States receive $3 billion to upgrade Medicaid technology

States will receive $3 billion to modernize their Medicaid technology systems under a new rule finalized by the Centers for Medicare & Medicaid Services last week.

The final rule extends a 2011 regulation that provided an increase in federal funding for creating and maintaining new Medicaid eligibility and enrollment systems. The funding increase was slated to expire this month, but the finalized rule makes the funding permanent.

The cost of the funding boost was originally estimated to cost $1.1 billion over the first four years; the final rule estimates the increase will cost $3 billion between 2016 and 2025.

The rule benefits the 28 states and territories who have out-of-date Medicaid systems, many of which have experienced difficulties under the pressure of Medicaid expansion, according to the final rule. Only nine states have eligibility and enrollment systems that would not need replacing: Colorado, Florida, Idaho, Montana, New Mexico, North Carolina, Oklahoma, Texas and Utah.

The changes afforded by the funding rule will “ improve customer service and support the dynamic nature of Medicaid eligibility, enrollment, and delivery systems,” CMS said.