The American Recovery and Reinvestment Act
The American Recovery and Reinvestment Act
The American Recovery and Reinvestment Act or ARRA greatly helped TennCare and the state of Tennessee as a whole avoid immediate budget reductions and allows the state to adjust to the changing economic climate over a period of time. TennCare estimates it will receive about $1.2 billion additional federal Medicaid matching dollars over the entire nine-quarter "recession adjustment period" outlined in the ARRA. That period of time spans from October 2008 to December 2010.
The funds will solely be received through an increased federal match on one type of expenditure - medical assistance payments. These are payments TennCare makes that are directly related to providing health care services to our 1.2 million enrollees. TennCare operates on a "reimbursement" model, meaning TennCare must spend state money and then the federal government will reimburse the state for a portion of the expense. Previously, for every dollar TennCare spent on medical assistance payments, the federal government paid about 65 cents, and the state of Tennessee paid about 35 cents.
With the passage of the American Recovery and Reinvestment Act, the federal match changed. The federal government now pays about 75 cents for every dollar spent on medical assistance payments, and the state pays the remaining 25 cents. This increased funding has prevented some immediate budget reductions and financially helped the state as a whole during these tough economic times by displacing state dollars that would be required to draw down the same amount of funding. The current enhanced match rate of 75 percent is set to expire on January 1, 2010. However, there are currently proposals at the federal level to approve a six-month extension of the enhanced match rate which would bring in additional federal dollars.
Health Information Exchange and Provider Incentives
ARRA also outlines grants to be used in implementing a new Health Information Exchange (HIE) and incentive funds to help encourage eligible providers to transition to universally compatible electronic health records (EHR). For information on provider eligibility click here.
In January 2010, the Centers for Medicare & Medicaid Services announced that they would grant Tennessee approximately $2.7 million in federal matching funds for state planning activities necessary to implement the electronic health record incentive. TennCare is currently developing a strategic plan for implementation of HIE and once completed will be submitted to CMS. In order to create an effective plan, TennCare will be reaching out to potentially eligible providers to collect information and gauge interest.
Click here for more detailed information about the American Recovery and Reinvestment Act.
