The U.S. Department of Health and Human Services (HHS) announced last week that new federal funds will soon be made available for states to upgrade their existing information technology (IT) systems in preperation for the federal health reform changes.

The proposed rules put out by HHS state that Medicaid eligibility systems may qualify for an enhanced federal matching rate of 90% for design and development of new systems and 75% for maintenance and operations (an upgrade from the 50% match currently available).   At the same time, HHS also released guidance for states to help them design and implent the IT changes needed to establish streamlined and efficient insurance Exchanges. 

This promise of federal funding is an exciting opportunity for New York, whose antiquated system is inadequate for the tasks that lie ahead.  Moreover, this money seems to come in direct response to a request from NYS officials, who stated in their submitted comments on the Exchange that New York would not be able to establish an insurance Exchange without additional federal support.

HHS is soliciting comments on these proposed rules, available on the Federal Register website, until January 7, 2011.