The federal government will give states free rein to implement additional information technologies to support the expansion of Medicaid and health insurance exchanges--before they even commit to going through on those projects, and with no payback if they don’t.

That policy is unveiled in a letter Centers for Medicare and Medicaid Services Acting Administrator Marilyn Tavenner sent to Virginia Gov. Robert McDonnell (R) on July 13, as first reported by Modern Healthcare.

The Supreme Court largely upheld the Affordable Care Act, which includes expansion of Medicaid--paid 100 percent by the federal government for three years and at least 90 percent thereafter--and implementation of insurance exchanges--either by a state, in partnership with other states or private organizations, or by the federal government. The Court, however, prohibited the feds from holding back any traditional Medicaid funding if a state does not expand Medicaid.

States, in light of the Supreme Court decision on the Affordable Care Act, have asked CMS questions about their choices in implementing Medicaid expansion or exchanges. Tavenner responded in a letter to McDonnell, chair of the Republican Governors Association; Gov. Martin O’Malley (D) of Maryland, chair of the Democratic Governors Association; and Gov. Dave Heineman, (R) of Nebraska, chair of the National Governors Association.

The response includes no strings attached to get I.T. money now for Medicaid expansion and exchanges, and no deadline for a state to tell the feds its plans for Medicaid expansion, according to the letter. “A state can receive extra funding for Medicaid I.T. costs and Exchange implementation costs even if it has not yet decided whether to expand Medicaid eligibility or run its own Exchange. And, if a state ultimately decides not to do so, it will not have to pay those resources back.”

For a copy of Tavenner’s letter, send an e-mail to

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