Financial Management
How this system supports the Medicaid Program
A system or subsystem that calculates FFS provider payment or recoupment amounts and initiates payment or recoupment action as appropriate. The system should also support appeals, capitation payments, and generates the data for timely and accurate financial reports.
CMS-Required Outcomes
Each CMS-Required outcome is based on statutory or regulatory requirements. CMS-Required Outcomes and Metrics are used to demonstrate that a system is compliant with the applicable federal regulations which pertain to that specific system or module. CMS-Required outcomes form the baseline for system/module functionality, which must continue to receive enhanced federal funding for operations.
| Reference # | CMS Required Outcomes | Default Metrics | Regulatory Sources |
|---|---|---|---|
| FM1 | The system calculates FFS provider payment or recoupment amounts, as well as value-based and alternative payment models (APM), correctly and initiates payment or recoupment action as appropriate. | - Count/percentage and amount/percentage of corrected claims by program, service category, and payment model. Report Medicaid and CHIP metrics separately. |
Section 1902(a)(37) of the Act
42 CFR 433.139 42 CFR 447.20 42 CFR 447.45 42 CFR 447.56 42 CFR 447.272 |
| FM2 | The system pays providers promptly via direct transfer and electronic remittance advice or by paper check and remittance advice if electronic means are not available. |
- 90% Clean Claims<=30 Days
- 99% Clean Claims <=90 Days - 100% All Other Claims <=12 Months |
42 CFR 447.45
42 CFR 447.46 |
| FM3 | The system supports the provider appeals by providing a financial history of the claim along with any adjustments to the provider's account resulting from an appeal. |
- Records must be retained for a minimum of 3 years for fiscal records, 5 years for records related to cost reports, 6 years for medical records of covered entities, and 10 years for managed care records (or greater if required under State laws) – periods are measured from the date of closure of all related actions for a given record.
- Pass/Fail that the state can demonstrate that 100% of records were retained for the appropriate number of years indicated above. | 42 CFR 431.152 |
| FM4 | The system accurately pays per member/per month capitation payments electronically in a timely fashion. Payments account for reconciliation of withholds, incentives, payment errors, beneficiary cost sharing, and any other term laid out in an MCO contract. | - Count/percentage and amount/percentage of payments by assistance program (Medicaid, CHIP, etc.), and service category. Report Medicaid and CHIP metrics separately. |
42 CFR 438
42 CFR 447.56(d) |
| FM5 | The system accurately tallies recoupments by tracking repayments and amounts outstanding for individual transactions and in aggregate for a provider. | - Repayment aging report showing counts/aggregate received/outstanding 60 days or less, >60 days, and any additional periods useful for State management of receivables. | 42 CFR 447 |
| FM6 |
The state recovers third party liability (TPL) payments by:
· Tracking individual TPL transactions, repayments, outstanding amounts due, · Aggregating by member, member type, provider, third party, and time period, · Alerting state recovery units when appropriate, and · Electronically transferring payments to the state. | - Third party recovery aging report showing counts/aggregate received/outstanding 60 days or less, >60 days, and any additional periods useful for State management of receivables. | 42 CFR 433.139 |
| FM7 | The system processes drug rebates accurately and quickly. | - Count/Percentage & Amount/Percentage on time (within 45 days of end of quarter)/late. | 42 CFR 447.509 |
| FM8 | State and federal entities receive timely and accurate financial reports (cost reporting, financial monitoring, and regulatory reporting), and record of all transactions according to state and federal accounting, transaction retention, and audit standards. | - Count/Percentage of on-time reporting for designated reporting period according to reporting schedule(s). |
42 CFR 431.428
42 CFR 433.32 |
| FM9 | The system tracks that Medicaid premiums and cost sharing incurred by all individuals in the Medicaid household does not exceed an aggregate limit of five percent of the family's income. If the beneficiaries at risk of reaching the aggregate family limit, the system tracks each family's incurred premiums and cost sharing without relying on beneficiary documentation. | - Count/percentage of family’s below/at/exceeding threshold. (The last of these indicates an overpayment by the household.) | 42 CFR 447.56(f) |
State-Specific Outcomes - CMS Approved
States requesting enhanced FFP for systems that fulfill state-specific program needs, beyond minimum legal requirements and the baseline of the CMS-required outcomes, should propose State-Specific Outcomes which address the proposed enhancements.
When drafting state-specific outcomes statements, keep these tips in mind.
Examples for Financial Management
We are actively gathering and evaluating outcomes statements crafted by states for this business area.
Please send examples from your state that you’d like to share to MESCertificationRepo@cms.hhs.gov. Our team will collect and share the best examples.
| State | Medicaid Program Goal | Outcome Statement | Metric(s) |
|---|---|---|---|