States must fund the 10 percent non-federal share of the Health Information Technology (HITECH) Act administrative expenditures consistent with the law and regulations applicable to the non-federal share for all Medicaid expenditures. Consistent with that authority, which includes Social Security Act sections 1902(a)(2), 1903(a), 1903(w), and 42 CFR Part 433, subpart B, states may fund the non-federal share of Medicaid expenditures through legislative appropriations to the Medicaid agency, intergovernmental transfers (IGTs), certified public expenditures (CPEs), permissible health-care related taxes, and bona-fide donations.
States must submit their proposed strategies for funding the non-federal share of HITECH administrative payments to CMS for review as part of the HIT plan approval process. CMS will review each individual State’s proposal to ensure that each proposed non-federal share funding source meets federal requirements. During this process, CMS can address specific questions about funding the non-federal share of Medicaid expenditures.
CMS strongly urges States to work on their funding proposals with their CMS HIT Coordinators as early as possible before claiming for HITECH administrative expenditures, to ensure funding structures are appropriate. HITECH administrative expenditures, like other title XIX expenditures, are subject to audit, and federal funds may be at risk if funding sources are found not to be in compliance with federal requirements.
Below are some statutory and regulatory citations pertaining to non-federal share financing requirements. Please note this is not an all-inclusive list of funding requirements.
• Use of Federal Funds
o Social Security Act §1903
o 42 CFR 433.51(c)
• State Appropriations
o Social Security Act §1902(a)(2)
o 42 CFR 433.51
• Intergovernmental Transfers
o Social Security Act §1903(w)(6)(A)
o 42 CFR 433.51
• Certified Public Expenditures
o Social Security Act §1903(w)(6)(A)
o 42 CFR 433.51
• Healthcare-Related Taxes and Provider-Related Donations
o 42 CFR part 433, subpart B
Created 2/7/2013
(FAQ7809)
