That's mostly correct ---- in the case of a 3-way tie, it's the highest ranked team in the CFP, EXCEPT if the 2nd-best team is ranked within one spot of the 1st-best team. In that case, it gets decided by who won the head-to-head matchup between those schools.
E.g., if (theoretically) MSU, OSU and U-M all go 7-1 in conference, and OSU is #3, U-M is #5 and MSU is #7 in the CFP poll, OSU goes to Indianapolis.
But bump U-M up to #4 and then U-M goes.
Now, here's a question for Jim Delaney --- you do know that the CFP isn't released until Tuesday evening every week of the year, right?
As things stand now, if U-M, OSU and MSU all go 7-1 in conference, we're likely looking at a situation where we don't know who goes to Indianapolis until Tuesday, a full 3 days after conference play concludes and only 4 days before the Indianapolis game.