HHS Extends Medicaid Cost Allocation Exception for Human Services Programs

The Department of Health and Human Services, in conjunction with the Department of Agriculture, released new guidance extending an exception to the Office of Management and Budget’s (OMB) cost allocation requirements that was set to expire December 31, 2015. The exception, which the new guidance extends through the end of 2018, permits states to depart from the normal cost allocation rules when they are building functionality in Medicaid, CHIP and state-based Marketplace Eligibility and Enrollment (E&E) systems that allows those systems to also determine eligibility for state-administered human services programs (such as TANF, Child Support or SNAP). Costs relating to services needed by the health programs would be allocated among those programs and not to the human services programs, even if benefiting them, while services or increases in capacities that are not required by the health programs would be allocated to the non-health programs pursuant to regular OMB cost allocation principles. The letter notes that this extension, along with CMS' previously proposed permanent extension of enhanced funding for the Medicaid component of E&E systems, enables states to build more efficient E&E systems that are integrated among multiple programs. CMS encourages states to use the extended timeline under the exception to pursue additional system integration.

CMS Expands Scope of Companies Exempt From Contraceptive Mandate

CMS published final regulations on the Affordable Care Act preventive services requirement, broadly defining which for-profit companies may elect not to include contraceptive coverage in their group health plans on the basis of religious beliefs. The regulation stems from the Hobby Lobby Supreme Court case ruling that "closely held" for-profit companies are entitled to accommodation from the contraceptive mandate. CMS’s final regulations define a closely held company as one that is for-profit, not publicly traded, and has the majority of its shares held by five or fewer individuals. Health insurance issuers and third party administrators are still required to provide contraceptive services to these companies’ group health plan enrollees, but may not charge the employer or enrollee for the service.