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Page 18 – State Health Official Letter can claim at a state’s CHIP enhanced FMAP (EFMAP), available under section 2105(b) of the Act. CHIP administrative funding is limited to 10 percent of either a state’s total computable allotments for a fiscal year or its total expenditures reported for a fiscal year, whichever is lower.61 Other activities, such as state development of eligibility policy and outreach in response to the changes at section 1903(v)(5) of the Act, may be claimed under Medicaid at the 50 percent administrative match, in accordance with regular claiming policies for such administrative activities.62 Financial Systems and Proper Claiming States should continue to ensure proper claiming and expenditure reporting on the quarterly budget and expenditure reports in the Medicaid and CHIP Budget and Expenditure System (MBES/CBES). States that provide state-only funded coverage to noncitizens for whom, beginning October 1, 2026, FFP will not be available for full Medicaid and CHIP benefits under sections 1903(v)(5) and 2107(e)(1)(R) of the Act must implement controls to limit claims for FFP to expenditures for emergency Medicaid. For this reason, states may also need to make edits or add controls to their MMIS and/or other accounting systems to ensure accurate claiming of related expenditures. States must be able to identify and isolate costs directly related to the administration of the Medicaid program (and if applicable, to CHIP) from any state-only health program costs incurred to ensure accurate reporting of claims for FFP and to implement allocation methodologies in accordance with the authority to claim administrative costs, (e.g., approved Public Assistance Cost Allocation Plan (PACAPs), Medicaid Administrative Claiming Plans (MACs), and APDs). Upon certification of the Form CMS-64, states are required to have all documentation in a readily reviewable form. States should report all claims for FFP related to emergency Medicaid on the Form CMS-64 Line 27 to reduce the risk of overclaiming FFP. CMS has conducted focused financial oversight of eight states with state-only funded programs that provide health coverage for noncitizens regardless of immigration status and has identified approximately $1.8B in questionable expenditures reported by states relating to services provided to noncitizens for whom FFP is available only for emergency Medicaid and not for full Medicaid benefits. CMS intends to continue conducting oversight to ensure state claims for FFP related to emergency Medicaid comply with federal requirements. Transformed-Medicaid Statistical Information System (T-MSIS) For consistency with the statutory changes made by section 71109 of the WFTC legislation that are applicable beginning October 1, 2026, states will need to update Medicaid and CHIP data submitted to T-MSIS to accurately report information about who is an FFP-eligible noncitizen and, in Medicaid, who is eligible for emergency Medicaid coverage only. We plan to provide additional information on T-MSIS data reporting, including updates to the T-MSIS Data Guide,63 in forthcoming guidance.

61 42 C.F.R. § 457.618(e)(1). 62 Section 1903(a)(7) of the Act and 42 C.F.R. § 433.15(b)(7). 63 The T-MSIS Data Guide is available at: https://www.medicaid.gov/tmsis/dataguide/.