State Plan

Medicaid State Plan Introduction

Medicaid is a federal-state partnership. Federal regulations provide a framework for each state to build a unique Medicaid program. States must all comply with some basic requirements such as:

  • Providing certain mandatory services like hospital care and physician services
  • Providing services that are "sufficient in amount, duration, and scope to reasonably achieve (their) purpose"
  • Providing services throughout the state
  • Serving certain mandatory populations like poverty-level children and low-income pregnant women

State Limitations

States are also prohibited from varying the amount, duration, and scope of covered services because of a beneficiary's diagnosis or type of illness. The method by which states communicate the design of their Medicaid program to the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees Medicaid, is the State Medicaid Plan. The official state plan for a state is maintained in the CMS Regional Office for that state. The Regional Office for Kansas is Region 7 and is located in Kansas City, Missouri:
Department of Health and Human Services
Centers for Medicare and Medicaid Services
601 East 12th Street
Suite 235
Kansas City, MO 64104

State Plan Amendments

When a state wants to change any of the Medicaid benefits it offers, or change the way in which they are offered, it must submit a State Plan Amendment (SPA). CMS recently established an electronic submission process. Once the CMS Regional Office receives a SPA, it has 90 calendar days to approve or deny the SPA, or send a formal Request for Additional Information (RAI) letter. Sending an RAI stops the 90-day clock; the clock will not start again until the state's written response to the RAI is received by CMS. Another 90-day clock starts at that point. Throughout this process, CMS has the option of asking informal questions via email or phone. Once a SPA is approved, it can take effect retroactive to the first day of the quarter of the federal fiscal year in which it was submitted. For example, a SPA submitted September 15, 2004, and approved February 2, 2005, can have an effective date of July 1, 2004. 

CMS has ruled, however, that states cannot implement SPA's until they are approved, so the retroactivity is primarily useful in relation to Medicaid payments for services. In July 2003, CMS made it known to the states that any SPA related to institutional (e.g., hospitals, nursing facilities, etc.) reimbursement would be subject to increased scrutiny, and states would have to answer five questions related to the source of the state dollars being used to fund the service(s) outlined in such a SPA. Earlier, in May 2002, CMS created the National Institutional Reimbursement Team (NIRT) to review and recommend action on, all institutional SPA's. In effect, approval of these SPA's now takes place in CMS' Central Office in Baltimore.

Whenever a state submits a SPA, CMS has the option of reviewing the entire section of the State Plan which is being amended. Thus, an amendment to change inpatient hospital reimbursement can result in CMS scrutinizing the entire section of the State Plan related to inpatient hospital services. It can then require states to answer questions about parts of the State Plan that were previously approved. These procedures can make the SPA approval process quite lengthy. Please feel free to visit our Kansas Medical Assistance Program website in dealing with issues other than state plan amendments.