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CMS Allocates Additional Federal Medicaid Matching Funds, Medicaid Regulations Moratoria Extended

April 29, 2009

The American Recovery and Reinvestment Act includes $87 billion in additional federal Medicaid matching funds over the next 27 months, by far the most important piece of the economic stimulus legislation for people living with mental illness.  These funds are already flowing to states and should play a critical role in helping states avoid further deep cuts to mental health services this year and next year.  In addition to the increase in federal Medicaid matching funds (known as FMAP), the new law also provides $53.6 billion for a "State Stabilization Fund" -- with $39.5 billion earmarked for education and $8.8 billion for other services. 

The additional $87 billion in FMAP in the new law is being allocated as follows:  65% of these additional federal funds will go to an across-the-board increase in each state’s federal Medicaid match rate (boosting each state’s rate by an expected 6.2%), while 35% will be allocated to states based on the increase in the state’s unemployment rate resulting from the current economic recession.  The increased Medicaid FMAP also comes with a "maintenance of effort" provision that will require states to maintain current eligibility standards for the next 2 years.

The ARRA also includes a 3-month extension (through June 1, 2009) of the current legislative moratoria freezing 7 different Medicaid regulations, including those for rehabilitation, school-based services and case management.

Click here to view a factsheet from the Centers for Medicare and Medicaid Services (CMS) on the additional FMAP funds for states.  

Click here to view a state-by-state chart on additional FMAP payments.


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