CMS has issued a letter to state Medicaid directors on "Federal Funding for Medicaid HIT Activities." Specifically, the letter provides guidance regarding implementation of section 4201 of the ARRA, which allow the payment of incentives to eligible professionals (EPs) and eligible hospitals to promote the adoption and meaningful use of certified electronic health record (EHR) technology. The ARRA provides 100% federal financial participation (FFP) to states for incentive payments to eligible Medicaid providers to adopt, implement, upgrade, and meaningfully use certified EHR technology, and 90% FFP for state administrative expenses related to the program. The CMS guidance outlines CMS’s expectations relating to the activities and potential uses of the 90/10 matching funds.