confidence that they comply with quality and accuracy standards. 
In developing additional requirements, the commenters urged CMS to 
ensure that Medicaid's application, renewal and verification procedures 
are no more paperwork intensive or burdensome than those for Exchange 
tax credit applicants.
    Response: We agree with the commenters that simplification and 
streamlining of the consumer experience are expected outcomes of the 
Affordable Care Act. However, business process and policy requirements 
for determining eligibility are outside the scope of this regulation 
and will be addressed in separate rulemaking. As discussed later in the 
response to comments concerning performance measures, we will also 
publish measures concerning expected business outcomes in separate 
notices. We are making no further additions to this section of the 
final rule.
    Comment: Some commenters requested reforms and clarifications 
regarding cost allocation principles.
    Response: Our proposed rule did not contain any proposals to alter 
cost allocation principles, and we believe it is prudent that CMS and 
the States continue to follow the cost allocation principles outlined 
by OMB in Circular A-87. As stated in the proposed rule, for integrated 
eligibility systems, assuming those systems meet the standards and 
conditions outlined in the final rule, only the costs associated with 
Medicaid eligibility and enrollment functions will be eligible for the 
enhanced funding and funding for Exchange activities is fully Federally 
funded through January 1, 2015. We discussed cost allocation and the 
principles of cost allocation in guidance that was released on November 
2010; that is, the IT guidance version 1.0 and in the Funding 
Opportunity Announcement for the Early Innovator Grants. States can 
access the OMB Circular A-87 at https://www.whitehouse.gov/omb/circulars_a087_2004.
    Comment: Several commenters asked for guidance on commercial off-
the-shelf (COTS) software products, and indicated that such products 
are often modular, reusable, sharable, leveraged, and aligned with 
MITA. Commenters also stated that enhanced FFP should be available for 
COTS initial licensing and implementation service costs as well as 
ongoing software licensing and maintenance costs. Commenters also 
questioned why there is no language confirming established protections 
for COTS pre-existing intellectual property (IP) and newly developed IP 
used in eligibility modernization initiatives.
    Response: We are not dictating specific solutions to States as they 
undertake their technology projects, as long as the standards and 
conditions of this final rule are met and we expect to work with States 
in an effort to share, reuse, and leverage other State solutions. For 
COTS products, we have a longstanding rule that the State must own any 
software that is designed, developed, installed or improved with 90 
percent FFP (see Sec.  433.112(b)(5)). In other words, software that is 
developed with public funds must be owned by the public and as a 
``public product'' is available to be shared with other States. COTS-
based solutions may still receive a 75 percent enhanced funding (that 
is, for licensing and implementation services costs), if they are 
related to the MMIS (including the eligibility determination system) 
and meet all the requirements of this final rule. In addition, current 
rules protecting intellectual property (such as copyright and/or patent 
laws) would simply apply in the way that they already do apply to 
intellectual property. Nothing in this final rule is attempting to 
alter those rules.
    Comment: Several commenters asked that we define the terms 
``modular'',

[[Page 21956]]

``modules'', ``models'', and ``successful models.'' Commenters 
indicated they are unclear about whether a model is equivalent to an 
architecture, reference model, process design, etc. for a given 
customer or class of customers and consistent with MITA architecture 
framework, process and planning guidelines, and maturity model.
    Response: We believe it is important to frame our response in terms 
of the IT Guidance jointly issued by CMS and CCIIO. This guidance 
outlined a set of expectations and principles for sharing solutions and 
approaches between both Medicaid and the Exchanges. Consequently, we 
believe it is imperative for States and vendors to view all IT 
activities much more broadly than a single physical implementation of a 
set of technical capabilities.
    ``Modular'' means reducing the complexity of a larger problem by 
breaking it down into small well defined pieces. For example, MITA 
business architecture reduced the complexity of the Medicaid program 
into eight high-level business areas. Each business area is further 
broken down/decomposed into smaller and manageable business processes. 
These business processes can be described as ``modules''. System 
components can also perform tasks in a similar fashion. ``Modularity'', 
if done right, accomplishes re-usability, maintainability, and 
reliability. The term also underscores our strong desire for States and 
the vendor community to develop ``lighter-weight'' and ``loosely-
coupled'' approaches to the design of health care systems, including, 
but not limited to eligibility determination and enrollment functions.
    In the MITA initiative, we have urged States to focus on designing 
sets of overarching and reusable functions that traditionally might 
have been included within one particular application and that would 
have been specific to that particular application, but that now could 
be used, in a consistent manner, by multiple applications used by the 
State. Additionally, we want to emphasize that the rules for processing 
data should be written in such a way as to be available to more than 
just one application. For example, whether it is a Web service querying 
for a response, or an Extract Transformation and Load (ETL) set of 
tools to move data from a database to an external interface, the rules 
that are invoked are the same, thus ensuring the underlying data 
maintains its inherent ability to consistently transform to the same 
information.
    ``Reference Models'' focus on classification and conceptual 
structure. Typically, a Technical Reference Model, for example, 
consists of infrastructure and business applications that interface 
with a number of operating and network services through a variety of 
specific applications such as graphics and imaging, data management, 
data interchange, user interface, transaction processing, security and 
system/network management.
    ``Reference Architecture'' is about proven solutions and best 
practices, typically without being vendor/platform specific. Typically 
arrayed in different tiers (access client tier, middle tier and data 
tier, for example), a technical reference architecture includes a 
client browser and an XML appliance to allow for access, a presentation 
layer using a portal with HTML and an application/Web server, business 
services applications, enterprise information integration, and 
operational data storage facility typically through a data base with 
data exploration capabilities sometimes arrayed via data marts.
    We believe MITA 2.0 addresses all of the defined terms. We also 
urge readers interested in these and related topics to familiarize 
themselves with the MITA Framework, look for additional guidance in the 
various iterations of the IT Guidance, and contact CMS staff for 
additional clarifications related to specific circumstances.
    Comment: Other commenters requested that the term ``eligibility 
determination system'' be defined. The term should indicate that 
eligibility determination system includes the technology interfaces for 
program applicants and beneficiaries, such as Web sites that include 
on-line applications and other Web features that allow individuals to 
use eligibility estimators, to report changes, to renew eligibility, or 
to seek information about their case status. Likewise, ``eligibility 
determination system'' should be defined to include computer generated 
notices and data.
    Response: Our final rule considers systems that process claims for 
eligibility to be part of mechanized claims processing and information 
retrieval systems. Thus, to the extent that a function is part of 
processing the claim for eligibility, we believe it could be eligible 
for enhanced FFP under this final rule. We believe building an online 
application would likely be part of the system that processes claims 
and applications for eligibility. Additionally, we can envision how all 
of the components identified by the commenters will be part of an 
eligibility determination system, but we would need to understand more 
fully how such components are integrated into a system that processes 
claims for eligibility. States will explain in their APDs how the 
various components are part of the mechanized claims processing and 
information retrieval system and will meet with our standards and 
conditions.
    We are making no further additions to this section of the final 
rule.
    Comment: One commenter indicated that it would be helpful if CMS 
provided additional leadership and technical assistance in further 
standardizing data semantics and information nomenclature across the 
eligibility function.
    Response: We agree with the commenter and look forward to working 
in close partnership with States, Exchanges, and the Office of the 
National Coordinator for Health Information Technology, and the HIT 
Policy and Standards Committees on this activity. We intend to enforce 
industry standards as they develop in order to promote 
interoperability, improve reliability of outputs and outcomes, and 
reduce development costs.
    Comment: A few commenters spoke of the importance of ensuring that 
county governments act as full partners in the planning, design, 
oversight and operations of necessary Medicaid eligibility system 
transformations. To ensure that counties are poised to best assist 
Medicaid applicants and recipients, the commenters suggested that the 
Secretary develop model systems and deploy the necessary resources for 
implementation including technical assistance and support for capital 
investment.
    Response: We agree with the commenter that States, Tribal 
organizations, County governments, and Federal government agencies 
should work together to ensure effective interoperability and to 
develop model systems, as well as to deploy the necessary resources for 
implementation including technical assistance and support for capital 
investment. We recognize the historical contribution made by counties 
to making eligibility determinations in most States. We look to States 
to determine how best to deploy and optimize assets within the State to 
accomplish the purpose and requirements of the Affordable Care Act.
    Comment: Several commenters believe that, to support the one 
application concept and streamlined eligibility determinations for 
Medicaid and related programs (including CHIP, TANF, Food Stamps, and 
WIC), CMS should work with other Federal agencies to obtain agreement 
to allow sharing of data across those related programs.

[[Page 21957]]

    Response: Our standard and condition regarding data exchange 
requires seamlessness with the Exchanges and also requires that States 
allow for interoperability with other health and human services 
programs. We also note that our standards and conditions require 
compliance with the standards and protocols adopted by the Secretary 
under sections 1104 and 1561 of the Affordable Care Act. We expect that 
such standards and protocols will promote reuse and data exchange.
    Comment: One commenter believes that to support timely processing 
of eligibility, CMS should work with other Federal agencies that 
interface with State Medicaid agencies to allow a single point for 
correction of client data errors, including birthdates and erroneously 
posted death dates.
    Response: We believe this comment addresses the actual program 
instructions and policy requirements for eligibility systems, and not 
the information technology solutions that will be needed for the 
systems themselves. Our requirements regarding these matters will be 
established in separate rulemaking.
    Comment: One commenter requested that CMS offer strong guidance to 
the States on privacy and confidentiality issues that need to be 
observed in the new State systems.
    Response: We agree that confidentiality and privacy are critical to 
protecting beneficiaries and providers. The final rule includes as a 
standard that systems ensure alignment with the HIPAA privacy, security 
and transaction standards.
    Comment: One commenter indicates that we should issue guidance more 
definitively discussing the standards developed in response to section 
1561 of the Affordable Care Act. The commenter noted that while section 
1561 the Affordable Care Act is an outstanding source of ideas and 
information, section 1561 the Affordable Care Act standards appear to 
stop short of creating specific, concrete requirements.
    Response: Section 1561 the Affordable Care Act requires HHS, in 
consultation with the Health Information Technology (HIT) Policy 
Committee and the HIT Standards Committee, to develop interoperable and 
secure standards and protocols that facilitate electronic enrollment of 
individuals in Federal and State health and human services programs. 
The HIT Policy and Standards Committees approved initial 
recommendations, and in September 2010, the Secretary adopted these 
recommendations. The recommendations include initial standards and 
protocols that encourage adoption of modern electronic systems and 
processes that allow a consumer to seamlessly obtain and maintain the 
full range of available health coverage and other human services 
benefits.
    The HIT Policy and Standards Committees recommendations are 
available at https://healthit.hhs.gov/portal/server.pt?open=512&mode=2&objID=3161. We wish to note that one of the 
seven standards and conditions specifically requires States to ensure 
alignment with, and incorporation of, industry standards and specifies 
several national standards including standards and protocols adopted by 
the Secretary under section 1561 of the Affordable Care Act.
    Comment: Another commenter suggested that we make all guidance 
documents, including the State Medicaid manual readily available.
    Response: We agree. We are currently working to gather all 
applicable guidance documents on the CMS Web site. Guidance documents 
are already posted to several web sites, including the proposed rule 
(see regulations.gov), the IT guidance version 1.0, (see https://www.hhs.gov/ociio/regulations/joint_cms_ociio_guidance.pdf), 
Overview on the MITA framework, (see https://www.cms.gov/MedicaidInfoTechArch), and Overview of the MMIS (see https://www.cms.gov/MMIS). Please note that Chapter 11 of the State Medicaid 
Manual can be accessed electronically at https://www.cms.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS021927.
    In summary, we are making no revisions to regulation text as a 
result of these comments.
    Comment: Several commenters suggested that CMS provide educational 
materials to ensure consumers get individualized assistance and have 
their questions answered to assure enrollment in Medicaid and the 
Exchanges.
    Response: We believe this comment addresses the actual program 
instructions and policy requirements for eligibility systems, and not 
the information technology solutions that will be needed for the 
systems themselves. Our requirements regarding these matters will be 
established in separate rulemaking.
    Comment: Commenters also requested that CMS issue ``Frequently 
Asked Questions,'' establishing a direct contact line for assistance, 
make available a complete contact list of all of the States and their 
designated person/representatives, and develop a Webpage/module to the 
existing Web site that will use this information and any ongoing data 
exchange information for the State. Commenters further recommended that 
CMS Regional Offices be fully trained and educated on the regulations 
and standards.
    Response: We will consider these recommendations as we begin 
implementation of this final rule. We expect to provide numerous venues 
for sharing of information, including conferences, information posted 
to the CMS.gov Web site, letters, program memoranda, and training 
materials. The final rule and additional IT guidance will provide 
information regarding funding standards and conditions. We expect to 
release additional guidance on performance matrices. We are currently 
exploring several approaches to expedite the APD process and will be 
providing guidance on this process soon after publication of this final 
rule.
    Additionally, we have recently awarded seven cooperative agreements 
to help a group of ``Early Innovator'' States design and implement the 
IT infrastructure needed to operate Exchanges. We expect to share 
information among these Innovator States and, as Exchanges are being 
developed, we expect to share information from these Innovator States 
with other States as well through the use of the CMS.gov Web site, 
conferences, and face-to-face meetings.

C. Public Feedback and Suggestions Related to the Seven Standard and 
Conditions

    Comment: Several commenters requested clarification on the 
standards and conditions, and questioned how progress would be 
measured. Specifically, several commenters were concerned about our 
reference at Sec.  433.112(b)(13) to ``promoting sharing, leverage, and 
reuse of Medicaid technologies and systems within and among States.'' 
Commenters requested that CMS define ``promoting'' and specify how 
States will be required to leverage this information between States. 
Further, the commenters questioned when CMS will provide States with 
information regarding ``promising State systems that can be leveraged 
and used by other States.'' They also questioned how these ``promising 
State systems'' will be identified. The commenters noted that it will 
be important for CMS to provide sufficient time for States to leverage 
promising systems and qualify for enhanced FFP to fund the development 
of those Medicaid eligibility systems. Other commenters expressed 
concern

[[Page 21958]]

that to meet the standards and conditions required for the Medicaid 
eligibility system to qualify for the enhanced funding, significant 
systems changes will be necessary to integrate Medicaid/CHIP 
eligibility and develop a single client identifier for all Medicaid and 
CHIP members to establish seamless coordination for eligibility and 
enrollment. Some commenters requested that CMS provide clarity on the 
criteria CMS will use to assess how States have demonstrated compliance 
with these standards and conditions including what documentation States 
will be expected to provide.
    Several commenters questioned the phrase ``seamless coordination.'' 
That is, Sec.  433.112(b)(16) requires seamless Medicaid coordination 
and integration between Medicaid eligibility systems and the Exchange, 
allowing for interoperability with the Exchanges, and other health 
information systems. The required interoperability would involve the 
exchange of eligibility and enrollment status to the health information 
system, however, the rule did not specify the health information being 
exchanged among the eligibility and enrollment systems. The commenters 
believed it would be important for CMS to provide additional guidance 
on the type of data to be exchanged between eligibility and enrollment 
systems and other health information systems; thus, the commenters 
requested a definition of ``seamless coordination.'' Additionally, the 
commenters requested that CMS provide clarity around whether other 
programs, such as the Supplemental Nutrition Assistance Program and the 
Temporary Assistance for Needy Families Program, are considered part of 
CMS' vision for ``seamless coordination'' and whether enhanced Medicaid 
funds would be used to make related changes to eligibility systems for 
these programs as well.
    One commenter suggested that we add stronger language to the list 
of standards and conditions in Sec.  433.112(b) consistent with the 
preamble language included in the proposed rule regarding the emphasis 
on the customer experience. Specifically, the commenter stated CMS 
references the goal of creating an ecosystem designed to deliver 
person- and citizen-centric services and benefits. The commenter 
requested similar language be added in regulations text.
    Numerous commenters were supportive of our proposed standards and 
conditions. Specifically, several commenters have indicated they 
welcome our efforts to identify ``promising State systems'' that can be 
leveraged and used by other States. Commenters indicated that they 
support our perspective that State eligibility and enrollment systems 
must be conceived of as contributing to a ``system of systems.'' To 
achieve interconnected, functional systems in time to implement the 
Affordable Care Act, States must leverage existing systems to the 
greatest extent possible and successfully connect across silos. 
Commenters further stated that CMS should develop a repository or 
method of sharing information and support the development of reference 
applications. Additionally, commenters stated CMS should establish a 
means for communication between agencies at the Federal level in a 
manner that can be replicated at the State level. The commenters also 
stated that CMS should also provide support to those States that choose 
to ``phase in'' some of the changes, to ensure that they can proceed 
while also receiving enhanced funds. Additionally, the commenters 
requested that CMS should consider the MITA governance model for 
disseminating more detailed specifications for the standards and 
conditions; that is, the MITA governance model which includes the 
Business, Information, and Technical Review Boards, organized to 
support the MITA model for review, approval, and adoption of national 
standards.
    Response: All of these comments are specific to Sec.  433.112 and 
Sec.  433.116 in which we have required that to receive enhanced 
funding for development, design, installation or enhancement of 
mechanized claims processing and information retrieval systems and 
operation of such systems, the standards and conditions specified in 
Sec.  433.112(b)(10) through (16) must be met. The standards and 
conditions are prescriptive in nature; we did, however, recognize that 
for State systems to meet these standards and conditions, it would be 
necessary to provide additional guidance that clearly articulates our 
criteria for