EmailExchange Establishment Cooperative Agreement Funding FAQs
June 2, 2011
Q1. Page 5 indicates that Level One Establishment grantees may reapply for another year of funding in the Level One Establishment category. Please confirm that the State may apply for a maximum of two years of Level One Establishment funding and then progress to Level Two Establishment funding?
A1. States may apply for more than one round Level One funding. There is no maximum number of Level One grants, however the final application due date for Level One funding is December 30, 2011 and the final application due date for Level Two funding is June 29, 2012, so States should consider this timeframe when determining which Level of funding for which they will apply. In addition, States should consider the reporting and other administrative requirements for each grant.
Q2. What is a permissible timeframe for commencing Establishment grants? Please confirm that Planning and Establishment-funded tasks can occur concurrently in 2011, so long as they are distinctly different tasks?
A2. Each State may decide for itself when it chooses to apply for and commence the Establishment grant. This decision should take into account that the dates for the last Level One application is December 30, 2011, for Level Two is June 29, 2012, for certification is by January 1, 2013 and for the start of operations and health insurance coverage for enrollees is January 1, 2014. States may find it helpful to take into consideration the activities leading up to these dates in planning on when to commence the Establishment grant. Additional dates that States may find helpful are the milestone dates in Appendix B of the funding opportunity announcement. Tasks can occur concurrently under the Planning and Establishment grants, as long as they are distinctly different tasks and the sources of funding for each are clearly distinct.
Q3. Milestones are also omitted for the Health Insurance Reforms core area. Will HHS be issuing any milestones in this core area?
A3. Yes. In addition, States may wish to review the interim final rules that have already been issued in conjunction with several of the market reforms made by amendments to the Public Health Service Act. As regulations and guidance are issued to implement the health insurance market reforms, we anticipate that States will act to incorporate those requirements into their work plans.
Q4. Under which core area does HHS view activities such as:
- Essential benefits analysis and benefit design for Exchange plan offerings?
A. Business Operations of the Exchange – Certification, Recertification, and Decertification of Qualified Health Plans - Collection of premiums from small employers and individuals and payments to QHPs?
A. Business Operations of the Exchange – Enrollment Process - Analysis on offering of OPM multi-state plans or Co-Op plans; and Business Operations of the Exchange?
A. Certification, Recertification, and Decertification of Qualified Health Plans - Analysis of the Basic Health Program option? States are not required to do this analysis as this is an option for States. The State believes these are integral analysis areas for Exchange planning and establishment but it is not apparent where these activities fall upon review of the HHS-defined core areas. Can a State use an establishment grant for activities related to the planning and establishment of a Basic Health Program? For example, could the establishment grant pay for activities that will allow a State to understand financial or market implications involved with a Basic Health Program option? Could it be used to fund the start-up costs of this program?
A. In general, Exchange Establishment Cooperative Agreement funds cannot be used by the State for the purpose of starting the Basic Health Program. To the extent there were funds granted in the Exchange Planning Grants to explore options, this is where some funding could have been spent to determine how best to serve the State population given the choices available under the Affordable Care Act. The eligibility determinations could include a determination of whether a person is eligible for an available Basic Health Program in a State. A call center-type activity could also overlap and provide information on the Basic Health Program. But the establishment and administration of the program cannot be funded with Federal grant monies awarded under the Affordable Care Act.
- Essential benefits analysis and benefit design for Exchange plan offerings?
Q5. Page 17 indicates that the application is limited to 80 pages, including supporting documents. We request that HHS provide flexibility in the page number so States may provide a responsive application with full, supporting documentation.
A5. The program office understands the complexity and will exercise as much flexibility as possible. The program office recommends that supporting documentation such as legislation, resumes, and letters of support be included at the end of the application if it exceeds 80 pages.
Q6. Is it permissible for the state to designate a nonprofit (not-for-profit) to receive establishment funds directly without passing through the state?
A6. No. A nonprofit may not directly receive establishment funds. The State may choose to contract/subcontract with a nonprofit to carry out Establishment grant activities.
Q7. On page 60 of the FOA, under Financial Management, for 2011, a required deliverable is “Establish a financial management structure and commit to hiring experienced accountants to support financial management activities of the Exchange, which include responding to audit requests and inquiries of the Secretary and the GAO as needed.” Is the intent for states to include a financial management organizational chart and supply wording that states their duties, or do these staff need to be in place in 2011? Again, we note the dependency on the Exchange Organization.
A7. The State should develop a financial management structure for the Exchange and commit to hiring needed staff when necessary. The State should adhere to HHS financial monitoring activities carried out for the Planning Grant and under the Establishment Cooperative Agreement.
Q8. On page 64 of the FOA, under the core area Exchange Website and Calculator, a required deliverable in Q3 of 2012 is to “Submit content for informational website to HHS for comment.” We assume that the intent is for states to progressively/iteratively develop the Exchange websites, and the 'information website' refers to an iteration that serves to notify stakeholders of the Exchange, functional information, key dates, etc. Is this a valid assumption? If not can you clarify the 'informational website requirements'?
A8. This is a valid assumption.
Q9. On page 69 of the FOA, under Information reporting to IRS and enrollee for 2014 a required deliverable is “Confirm that systems are prepared to generate information reports to enrollees.” Can you clarify this requirement and/or cite the applicable PPACA provision regarding enrollee reporting? Or was the requirement misstated and actually represents the required reporting to the IRS on Exchange enrollment?
A9. This is required by section 36B(f)(3) of the Internal Revenue Code of 1986, as added by section 1401(a) of the Affordable Care Act. This section requires the Exchange to provide information to all individuals enrolled in a qualified health plan, regardless of whether an advance premium tax credit is received. This same information must be reported to the Secretary of the Treasury (IRS).
Q10. Core Areas in the Exchange Establishment Grant FOA do not appear to be comprehensive. We have identified additional activities (e.g., benefit package development). How should the budget for these activities be represented?
A10. Benefit package development would fall under Certification, Recertification, and Decertification of Qualified Health Plans. If there are questions regarding a specific activity, please contact the program office for assistance.
Q11. We would like to confirm that we have all of the correct information regarding the calls. Also, we want to make sure that we are on the list to receive the transcript of the calls.
A11. Information regarding pre-application calls is included in Section III of the funding opportunity announcement, which can be found at grants.gov by searching CFDA Number 93.525. The Department does not send out transcripts. A recording and transcript of each call will be available on the CCIIO website: http://cciio.cms.gov/
Q12. Our State submitted a Letter of Intent for a Level Two application and may apply for Level One instead. Also, the date that we will apply has changed from what was stated in the Letter of Intent. Is this okay?
A12. The Letter of Intent is not binding. Therefore, a State may change the Level(s) that they choose to apply for as well as the date(s) of application.
Q13. Do we need to distinguish between Tribal Consultation and Stakeholder Consultation in the project narrative and work plan?
A13. Yes, Tribal Consultation and Stakeholder Consultation should be distinguished in the work plan and project narrative. Tribal Consultation is a government-to-government process between the state and tribal leaders of federally recognized tribes. States are encouraged to review and adapt procedures relating to the State Medicaid Tribal Consultation Policy. In addition to Tribal Consultation, the state may engage in consultation with tribal organizations or stakeholders; this form of consultation would be included in the Stakeholder Consultation process.
Q14. On forms 424 and 424A of the establishment one grant application, it asks for total federal funds going into the project and funds from other sources. Where do I put the funds coming from CMS to our State Medicaid Agency for their portion of the eligibility systems project? Do I mark them as "other" even though they are federal funds? If I count them as federal funds, then I'm unclear how to separate that money from the money that the Exchange is asking for in this grant application. Or do I not include the Medicaid portion of the eligibility systems project funding in this application at all?
A14. The funds denoted as federal on the SF 424 and SF 424A should be those the State is requesting from CCIIO through this application. Applicants should include the Medicaid portion of the eligibility systems project funding in this application and applicants should mark the funds as “other” even though they are federal funds.
Q15. We are applying for funds for all core areas. In our budget narrative, we are justifying what various costs are by activity (with assumptions), but not necessarily tying it to a core area, especially in areas such as travel or salaries. Do we still have to break it down by core area? So, do we have to say 5 FTEs are spending 10% of their time on program integrity, for instance?
A15. This is correct. Applicants must break down costs by core area, in order to provide a clear picture of how much it costs to build the Exchange in the applicant’s state based on the activities.
Q16. We are uncertain whether or not our State meets the Eligibility criteria for a Level Two Establishment application. If we don’t, will we automatically be considered for a Level One application?
A16. No, the application will not be automatically considered for a Level One application. The applicant may resubmit the application at any time before the final application due date for that Level (i.e., December 30, 2011 for Level 1; June 29, 2012 for Level 2.) If the applicant would like to have their documentation of Level Two eligibility reviewed prior to submitting an application, CCIIO will perform an informal review. States should allow two to four weeks for this informal review to take place.
Q17. Can a State apply for funds in other Core Areas even though we have not yet been able to do the IT gap analysis?
A17. Performing the IT Gap Analysis is not an eligibility requirement. The IT Gap analysis summary is part of the project narrative and therefore part of the scored review criteria. Additionally, if a State receives funding without completing an IT Gap Analysis, any funds related to Exchange IT Systems may be restricted.
Q18. We would like the ability to modify budget submissions as Exchange policy and design decisions are developed. Can you please acknowledge that as our budget changes as a result of such decision-making, and if explained by the State, such changes will be accepted by HHS.
A18. CCIIO expects that Exchange budgets will be modified to align with policy decisions over time. Per grants policy, prior approval by the grantee’s Grants Management Officer is always required in the event of significant re-budgeting.
Significant re-budgeting is defined as 25% or more of the total award. Budget modifications are cumulative.
The grantee should always discuss a budgeting change with their Project Officer. Should the budget change not exceed the threshold above, the Project Officer can work directly with the grantee to expedite the re-budgeting.
Q19. HHS has indicated that revised/updated milestones will be issued with the proposed rule. Could HHS indicate whether any of the current milestones will change in timing as this will impact structuring of work?
A19. As of early June 2011, we do not know whether or not there will be changes in the timing of milestones. We will release updated milestones following the release of the Notice of Proposed Rulemaking.
Q20. Evaluative measures: Does the evaluation have to be performed by third party or can it be conducted by a State agency or other internal State entity?
A20. It is up to the State whether the evaluation is to be performed by a State agency, another internal State entity, or a third party. This is not an academic or research evaluation. This is a programmatic evaluation to measure the impact of the program. The evaluation should be thorough and thoughtful.
Q21. As a 2011 Oversight & Program Integrity milestone, HHS notes that the State should “...hire staff for oversight and program integrity functions.” Could HHS clarify if: (1) if the state could fulfill these functions through existing staff if it is determined that the state has adequate resources? and (2) if there is any flexibility in this timing as State may not have made this decision by the end of 2011?
A21. 1) Yes, the State could fulfill these functions through existing staff if it is determined that the State has adequate resources. 2) The oversight and program integrity milestone specific to staffing in 2011 is not a bolded milestone. Milestones that are not bolded are recommended and not required, and have flexible timing. Milestones that are bolded are critical for timing and are required.
Q22. I’m a bit confused as to the budget requirements based on Appendices E and F in the FOA. Are we required to provide two budgets – one with justification for the entire budget for the project period, and another by core area? Or just one with justification by core area? I realize we will fill out the 424A, which lists all of the categories. I’m just trying to figure out how many justifications we need to give (by full application and/or by core area).
A22. Applicants must complete and submit a 424A and budget justification by Object class code for the project period. Applicants also need to break out the budget by the core area for which the applicant is applying.
For example, if the applicant budgets $25,000 for Stakeholder Consultation, the budget narrative should address key assumptions and the applicant’s general approach to reaching that estimate.
Q23. The Level 2 Establishment grant eligibility criteria that requires the State to "submit a plan describing how capacity for providing assistance to individuals and small businesses in the State will be created, continued, and/or expanded, including provision for a call center." Is HHS looking for a separate plan, or can this information just be addressed/demonstrated as part of the Project Narrative (in discussing Proposal to Meet Program Requirements) and Work Plan pieces as part of the application? How may this be different from the information included in other parts of the application? We do not want to significantly exceeding the page limit.
A23. Applicants should compile all eligibility documents in one attachment labeled “Eligibility Documentation.” This should be separate from the information included in the project narrative, even if the content is the same. Regarding concerns of exceeding the 80 page limit, the program office understands the complexity of this proposal. As such, program recommends that supporting documentation such as legislation, resumes, and letters of support be included at the end of the application if it exceeds 80 pages.
Q24. On Page 49 of the FOA, 18 sub-areas under the Business Operations of the Exchange are referenced and described in further detail. Appendix B of the FOA, which lists milestones under the core areas, includes only a selection of these 18 sub-areas. Was this intentional? Will HHS be issuing milestones in any of the sub-areas not addressed (e.g., Risk Adjustment and Transitional Reinsurance, Seamless Eligibility and Enrollment Process with Medicaid and applicable State Health Subsidy Programs)?
A24. HHS will be issuing additional milestones for the core areas that are not addressed specifically in the FOA. Guidance will be provided to States after release of the Notice of Proposed Rulemaking. For milestones related to Seamless Eligibility and Enrollment Process with Medicaid and CHIP, see the milestones under Program Integration, Eligibility Determinations, and Enrollment Process. The activities an Exchange needs to carry out to establish this seamless eligibility and enrollment process with Medicaid, CHIP, and other programs overlap with activities related to eligibility determinations and enrollment for individuals purchasing coverage in the Exchange. Therefore, there is no one core area that is specific to coordination with Medicaid, CHIP, and other programs.
Q25. On Page 64 of the FOA, as a 2011 milestone for the “Business Operations of the Exchange - Quality Rating System” core area, HHS notes “Utilize the Federal quality rating system developed by HHS in development of draft contract for qualified health plans.” Where may this information be accessed and when does HHS anticipate making it available?
A25. More information will be provided in the Notice of Proposed Rulemaking.