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American Recovery and Reinvestment Act of 2009

The American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law by President Obama on February 17, 2009.  ARRA made $781 billion in federal funding available nationally. 

Information on the national economic recovery effort is available at www.recovery.gov.

Information on California's economic recovery effort is available at www.recovery.ca.gov.

ARRA made available $87 billion was made available for state Medicaid programs.  ARRA impacts the Medi-Cal program in the following ways:

 

TEMPORARY INCREASE IN FEDERAL MEDICAL ASSISTANCE PERCENTAGE (FMAP)

The FMAP is the share of Medicaid expenditures paid by the federal government.  ARRA increased California’s FMAP from 50 percent to 61.59 percent, meaning that the federal government now pays about 62 cents for every dollar of Medi-Cal services used.  The FMAP increase is effective from October 1, 2008, through December 31, 2010. 

      • States must follow several requirements in order to quality for increased FMAP:
      • States must maintain the eligibility standards, methodologies and procedures in effect on July 1, 2008. 
      • Increased FMAP does not apply to certain federal payments to states, including Disproportionate Share Hospital (DSH) payments, most payments for family assistance and child welfare services, payments for the Children’s Health Insurance Program, payments that currently receive enhanced FMAP and payments for individuals covered under recent eligibility expansions.
      • States cannot deposit or credit the FMAP increase to a rainy day fund.
      • States must meet existing federal requirements for prompt payment of providers.  ARRA also temporarily extends prompt payment requirements to hospitals and nursing homes.
      • States cannot require political subdivisions of the state (e.g., cities or counties) to pay an increased share of Medicaid expenditures.

        TEMPORARY INCREASE IN DHS PAYMENTS

        ARRA increases states’ DSH allotments by 2.5 percent in federal fiscal years 2009 and 2010.

         

        MORATORIA ON MEDICAID REGULATIONS

        ARRA extends the moratoria, or hold, on federal Medicaid regulations regarding targeted case management, school-based services, provider taxes and outpatient hospital services through June 30, 2009.  ARRA also expresses the intent of Congress that the federal government should not finalize regulations for graduate medical education, cost limit for public providers and rehabilitative services.  Finally, ARRA bars enforcement of the outpatient hospital services regulation retroactive to December 8, 2008.

         

        EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA)

        ARRA extends the TMA program through December 31, 2010.  The TMA program provides short-term Medicaid coverage for beneficiaries who would otherwise lose their eligibility because of changes in their income.  ARRA also gives states the option to make certain changes in eligibility for the TMA program.

         

        EXTENSION OF QUALIFYING INDIVIDUAL PROGRAM

        ARRA extends the QI program through December 31, 2010.  The QI program pays Medicare Part B premiums for certain low-income individuals. 

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        PROTECTIONS FOR AMERICAN INDIANS AND ALASKA NATIVES

        ARRA includes several protections for American Indians and Alaska Natives enrolled in Medicaid related to premiums and cost sharing, eligibility determinations and managed care.  ARRA also requires states to seek advice from Indian Health programs and Urban Indian Organizations prior to any state plan amendments, waiver requests and proposals for demonstration projects likely to directly impact Indians, Indian Health Programs or Urban Indian Organizations.

         

        FUNDING FOR HEALTH INFORMATION TECHNOLOGY (HIT)

        ARRA provides $40 billion in federal funding for HIT for the Medicare and Medicaid programs, which includes financial incentives for certain Medicaid providers to use electronic medical records and share information through electronic health information exchange.

         

        ADDITIONAL INFORMATION

      •      ARRA Overview

        • Centers for Medicare & Medicaid Services ARRA Guidance

      •      ARRA Frequently Asked Questions
      •      ARRA # 1
      •      ARRA # 2
      •      ARRA # 3
      •      ARRA # 4
      •      ARRA # 4 Appendix
      •      ARRA # 5
        Centers for Medicare & Medicaid Services ARRA HIT Guidance

      • Enclosure A – State Medicaid Hit Plan (SMHP)

      • Enclosure B – Relationship between MMIS, MITA and HIT Adoption

      • Enclosure C – The American Recovery and Reinvestment Act of 2009: Roles and Responsibilities of CMSO and the State to Administer and Implement HIT Incentive Payments

      • Enclosure D – Office of the National Coordinator Grant Opportunities and CMS Funding Opportunities

      • Enclosure E – Medicaid – American Recovery and Reinvestment Act (ARRA) Section 4201:  Health Information Technology (HIT) Potentially Eligible for 90 Percent HIT Administrative Match

      • Enclosure F – Health Information Technology Resources 

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