[Federal Register Volume 87, Number 172 (Wednesday, September 7, 2022)]
[Proposed Rules]
[Pages 54760-54855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18875]
[[Page 54759]]
Vol. 87
Wednesday,
No. 172
September 7, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 431, 435, 457, et al.
Streamlining the Medicaid, Children's Health Insurance Program, and
Basic Health Program Application, Eligibility Determination,
Enrollment, and Renewal Processes; Proposed Rule
Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 /
Proposed Rules
[[Page 54760]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 431, 435, 457, and 600
[CMS-2421-P]
RIN 0938-AU00
Streamlining the Medicaid, Children's Health Insurance Program,
and Basic Health Program Application, Eligibility Determination,
Enrollment, and Renewal Processes
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This rulemaking proposes changes to simplify the processes for
eligible individuals to enroll and retain eligibility in Medicaid, the
Children's Health Insurance Program (CHIP), and the Basic Health
Program. This proposed rule would remove barriers and facilitate
enrollment of new applicants, particularly those dually eligible for
Medicare and Medicaid; align enrollment and renewal requirements for
most individuals in Medicaid; establish beneficiary protections related
to returned mail; create timeliness requirements for redeterminations
of eligibility in Medicaid and CHIP; make transitions between programs
easier; eliminate access barriers for children enrolled in CHIP by
prohibiting premium lock-out periods, waiting periods, and benefit
limitations; and modernize recordkeeping requirements to ensure proper
documentation of eligibility and enrollment.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on November 7, 2022.
ADDRESSES: In commenting, please refer to file code CMS-2421-P.
Because of staff and resource limitations, we cannot accept
comments by facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-2421-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-2421-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Stephanie Bell, (410) 786-0617,
[email protected].
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to
view public comments.
I. Background
Since 1965, Medicaid has been a cornerstone of America's health
care system. The program provides free or low-cost health coverage to
low-income individuals and families and helps to meet the diverse
health care needs of children, pregnant individuals, parents and other
caretaker relatives, older adults, and people with disabilities. For 25
years, the Children's Health Insurance Program (CHIP) has served as a
bridge from Medicaid to private insurance for somewhat higher-income
children. As of May 2022, the most recent month for which enrollment
data are available, nearly 89 million individuals were enrolled in
Medicaid and CHIP.\1\
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\1\ May 2022 Medicaid & CHIP Enrollment Data Highlights--https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaid-chip-application-eligibility-determination-and-enrollment-reports-data/index.html.
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Access to health coverage expanded significantly in 2010 with
enactment of the Patient Protection and Affordable Care Act (Pub. L.
111-148, enacted on March 23, 2010), as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March
30, 2010), together referred to as the Affordable Care Act (ACA). The
ACA expanded Medicaid eligibility to low-income adults under age 65
without regard to parenting or disability status, simplified Medicaid
and CHIP enrollment processes, and established health insurance
Marketplaces where individuals without access to Medicaid, CHIP, or
other comprehensive coverage could purchase coverage in a Qualified
Health Plan (QHP). Many individuals with household income above the
Medicaid and CHIP income standards became eligible for premium tax
credits and/or cost-sharing reductions to help cover the cost of the
coverage. In addition, the ACA provided States with the option of
establishing a Basic Health Program (BHP), which provides affordable
health coverage to individuals whose household income exceeds 133
percent but does not exceed 200 percent of the Federal Poverty Level
(FPL) (that is, lower income individuals who would otherwise be
eligible to purchase coverage through the Marketplaces with financial
subsidies). BHPs allow States to provide more affordable coverage for
these individuals and to improve the continuity of care for those whose
income fluctuates above and below the Medicaid and CHIP levels. To
date, two States, New York and Minnesota, have established BHPs,
covering over 1 million people.\2\
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\2\ https://www.cms.gov/files/document/health-insurance-exchanges-2022-open-enrollment-report-final.pdf.
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In addition to coverage expansion, the ACA also required the
establishment of a seamless system of coverage for all insurance
affordability programs (that is, Medicaid, CHIP, BHP, and the insurance
affordability programs available through the Marketplaces). In
accordance with sections 1943 and 2107(e)(1)(T) of the Social Security
Act (the Act) and sections 1413 and 2201 of the ACA, individuals must
be able to apply for, and enroll in, the program for which they qualify
using a single application submitted to any program. In the March 23,
2012 Federal Register, CMS issued implementing regulations titled
``Medicaid program; Eligibility Changes Under the Affordable Care Act
of 2010'' final rule, (77 FR 17144) (referred to hereafter as the
``2012 eligibility final rule''), and the ``Medicaid and Children's
Health Insurance Programs: Essential Health Benefits in Alternative
Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes,
and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment''
final rule titled in July 2013 (78 FR 42160) (referred to hereafter
[[Page 54761]]
as the ``2013 eligibility final rule''). These regulations focused on
establishing a single streamlined application, aligning financial
methodologies and procedures across insurance affordability programs,
and maximizing electronic verification in order to create a
streamlined, coordinated, and efficient eligibility and enrollment
process for eligibility determinations based on Modified Adjusted Gross
Income (MAGI).
Significant progress has been made in simplifying eligibility,
enrollment, and renewal processes for applicants and enrollees, as well
as reducing administrative burden on State agencies administering
Medicaid, CHIP, and BHP, since the promulgation of these regulations.
The dynamic online applications developed by States and the Federally
Facilitated Marketplaces, which ask only those questions needed to
determine eligibility have reduced burden on applicants. Greater
reliance on electronic verifications has reduced the need for
individuals to find and submit, and for eligibility workers to review,
copies of paper documentation, decreasing burden on both States and
individuals and increasing program integrity. Renewals completed using
electronic information available to States have increased retention of
eligible individuals, while also decreasing the administrative burden
on both States and enrollees.
Following a period of steady growth attributed to the ACA,
enrollment in Medicaid and CHIP declined from 2017 through 2019.
Evidence suggests that the economy was the primary driver of this
decline. However, we also know that more restrictive State enrollment
policies contribute to coverage disruptions and create churning as
people lose their Medicaid or CHIP coverage and then re-enroll within a
short period of time.\3\ The Georgetown University Center for Children
and Families estimated that 4.4 million children were uninsured in
2019, an increase from 2016 of 726,000 uninsured children. Looking at
uninsurance among children by income, those with household income below
138 percent of the FPL (133 percent of the FPL is the minimum income
standard that States may establish for children in Medicaid, plus a 5
percentage point disregard), the percentage of Medicaid-eligible
children who did not have any health insurance coverage increased from
6.8 percent in 2016 to 7.7 percent in 2019.\4\ Based on the most
recently available data from the American Community Survey, children in
poverty continued to experience an increase in uninsurance from 2018
through 2020 as the uninsurance rate increased by 1.6 percentage points
to 9.3 percent.\5\ The raw numbers represented by these percentage
changes correspond to a large number of individual children who were
uninsured despite having a household income low enough to be eligible
for Medicaid and who may have deferred or foregone needed health care
as a result.
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\3\ Medicaid Churning and Continuity of Care: Evidence and
Policy Considerations Before and After the COVID-19 Pandemic;
accessed on 8/30/21 at https://aspe.hhs.gov/sites/default/files/private/pdf/265366/medicaid-churning-ib.pdf.
\4\ Alker, Joan and Corcoran, Alexandra. 2020. ``Children's
Uninsured Rate Rises by Largest Annual Jump in More than a Decade.''
Accessed on 03/16/2022 at https://ccf.georgetown.edu/wp-content/uploads/2020/10/ACS-Uninsured-Kids-2020_10-06-edit-3.pdf.
\5\ Katherine Keisler-Starkey and Lisa N. Bunch, U.S. Census
Bureau Current Population Reports, P60-274, Health Insurance
Coverage in the United States: 2020, U.S. Government Publishing
Office, Washington, DC, September 2021.
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Additionally, enrollment in Medicare Savings Programs (MSPs),
through which Medicaid provides coverage of Medicare premiums and/or
cost-sharing for lower income Medicare beneficiaries, has remained
relatively low. The MSPs are essential to the health and economic well-
being of those enrolled, promoting access to care and helping free up
individuals' limited income for food, housing, and other of life's
necessities. Yet a 2017 study conducted for Medicaid and CHIP Payment
and Access Commission (MACPAC) estimated that only about half of
eligible Medicare beneficiaries were enrolled in MSPs.\6\
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\6\ Medicare Savings Program Enrollees and Eligible Non-
Enrollees, Kyle J. Caswell, Timothy A. Waidmann, The Urban
Institute, June 2017: https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf.
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The critical role of Medicaid and CHIP providing timely health care
access to the most vulnerable individuals was highlighted as the Novel
Coronavirus 2019 (``COVID-19'') spread across our country beginning in
2020. Medicaid and CHIP helped to provide a lifeline for those who may
have lost their jobs or been exposed to COVID-19, or both, and they
played a critical role in the national pandemic response. The Families
First Coronavirus Response Act (Pub. L. 116-127) (FFCRA) conditioned a
temporary increase in Federal Medicaid funding on State compliance with
several conditions, including maintaining enrollment for beneficiaries
enrolled in Medicaid through the end of the month in which the COVID-19
public health emergency (PHE) ends (``continuous enrollment
condition''). Additionally, the FFCRA, along with the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act; Pub. L. 116-135) and the
American Rescue Plan Act of 2021 (ARP; Pub. L. 117-2), also ensured
Medicaid and CHIP coverage of COVID-19 testing, treatment, and
vaccines, as well as vaccine administration.
The Biden-Harris Administration is committed to protecting and
strengthening Medicaid and CHIP both during and following the COVID-19
PHE. On January 20, 2021, President Biden issued an Executive Order on
advancing racial equity and support for underserved communities. It
charged Federal agencies with identifying potential barriers that
underserved communities may face to enrollment in programs like
Medicaid and CHIP.\7\ This was followed on January 28, 2021, by
Executive Order 14009 with a specific call to strengthen Medicaid and
the ACA and remove barriers to obtaining coverage for the millions of
individuals who are potentially eligible but remain uninsured.\8\ In
April 2022, President Biden issued another Executive Order, building on
progress from the first and reflecting new Medicaid and CHIP
flexibilities established by the ARP. The April 5, 2022 Executive Order
14070, ``Continuing to Strengthen Americans' Access to Affordable,
Quality Health Coverage'' charges Federal agencies with identifying
ways to help more Americans enroll in quality health coverage.\9\ It
calls upon Federal agencies to examine policies and practices that make
it easier for individuals to enroll in and retain coverage. Following
this charge, we reviewed the improvements made to implement the ACA,
examined States' successes and challenges in enrolling eligible
individuals, considered the changes brought about by the COVID-19 PHE,
and looked for gaps in our regulatory framework that continue to impede
access to coverage.
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\7\ E.O. 13985, 86 FR 7009. Accessed online on July 19, 2022 at
https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
\8\ E.O. 14009, 86 FR 7793. Accessed online on July 19, 2022 at
https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/.
\9\ E.O. 14070, 87 FR 20689. Accessed online on July 19, 2022 at
https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/.
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We have learned through our experiences working with States and
other stakeholders that certain policies continue to result in
unnecessary administrative burden and create barriers to enrollment and
retention of
[[Page 54762]]
coverage for eligible individuals. For example:
There are no regulations to facilitate enrollment in the
MSPs. In particular, CMS does not have regulations to link enrollment
in other Federal programs with the MSPs, despite the high likelihood
that individuals in such programs are eligible for the MSPs. This
hinders States' ability to enroll those known to be eligible.
Additionally, stakeholders report that burdensome documentation
requirements substantially impede eligible individuals from enrolling
in the MSPs.\10\
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\10\ In October 2020, CMS engaged with 55 stakeholders across
four States to better understand experiences when applying for the
MSPs. One of the main findings was that burdensome documentation
requirements substantially impede eligible individuals from
enrolling in the MSPs and that easing these requirements is a
critical step to ensuring individuals can obtain and retain these
critical benefits.
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Individuals whose eligibility is not based on MAGI (non-
MAGI individuals)--for example, those whose eligibility is based on
being age 65 or older, having blindness, or having a disability--
generally were not included in the enrollment simplifications
established under the ACA or our implementing regulations (the 2012 and
2013 eligibility final rules), leaving such individuals at greater risk
of being denied or losing coverage due to procedural reasons than their
MAGI-based counterparts, even though, we believe, many are more likely
to remain Medicaid eligible due to lower likelihood of changes in their
income or other circumstances.
Current regulations do not consistently provide clear
timeframes for applicants and enrollees to return information needed by
the State to make a determination of eligibility or for States to
process and act upon information received. This may lead to unnecessary
delay in processing applications and renewals, some ineligible
individuals retaining coverage, and some individuals being denied
increased assistance for which they have become eligible.
Our recordkeeping regulations, which are critical to
ensuring appropriate and effective oversight to identify errors in
State policies and operations, were last updated in 1986 and are both
outdated and lacking in needed specificity. We believe these outdated
requirements have contributed to inconsistent documentation policies
across States, which may have furthered the incidence of Medicaid
improper payments.
Barriers to coverage that are not permitted under any
other insurance affordability program--including lock-outs for
individuals terminated due to non-payment of premiums, required periods
of uninsurance prior to enrollment, and annual or lifetime caps on
benefits--remain a State option in separate CHIPs.
In this rulemaking, we seek to close these and other gaps, thereby
streamlining Medicaid and CHIP eligibility and enrollment processes,
reducing administrative burden on States and enrollees, and increasing
enrollment and retention of eligible individuals. We also seek to
improve the integrity of Medicaid and CHIP. Through the PERM program,
the Medicaid Eligibility Quality Control (MEQC) program, and other CMS
eligibility reviews, we have regular opportunities to work with States
in reviewing their eligibility and enrollment processes. As a result of
these reviews, and other internal program integrity efforts, States are
continually making improvements to their eligibility and enrollment
systems both to enhance functionality and to correct any newly
identified issues. We believe the changes proposed in this rule will
further these program integrity efforts, and we will continue to work
closely with States throughout implementation.
Current regulations at 42 CFR 433.112 establish conditions that
State eligibility and enrollment systems must meet in order to qualify
for enhanced Federal matching funds. Among these conditions, Sec.
433.112(b)(14) requires that each State system support accurate and
timely processing and adjudications/eligibility determinations. As
States submit proposed changes to their eligibility and enrollment
systems and implement new and/or enhanced functionality, we will
continue to provide them with technical assistance on the policy
requirements, conduct ongoing reviews of both the State policy and
State systems, and ensure that all proposed changes support more
accurate and timely processing of eligibility determinations.
We will also continue to explore other opportunities for reducing
the incidence of beneficiary eligibility-related improper payments,
including leveraging the enhanced funding available for design,
implementation, and operation of State eligibility and enrollment
systems, as well as mitigation and corrective action plans that address
specific State challenges. Our goal is to ensure that eligible
individuals can enroll and stay enrolled without unnecessary burden and
that ineligible individuals are redirected to the appropriate coverage
programs as quickly as possible.
Finally, we recognize that the COVID-19 PHE and the continuous
enrollment condition have disrupted routine eligibility and enrollment
operations for Medicaid, CHIP, and BHP. As States look ahead toward the
eventual end of the PHE and the resumption of routine operations, they
are faced with providing coverage for a significantly larger pool of
enrollees than they have ever had to manage in the past. From February
2020 through May 2022, enrollment in Medicaid and CHIP increased by
25.9 percent, or 18.3 million individuals, and new applications
continue to be submitted. In May 2022, about 2.1 million new
applications for Medicaid and CHIP were submitted to States. At the
same time, many States report a shortage of eligibility workers.
CMS is actively engaged with States as they plan for initiating
eligibility and enrollment work over the course of a 12-month unwinding
period when the COVID-19 PHE ends (hereinafter referred to as the
``unwinding period''). A March 2022 report by the Urban Institute
projected that as many as 15.8 million people could lose their Medicaid
coverage when the PHE ends and the continuous enrollment requirement is
no longer in effect.\11\ It is a CMS priority to ensure that renewals
of eligibility and transitions between coverage programs occur in an
orderly process that minimizes beneficiary burden and promotes
continuity of coverage.
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\11\ Buettgens, M. and Green, A. 2022. What will Happen to
Medicaid Enrollees' Health Coverage after the Public Health
Emergency. Washington, DC: Urban Institute. Accessed on July 19,
2022 at https://www.urban.org/research/publication/what-will-happen-medicaid-enrollees-health-coverage-after-public-health-emergency.
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As we consider the challenges faced by States during the unwinding
period, we seek comment on reasonable implementation timelines for the
provisions in this proposed rule, which would allow States to move
these important protections forward without negatively impacting the
resumption of routine eligibility and enrollment operations. Certain
provisions designed to improve the retention of eligible individuals,
such as the prospective deduction of medical expenses for medically
needy individuals, agency actions on returned mail, and transitions
between coverage programs, could reduce the likelihood of eligible
individuals losing health coverage during unwinding. However, if
implementing such provisions early would divert needed resources away
[[Page 54763]]
from critical unwinding-related activities, then a compliance date
following the unwinding period may be preferred.
We recognize that each State faces a unique set of challenges
related to the unwinding period, with differing needs and
opportunities. As we contemplate the timing of a final rule, we are
considering adopting an effective date of 30 days following publication
and a separate compliance date, which may vary by requirement, with
full compliance no later than 12 months following the effective date of
the final rule. This approach would provide States with immediate
access to new options, like the option to establish an earlier
effective date for coverage provided to individuals eligible in the QMB
group. This approach also would allow States to immediately extend
temporary options authorized under section 1902(e)(14)(A) of the Act as
they prepare for unwinding, like the option to rely on certain third-
party information to update a beneficiary's mailing address. And it
would permit States with greater capacity to implement new system
changes to immediately adopt simplifications like removal of the
requirement to apply for other benefits as a condition of Medicaid
eligibility.
At the same time, we recognize that certain changes proposed in
this rule may require States to make changes to their own statute and/
or regulations, as well as systems changes prior to implementation, and
this process can take time. For example, if the proposed prohibition on
premium lock-out periods, which delay a child's ability to re-enroll in
a separate CHIP following termination of coverage due to the family's
failure to pay premiums, is finalized, we would provide CHIPs that
currently impose such lockout periods with the time needed to comply
with the new prohibition. At the same time, by making the final rule
effective 30 days following enactment, States could not newly adopt a
premium lock-out period.
We seek comment on whether an effective date of 30 days following
publication would be appropriate when combined with a later date for
compliance for most provisions. We seek comment on the timeframe that
would be most effective for compliance with each provision and whether
the compliance date should vary by provision. We believe compliance
with the proposed provision implementing current statutory requirements
(the requirement to utilize Medicare Part D Low-Income Subsidy
``leads'' data from SSA to initiate an MSP application) should be
required 30 days following publication of the final rule, because we do
not have flexibility to delay what is required under the statute. New
State options established under the final rule would be effective 30
days following publication, but do not require a compliance date, since
States are not required to adopt optional policies. We would encourage
States to come into compliance with all other new requirements as
expeditiously as possible, not only because they would improve access
for new applicants and improve retention of eligible enrollees, but
also because they would streamline eligibility and enrollment processes
and promote the overall integrity of Medicaid and CHIP. However, for
proposed provisions that do not create State options and are not
implementing statutory requirements, we are considering compliance
dates of 90 days, 6 months, and/or 12 months following the effective
date of the final rule. We seek comment on the appropriate compliance
timeframe for each provision, and request that commenters explain why
they believe finalizing a shorter or longer compliance timeframe is
most appropriate.
II. Provisions of the Proposed Regulations
A. Facilitating Medicaid Enrollment
1. Facilitate Enrollment Through Medicare Part D Low-Income Subsidy
``Leads'' Data (Sec. Sec. 435.4, 435.601, 435.911, and 435.952)
The MSPs consist of several mandatory Medicaid eligibility groups
that cover Medicare Part A and/or B premiums and, in some cases, cost-
sharing. State Medicaid agencies receive applications and adjudicate
eligibility for full Medicaid, as well as MSP-only benefits. Currently,
the MSP eligibility groups cover over 10 million low-income
individuals. There are three primary MSP eligibility groups: \12\ the
Qualified Medicare Beneficiary (QMB) group, which pays all of an
individual's Medicare Parts A and B premiums and assumes liability for
most associated Medicare cost-sharing charges for people with income
that does not exceed 100 percent of the FPL; the Specified Low-Income
Medicare Beneficiary (SLMB) group, which pays the Part B premium for
people with income that exceeds 100 percent, but is less than 120
percent, of the FPL; and the Qualifying Individuals (QI) group, which
pays Part B premiums for people with income at least 120 percent but
less than 135 percent of the FPL. Individuals also must meet
corresponding resource criteria in order to be eligible for an MSP. The
income and resource requirements for coverage under the MSPs, and the
benefits to which eligible individuals are entitled, are set forth at
sections 1905(p)(1) and 1902(a)(10)(E) of the Act. Among other things,
section 1905(p) of the Act directs that the income and resource
methodologies applied by the Social Security Administration (SSA) in
determining SSI eligibility per sections 1612 and 1613 of the Act be
used to determine financial eligibility for the MSPs, except that
States may employ less restrictive income and/or resource methodologies
than those applied in determining SSI eligibility under the authority
of section 1902(r)(2) of the Act.
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\12\ There is a separate and fourth MSP eligibility group
generally referred to as the ``Qualified Disabled Working
Individuals (QDWI) group,'' or QDWI group. As described in
1902(a)(10)(E)(ii), eligibility in the QDWI group is limited to
individuals whose incomes do not exceed 200 percent of the FPL;
whose resources do not exceed twice the relevant SSI resource
standard (that is, for a single individual or couple); and who are
eligible to enroll in Part A under section 1818A of the Act. Section
1818A of the Act permits individuals who became entitled to Part A
on the basis of their receipt of Social Security disability
insurance (SSDI) and who subsequently lose SSDI after returning to
work (and, hence, entitlement to Part A) to enroll in Part A
contingent on paying the Part A premiums. The medical assistance
available to QDWIs is the coverage of the Part A premiums. The QDWI
group is not included in this proposal, because the income limits of
the QDWI group are significantly higher than LIS and there does not
exist the flexibility to disregard resources that are available for
the other MSPs.
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The MSPs are essential to the health and economic well-being of
low-income Medicare enrollees, helping to free up limited income for
food, housing, and other life necessities. For example, in 2022, the
Part B premium is $170.10 a month, which is more than 10 percent of the
income of individuals who qualify for the QI group, and an even higher
percentage of income for those who qualify for the QMB or SLMB groups.
Despite the importance of the MSPs, a 2017 study conducted for MACPAC
estimated that only about half of eligible individuals enrolled in
Medicare were also enrolled in the MSPs.\13\ This means that millions
of Medicare enrollees living in poverty are paying over 10 percent of
their income to cover Medicare premiums alone. Complex MSP enrollment
processes contribute to this low participation
[[Page 54764]]
rate.14 15 In order to address the barriers to
accessing MSP coverage, in 2008 Congress enacted the Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA, Pub. L.
110-275). MIPPA included new requirements for States to leverage the
Medicare Part D Low-Income Subsidy (LIS) program to help enroll likely-
eligible individuals in MSPs.
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\13\ Medicare Savings Program Enrollees and Eligible Non-
Enrollees, Kyle J. Caswell, Timothy A. Waidmann, The Urban
Institute, June 2017: https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf.
\14\ Loss of Medicare-Medicaid Dual Eligible Status: Frequency,
Contributing Factors, and Implications, Office of the Assistant
Secretary for Planning and Evaluation, 2019. https://aspe.hhs.gov/basic-report/loss-medicare-medicaid-dual-eligible-status-frequency-contributing-factors-and-implications.
\15\ Medicare Savings Programs: Implementation of Requirements
Aimed at Increasing Enrollment, Government Accountability Office,
2012. https://www.gao.gov/assets/gao-12-871.pdf.
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The Medicare Part D LIS program, also sometimes referred to as
``Extra Help,'' is administered by SSA and pays Medicare Part D
prescription drug premiums and cost-sharing for over 13 million
individuals with low income. Full premium subsidy LIS (or ``full LIS'')
generally pays the Part D premiums and deductibles in full and sets co-
payments for drugs at between $0 and $9.85 (in 2022) for people with
incomes below 135 percent of the FPL 16 17 who
also meet certain resource criteria. To receive this benefit,
individuals complete an application and submit it to SSA. Once
received, SSA verifies the information provided on the LIS applications
and determines eligibility. Income, resources and other eligibility
criteria for the LIS program are defined at section 1860D-14 of the
Act. Under section 1860D-14(a)(3)(C)(i) of the Act, income shall be
determined in the manner described in section 1905(p)(1)(B) of the Act,
without regard to the application of section 1902(r)(2) of the Act and
except that support and maintenance furnished in kind shall not be
counted as income. Section 1860D-14 of the Act provides that, for
purposes of determining eligibility for the LIS program, applicants'
resources be calculated ``as determined under section 1613 of the Act
for the purposes of the supplemental security income (SSI) program
subject to a life insurance exclusion policy.'' The SSA has also
adopted several other regulatory and sub-regulatory methodological
simplifications for the LIS program that deviate from SSI rules. These
include the exclusion of interest and dividend income and non-liquid
resources and burial funds.
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\16\ Section 1860D-14 of the Act [42 U.S.C. 1395w-114].
\17\ Partial premium subsidy LIS (or ``partial LIS'') generally
pays for premiums on a sliding scale, from 100 percent to 25 percent
paid, and sets deductibles and co-payments for drugs at a reduced
level for people with income below 150 percent of the FPL who meet
certain resource criteria.
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The MSP and LIS programs both assist individuals with incomes below
135 percent of the FPL \18\ in accessing the Medicare benefits to which
they are entitled and, as illustrated above, generally use a common
methodology to determine income and resource eligibility. Current
regulations at 42 CFR 423.773(c) require that individuals enrolled in
MSPs be automatically enrolled in LIS, but the reverse is not true, and
many people enrolled in the LIS program are not enrolled in an MSP,
despite likely being eligible. As mentioned above, MIPPA included
several provisions to promote the enrollment of LIS applicants into the
MSPs. In addition, section 112 of MIPPA amended section 1905(p)(1)(C)
of the Act to increase the resource limit for the QMB, SLMB, and QI MSP
eligibility groups to the same resource limit applied for full LIS
established at section 1860D-14(a)(3) of the Act. The resource standard
for the full LIS program and the QMB, SLMB, and QI eligibility groups
for 2022 is $8,400 for a single individual and $12,600 for a couple.
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\18\ Section 11404 of the Inflation Reduction Act of 2022 (Pub.
L. 117-169, enacted on August 16, 2022) increases the income limit
for the full LIS program to income below 150 percent of the FPL and
increases the resource limit to the same resource limit as applied
for partial LIS program at section 1860D-14(a)(3)(E) of the Act
beginning January 1, 2024.
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Section 113 of MIPPA amended section 1144 of the Act to further
eliminate barriers to enrollment in the MSP and LIS programs. Section
1144(c)(3) of the Act requires SSA to transmit data from LIS
applications (``leads data'') to State Medicaid agencies. Section
1144(c)(3) of the Act also provides that the electronic transmission
from SSA ``shall initiate'' an MSP application. MIPPA section 113 also
added a new paragraph at section 1935(a)(4) of the Act that, beginning
January 1, 2010, required States to accept leads data and ``act upon
such data in the same manner and in accordance with the same deadlines
as if the data constituted'' an MSP application submitted by the
individual. As such, under Sec. 435.912, States have 45 days to make
an MSP eligibility determination based on the LIS data. The date of the
MSP application is defined as the date of the individual's application
for LIS under section 1935(a) of the Act.
Despite these statutory requirements, not all States initiate an
MSP application upon receipt of leads data from SSA. CMS data reflect
that over a million individuals enrolled in full LIS are not enrolled
in an MSP. Given near alignment of MSP and LIS eligibility criteria,
most of these individuals are likely eligible for an MSP eligibility
group (See November 1, 2021 Center for Medicaid and CHIP Services
Informational Bulletin, ``Opportunities to Increase Enrollment in
Medicare Savings Programs'').\19\
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\19\ Available at https://www.medicaid.gov/federal-policy-guidance/downloads/cib11012021.pdf.
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The January 28, 2021 Executive Order on Strengthening Medicaid and
the ACA directs agencies to address policies and practices that may
present unnecessary barriers to individuals and families attempting to
access Medicaid coverage,\20\ the April 5, 2022 Executive Order on
Continuing to Strengthen Americans' Access to Affordable, Quality
Health Coverage charges Federal agencies with identifying ways to help
more Americans enroll in quality health coverage,\21\ and the December
13, 2021 Executive Order on Transforming Federal Customer Experience
and Service Delivery to Rebuild Trust in Government supports
streamlining State enrollment and renewal processes and removing
barriers to ensure eligible individuals are automatically enrolled in
and retain access to critical benefit programs.\22\ As such, we have
evaluated CMS's regulatory authority to reduce barriers to enrollment
of eligible individuals into the MSPs. Under the authority in section
1902(a)(4) of the Act to specify ``methods of administration'' that the
Secretary finds to be ``necessary for the proper administration'' of
State plans, we propose several regulatory changes to promote efficient
enrollment in the MSPs by maximizing State use of LIS leads data. We
believe these proposals will also have a positive impact on health
equity by helping to provide more low-income individuals with access to
additional health coverage consistent with the January 20, 2021
Executive Order.\23\
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\20\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/.
\21\ https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/.
\22\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/13/executive-order-on-transforming-federal-customer-experience-and-service-delivery-to-rebuild-trust-in-government/.
\23\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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Accepting LIS leads data as an MSP application. As noted above,
under section 1935(a)(4) of the Act, SSA must
[[Page 54765]]
transmit the LIS leads data to States, and States must use that data to
initiate an application for the MSPs. On February 18, 2010, CMS issued
a State Medicaid Director Letter (SMDL #10-003), ``Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA),''
explaining that, ``starting January 1, 2010, the State is directed to
treat the [leads] data as an application for MSP benefits, as if it had
been submitted directly by the applicant.'' Additionally, the guidance
explained, ``States must act on the data as an application for MSP
benefits, even if the LIS application was denied by SSA.'' \24\ We
reiterated the 2010 guidance in 2020 through updates to the Manual for
the State Payment of Medicare Premiums.\25\
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\24\ State Medicaid Director Letter, #10-003, ``Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA),'' page
2. Available at https://www.medicaid.gov/federal-policy-guidance/downloads/smd10003.pdf.
\25\ Chapter 1, section 1.11.
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In this rulemaking, we propose to codify in regulation the
statutory requirements for States to maximize the use of leads data to
establish eligibility for Medicaid and the MSPs. We anticipate that
codifying these requirements will lead to more eligible individuals
enrolling in MSPs because we believe that some States may have been
unaware or unclear of the steps required to meaningfully use the leads
data to streamline eligibility and enrollment in the MSPs.
Currently, all States receive leads data from SSA each business
day. This data includes information on the individual's address,
income, resources and household size that SSA has verified.\26\ Per
section 113 of MIPPA, States must accept, via secure electronic
transfer, the SSA leads data and process that information to initiate
an MSP application. However, we are aware that several States do not
use the leads data to begin the application process. For example, upon
receipt of the leads data, some States simply send the individual a
letter that encloses a blank application or instructions on how to
apply for the MSPs. Such practices fall short of States' statutory
obligation to treat receipt of leads data as an application and to
evaluate individuals' eligibility using the leads data.
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\26\ The leads data also includes information on the LIS subsidy
amount and denial reasons, which States can use to immediately
identify if the individual is ineligible for MSPs.
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We propose to add a definition of LIS leads data at Sec. 435.4 and
a new paragraph (e) to Sec. 435.911 of the regulations to clearly
delineate the steps States must take upon receipt of leads data from
SSA. We propose to define LIS leads data to mean data from an
individual's application for low-income subsidies under section 1860D-
14 of the Act that the SSA electronically transmits to the appropriate
State Medicaid agency as described in section 1144 (c)(1) of the Act.
Proposed Sec. 435.911(e)(1) requires States to accept, via secure
electronic interface, the SSA LIS leads data. Proposed paragraph (e)(2)
requires that States treat receipt of the leads data as an application
for Medicaid and promptly and without undue delay, consistent with the
timeliness standards at Sec. 435.912, determine MSP eligibility
without requiring submission of a separate application.
We recognize that State Medicaid agencies generally will need to
request additional information in order to make a determination of
eligibility, as some differences remain in income and resource counting
methodologies between the LIS and MSPs. In addition, the leads data
transmitted to the State does not include information on an
individual's citizenship or immigration status, and therefore, States
will need to ask individuals for their status, which must be verified
in accordance with sections 1137(d), 1902(ee) or 1903(x) of the Act and
Sec. Sec. 435.956(a) and (b), 435.406 and 435.407, if such information
is not already in the casefile and has been verified in a previous
application. As such, we propose at paragraph (e)(3) of Sec. 435.911
that States must request additional information in order to make a
determination of eligibility for MSPs. We also recommend that when
States request additional information from individuals, they include
information on how to contact the local State Health Insurance
Assistance Program (SHIP) for assistance.
However, consistent with existing regulations at Sec. Sec.
435.907(e) and 435.952(c), we propose at paragraph (e)(4) of Sec.
435.911 that States may only require that individuals provide
information needed to complete an eligibility determination if
information needed for such determination is not available to the
agency or if information available to the agency through an electronic
data match or other means is not reasonably compatible with information
provided by or on behalf of the individual. Thus, under the proposed
rule, States may not request that individuals attest or otherwise
provide documentation to establish information contained in leads data,
which SSA has already verified and confirmed for the LIS eligibility
determination.
Note that a State is not in compliance with the statutory
requirement in section 1935(a)(4) of the Act to initiate an application
based on leads data or with the proposed regulation if it requires the
individual to file a new application for MSP, since the leads data
already provides much of the information that would otherwise be
requested on an application. Further, as discussed in more detail
below, States have the flexibility under section 1902(r)(2) of the Act
to align the methodologies applied in determining MSP eligibility with
the methodologies for determining eligibility for LIS. Additionally, we
highly recommend completely aligning financial methodologies for
determining LIS and MSP eligibility as a program integrity best
practice. If a State chooses such complete alignment in financial
methodologies between the LIS and MSP programs, under the proposed rule
the State may not require additional financial information from an
individual for whom the State has received leads data in order to make
a determination of MSP eligibility.
The LIS leads data that is transferred to State agencies has been
verified by the SSA. Thus, we believe that State verification of this
data prior to adjudicating eligibility is duplicative and inefficient.
Consistent with the Secretary's authority under section 1902(a)(4) of
the Act (relating to establishment of such methods of administration as
the Secretary determines ``necessary for proper and efficient
administration'' of the Medicaid program) and section 1902(a)(19) of
the Act (relating to simplicity of administration and the best
interests of recipients), we also propose at Sec. 435.911(e)(5) that
States accept the information verified by SSA and provided through the
leads data as verified, provided that the information provided through
the LIS leads data supports a determination of eligibility under
section 1902(a)(10)(E) of the Act.
The Computer Matching and Privacy Protection Act at 5 U.S.C.
522a(p)(1) requires States to take actions to independently verify
information that SSA provides before the State may terminate, suspend,
reduce, deny, or take other adverse action against an individual.
Therefore, in instances in which the leads data would not support a
determination of eligibility for MSPs, we propose at Sec.
435.911(e)(7) to require that States use the attested information
provided by the applicant to SSA through the LIS application process
and separately verify the individual's eligibility for Medicaid in
accordance with the State's verification policies.
[[Page 54766]]
Specifically, under proposed Sec. 435.911(e)(7), the State would be
required to (1) determine whether additional information is needed to
make a determination of eligibility for an MSP; (2) if additional
information is needed, notify the individual that they may be eligible
for assistance with their Medicare premium and/or cost sharing charges,
but that additional information is needed for the agency to make a
determination of such eligibility; (3) provide the individual with a
minimum of 30 days to furnish any information needed by the agency to
determine MSP eligibility; and (4) verify the individual's eligibility
for an MSP in accordance with the State's verification plan developed
in accordance with Sec. 435.945(j). We note that, in the case of an
applicant who has attested to income or assets over the applicable
income or resource standard, States can, but are not required to,
request additional information from the individual to confirm
ineligibility for coverage.
We note that, under our proposal, States may continue to request
from the individual information necessary to make an eligibility
determination but that is missing from the leads data or other third-
party sources. Pursuant to Sec. 435.952(c), States may also seek
information from the individual if the State has other information that
is not reasonably compatible \27\ with the leads data; however, we
anticipate such circumstances with respect to financial eligibility
will be extremely rare since SSA generally relies on the same sources
for financial eligibility data also relied upon by States and the data
from SSA will in most instances be the most current.
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\27\ Under 42 CFR 435.952(c)(1), income information obtained
through an electronic data match shall be considered ``reasonably
compatible'' with income information provided by or on behalf of an
individual if both are either above or at or below the applicable
income standard or other relevant income threshold.
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Finally, individuals eligible for the LIS program may be eligible
for full Medicaid benefits, in addition to the assistance with Medicare
premiums and cost-sharing available under the MSPs. Under the current
regulations at Sec. 435.911, for individuals who submit the single
streamlined application used for individuals applying for Medicaid on
the basis of MAGI, but who may be eligible on a basis other than MAGI,
States are required to collect any additional information that is
needed to make a determination on a non-MAGI basis, and to make such
determination if the individual provides the needed information.
Consistent with sections 1902(a)(4) and (a)(19) of the Act, we propose
a similar requirement with respect to individuals whose application was
initiated by receipt of LIS leads data. Specifically, under proposed
Sec. 435.911(e)(6), States would be required to collect such
additional information as may be needed to determine whether such
individuals are eligible for Medicaid in any other eligibility groups
(that is, other than the MSPs), including other non-MAGI groups and
MAGI-based groups as well. We believe this proposal would codify a
pathway for efficient enrollment of LIS enrollees into both the
appropriate MSP eligibility group, as well as into a full-benefit group
if eligible without imposing undue administrative burdens on States. We
believe this would also promote program integrity. We note that
individuals can be eligible for both an MSP and an eligibility group
that confers full Medicaid benefits. Therefore, the requirement under
proposed Sec. 435.911(e)(6) is in addition to the requirement to
determine the individual's eligibility for an MSP.
Streamlining Methodologies. As mentioned previously, the income
standard for the LIS program and the highest income standard for the
MSPs is similar, the resource standard for all MSPs and the LIS is the
same until January 1, 2024, and the methodologies for both programs are
very closely aligned. However, the differences in income and resource
methodologies prevent LIS enrollees from being seamlessly enrolled into
the MSPs unless the State has elected to align the MSP methodologies
with LIS methodologies by adopting certain income and resource
disregards under section 1902(r)(2) of the Act.
As discussed above, the two methodologies differ slightly in that
several types of income and resources that are counted in determining
MSP eligibility are not counted in determining LIS eligibility.\28\
States have the flexibility to achieve full alignment of the MSP and
LIS methodologies. Specifically, under section 1902(r)(2) of the Act,
codified in regulation at Sec. 435.601(d), States have the option to
use less restrictive income and resource methodologies in making
eligibility determinations for most non-MAGI eligibility groups,
including the MSPs. States can use this authority to align MSP
methodologies with LIS methodologies by adopting less restrictive
methodologies to disregard income and resources that are counted in
determining MSP but not LIS eligibility. These include: (1) the
following types of income: in-kind support and maintenance, dividend
income, and interest income; and (2) the value of the following types
of resources: non-liquid resources, burial funds, and life insurance.
We expect that States have not maximized this opportunity due to
competing priorities and the complexity of eligibility policy.
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\28\ For example, section 116 of MIPPA directs SSA not to count
in-kind support and maintenance as income, and not to count the cash
surrender value of life insurance policies as a resource, when
determining eligibility for LIS. These statutory disregards apply
only to LIS eligibility determinations and not to MSP eligibility
groups.
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Under proposed Sec. 435.911(e), States that adopt less restrictive
MSP eligibility methodologies to completely align with the LIS
methodologies would be able to use leads data to make a determination
of MSP financial eligibility without requesting additional information
from the individual (as noted above, information on citizenship and
immigration status would still be needed), thus reducing administrative
burden for the State and relieving LIS recipients of the need to
navigate a complex application process.
States that have not fully aligned methodologies must continue to
request the additional information needed to determine financial
eligibility which is not provided through the leads data. In addition,
as noted above, States must request information relating to U.S.
citizenship and immigration status in order to verify such status in
accordance with the State's usual processes. In accordance with Sec.
435.406(a) and section 1137(d) of the Act, individuals must first make
a declaration of U.S. citizenship or satisfactory immigration status in
accordance with Sec. 435.406(a). After the declaration is made, per
regulations at Sec. 435.956, States must attempt to electronically
verify U.S. citizenship or satisfactory immigration status and, if such
status cannot be promptly verified, the State must provide the
individual with a reasonable opportunity period to provide
documentation or other information needed to verify their status.
During the reasonable opportunity period, the State must furnish
benefits to individuals who otherwise meet all eligibility requirements
and must itself continue efforts to verify the individual's status.
These requirements apply equally to individuals being determined for
eligibility in the MSPs following the State's receipt of leads data
from SSA.
However, in accordance with the authority at section 1902(a)(4) of
the Act to promote the administrative efficiency of the program and
section 1902(a)(19) of the Act relating to simplicity of administration
and the best interests of beneficiaries, we propose to add a new
[[Page 54767]]
paragraph (e) to Sec. 435.952 to require that States adopt a number of
enrollment simplification policies related to the income and resources
that are counted in determining MSP, but not LIS, eligibility that
would enable State agencies to use the leads data more efficiently,
reduce burden on applicants and States, and increase the number of LIS
enrollees successfully enrolled in the MSPs. We also anticipate these
policies would have a positive health equity impact by increasing
access to Medicare coverage for low-income individuals and increasing
the financial security of those who successfully enroll consistent with
the January 20, 2021 Executive Order.\29\
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\29\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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Finally, we anticipate that these enrollment simplifications will
help reduce the high rate of churn that dually eligible individuals
experience, largely due to administrative reasons such as providing
documentation of certain income and assets to demonstrate their
continued eligibility. Analysis by the Assistant Secretary for Planning
and Evaluation (ASPE) for the Department of Health and Human Services
in 2019 examined data from years 2007 through 2009 and found that 29.1
percent of individuals lost Medicaid eligibility for at least 1 month
during the first year of transitioning to full-benefit dual eligibility
and 21.1 percent lost Medicaid eligibility for at least 3 months
following the transition despite dually eligible individuals'
relatively stable income and assets over time.\30\ Experts interviewed
noted that dually eligible beneficiaries most often lost coverage
because of failing to comply with administrative requirements as
opposed to changes in income, assets, or functional status. In 2021,
CMS performed similar analysis on data from years 2015 through 2018 and
found similar results: 29.1 percent of individuals lost Medicaid
eligibility for at least 1 month during the first year of transitioning
to full-benefit dual eligibility and 24.1 percent lost Medicaid
eligibility for at least 3 months following the transition.\31\ The
proposed simplifications for each source of income and resource are
discussed below.
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\30\ Assistant Secretary for Planning and Evaluation (ASPE)
(2019). Loss of Medicare-Medicaid dual eligible status: Frequency,
contributing factors and implications. https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf.
\31\ CMS completed an updated internal analysis of ASPE's study
in 2021 using data from 2015-2018 that shows that dually eligible
individuals continue to lose Medicaid at a high rate in their first
year due to administrative reasons.
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We note that our proposals would not change the income and resource
rules for individuals applying for non-MAGI eligibility groups other
than the MSPs. We propose simplifying income and resource policies for
the MSP eligibility groups given the narrow scope of assistance
available under these groups (limited to assistance with Medicare
premiums and/or cost-sharing assistance), their smaller numbers of
eligible and enrolled individuals relative to other non-MAGI
eligibility groups, and MIPPA provisions which closely align them with
the LIS program, which does not count these types of income and
resources. We seek comment on extending the proposals below to all
individuals seeking eligibility on a non-MAGI basis. We also seek
comment on extending the proposal relating to verification of dividend
and interest income to individuals seeking eligibility based on MAGI,
as well as whether there are additional income or resource types to
which the proposals below could be extended for all individuals.
Interest and Dividend Income. Regulations governing LIS eligibility
determinations at 20 CFR 418.3350(d) exclude all interest and dividend
income earned on resources owned by the applicant or their spouse.
However, under the SSI income methodologies applicable to MSP
determinations, States must count interest and dividend income, unless
they have elected to disregard such income using the authority provided
under section 1902(r)(2) of the Act and 42 CFR 435.601(d).
Based on stakeholder reports and program experience, we believe
that the vast majority of individuals likely to qualify for an MSP
eligibility group do not have significant interest or dividend income,
whereas the requirement to timely obtain and furnish acceptable
statements from financial institutions, sometimes extending back over a
lengthy period of time, to document interest and dividend income earned
is unduly burdensome for applicants and provides negligible program
integrity value. Therefore, consistent with section 1902(a)(19) of the
Act, in order to minimize undue administrative burden on applicants, we
are proposing at Sec. 435.952(e)(1)(i) and (ii) to prohibit States
from requesting documentation of dividend and interest income prior to
making a determination of MSP eligibility, except when the agency has
information that is not reasonably compatible with the applicant's
attestation. Under the proposed rule, States would be required to
accept self-attestation of dividend and interest income for MSP
applicants and their spouse, but would retain the option to verify such
income after the individual has been enrolled (a process, currently
available at State option with respect to most eligibility criteria,
which we refer to as ``post-enrollment verification''), including the
option to require the individual to provide documentation of interest
or dividend income if electronic verification is not available.
We seek comment on the utility of post-enrollment verification and
whether it results in unnecessary procedural denials of eligible
individuals. If a State chooses to conduct post-enrollment verification
checks, under proposed Sec. 435.952(e)(1)(iii) it must allow
individuals at least 90 calendar days to respond to requests for
documentation. We seek comment on the proposal to require that States
provide individuals with at least 90 calendar days to respond to
requests for additional information in this situation and whether
States should be required to provide, at a minimum, a shorter period of
time, such as at least 30 or 60 calendar days. If a State found that an
individual has income exceeding the income standard during the post-
enrollment verification process, the State would take appropriate
action consistent with regulations at Sec. 435.916(d) (redesignated
and revised at proposed regulations at Sec. 435.919 in this
rulemaking), including determining eligibility on other potential bases
and, if not eligible on any basis, providing advance notice and fair
hearing rights prior to terminating MSP coverage. Section
435.952(e)(1)(ii) clarifies that States must request documentation
prior to making an initial determination to deny eligibility if they
have information that is not reasonably compatible with the applicant's
attestation in accordance with Sec. 435.952(c)(2).
As discussed above, under section 1902(r)(2) of the Act, States
also have the ability to disregard interest and dividend income
entirely, which would bring treatment of interest and dividend income
in determining eligibility for MSPs into alignment with the LIS
program. We encourage States to consider adoption of such an income
disregard, as it is unlikely that an applicant could have both
investments large enough to generate significant interest or dividend
income and resources and still satisfy the resource test for the LIS or
MSP benefits.
Non-liquid resources. For LIS eligibility determinations, under 20
CFR 418.3405, SSA only counts liquid
[[Page 54768]]
resources, which it defines as cash, financial accounts, and other
financial instruments that can be converted to cash within 20 workdays.
Non-liquid resources, such as an automobile, are not counted for LIS
eligibility.\32\ However, SSI rules in section 1613 of the Act, which
apply to MSP determinations, have a broader definition of countable
resources that includes non-liquid resources; for example, while SSI
excludes one automobile for resource-eligibility purposes, a second
automobile is countable. This can be onerous for MSP applicants because
it can be difficult to timely determine, and furnish acceptable
documentation of, the value of something that cannot easily be sold.
Similar to interest and dividend income, consistent with section
1902(a)(19) of the Act and in order to minimize administrative burdens
on individuals, we are proposing at Sec. 435.952(e)(2)(i) to require
that States accept applicants' attestation of the value of any non-
liquid resources, except, as described at proposed Sec.
435.952(e)(2)(ii), when the State has information that is not
reasonably compatible with the individual's attestation. However, as
with dividend and interest income, as described at proposed Sec.
435.952(e)(2)(iii), States would retain the option to conduct post-
enrollment verification, including the option to require the individual
to provide documentation of non-liquid resources if electronic
verification is not available, and to take appropriate action,
consistent with regulations at Sec. 435.916(d) (redesignated and
revised at proposed regulations at Sec. 435.919 in this rulemaking),
if the State determines the individual greatly undervalued or failed to
disclose resources. If the agency elects to conduct verifications post-
enrollment, and documentation is requested, the agency must provide the
individual with at least 90 calendar days from the date of the request
to respond and provide any necessary information requested. As with
dividend and interest income, Sec. 435.952(e)(2)(ii) clarifies that
States must request documentation prior to making an initial
determination denying eligibility if they have information that is not
reasonably compatible with the applicant's attestation in accordance
with Sec. 435.952(c)(2). Finally, States also may use authority at
section 1902(r)(2) of the Act to disregard the value of all non-liquid
resources.
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\32\ The exception to this rule is that the equity value of any
real property than an individual owns other than the individual's
primary place of residence is counted as a resource.
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Burial funds. Under section 1613(d)(1) of the Act, which applies to
both LIS and MSP determinations, up to $1,500 in burial fund are to be
excluded for the applicant (and an additional $1,500 for their spouse)
so long as the burial fund is ``separately identifiable and has been
set aside.'' The statute does not, however, prescribe how the funds
must be separately identifiable. Current SSA policy allows LIS
applicants to attest to having $1,500 in burial funds, which may be co-
mingled with other funds in a single account (see SSA Program
Operations Manual Systems [POMS] HI 03030.020 Resource Exclusions
Section B.3.). However, consistent with section 1905(p)(1)(C) of the
Act, which directs that SSI's resource methodologies be used to
determine MSP-related resource eligibility, States typically require
applicants to provide documentation that their burial funds are set
aside in a separate account, as provided under SSI's burial fund-
related methodology described in 20 CFR 416.1231(b). This creates a
misalignment between LIS and MSP methodologies and imposes additional
burdens on MSP applicants.
We propose in Sec. 435.952(e)(3)(i) to require that States, when
determining eligibility for the MSPs, allow individuals to self-attest
that up to $1,500 of their resources, and up to $1,500 of their
spouse's resources, are set aside as burial funds in a separate account
and therefore are not countable as resources for MSP determinations.
Proposed Sec. 435.952(e)(3)(ii) clarifies that States must request
documentation prior to making an initial determination of ineligibility
if they have information that is not reasonably compatible with the
applicant's attestation in accordance with Sec. 435.952(c)(2). As in
the proposed provision for interest and dividend income and non-liquid
resources, and described at Sec. 435.952(e)(3)(iii), States would
retain the option to conduct post-enrollment verification, including
obtaining documentation of resources in burial funds, and taking
appropriate action, consistent with regulations at Sec. 435.916(d)
(redesignated and revised at proposed regulations at Sec. 435.919 in
this rulemaking). If the agency elects to conduct verifications post-
enrollment, and documentation is requested, the agency must provide the
individual with at least 90 calendar days from the date of the request
to respond and provide any necessary information requested. Again, we
seek comment on the 90-day response period in this situation and
whether States should be required to provide, at a minimum, a shorter
period of time, such as least 30 or 60 calendar days. Finally, States
may also use authority at section 1902(r)(2) of the Act to disregard
all or a greater amount of burial funds or to not require that the
burial funds be held in a separate set-aside account.
Life Insurance Policies. Section 116 of MIPPA, codified at section
1860D-14(a)(3)(G) of the Act, eliminated the value of life insurance
policies as a countable resource for LIS determinations. However, under
the SSI resource methodologies described in section 1613(a) of the Act,
which, as noted above, apply to MSP-related resource eligibility
determinations per section 1905(p)(1)(C) of the Act, the cash surrender
value of life insurance with a total face value exceeding $1,500 is
countable. Term life insurance policies do not have a cash surrender
value and are not a countable resource under SSI methodologies
described in 20 CFR 416.1230(a). Because term life insurance is not
relevant to the Medicaid eligibility determination, States are not
permitted to request information about the face value of such policies.
We have received reports from advocates that obtaining
documentation of a life insurance policy's cash surrender value is
highly burdensome for applicants. A life insurance policy's cash
surrender value depends on the market, the length of time the
policyholder has paid premiums, and other factors. Further, the cash
surrender value is not knowable solely from the documents a
policyholder is likely to have. To obtain the current cash surrender
value of a policy, an applicant generally must contact the company that
has issued the policy, request a statement of the current cash
surrender value and then submit that statement to the State agency once
obtained. This can pose a significant hurdle to applicants, leading to
denials for otherwise eligible applicants.
To reduce this burden on applicants, we encourage States to use
their authority under section 1902(r)(2) of the Act to disregard a
higher face value of life insurance policies or to disregard the cash
surrender value of life insurance policies altogether. A few States
currently disregard policies with face values of at least up to
$10,000, which eliminates administrative hurdles for most individuals,
while ensuring that those comparatively few applicants who own
substantial policies have the value of those policies counted in their
eligibility determinations.
Under proposed Sec. 435.952(e)(4)(i), if an individual attests to
having a life insurance policy with a face value
[[Page 54769]]
below $1,500, States must accept the attested face value for purposes
of making an initial eligibility determination for MSP coverage, unless
the State has information that is not reasonably compatible with
attested information. If the total face value of all of an individual's
life insurance policies does not exceed $1,500, the cash surrender
value of the individual's policies is not counted in determining MSP
eligibility pursuant to sections 1613(a)(16) and 1905(p)(1)(C) of the
Act. As with attested interest and dividend income, non-liquid assets,
and burial funds, States would be required, as specified at proposed
Sec. 435.952(e)(4)(ii), to request additional information if they have
information not reasonably compatible with the attested value prior to
enrolling the individual in coverage in accordance with Sec.
435.952(c)(2). Per current Sec. 435.952(c)(2), the agency may accept a
reasonable explanation from the applicant or require documentation.
Under proposed Sec. 435.952(e)(4)(i)(A), if an individual attests
to having a life insurance policy with a face value in excess of
$1,500, consistent with current regulations at Sec. 435.948, States
may accept the attested cash surrender value. If the State has
information that is not reasonably compatible with the attested value
of the policy, we propose, at Sec. 435.952(e)(4)(ii), that the State
must seek additional information from the individual in accordance with
Sec. 435.952(c)(2). Per current Sec. 435.952(c)(2), the agency may
accept a reasonable explanation from the applicant or require
documentation.
Per proposed Sec. 435.952(e)(4)(iii), States would have the option
to conduct post-enrollment verification for individuals enrolled based
on an attested value. In conducting post-enrollment verification, if a
State determines that the face value of the policy exceeds $1,500, then
the State must redetermine the cash surrender value, consistent with
regulations relating to changes in circumstances at Sec. 435.916(d)
(redesignated and revised at Sec. 435.919 in this proposed rule), as
described above and seek the cash surrender value on behalf of the
individual consistent with Sec. 435.952(e)(4)(iv)(A). If, in
redetermining eligibility, including the cash surrender value of the
policy, once obtained, the State determines the individual to be
ineligible for an MSP, the State would need to consider eligibility on
other potential bases and provide advance notice and fair hearing
rights in accordance with part 431 subpart E of the regulations prior
to terminating MSP coverage.
We also propose at Sec. 435.952(e)(4)(iv)(A) that when
documentation of the cash surrender value of a life insurance policy is
required, the State must assist the individual with obtaining this
information and documentation by requesting that the individual provide
the name of the insurance company and policy number and authorize the
State to obtain such documentation on the individual's behalf, similar
to the assistance that SSA provides SSI applicants, in which SSA
obtains from the applicant basic information about the policy and
authorization to contact the insurer, and then confirms the cash
surrender value directly with the life insurance company itself.\33\
The agency may also request, but may not require, additional
information from the applicant to assist the agency in obtaining
documentation of the cash surrender value, such as the name of an
agent. If the individual does not provide basic information about the
policy and an authorization, under proposed Sec. 435.952(e)(4)(iv)(B),
the State may require that the individual provide documentation of the
cash surrender value. Under proposed Sec. 435.952(e)(4)(iv)(C), the
State must provide the individual with at least 15 calendar days to
provide such documentation if required pursuant to paragraph (e)(4)(i)
or (ii) of this section (that is, if documentation of the cash
surrender value is needed prior to the agency's making a determination
of eligibility) and at least 90 calendar days if required pursuant to
paragraph (e)(4)(iii) of this section (that is, post-enrollment). We
note that the minimum of 15 calendar days in proposed Sec.
435.952(e)(4)(iv)(C) for applicants to provide documentation of cash
surrender value of a life insurance policy is consistent with the
minimum 15 calendar days that we propose States must generally provide
applicants to provide required documentation under proposed at Sec.
435.907(d), discussed in section II.B.3 of this proposed rule. We seek
comment on whether 15 calendar days or a longer minimum period, such as
20 calendar days or 30 calendar days, appropriately balances the
complexity of determining and obtaining documentation of the cash
surrender value with the 45-day limit for States to complete Medicaid
eligibility determinations for individuals applying on a basis other
than disability status under Sec. 435.912(c)(3). The 90 calendar days
proposed for individuals to obtain documentation of the cash surrender
value of a life insurance policy during a post-enrollment verification
process is consistent with the 90 calendar days in proposed paragraphs
(e)(1)(iii), (e)(2)(iii), and (e)(3)(iii) of Sec. 435.952.
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\33\ See SSA POMS SI 01130.300.D., Developing Life Insurance
Policies at http://policy.ssa.gov/poms.nsf/lnx/0501.130300.
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We recognize this proposal would represent a significant change for
a number of States and could present some administrative challenges to
implement. However, documenting the cash surrender value of life
insurance is a considerable hurdle for many applicants. Because the
cash surrender value of most applicants' policies is likely very
modest, the value of any life insurance policy likely will have a
minimal impact on their financial eligibility for coverage, whereas
obtaining documentation of the cash surrender value may pose a
substantial administrative barrier to access. We believe it is in the
interest of efficient administration of the program, consistent with
section 1902(a)(4) of the Act, to implement a process that places fewer
burdens on applicants. We also believe that States are better able to
navigate obtaining such documentation when needed. We seek comment on
whether the burden shifted to States under the proposed rule is
appropriate, or whether an alternative approach would be preferable.
In-Kind Support and Maintenance. In-kind support and maintenance is
assistance an applicant receives that is paid for by someone else, such
as groceries or utilities paid for by an adult child. Section 1860D-
14(a)(3)(C)(i) of the Act, added by section 116 of MIPPA, excludes in-
kind support and maintenance as countable income for LIS
determinations. Under SSI methodologies at 20 CFR 416.1131, which apply
to MSP determinations, the value of in-kind support and maintenance, if
both food and shelter are received by an applicant, is presumed to be
one-third of the Federal benefit rate (FBR) ($841 per month in 2022 for
a single person), unless the applicant provides documentation
demonstrating a different amount. While documenting the amount of
actual in-kind support and maintenance can be difficult for applicants,
we do not believe it is common for applicants to attempt to rebut the
one-third FBR presumption, and therefore, it is rare that applicants
are faced with providing documentation of this type of income.
Under the proposed rule, States would continue to be permitted to
require documentation from individuals who seek to rebut the one-third
FBR presumption. However, we seek comment on if obtaining documentation
to rebut the one-third presumption
[[Page 54770]]
poses a barrier to eligibility and whether we should require States to
accept self-attestation from individuals who seek to rebut a
presumption of the amount of in-kind support and maintenance they
receive subject to post-enrollment verification as discussed above.
Alternatively, States can, and are encouraged to, further streamline
the MSP eligibility and enrollment process for individuals with in-kind
maintenance and support by disregarding in-kind support and maintenance
entirely under section 1902(r)(2) of the Act.
2. Define ``Family of the Size Involved'' for the Medicare Savings
Program Groups Using the Definition of ``Family Size'' in the Medicare
Part D Low-Income Subsidy Program (Sec. 435.601)
To further facilitate alignment of methodologies used to determine
eligibility for the Medicare Part D LIS and MSP groups and facilitate
enrollment in the MSPs based on LIS data, we propose to amend Sec.
435.601 (``Application of financial eligibility methodologies'') to
create a new paragraph (e), in which we propose to define ``family
size'' for purposes of MSP eligibility.
Each year, the U.S. Department of Health and Human Services (HHS)
issues the Federal poverty guidelines (often referred to as the Federal
poverty level or FPL), a measure of poverty used as an eligibility
criterion by Medicaid and a number of other Federal programs. The FPL
is a dollar amount that increases with the family size of an
individual. For example, in 2022, in terms of annual income, the FPL is
$13,590 for a single person, $18,310 for a couple, and $23,030 for a
family of three.
Under section 1905(p)(2)(A) and (B) of the Act, QMB-eligible
individuals have incomes that do not exceed 100 percent of the FPL
``applicable to a family of the size involved.'' Section 1905(s)(2) of
the Act similarly directs that Qualified Disabled Working Individual
(QDWI)-eligible individuals have incomes that do not exceed 200 percent
of the FPL ``applicable to a family of the size involved.'' Section
1902(a)(10)(E)(iii) and (iv) of the Act also direct that the income
standards for the SLMB and QI eligibility groups be percentages of the
FPL ``applicable to a family of the size involved.'' As described
above, SLMBs have incomes greater than 100 percent of the FPL and less
than 120 percent of the FPL, and QIs have incomes at least equal to 120
percent of the FPL and less than 135 percent of the FPL. The statute
does not define the phrase ``family of the size involved'' and CMS has
historically permitted States to apply their own reasonable definition
of this phrase.\34\
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\34\ Memorandum from Director, Center for Medicaid and State
Operations, to Regional Administrator, Re: Medicaid Eligibility--
Policy Governing Family Size in Determining Eligibility for
Qualified Medicaid Beneficiaries and Specified Low-Income
Beneficiaries. Oct. 2, 1997. Available at https://www.medicaid.gov/sites/default/files/2019-12/medicaid-eligibilty-memo.pdf.
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However, in light of the various statutory provisions to facilitate
enrollment of LIS recipients into MSPs and vice versa, we believe it is
appropriate to establish Federal standards governing the phrase
``family of the size involved.''
Specifically, we propose for purposes of determining eligibility
for the MSP groups, consistent with our authority under section
1902(a)(4) of the Act to facilitate methods of administration that
promote the proper and efficient administration of the Medicaid
program, that ``family of the size involved'' be defined to include at
least the individuals included in the definition of ``family size'' in
the LIS program. Under Sec. 423.772 (``Definitions'' relating to the
LIS program), ``family size'' is defined to include the applicant, the
applicant's spouse (if the spouse is living in the same household with
the applicant), and all other individuals living in the same household
who are related to the applicant and dependent on the applicant or
applicant's spouse for one-half of their financial support.
By proposing that a State's definition of ``family of the size
involved'' include ``at least'' the individuals described in Sec.
423.772 for purposes of the MSP groups, States would retain flexibility
to include other individuals who are not described in Sec. 423.772.
Additionally, this proposal would not affect the States' ability to
adopt a different reasonable definition of the phrase for purposes of
other eligibility groups. For example, in order to be eligible under
section 1902(a)(10)(A)(ii)(XIII) of the Act (providing coverage for
working individuals with disabilities), an individual must have income
that is less than 250 percent of the FPL for a ``family of the size
involved.'' States would not be required to adopt the definition at
proposed Sec. 435.601(e) for purposes of determining income
eligibility for this eligibility group. We seek comment on this
proposal to define ``family of the size involved'' for purposes of the
MSP groups.
3. Automatically Enroll Certain SSI Recipients Into the Qualified
Medicare Beneficiaries Group (Sec. 435.909)
SSI is a Federal cash assistance program that serves low-income
individuals who are age 65 or older, or have blindness or a disability.
SSI recipients typically qualify for other Federal and State programs.
For example, many SSI recipients are entitled to Medicare under 42 CFR
406.5(a) and (b). Additionally, in most States, the receipt of SSI is a
mandatory basis for Medicaid eligibility pursuant to section
1902(a)(10)(A)(i)(II)(aa) of the Act, implemented at Sec. 435.120
(``Individuals receiving SSI group,'' hereafter the ``mandatory SSI
group''). Thirty-three States and the District of Columbia (DC) that
cover the mandatory SSI group have an agreement with SSA under section
1634(a) of the Act under which SSA completes the determination of
eligibility for the mandatory SSI group, and the Medicaid agency
automatically enrolls the individual in Medicaid following a data
exchange with SSA. These States commonly are referred to as ``1634
States.'' A minority of States that cover the mandatory SSI group apply
the SSI program's income and resource methodologies and disability
criteria but require individuals to submit a separate application to
the State Medicaid agency (``criteria States'').
Eight States do not cover the mandatory SSI group. Instead, these
States have elected the authority provided under section 1902(f) of the
Act to apply financial methodologies and/or disability criteria more
restrictive than the SSI program in determining eligibility for
individuals 65 years old or older or who have blindness or a
disability, subject to certain conditions. These States are referred to
as ``209(b) States,'' after the provision of section 209(b) of the
Social Security Act Amendments of 1972 (Pub. L. 92-603), which enacted
what became codified at section 1902(f) of the Act. The eligibility
group authorized by section 1902(f) of the Act is implemented at Sec.
435.121 (``Individuals in States using more restrictive requirements
for Medicaid than the SSI requirements,'' hereafter ``mandatory 209(b)
State group'').
Most Medicare-eligible SSI recipients also meet the eligibility
requirements for the QMB eligibility group described in sections
1902(a)(10)(E) and 1905(p) of the Act, which provides Medicaid coverage
of Medicare premiums (both Part A, if applicable, and Part B) and cost-
sharing (copayments, coinsurance, and deductibles).
[[Page 54771]]
Section 1905(p)(1) of the Act provides that, to be eligible under
the QMB group, an individual must be entitled to Medicare Part A or
enrolled in Medicare Part B for coverage of immunosuppressive drugs
under section 1836(b) of the Act, have income that does not exceed 100
percent of the FPL for the applicable family size, and have resources
that do not exceed the limits for the full-subsidy LIS program. As
described at section 1860D-14(a)(3)(D) of the Act, the full-subsidy LIS
resource limit is three times the SSI resource limit, adjusted annually
based on changes to the Consumer Price Index.\35\ (See section II.A.1.
of this proposed rule for discussion of the LIS program.) The income
standard for SSI (that is, SSI's maximum Federal benefit rate) is
typically 74 percent of the FPL for an individual and 83 percent of the
FPL for married individuals. Thus, because the income and resource
standards for the QMB group exceed the income and resource standards
for SSI, individuals entitled to Medicare Part A who meet the income
and resource requirements for the mandatory SSI group or mandatory
209(b) group will always meet the income and resource requirements for
the QMB group and be eligible for the QMB group.
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\35\ The resource limit for LIS is three times the SSI limit
with yearly updates since January 1, 2010 to reflect to reflect
Consumer Price Index (CPI). Note that the MSP resource test is
determined without regard to the life insurance policy exclusion for
Part D LIS, in accordance with section 1902(p)(1)(C).
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Most individuals enrolled in Medicare qualify for Part A without
paying a premium (premium-free Part A). SSA automatically enrolls these
individuals in premium-free Part A if they are age 65 or over and
receive Social Security or Railroad Retirement Board (RRB) retirement
benefits under title II of the Act or are under age 65 and have
received Social Security or RRB disability benefits for 24 months under
title II of the Act. See 42 CFR part 406 subpart A. In 2021,
approximately 2.6 million individuals (approximately one third) of SSI
recipients were entitled to premium-free Part A.\36\
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\36\ SSI Monthly Statistics, September 2021, Social Security
Office of Retirement and Disability Policy 2021. https://www.ssa.gov/policy/docs/statcomps/ssi_monthly/2021-09/table01.html.
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Under Sec. 406.20, many individuals who are not eligible for
premium-free Part A may still enroll in Part A by applying for benefits
at SSA and paying a premium (``premium Part A''). In 2022, the premium
for Medicare Part A was $499; however, based on prior work history,
some individuals may qualify for a reduced rate of $274. Individuals
who are not eligible for premium-free Part A are not automatically
enrolled in premium Part A and they must enroll in Part B prior to or
at the same time as they enroll in Part A. All Medicare beneficiaries
must pay a monthly premium for enrollment in Part B, which is subject
to an adjustment based on income. In 2022, the minimum Part B premium
was $170.10.
All States currently have a buy-in agreement with the Secretary
under section 1843 of the Act which requires them to pay the Part B
premiums for certain Medicaid beneficiaries, including individuals
enrolled in the QMB group and those receiving SSI (known as ``Part B
buy-in'') as described in the Medicare regulations at Sec. 407.42. A
buy-in agreement permits States to directly enroll eligible individuals
in Medicare Part B at any time of the year (without regard for Medicare
enrollment periods or late enrollment penalties if applicable) and to
pay the Part B premiums on the individual's behalf. In 1634 States,
when SSA determines an individual eligible for both the mandatory SSI
group and Medicare Part B, CMS automatically initiates Part B buy-in
for the individual through a joint data exchange among CMS, the State
Medicaid agency, and SSA (``buy-in data exchange'').\37\ In SSI
criteria and 209(b) States, SSA notifies both the State and CMS that an
individual has been determined eligible for SSI and Medicare Part B;
however, because such individuals must submit a separate Medicaid
application for determinations of eligibility, CMS does not
automatically initiate Part B buy-in. Rather, once the State determines
an individual eligible for the mandatory SSI or 209(b) group, the State
must initiate Part B buy-in for the individual pursuant to its buy-in
agreement through its daily exchange of enrollment data with CMS. See
42 CFR 407.40(c)(4) and 407.42; CMS Manual for the State Payment of
Medicare Premiums, chapter 2, section 2.5.1.
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\37\ States with buy-in agreements must exchange buy-in
enrollment data with CMS on a daily basis under Sec. 407.40(c)(4),
and CMS also exchanges buy-in data with SSA on a daily basis. CMS
collectively refers to these data exchange processes as the ``buy-in
data exchange.'' See Manual for the State Payment of Medicare
Premiums, chapter 2, sections 2.0 and 2.1.
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While individuals enrolled in the mandatory SSI or 209(b) group
receive full Medicaid benefits, enrollment in the QMB group provides
these individuals with additional protection from out-of-pocket health
care costs--specifically Medicare premiums and cost-sharing charges.
Moreover, Federal law prohibits all Medicare providers and suppliers,
not just those participating in Medicaid, from charging QMBs for
Medicare cost-sharing. Since 2018, CMS has notified Medicare providers
and suppliers when an individual is enrolled in the QMB group and
protected from Medicare cost-sharing liability.
Maximizing the number of Medicaid beneficiaries who are also
enrolled in Medicare is not only advantageous to the individual, but it
can also result in cost savings for States. As a third-party payer,
Medicare pays primary to Medicaid for Medicare Part A (inpatient
hospital and skilled nursing facility services) and Medicare Part B
(outpatient medical care). In addition, Medicaid beneficiaries who are
enrolled in both Medicare Parts A and B may join Medicare-Medicaid
integrated care plans, which provide more coordinated care across the
two payers and may generate savings to the State by helping
beneficiaries avoid institutional placement and by providing
supplemental benefits, such as dental, transportation, hearing, or
other benefits that otherwise would have been covered by Medicaid.
Despite the potential benefits for Medicaid beneficiaries and State
agencies, CMS data from 2022 indicates that over 500,000 or 16 percent
of SSI recipients who are eligible to enroll in Medicare are not
enrolled in the QMB eligibility group. We believe a major driver of
eligible but unenrolled QMBs is that many States require SSI recipients
to file a separate application with the State Medicaid agency in order
to be evaluated for eligibility for the QMB group, even though they
have been determined eligible for the mandatory SSI or 209(b) groups,
and all SSI recipients who are entitled or able (with a premium) to
enroll in Part A necessarily meet the requirements for QMB eligibility.
To facilitate the enrollment of SSI recipients into the QMB
eligibility group we propose, consistent with section 1902(a)(4) of the
Act to promote the proper and efficient administration of the Medicaid
program, the January 28, 2021 Executive Order on Strengthening Medicaid
and the Affordable Care Act, the April 5, 2022 Executive Order on
Continuing to Strengthen Americans' Access to Affordable, Quality
Health Coverage, and the December 13, 2021 Executive Order on
Transforming Federal Customer Experience and Service Delivery to
Rebuild Trust in Government, to add a new paragraph (b) at Sec.
435.909 that generally would require States to deem an individual
enrolled in the mandatory SSI or 209(b) group eligible for the QMB
group the
[[Page 54772]]
month the State becomes responsible for paying the individual's Part B
premiums under its buy-in agreement pursuant to Sec. 407.47(b). We
also propose technical changes to remove reserved paragraph (a) at
Sec. 435.909, redesignate Sec. 435.909 paragraph (b) as (a) and add a
new header to new Sec. 435.909(a).
We note that under section 1902(e)(8) of the Act, QMB eligibility
is effective the month following the month in which the determination
of eligibility for the QMB group is made. Thus, under our proposal, QMB
coverage would start the month following the month the State deems
(that is, determines) an individual eligible for the QMB group and
starts paying the individual's Part B premiums under the buy-in
agreement. For example, if an individual is first enrolled in both the
mandatory SSI or 209(b) Medicaid group and entitled to Part A in
January 2025, the State would start paying the individual's Part B
premiums under the buy-in agreement and deem the individual eligible
for the QMB group in January 2025. The individual's QMB coverage would
start February 1, 2025.
SSI Recipients Who Have Premium-Free Medicare Part A
As noted above, SSA automatically enrolls individuals who receive
Social Security or RRB retirement benefits or disability benefits for
24 months into premium-free Part A. SSA data for States (including
those with a 1634 agreement and those without a 1634 agreement)
indicates whether an SSI recipient is entitled to premium-free Part A.
As discussed above, because all SSI recipients meet the financial
eligibility requirements for the QMB group, proposed Sec.
435.909(b)(1)(i) would require all States to deem SSI recipients who
are determined eligible for either the mandatory SSI group at Sec.
435.120 or the mandatory 209(b) group at Sec. 435.121 as eligible for
the QMB group if they are entitled to premium-free Medicare Part A.
Under the proposed rule, when a 1634 State (which has delegated
authority to SSA to make Medicaid eligibility determinations for SSI
recipients) receives from CMS the Part B buy-in enrollment for an SSI
recipient who is entitled to premium-free Medicare Part A, the State
would automatically enroll the individual in both the mandatory SSI
group and the QMB group; such individuals would not be required to
submit a separate application to the Medicaid agency to determine
eligibility for the QMB group.
Criteria States and 209(b) States also obtain from CMS information
that an SSI recipient is Medicare-eligible and entitled to premium-free
Medicare Part A. However, in these States SSI recipients must submit a
separate application to the Medicaid agency which determines
eligibility for either the mandatory SSI or the 209(b) group. Under
proposed Sec. 435.909(b)(1)(i), once the State has determined an SSI
recipient eligible for the mandatory SSI or the 209(b) group, the State
also would start paying the Part B premiums for the individual the
first month they are entitled to Part A and receiving SSI-based
Medicaid and start QMB group coverage the first day of the following
month.
From time to time, individuals enrolled in the mandatory SSI or
209(b) group become retroactively entitled to premium-free Medicare
Part A based on a retroactive award of Social Security Disability
Insurance (SSDI). Under the Medicare regulations at Sec. 407.47(b),
States generally become responsible for retroactive Part B premiums for
such individuals dating back to the first month they were enrolled in
the mandatory SSI or 209(b) group and eligible for Part B.\38\ In an
April 27, 2022 proposed rule entitled, ``Implementing Certain
Provisions of the Consolidated Appropriations Act and other Revisions
to Medicare Enrollment and Eligibility Rules'' (87 FR 25090) (referred
to hereafter as the ``2022 Medicare eligibility and enrollment proposed
rule''), we proposed adding a new paragraph (f) at Sec. 407.47 to
limit State liability for retroactive Part B premiums for full-benefit
Medicaid beneficiaries, including individuals receiving SSI-based
Medicaid, to a period of no greater than 36 months prior to the date of
the Medicare enrollment determination. At 87 FR 25114 through 25115 of
the proposed rule, we noted that this time limit would reduce burden on
providers, help State Medicaid programs and the Medicare program run
more efficiently, be consistent with a legal ruling in favor of States
in at least one Federal court, and not harm Medicaid beneficiaries
since Medicaid would have covered any medical costs the beneficiary
incurred for periods in the past.
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\38\ Individuals who are entitled to premium-free Part A are
eligible to enroll in Medicare Part B under Sec. 407.10(a)(1).
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To align with that change, under Sec. 435.909(b)(3), we propose
that retroactive QMB coverage for individuals in the mandatory SSI or
209(b) group be limited to the same period for retroactive Part B
premium liability proposed at Sec. 407.47(f) in the 2022 Medicare
eligibility and enrollment proposed rule. For example, if SSA
determines an individual enrolled in the mandatory SSI or 209(b) group
eligible for premium-free Part A in January 2025 with an effective date
back to January 2023, the State would deem the individual eligible for
the QMB group retroactive to January 2023. Because coverage under the
QMB group begins the month after the month of the eligibility
determination, QMB coverage in this example would be effective February
1, 2023. Alternatively, if SSA determines an individual enrolled in the
mandatory SSI or 209(b) group eligible for premium-free Part A in
January 2025 with an effective date back to January 2021, the State
would deem the individual eligible for the QMB group retroactive to
January 2022, with QMB coverage effective February 1, 2022. We invite
comment on this limit on retroactive QMB eligibility.
Additionally, we remind States that individuals deemed eligible for
Medicaid are not exempt from regularly-scheduled renewals of Medicaid
eligibility in accordance with Sec. 435.916. However, for an
individual eligible under both the mandatory SSI and QMB groups, the
State need only verify that the individual still receives SSI and is
entitled to Medicare Part A in order to renew their eligibility in both
groups. States can do this verification electronically by confirming
receipt of SSI in the State Verification Exchange System or State
Online Query System, and we encourage them to do so to minimize burden.
When a beneficiary no longer meets the eligibility requirements for the
eligibility group under which they have been receiving coverage, the
State must determine eligibility on all bases before terminating
eligibility.
SSI Recipients Eligible for Premium Part A
As mentioned above, individuals age 65 and over who lack the
sufficient work history for premium-free Part A may qualify to pay, or
have paid on their behalf, a monthly premium to receive Medicare Part A
benefits.\39\ To meet the requirements for premium Part A at Sec.
406.20(b), the individual must be: age 65 or older, a U.S. resident,
not otherwise entitled to Part A, entitled to Part B or in the process
of enrolling in it, and a U.S. citizen or lawful permanent resident who
has resided in the U.S. continuously during the 5 years immediately
preceding the month they enrolled in Medicare.
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\39\ Note that all individuals receiving title II benefits based
on disability who have met the 24-month waiting period to enroll in
Medicare are entitled to premium-free Part A.
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[[Page 54773]]
All States must pay the Part A premium for individuals who are
enrolled in the QMB eligibility group. However, States can choose one
of two methods to pay the Part A premium for QMBs.\40\ First, States
can expand their buy-in agreement with CMS under section 1818(g) of the
Act to include enrollment and payment of Part A premiums for QMBs who
do not have premium-free Part A. Currently, 36 States and the District
of Columbia have chosen this option. States that include payment of
Part A premiums for QMBs in their buy-in agreements are called ``Part A
buy-in States.'' In Part A buy-in States, individuals determined
eligible for the QMB group can enroll in premium Part A at any time of
the year and without regard to late enrollment penalties. Fourteen
States do not include Part A in their buy-in agreements and instead pay
the Part A premiums for QMBs using a group payer arrangement, which
allows certain third parties (for example, States) to pay the Part A
premiums for a class of beneficiaries.\41\ States that use a group
payer arrangement for QMBs are known as Part A ``group payer States.''
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\40\ See chapter 1, section 1.2 of the CMS Manual for the State
Payment of Medicare Premiums.
\41\ See Program Operations Manual System (POMS) HI 01001.230
Group Collection-General at http://policynet.ba.ssa.gov/poms.nsf/lnx/0601001230.
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As previously noted, in order to qualify for the QMB eligibility
group under section 1905(p)(1) of the Act, an individual must be
entitled to hospital insurance benefits under Part A of title XVIII.
Being ``entitled to'' Part A means that if an individual receives Part
A-covered services, the costs of those services will be covered by
Medicare. See 42 CFR 406.3. In general, an individual becomes so
entitled to Part A if--(1) they are eligible for premium-free Part A
based on payment of a payroll tax; or (2) are eligible to enroll in
Premium Part A and do enroll (creating a Part A premium obligation).
The premium payment is due for each month beginning with the first
month of coverage. 42 CFR 406.32(f).
Further, section 1905(a) of the Act specifies that payments of
Medicare cost-sharing for QMBs (including Part A premiums) are
``medical assistance'' for purposes of FFP, if made in the month
following the month in which the individual becomes a QMB. (Per the
introductory paragraph of section 1905(a) of the Act, payments for
Medicare premiums and cost sharing only qualify as medical assistance
in the case of Medicare cost-sharing with respect to a QMB described in
section 1905(p)(1) of the Act, if provided after the month in which the
individual becomes such a beneficiary). Thus, under a literal reading
of the words of the statute, a State cannot claim FFP under the QMB
group until the month after the month in which the individual is
``entitled to Part A,'' which requires first that a Part A premium be
paid. This creates a ``catch 22'' in which low-income individuals can
only be eligible for QMB coverage that makes Part A enrollment
affordable if they first became liable for its premium.
This result would eviscerate the purpose of sections 1843 and
1818(g) of the Act (``buy-in statute''). Under a literal read, States
with a Part A buy-in agreement could theoretically use State-only funds
to pay Part A premiums the first month to allow the individual to
become entitled to Part A and start QMB coverage the next month.
However, in Harris v. McCrae, 448 U.S. 297 (1980), the U.S. Supreme
Court held that States cannot be required to provide Medicaid using
only State funds. Further, while individuals can enroll in Part A at
any time of the year without regard for Medicare enrollment periods or
late enrollment if the State pays their Part A premium under its buy-in
agreement, this is not the case for individuals who are paying the
premium themselves. Individuals who must pay the Part A premium
themselves must wait until a Medicare enrollment period to enroll in
Part A and may be subject to late enrollment penalties. Thus, a literal
read of the statute would defeat the purpose of buy-in statute--to
avoid delays in QMB enrollment by allowing QMB-eligible individuals who
reside in Part A buy-in States to enroll in Part A at any time of the
year, without regard to Medicare enrollment penalties.
Recognizing that a literal read of the statute would produce a
result that essentially nullifies the impact of the QMB and buy-in
statutory provisions, CMS instituted a policy approximately 30 years
ago under which States can receive FFP for paying an individual's Part
A premium the first month of entitlement, thereby triggering both Part
A entitlement and QMB coverage. Under this policy, Part A buy-in States
can determine an individual eligible for QMB status, and thus for their
Part A premiums to be paid, if they are enrolled in Part B but not yet
entitled to Part A.\42\ Group payer States similarly can approve
eligibility for individuals under the QMB eligibility group if SSA has
determined them conditionally eligible for premium Part A, through a
process known as ``conditional enrollment.'' The conditional enrollment
process enables low-income individuals to apply at SSA for premium Part
A on the condition that they will only be enrolled in Part A if the
State determines they are eligible for the QMB group.\43\ Most group
payer States recognize conditional enrollment in Part A for purposes of
determining QMB eligibility, but they are not required to do so.
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\42\ Chapter 1, section 1.10 of the CMS Manual for the State
Payment of Medicare Premiums and SSA Program Operations Manual
System (POMS) HI 00801.140.C Premium Part A Enrollments for
Qualified Medicare Beneficiaries (QMBs)--Part A Buy-In States and
Group Payer States at http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140.
\43\ The conditional enrollment process is described in chapter
1, section 1.11 of the CMS Manual for the State Payment of Medicare
Premiums and in SSA Program Operations Manual System (POMS) HI
00801.140 Premium Part A Enrollments for Qualified Medicare
Beneficiaries (QMBs)--Part A Buy-In States and Group Payer States at
http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140.
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Individuals who lack premium-free Part A are more likely to have
worked in the informal economy in low wage jobs.\44\ Internal analysis
by CMS from 2017 found that, as compared to their QMB-eligible
counterparts with premium-free Part A, QMB-eligible individuals who
qualify for premium Part A tend to be poorer and more likely to be non-
native English speakers. For multiple decades, the conditional
enrollment policy has helped hundreds of thousands of individuals
obtain essential assistance with Medicare premiums and cost-sharing by
allowing States to pay the first month's premium needed to trigger
Medicare Part A entitlement. Without this policy, the subsidies
available under the QMB group to make Part A affordable would only be
available to individuals who somehow found a way to pay the initial
Part A premium (including a late enrollment penalty if applicable)
themselves. We estimate that precluding coverage of Part A premium
payments under the QMB group until the month after an individual has
become entitled to Part A would prevent over 78,000 individuals each
year from enrolling in Part A with State payment of Part A
premiums.\45\
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\44\ Streamlining Medicare and QMB Enrollment for New Yorkers:
Medicare Part A Buy-In Analysis and Policy Recommendations, Medicare
Rights Center, February 2011. https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf.
\45\ Based on internal CMS data from 2015-2019.
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We believe that we should implement the statute in a manner that
gives full effect to what we believe to be Congress' intended policy in
this rare instance in which implementing the plain meaning of the words
of the statute would produce a result that is at odds with this
statutory purpose. In United States v.
[[Page 54774]]
Ron Pair Enterprises, Inc., 489 U.S. 235 (1989), the U.S. Supreme Court
found, ``The plain meaning of legislation should be conclusive, except
in the `rare cases [in which] the literal application of a statute will
produce a result demonstrably at odds with the intentions of its
drafters.' Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571
(1982). In such cases, the intention of the drafters, rather than the
strict language, controls. Ibid.''
More recently, in Donovan v. First Credit, Inc., 983 F.3d 246, 254
(6th Cir. 2020) the Sixth Circuit reformulated this concept as follows:
``Thus, the absurd-results doctrine sanctions the use of extra-textual
sources to contravene statutory text only if there is no alternative
and reasonable interpretation available that, consistent with
legislative purpose, would avoid the absurd result.'' See id.; In re
Corrin, 849 F.3d 653 at 657 (`When the language is ambiguous or leads
to an absurd result, the court may look at the legislative history of
the statute to help determine the meaning of the language.').''
We note that there is precedent, in the Medicare Part D context,
for not applying the plain meaning of the words of the statute when it
leads to what we believe to be an absurd result contrary to the purpose
of the statute. The following language from the preamble to the January
28, 2005 final rule implementing Medicare part D explains:
Section 1860D-1(b)(1)(C) of the Act requires CMS to auto-enroll
into PDPs an individual ``who is a full benefit dual eligible
individual'' who ``has failed to enroll in a prescription drug plan
or an MA-PD plan.'' Although this statutory provision specifically
references the statutory definition of ``full-benefit dual eligible
individual'' under section 1935(c)(6) of the Act, if interpreted
literally, section 1860D-1(b)(1)(C) of the Act would require CMS to
auto-enroll into Part D plans only individuals receiving full-
benefits under Medicaid who are already enrolled in Part D but who
have ``failed to enroll in'' a Part D plan, a patently absurd
result. We have an obligation to interpret the statute so as to
avoid an absurd result and give full effect to the Congress'
intended policy. We think it is clear that the Congress required CMS
to establish an auto-enrollment process to ensure that individuals
who currently receive coverage for Part D drugs under Medicaid
continue to receive coverage for such drugs through enrollment in
Part D beginning in 2006.\46\
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\46\ 70 FR 4194 at 4370 and 4371 (January 28, 2005). https://www.govinfo.gov/content/pkg/FR-2005-01-28/pdf/05-1321.pdf.
For the reasons set forth above, we believe that in this case also,
reading the statute literally to require an individual to pay their
first month's Part A premium in order to become eligible to receive
coverage of Part A premiums under the QMB group would be contrary to
the fundamental purpose of the QMB statutory provisions: to enable low-
income individuals to gain Medicare benefits they could not otherwise
afford. A literal read of the statute is also at odds with the intent
of the buy-in statute to avoid undue delays in QMB enrollment.
Therefore, we propose to incorporate in the regulations our
longstanding practice of providing FFP for State payments of the first
month of an individual's Part A premium for individuals who are
eligible for the QMB group based on conditional enrollment in Part A.
This also will facilitate enrollment into the QMB group for SSI
recipients who need to pay a premium to enroll in Part A.
According to internal CMS estimates, in 2022 approximately 800,000
SSI recipients were eligible for Part A by paying a premium. When an
individual age 65 or older is determined eligible for SSI and Medicare
Part B but lacks sufficient work history for premium-free Part A, SSA
transmits the individual's record to CMS. In 1634 States, CMS
automatically initiates Part B buy-in (that is, enrollment in Part B
with the State paying the Part B premium); in criteria and 209(b)
States, CMS alerts the State that the individual is eligible for SSI
and Medicare. As described above, States must pay the Part B premiums
for individuals once they are eligible for Part B and have been
determined eligible for the mandatory SSI or 209(b) group under
Sec. Sec. 407.42 and 407.47(b). Once the SSI recipient is enrolled in
Part B buy-in, CMS notifies SSA, which also updates its SSI records to
reflect Part B buy-in for the individual.
As mentioned above, in Part A buy-in States, CMS considers
enrollment in Part B sufficient to treat the individual as meeting the
requirement that the individual be entitled to Part A for the purposes
of the State's QMB eligibility determination. Because the SSI income
and resource standards are below the standards for eligibility under
the QMB group, individuals eligible for the mandatory SSI or 209(b)
group will meet the financial eligibility requirements for the QMB
group. Thus, in Part A buy-in States, when an SSI recipient who lacks
sufficient work history for premium-free Part A has been determined
eligible for the mandatory SSI or 209(b) group and is enrolled in Part
B, the State can determine the individual eligible for the QMB
eligibility group and enroll the individual in Part A buy-in.
To streamline QMB enrollment for SSI recipients who must pay a
premium to enroll in Part A, we propose at Sec. 435.909(b)(1)(ii) to
require Part A buy-in States to deem those individuals who are
determined eligible for the mandatory SSI or 209(b) groups as eligible
for the QMB group and initiate their enrollment into Medicare Part A,
pursuant to their buy-in agreement, the month they are enrolled in Part
B buy-in.
As noted, in States that have a 1634 agreement with SSA, when SSA
determines an individual eligible for the mandatory SSI group, SSA also
notifies CMS that an individual eligible for Medicare Part B has been
determined eligible for the mandatory SSI group. CMS initiates the
individual's enrollment in Medicare Part B buy-in and notifies the
State after doing so. In Part A buy-in States with a 1634 agreement,
once the State receives the automated Part B buy-in enrollment from CMS
for an SSI recipient who lacks a sufficient work history for premium-
free Part A, under proposed Sec. 435.909(b)(1)(ii) the State would
enroll the individual in the mandatory SSI group, deem the individual
eligible for the QMB group, and effectuate enrollment in Medicare Part
A through the buy-in agreement.
As discussed above, in criteria and 209(b) States, when CMS
receives information from SSA that an individual is eligible for SSI
and Medicare Part B, CMS does not automatically initiate Part B
enrollment, which is a prerequisite for entitlement to Part A for
individuals subject to a Part A premium. In a Part A buy-in State
without a 1634 agreement (that is, a criteria or 209(b) State), once
the individual applies to the Medicaid agency, some States currently
only determine eligibility for the mandatory SSI or 209(b) group, as
applicable, and initiate Part B enrollment per their buy-in agreement.
Under proposed Sec. 435.909(b)(1)(ii), these Part A buy-in States also
would be required to deem any individuals determined by the State to be
eligible for the mandatory SSI or 209(b) groups as eligible for the QMB
group and initiate enrollment in both Medicare Part A and Part B buy-
in.
In the 14 group payer States, it is more challenging for SSI
recipients to enroll in Medicare Part A and the QMB eligibility group.
Unlike in Part A buy-in States, individuals determined eligible for the
mandatory SSI or 209(b) group in group payer States who are enrolled in
Part B pursuant to the State's buy-in agreement will not necessarily
satisfy the eligibility requirement for the QMB group that the
individual be entitled to Part A. Even though the State will initiate
enrollment of the
[[Page 54775]]
individual in Part B, pursuant to its buy-in agreement, it will not
cover the individual's Part A premium or initiate Part A enrollment
under the buy-in agreement. Instead, the individual must separately
apply for premium Part A at SSA using the conditional enrollment
process.
Although the conditional enrollment process provides a way for
individuals to enroll in the QMB eligibility group without paying their
own Part A premiums upfront, the process is administratively burdensome
for both individuals and the State, and the vast majority of
individuals fail to complete the process unless an eligibility worker
or other application assistor provides hands on assistance through
every step of the process.\47\ Two other challenges currently make QMB
enrollment harder for SSI recipients without premium-free Part A in
group payer States. First, group payer States can only enroll
individuals in premium Part A during the general Medicare enrollment
period that runs from January through March each year. Second, group
payer States are required to pay late enrollment penalties, if
applicable, for those Medicaid beneficiaries who did not timely enroll
in Medicare Part A when they first became eligible to do so.
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\47\ Streamlining Medicare and QMB Enrollment for New Yorkers:
Medicare Part A Buy-In Analysis and Policy Recommendations, Medicare
Rights Center, February 2011. https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf.
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To streamline QMB enrollment for SSI recipients without premium-
free Part A in group payer States, we propose to add a State option for
deeming individuals eligible for the QMB group. Specifically, proposed
Sec. 435.909(b)(2) would allow, but not require, group payer States to
directly initiate Medicare Part A enrollment for individuals who are
not entitled to premium-free Part A without first sending them to SSA
to apply for conditional Part A enrollment. Under this proposed option,
once the State has determined the individual eligible for the mandatory
SSI or 209(b) group and become liable for paying their Part B premiums
under the buy-in agreement pursuant to Sec. 407.42, the State would
also deem them eligible for the QMB group.
We are aware that State-specific variables can impact a State's
decision to either enter into a Part A buy-in agreement or to remain a
group payer State. By allowing, but not requiring, group payer States
to adopt the same streamlined QMB enrollment procedures used in Part A
buy-in States, we preserve the current statutory option for group payer
States to operate differently than Part A buy-in States while still
enabling them to modernize their processes and facilitate enrollment of
these very low-income individuals into Medicare Part A and the QMB
group. However, we seek comments on the administrative and fiscal
impacts of our proposal and of other approaches, such as requiring
group payer States to deem individuals determined eligible for the
mandatory SSI or 209(b) groups as eligible for the QMB group once they
have completed the conditional enrollment process at SSA.
4. Clarifying the Qualified Medicare Beneficiary Effective Date for
Certain Individuals (Sec. 406.21)
In the above section, we seek to facilitate enrollment for SSI
recipients into QMB. Here, we propose to clarify the effective date of
coverage under the QMB group for individuals who must pay a premium to
enroll in Part A and reside in a group payer State in order to provide
individuals with protection from Medicare premiums and cost-sharing
costs on the earliest possible date.
The first opportunity individuals have to enroll in premium Part A
is during their initial enrollment period (IEP). For most individuals
who become eligible for Medicare on or after 1966, under section
1837(d) of the Act, the IEP begins on the first day of the third month
before the month the individual turns 65 and ends 7 months later.
Eligible individuals who do not enroll in premium Part A during
their IEP, or who disenroll from premium Part A and wish to re-enroll,
must generally do so during the general enrollment period (GEP). The
GEP is established under section 1837(e) of the Act, and is the period
beginning on January 1 and ending on March 31 of each year. For
individuals who enroll in Medicare under the GEP in a month before
January 1, 2023, Part A entitlement would begin the first of July
following their enrollment, as provided in sections 1838(a)(2)(D)(i)
and (ii) and (a)(3)(B)(i) and (ii) of the Act. Section 120 of the
Consolidated Appropriations Act, 2021 (CAA) revised the Part A
entitlement effective date for individuals who enroll during the GEP in
a month beginning on or after January 1, 2023. Specifically, Part A
entitlement for individuals who enroll in premium Part A during the GEP
would begin with the first day of the month following the month in
which they enroll.
In the 2022 Medicare eligibility and enrollment proposed rule at 87
FR 25094, we proposed to revise Sec. 406.21(c) to implement the GEP
effective dates outlined in section 120 of the CAA. Specifically, Sec.
406.21(c)(3)(i) would require that for individuals who enroll or
reenroll during a GEP prior to January 1, 2023, entitlement would begin
July 1 following their enrollment, while Sec. 406.21(c)(3)(ii) would
require that for individuals who enroll or reenroll during a GEP on or
after January 1, 2023, entitlement would begin on the first day of the
month after the month of enrollment, consistent with section
1838(a)(2)(D)(ii) of the Act (incorporated for premium Part A
beneficiaries by reference in section 1818(c) of the Act).
To align with that change, we propose to clarify the applicable
effective date of QMB coverage for an individual who resides in a group
payer State and enrolls in conditional Part A during the GEP. As
discussed above in section II.A.3 of this preamble, in a Part A buy-in
State, CMS considers enrollment in Part B sufficient to meet the
requirement that an individual be entitled to Part A for the purposes
of the QMB eligibility determination. However, in a group payer State,
enrollment in QMB for individuals who need to pay a premium to enroll
in Part A is always a two-step process. The State cannot determine
individuals eligible for QMB and enroll them in Part A buy-in until SSA
establishes actual or conditional Part A enrollment. With respect to
QMB enrollment under a buy-in agreement under Sec. 406.26, Medicare
Part A coverage begins the first month an individual is entitled to
Part A under Sec. 406.20(b) and has QMB status. We consider a
conditional Part A filing to be sufficient to fulfill the requirement
for entitlement to Part A as applicable for QMB coverage.\48\
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\48\ See CMS Manual for the State Payment of Medicare Premiums,
chapter 1, section 1.11.
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Specifically, in this rule we propose in new Sec. 406.21(c)(5) to
codify existing policy for individuals who enroll in actual or
conditional Part A during the GEP. Beginning on or after January 1,
2023, the effective date of Medicare coverage for individuals who
enroll in Medicare during the GEP is the month following the month of
enrollment under section 1838(a)(2)(D)(1) and (a)(3)(B)(i) of the Act.
For such individuals, QMB coverage starts the month premium Part A
entitlement begins (if the State determines the individual has met the
eligibility requirements for QMB coverage in the same month that Part A
enrollment occurs), or a month later than the month of Part A
entitlement (if the individual is determined eligible for QMB the month
Part A entitlement begins or later).
[[Page 54776]]
This proposal would clarify that individuals who reside in group
payer States and enroll in actual or conditional Part A during the GEP
can obtain QMB as early as the month Part A entitlement begins.
5. Facilitate Enrollment by Allowing Medically Needy Individuals To
Deduct Prospective Medical Expenses (Sec. 435.831)
The current medically needy income eligibility regulation at 42 CFR
435.831 permits institutionalized individuals to deduct their
anticipated medical and remedial care expenses from their income. We
propose to amend the regulation to allow noninstitutionalized
individuals, under certain circumstances, to do the same for purposes
of medically needy eligibility determinations. This proposal is
designed to eliminate the institutional bias inherent in only
permitting projection of the cost of care for institutionalized
individuals.
Section 1902(a)(10)(C) of the Act provides States the option to
extend Medicaid eligibility to ``medically needy'' individuals.
Implementing regulations are codified at 42 CFR part 435, subpart D.
The medically needy are individuals who have incomes too high to
qualify in a categorically needy group described in section
1902(a)(10)(A) of the Act, but who have certain significant and costly
health needs. Consistent with section 1902(a)(10)(C)(i)(III) of the Act
and regulations at Sec. 435.811(a), States establish a separate income
standard to determine the income eligibility of medically needy
individuals (referred to as the ``medically needy income level,'' or
``MNIL''). As directed by section 1903(f)(2) of the Act and Sec.
435.831(d), a State's determination of a prospective medically needy
individual's income eligibility includes the deduction of the uncovered
medical and remedial expenses incurred by the individual, the
individual's family members, or the individual's financially
responsible relatives, from the individual's countable income. This
process of deducting incurred medical and remedial expenses from an
individual's countable income is referred to as a ``spenddown.''
To determine income eligibility for medically needy coverage, a
State first determines an individual's countable income in accordance
with Sec. 435.831(b), including application of any disregards imposed
under the methodology appropriate for the individual (for example, a
$20 monthly income disregard for an individual whose Medicaid is based
on SSI methodologies), or approved under the State's Medicaid plan
under the authority of section 1902(r)(2) of the Act and Sec.
435.601(d).
If the individual's remaining countable income is at or below the
MNIL, they are income-eligible for the medically needy group. If the
remaining countable income exceeds the MNIL, the individual will need
to meet a spenddown; that is, the individual will need to reduce the
amount of their income above the MNIL by the amount of their
outstanding medical and remedial care expense liability, from bills the
individual incurs during their current budget period, and, in some
circumstances, previous to it (for example, under 42 CFR 435.831(f),
bills incurred in previous budget periods that were not used to meet a
spenddown because the individual had other bills that were sufficient
to meet the spenddown in the previous budget periods may be used in the
current budget period). As required by Sec. 435.831(a)(1), States must
choose a budget period of between 1 and 6 months to be used for
medically needy individuals. The State multiplies the amount that an
individual's countable income exceeds the MNIL for a single month by
the number of months in the budget period. The product is the amount of
medical or remedial care expenses for which the individual must
document being liable--the spenddown--to establish eligibility during
the budget period. Once the individual confirms having the necessary
medical expense liability to the State agency, the individual is
eligible for the remainder of the budget period.
For example, if an individual's countable monthly income is $1,200
in a State in which the MNIL is $700, the individual's spenddown
amount, based on monthly income, would be $500 ($1,200-$700 = $500). If
the budget period elected by the State is 3 months, the State
multiplies $500 by 3, and the individual's spenddown is $1,500 for the
budget period. If the individual's budget period begins on January 1st,
and the individual incurs unpaid medical expenses that are equal to or
greater than $1,500 on February 15th, the individual will be eligible
for Medicaid from February 15th through March 31st. To reestablish
Medicaid eligibility in the next budget period, the individual will
have to incur separate medical or remedial care expenses for $1,500.
The individual will not become eligible for Medicaid again until the
expenses have been incurred. This results in the individual
consistently cycling on and off Medicaid, with eligibility starting at
some point after the new budget period begins, causing a gap in
coverage for the individual and additional administrative work for the
State.
Separately, section 1902(f) of the Act and regulations at Sec.
435.121 authorize States to apply criteria more restrictive than the
SSI program criteria in determining eligibility under the mandatory
eligibility group for individuals seeking Medicaid on the basis of
being 65 years old or older or having blindness or disabilities,
provided that they offer Medicaid to any such individual who would have
been eligible under the State's 1972 Medicaid plan. (States electing
this option are referred to as ``209(b) States,'' after the provision
in the Social Security Amendments of 1972, Public Law 92-603, that
enacted section 1902(f) of the Act). In determining whether any such
individual is income-eligible, section 1902(f) of the Act and Sec.
435.121(f)(1)(iii) also require that uncovered medical expenses
incurred by the individual, the individual's family, or individual's
financially responsible relatives, be deducted from countable income,
and that a spenddown be calculated for individuals with income
exceeding the income limit for the mandatory 209(b) State group in
generally the same manner it is calculated for the medically needy.
In 1994, based on the authority granted to the Secretary under
sections 1102 and 1902(a)(4) of the Act to create rules necessary for
the efficient operation of the Medicaid program, and under section
1902(a)(17) of the Act to prescribe the extent to which costs of
medical care may be deducted from income, we established, under Sec.
435.831(g)(1), that States have the option to ``include medical
institutional expenses (other than expenses in acute care facilities)
projected to the end of the budget period at the Medicaid reimbursement
rate'' in calculations \49\ (59 FR 1659, January 12, 1994 referred to
hereafter as the ``1994 rulemaking''). We further confirmed in the
preamble to the 1994 rulemaking that 209(b) States are authorized to
implement the authority established in the rule relating to the
projection of medical institutional expenses.
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\49\ ``Medicaid Program; Deduction of Incurred Medical Expenses
(Spenddown)'' Final Rule with Comment Period; https://www.govinfo.gov/content/pkg/FR-1994-01-12/html/94-547.htm.
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``Projecting'' expenses means that a State includes in incurred
medical expenses those costs that it anticipates an individual will
incur during a budget period, which can make eligibility effective on
the first day of an
[[Page 54777]]
individual's budget period, if the anticipated expenses equal or exceed
the individual's spenddown. In promulgating the 1994 regulation, we
reasoned that institutional services are, by their nature, constant and
predictable, which supported a simplified approach for States to
determine that an institutionalized individual will meet their
spenddown amount each budget period. As required by regulations in
Sec. 435.831(i)(2), States must reconcile the projected amounts with
the actual amounts incurred at the end of the budget period in order to
confirm that the individual's incurred expenses were at least equal to
the individual's spenddown.
For example, consider an individual in an institution on the first
day of a month with a spenddown amount of $3,000 in a State in which
the medically needy budget period is 1 month. The Medicaid rate for the
facility is $4,500 ($150 daily), the private rate is $6,000 ($200
daily), and the State does not project institutional expenses. Until
eligibility for Medicaid is established, the individual will be charged
the private daily rate, which would mean that, in a month in which the
individual does not receive any services not included in the daily
rate, the individual will incur $3,000 in expenses as of the 15th of
the month (3,000 / 200 = 15), at which point the individual will be
eligible for Medicaid, for the remainder of the month. If the
individual does, however, receive any uncovered services beyond the
basic services included in the daily rate, the individual would become
eligible earlier in the month, although again only for the remainder of
the month. The result is that the individual is consistently cycling on
and off Medicaid, with an eligibility start date each budget period
that is not predictable to either the institutionalized individual or
State agency.
On the other hand, if the State elects to project the individual's
institutional expenses under the authority of Sec. 435.831(g)--that
is, determine that the individual will incur the Medicaid rate of
$4,500 for the month--the State can establish that the individual is
eligible for Medicaid, and grant eligibility effective the first day of
the month. No further eligibility-related determination is necessary.
Projecting expenses can benefit both parties, by reducing
administrative costs for the State and providing continuity of coverage
for the beneficiary.
We explained that we considered use of the Medicaid reimbursement
rate in the projection of expenses necessary to achieve the highest
level of certainty that an individual will incur the liability that the
regulation was permitting States to anticipate prior to the actual
receipt of the services (see 59 FR 1661). For example, if a State
projects the private rate for the services for an institutionalized
individual, and the private rate for a particular month exceeds the
individual's spenddown and the individual is consequently deemed
Medicaid eligible on the first day of the month, the individual will
not be charged the private rate for any of the services that month, but
instead will be charged the Medicaid rate, as the provider would have
to accept the Medicaid reimbursement rate for the Medicaid-covered
services. If, however, the individual's spenddown amount exceeds the
cost of the Medicaid rate, the individual possibly will not end up
incurring in the month the expenses necessary to meet his or her
spenddown. Therefore, to avoid possible erroneous grants of
eligibility, we determined that the use of the Medicaid reimbursement
rate in the projection of expenses was more appropriate.
The projection of expenses can have the effect of accelerating
eligibility. However, only permitting projection of the cost of care
for institutionalized individuals creates an inherent institutional
bias. Further, we believe that there are noninstitutional services that
may be similarly constant and predictable such that States could
project them for individuals who must meet a spenddown to become
income-eligible. Permitting projection of such noninstitutional
services would reduce some of the complexity that both State agencies
and individuals seeking coverage of home and community-based services
(HCBS) currently experience and reduce institutional bias. Projecting
noninstitutional expenses would reduce administrative costs associated
with disenrolling and reenrolling individuals, as well as lead to
better outcomes for individuals who would no longer cycle on and off
Medicaid and experience disruptions to their continuity of care.
We propose to amend Sec. 435.831(g) to permit States to project
certain additional services that the State can determine with
reasonable certainty will be constant and predictable. Similar to the
explanation provided for institutional expenses in the preamble to the
1994 rule, the projection of expenses for noninstitutional services is
limited to those that are reasonably certain to be received by the
individual, since only the amounts for which the individual is
ultimately liable can be used to reduce income. Like the reconciliation
process required for projected institutional expenses, under the
proposed revisions to Sec. 435.831(g), States will have to reconcile
actual noninstitutional services received with those projected at the
end of budget periods to address erroneous grants of spenddown-related
eligibility. Note that this proposal does not change the requirement
that a State continue to apply any eligible expenses actually incurred
by the individual in determining whether individuals have met the spend
down amount, regardless of whether the expense was projected.
We propose to include in the regulatory language examples of
specific types of expenses that we believe meet this standard, while
providing additional flexibility for States to identify additional
expenses that meet the criteria of being constant and predictable.
Specifically, we propose to allow projection of medical or remedial
expenses for the HCBS that are included in a plan of care (care plan)
for an individual receiving a section 1915(i), 1915(j), or 1915(k)
benefit or participating in a section 1915(c) HCBS waiver. We believe
these medical and remedial expenses are generally constant and
predictable because States are required to develop a care plan that
identifies the services, and the frequency with which they will be
received, for individuals eligible for section 1915(c), (i), (j), and
(k) services, as set forth in section 1915(c)(1), (i)(1)(E) and (G),
(j)(1), (5)(C), and (k)(1)(A)(i) of the Act, and Sec. Sec.
441.301(b)(1)(i), 441.468(a)(1), 441.540(b)(5), 441.720, and 441.725.
States could reasonably calculate, and deduct, the anticipated cost,
based on the Medicaid reimbursement rate, of the services in an
individual's care plan. We believe this proposal would also have the
effect of eliminating the institutional bias that is fostered by the
existing regulation's allowance for the projection of only
institutional expenses.
The same may be true of individuals who have significant expenses
related to high-cost drugs that treat a chronic condition. Pharmacies
routinely keep a patient medication profile (``pharmacy profile'') for
a patient, which could be used to determine which medications are for
chronic conditions and which are for acute treatment. A State could,
for example, use a pharmacy profile to review the 3-, 6-, or 12-month
history of the prescriptions that an individual has been prescribed,
and use that information to project expenses that are reasonably
expected to be incurred in the current budget period.
[[Page 54778]]
We recognize that the projection of institutional expenses is often
a straightforward calculation, as it involves only one provider, with a
fixed and easily identifiable rate. By contrast, the feasibility of
projecting expenses for individuals receiving section 1915(c) or (i)
services or prescriptions for chronic conditions will depend on the
individual's specific circumstances. For example, it is possible that a
section 1915(c) participant will not receive a service that is part of
their care plan during a month, or that the frequency with which the
individual receives one of the services, or multiple services, in the
care plan varies on a periodic basis. For such HCBS beneficiaries who
need a spenddown to qualify, it may take time before a State develops a
reasonable degree of certainty regarding the predictable costs the
individual incurs each month. For HCBS beneficiaries whose use of
services in their care plan varies greatly over the course of multiple
budget periods, a State may be unable to reasonably predict the
individual's service costs in a forthcoming budget period. Therefore,
we propose to expressly permit States to project the expenses of
section 1915(c), (j), (k) and (i) services and prescription drug
services, as well as other expenses in calculating whether an
individual meets their spenddown, where the State has determined that
such services are constant and predictable.
For both the expenses for services expressly permitted under the
examples in the proposed regulation text and for any other expenses for
services that the agency has determined are reasonably constant and
predictable, States would need to develop processes to evaluate the
likelihood of an individual receiving the services in an upcoming
budget period and the anticipated cost of the services. Discrepancies
between a State's projections and the cost of services actually
received inevitably will exist. Under proposed Sec. 435.831(g)(2),
States would be required to project expenses to the end of the budget
period with reasonable certainty. Consistent with current regulations
at Sec. 435.831(i)(2), States would need to reconcile the projected
amounts with the actual amounts incurred at the end of the budget
period. Individuals who the State determines as a result of
reconciliation did not actually meet their spenddown during the budget
period may not have eligibility terminated retroactively. The State
should use the findings made during reconciliation to prospectively
determine whether the individual can be expected to incur reasonably
constant and predictable expenses in the next budget period, and adjust
the projection accordingly.
We invite comment to identify any other types of services that
individuals may receive on a constant and predictable basis, and for
which a State could project, with a degree of relative certainty,
consistent costs for an individual over the course of a prospective
budget period. Such services would be considered for inclusion in the
regulatory text in the final rule as specific examples of services that
a State can determine with reasonable certainty to be constant and
predictable.
We propose to amend Sec. 435.831 to replace the current text in
paragraph (g)(2) with the proposed State option to project
noninstitutional expenses. Current paragraphs (g)(2) and (3) in Sec.
435.831 will be redesignated at paragraphs (g)(3) and (4). Note that
the proposed changes to Sec. 435.831(g) that would enable States to
project reasonably certain noninstitutional expenses for medically
needy individuals would also apply in projecting noninstitutional
expenses in 209(b) States.
6. Application of Primacy of Electronic Verification and Reasonable
Compatibility Standard for Resource Information (Sec. Sec. 435.952 and
435.940)
All 50 States and the District of Columbia are required to
implement an asset verification system (AVS) under section 1940 of the
Act to verify certain financial resources for all individuals applying
for or receiving Medicaid as an aged, blind, or disabled (ABD)
individual. An AVS enables States to verify assets held in virtually
any financial institution in the United States through an electronic
data matching process, although not all information returned through an
AVS occurs in real time; information from smaller financial
institutions may take as long as 30 days or more to be returned to the
Medicaid agency. In our work with States implementing the AVS
requirement, many States have asked whether they are permitted to
request additional documentation from applicants and beneficiaries
related to resources that can be verified through the State's AVS, or
if they can apply a reasonable compatibility standard for resources
when resource information returned from an electronic data source is
comparable to the information provided by the applicant or beneficiary.
The current regulation at Sec. 435.952(b) provides that, if
information provided by or on behalf of an individual is ``reasonably
compatible'' with information obtained by the State in accordance with
Sec. Sec. 435.948, 435.949 or 435.956, that the State must determine
or renew eligibility based on such information. Current Sec.
435.952(c) provides that an individual must not be required to provide
additional information or documentation unless information needed by
the State in accordance with Sec. Sec. 435.948, 435.949 or 435.956
cannot be obtained electronically or the information obtained
electronically is not reasonably compatible with information provided
by or on behalf of the individual. Section 435.952(c)(1) provides that
States must consider income information obtained through an electronic
data match to be reasonably compatible with attested income information
if either both are above or both are at or below the applicable income
standard or other relevant income threshold. Current Sec.
435.952(c)(2) requires the agency to seek additional information, which
may include documentation, if attested information is not reasonably
compatible with information obtained through an electronic data match.
However, documentation from the individual is permitted only to the
extent electronic data are not available and establishing a data match
would not be effective. In determining effectiveness, States must
consider such factors as the administrative costs associated with
establishing and using the data match compared with the administrative
costs associated with relying on paper documentation, and the impact on
program integrity in terms of the potential for ineligible individuals
to be approved, as well as for eligible individuals to be denied
coverage. We seek comment from States on potential implementation
challenges, including any systems integration considerations or
challenges, under this proposal which could impact the effectiveness
and usefulness of such a data match.
The language of Sec. 435.952 is written broadly to encompass all
factors of eligibility, including income and resource criteria, when
applicable. However, at the time Sec. 435.952 was promulgated in the
2012 eligibility final rule, no State had implemented the AVS
requirement and Federal requirements relating to verification of
resources were not included in the regulations. Because Sec.
435.952(b) and (c) apply specifically to information needed by the
State to verify an individual's eligibility in accordance with
Sec. Sec. 435.948 (relating to income), 435.949 (relating to
information received through the
[[Page 54779]]
Federal Data Services Hub), or 435.956 (relating to non-financial
eligibility requirements), some have interpreted this requirement not
to apply to verification of resources. This interpretation is not
consistent with our intent. The language in Sec. 435.952 is not
specific to income. Indeed, the reasonable compatibility policies
described in Sec. 435.952(b) and (c) also apply to verification of
non-financial eligibility criteria, for example, State residency which
can also be verified electronically (for example, through a data match
with the State's department of motor vehicles). Applying Sec. Sec.
435.952(b) and (c) to resources will help streamline enrollment for
individuals applying for Medicaid on a non-MAGI basis, such as on the
basis of age, blindness, or disability, and decrease burden for both
States and beneficiaries. If attested resource information is found to
be reasonably compatible with the resource information returned from
the AVS, then these resources are considered verified and no further
actions from the State or from the beneficiary are needed. Therefore,
we propose to revise paragraphs (b) and (c) of Sec. 435.952 to clarify
that these provisions apply also to verification of resources.
Specifically, we propose to make clear that paragraphs (b) and (c)
apply to any information obtained by the State--not just information
obtained in accordance with Sec. 435.948, 435.949 or 435.956. We also
propose to insert the words ``and resource'' after ``income'' in
paragraph (c)(1) and to delete the word ``income'' where it appears
before ``standard'' and ``threshold'' to require that States consider
resource information obtained through an electronic data match to be
reasonably compatible with attested resource information if both are
either above or at or below the applicable standard or other relevant
threshold.
This proposal is intended to clarify that States are not permitted
to request additional resource information from the beneficiary to
determine eligibility if the resource information provided by an
individual is reasonably compatible with the information received from
an electronic data source, such as the AVS. If information provided by
an individual is not reasonably compatible with the information
received from the electronic data source, States must resolve any
discrepancies per Sec. 435.952(c)(2), which is not revised in this
rulemaking.
Under the proposed regulations, resource information obtained from
an electronic data source, such as an AVS, must be considered
reasonably compatible with resource information provided by the
applicant or beneficiary if both are either above or at or below the
applicable resource standard or other applicable resource threshold.
Further, while not required, States could establish a reasonable
compatibility threshold, such that electronic data would be considered
reasonably compatible with attested resources if the electronic data is
no higher than attested resources plus the State's elected threshold
amount (expressed as either a percentage or dollar amount). Some
States, for example, apply a reasonable compatibility threshold of 5 or
10 percent of attested income in verifying income eligibility. States
would not be required to establish the same reasonable compatibility
threshold for income and resources, and may apply different reasonable
compatibility thresholds for different eligibility groups, provided
that the State has a reasonable rationale for doing so.
We also propose a corresponding technical change to amend Sec.
435.940 to add section 1940 of the Act as a basis for the income and
eligibility verification requirements. The proposed changes to Sec.
435.952 in this rulemaking include resource information obtained from
electronic data sources, such as an asset verification program
described under section 1940 of the Act.
7. Verification of Citizenship and Identity (Sec. 435.407)
In 2016, we revised the Medicaid and CHIP regulations governing the
verification of citizenship and identity to require States to rely
primarily on electronic verification to effectuate the streamlined and
coordinated approach required by the ACA to reduce burden on
individuals and increase administrative efficiency. These regulatory
changes were issued by CMS in a November 2016 final rule titled,
``Medicaid and Children's Health Insurance Programs: Eligibility
Notices, Fair Hearing and Appeal Processes for Medicaid and Other
Provisions Related to Eligibility and Enrollment for Medicaid and
CHIP'' (81 FR 86453, November 30, 2016) (referred to hereafter as the
``2016 eligibility and enrollment final rule''). Under the regulations,
all States must first attempt to verify citizenship electronically
using data from the SSA, and most States rely on a match through the
Federal Data Services Hub (FDSH) for this data. In that final rule, we
also streamlined and simplified the list of documents and other
acceptable means of verification that can be used when citizenship
cannot be verified electronically with SSA. One such alternative source
of citizenship verifications, codified at Sec. 435.407(b), is a data
match with the State's (or another State's) vital statistics system. We
explained in the preamble to the 2016 eligibility and enrollment final
rule that if citizenship verification cannot be completed through an
electronic data match with SSA, the State must attempt to verify
citizenship through an electronic data match with the State's (or
another State's) vital statistics system, before requesting paper
documentation from the individual, if such match is available within
the meaning at Sec. 435.952(c)(2)(ii).
Under current regulation, individuals whose citizenship is verified
based on any of the sources identified in Sec. 435.407(b)--which
includes, under the current regulations, a match with a State's vital
statistics records or with the U.S. Department of Homeland Security
(DHS) Systematic Alien Verification for Entitlements (SAVE) Program--
must also provide proof of identity. The documentary evidence
identified in section 1903(x)(3)(B) of the Act, codified through the
2016 eligibility and enrollment final rule at Sec. 435.407(a), in
contrast, provides ``stand-alone'' proof of citizenship; separate proof
of identity is not required. Section 1903(x)(3)(B)(vi) of the Act
authorizes the Secretary to specify that other documents in addition to
those specified in the statute, must be accepted as stand-alone
satisfactory documentation of citizenship if they determine that such
documents provide both proof of United States citizenship or
nationality, as well as reliable documentation of personal identity. As
explained below, verification with a State's vital statistics records
or SAVE, like the data match with SSA, which provides both proof of
U.S. citizenship or nationality and reliable documentation of personal
identity, meets this standard.
In this rule, we are proposing to further simplify the verification
procedures by moving verification of citizenship with a State vital
statistics agency or SAVE from paragraph (b) to paragraph (a) of Sec.
435.407 for Medicaid, which is incorporated into CHIP regulations
through existing cross-references at Sec. Sec. 457.380(b)(1)(i) and
435.956(a). This change would mean that verification of birth with a
State vital statistics agency or verification of citizenship with SAVE
would be considered stand-alone evidence of citizenship; separate
verification of identity would not be required, similar to the
treatment afforded to verification of citizenship with SSA. This
proposed change would reduce burden on
[[Page 54780]]
individuals and State Medicaid agencies and increase administrative
efficiency.
Turning first to citizens whose status can be verified with DHS'
SAVE Program, SAVE can provide electronic verification of U.S.
citizenship for individuals who have a DHS record of naturalized or
derived citizenship, usually documented with a Certificate of
Naturalization or Certificate of Citizenship. Any SAVE program
requestor (for example, the Medicaid or CHIP agency or other benefit
granting or licensing agency) that requests verification of U.S.
citizenship or immigration status through the SAVE program must provide
the SAVE program with the individual's biographic information (first
name, last name, and date of birth) and a personalized numeric
identifier (such as an Alien Number; Form I-94, Arrival/Departure
Record Number; Student and Exchange Visitor Information System (SEVIS)
ID number; or unexpired foreign passport number) unique to that
individual. DHS verifies identity prior to providing a SAVE program
response verifying citizenship or immigration status, reviewing
multiple records and in some cases requiring additional information
from the requestor. If an individual's immigration status is confirmed
by SAVE, the State's verification of immigration status is complete
under current regulations, whereas separate proof of identity is
required if SAVE confirms the individual's citizenship. Because the
process followed by SAVE is identical, we do not believe that the extra
step required for citizens is justified. Therefore, we propose
revisions to Sec. 435.407 to provide for comparable processes for
individuals whose status is verified by SAVE, regardless of whether
they are a citizen or non-citizen. Specifically, we propose to remove
verification of citizenship with SAVE currently at Sec. 435.407(b)(11)
(which requires separate proof of identify) and to add such
verification at proposed Sec. 435.407(a)(8) (which would not require
separate proof of identity) for Medicaid, which is incorporated into
CHIP regulations through existing cross-references at Sec. Sec.
457.380(b)(1)(i) and 435.956(a).
Verification of U.S. citizenship with a State vital statistics
agency provides a similarly robust data matching process because a
State Medicaid or CHIP agency must provide the State vital statistics
agency with a minimum set of identifiable information including the
name, date of birth, and Social Security Number (SSN). Some States also
use additional identifiers if they are available, such as the
individual's birth county, the parents' names or the mother's maiden
name. Based on State feedback, CMS understands that the process and
data fields used to verify citizenship with a State vital statistics
agency are similar across States. Conducting a data match with specific
identifiers like date of birth and SSN is the same process that could
be used to provide evidence of identity, thereby making a requirement
to separately verify identity redundant. Therefore, we propose
revisions to Sec. 435.407 under which verification of citizenship with
a State vital statistics agency would serve as stand-alone proof of
U.S. citizenship and no separate proof of identify would be required.
Specifically, we propose to remove verification of citizenship with a
State vital statistic's agency currently at Sec. 435.407(b)(2) (which
requires separate proof of identify) and to add such verification at
proposed Sec. 435.407(a)(7) (which would not require separate proof of
identity) for Medicaid, which is incorporated into CHIP regulations
through an existing cross-references at Sec. Sec. 457.380(b)(1)(i) and
435.956(a). However, we recognize that different State Medicaid and
CHIP agencies and vital statistics agencies may employ different
processes and seek comment on what processes Medicaid and CHIP agencies
use to verify citizenship with a State vital statistics agency,
including what information and identifiers are used to complete
verification, whether the data matching process with all State vital
statistics agencies is sufficiently robust to appropriately apply this
proposed change in policy to verification of citizenship in all States,
or limit this change in policy only to States in which the vital
statistic agency's processes are comparable to those of the SAVE
program.
We note that, if citizenship cannot be verified through an
electronic match with SSA, States are required to verify citizenship
using an electronic match prior to requesting other forms of
documentation, if such match is available and effective in accordance
with Sec. 435.952(c)(2)(ii). Inasmuch as State vital statistics
agencies generally can provide electronic data matching, we are also
proposing to delete the words ``at State option,'' which are included
in existing Sec. 435.407(b)(2), from proposed Sec. 435.407(a)(7) for
Medicaid, which is incorporated into CHIP regulations through an
existing cross-reference at Sec. 457.380(b)(1)(i) to Sec. 435.956(a).
Use of such match with a vital statistics agency is not voluntary if it
is available and effective in accordance with Sec. 435.952(c)(2)(ii).
This proposed revision does not necessarily require a State to develop
a match with its vital statistics agency. However, States that do not
currently perform such electronic matches must develop that capacity if
such match is available and would be effective in accordance with the
standard set forth in Sec. 435.952(c)(2)(ii). If a State already has
established a match with a State vital statistics agency or it would be
effective to establish such capability in accordance with the standard
set forth in Sec. 435.952(c)(2)(ii), the State must utilize such match
before requesting paper documentation.
B. Promoting Enrollment and Retention of Eligible Individuals
1. Aligning Non-MAGI Enrollment and Renewal Requirements With MAGI
Policies (Sec. Sec. 435.907 and 435.916)
The 2012 and 2013 eligibility final rules established a number of
eligibility and enrollment simplifications for MAGI-based Medicaid and
CHIP beneficiaries. Among these were streamlined processes that made it
easier for eligible individuals to apply and remain enrolled in
Medicaid and CHIP. However, beneficiary advocates raised concerns that
these simplifications have not been afforded to Medicaid beneficiaries
excepted from use of MAGI-based methodologies, which is particularly
problematic given that individuals over age 65 and those who are
eligible based on blindness or a disability are likely to have more
stable eligibility. Therefore, in this proposed rule, we propose
changes to both the application and renewal requirements for MAGI-
excepted applicants and beneficiaries to align with the requirements
for populations based on MAGI.
Beginning with the application process, individuals must be
permitted to submit the single streamlined application developed by the
Secretary, or an alternative single streamlined application described
at Sec. 435.907(a)(2) of the current regulations, through all
modalities specified at Sec. 435.907(a) (online, by telephone, by
mail, or in person). Although not expressly stated in the regulations,
States also are expected to accept applications and supplemental forms
needed for individuals to apply for coverage on a non-MAGI basis via
all modalities identified in Sec. 435.907(a). In addition, Sec.
435.907(d) prohibits States from requiring an in-person interview as
part of the application process, when determining eligibility based on
MAGI, whereas States are still permitted to
[[Page 54781]]
require an in-person interview for MAGI-excepted applicants.
At renewal, current Sec. 435.916(a) requires States to conduct
renewals of Medicaid eligibility on an annual basis for individuals
whose financial eligibility is determined using MAGI-based
methodologies. However, for individuals excepted from use of the MAGI-
based methodologies, Sec. 435.916(b) of the current regulations
permits States to conduct regularly-scheduled renewals more frequently
(for example, every 6 months). States must renew eligibility for all
Medicaid beneficiaries without requiring information from the
individual if able to do so consistent with regulations at Sec. Sec.
435.916(a)(2) and (b). However, when a beneficiary's eligibility cannot
be renewed based on available information, States must follow a set of
streamlined procedures for MAGI-based beneficiaries, which are not
required for those excepted from MAGI. The procedures for requesting
information from MAGI-based beneficiaries are described at Sec.
435.916(a)(3) of the current regulations and include: (1) using a pre-
populated renewal form; (2) providing the individual a minimum of 30
calendar days to sign and return the form along with any requested
information; and (3) reconsidering eligibility for an individual
terminated for failure to return the renewal form or other needed
information if the form or other information is returned within 90
calendar days after the date of termination. The procedures for
requesting information from MAGI-based beneficiaries are described at
Sec. 435.916(a)(3) of the current regulations and include: (1) using a
pre-populated renewal form; (2) providing the individual a minimum of
30 calendar days to sign and return the form along with any requested
information; and (3) reconsidering eligibility for an individual
terminated for failure to return the renewal form or other needed
information if the form or other information is returned within 90
calendar days after the date of termination. In addition, States may
not require a MAGI beneficiary to complete an in-person interview as
part of the renewal process under Sec. 435.916(a)(3)(iv) of the
current regulations. States may, but are not required to, adopt the
procedures at Sec. 435.916(a)(3) for individuals whose eligibility is
determined on a basis other than MAGI, per Sec. 435.916(b) of the
current regulations.
While almost all States adopt at least one of the optional
processes for renewals of non-MAGI beneficiaries,\50\ the differences
in renewal requirements for MAGI and non-MAGI beneficiaries result in a
less streamlined and more burdensome process for beneficiaries who
qualify for Medicaid on a non-MAGI basis, such as being age 65 or older
or having blindness or a disability. As a result of these differences,
individuals who are Medicaid eligible on one of these bases may be
required to spend more time completing renewal paperwork if their
renewal form is not prepopulated. They may be provided less time to
return their renewal form and requested information, even if the
individual must provide information related to additional factors of
eligibility associated with non-MAGI eligibility groups as compared to
MAGI eligibility groups, such as asset information.
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\50\ Kaiser Family Foundation (2019). Medicaid financial
eligibility for seniors and people with disabilities: Findings from
a 50-State survey, p. 19-20. https://www.kff.org/report-section/medicaid-financial-eligibility-for-seniors-and-people-with-disabilities-findings-from-a-50-state-survey-issue-brief/.
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CMS finds this to be problematic for several reasons. First,
individuals who are Medicaid eligible based on being age 65 or older or
having blindness or a disability are more likely to live on a fixed
income and, therefore, are more likely to remain financially eligible
for coverage than the non-disabled beneficiaries under age 65 who
qualify for Medicaid based on MAGI.\51\ We are concerned that, despite
the generally greater stability of their income, and therefore,
eligibility, a larger proportion of non-MAGI beneficiaries who lose
coverage do so for procedural reasons. Indeed, as noted in section
II.A.1. of this proposed rule, dually eligible for Medicaid and
Medicare who lose Medicaid coverage within the first year of enrollment
likely lose such coverage for reasons that are administrative in
nature.\52\ Also, individuals who are Medicaid eligible based on being
age 65 or older or having blindness or disability status may experience
additional barriers related to document retention, communication (for
example, limited English proficiency and low health literacy),
technology (for example, printing costs, access to a computer or
internet) and limited access to transportation, among others. Processes
that provide greater flexibility, such as reduced documentation
requests and more time for returning information, can reduce these
barriers.53 54 As a result, we believe that when States do
not use available streamlined renewal procedures for this population,
there is a greater risk of terminations for procedural reasons.
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\51\ Ku, L. & Steinmetz, E. (2013). Bridging the Gap: Continuity
and Quality of Coverage in Medicaid. https://ccf.georgetown.edu/wp-content/uploads/2013/09/GW-Continuity-Report-9-10-13.pdf; Office of
the Assistant Secretary for Planning and Evaluation, U.S. Department
of Health and Human Services (2021). Medicaid Churning and
Continuity of Care: Evidence and Policy Considerations Before and
After the COVID-19 Pandemic. https://aspe.hhs.gov/sites/default/files/private/pdf/265366/medicaid-churning-ib.pdf.
\52\ Assistant Secretary for Planning and Evaluation (2019).
Loss of Medicare-Medicaid dual eligible status: Frequency,
contributing factors and implications. https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf. CMS also recently completed an
updated internal analysis of ASPE's study using data from 2015-2018
that shows that dually eligible individuals continue to lose
Medicaid at a high rate in their first year due to administrative
reasons.
\53\ CMS Office of Burden Reduction & Health Informatics (April
2022). Navigating the Medicare Savings Program (MSP) Eligibility
Experience. https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf.
\54\ CMS Office of Burden Reduction & Health Informatics (April
2022). Navigating the Medicare Savings Program (MSP) Eligibility
Experience. https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf.
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Using the authority provided in sections 1902(a)(4)(A) and (a)(19)
of the Act to ensure the proper and efficient administration of the
program and that eligibility is determined in a manner consistent with
simplicity of administration and best interests of beneficiaries, we
propose to revise current renewal regulations at Sec. 435.916 to
require States to apply the same renewal procedures for MAGI and non-
MAGI beneficiaries. Specifically, we propose, by removing the reference
in Sec. 435.916(a)(1) to MAGI beneficiaries, to require that States
conduct regularly-scheduled renewals of eligibility once, and only
once, every 12 months for all Medicaid beneficiaries, including non-
MAGI beneficiaries with limited exception, discussed below. We believe
aligning the frequency of renewals for non-MAGI beneficiaries with the
current requirement for MAGI beneficiaries is appropriate given that
circumstances related to eligibility are generally more stable for non-
MAGI beneficiaries and will reduce beneficiary burden, consistent with
sections 1902(a)(4) and (a)(19) of the Act. In addition, we believe
this proposal promotes equity across enrolled populations since non-
MAGI beneficiaries, whose income tends to be more stable, would no
longer be subject to more frequent requests to return renewal forms or
provide documentation to verify continued eligibility than other
beneficiaries. We also note that over 40 States currently conduct
renewals only once every 12 months for all Medicaid beneficiaries.
[[Page 54782]]
We seek comment on this proposal at Sec. 435.916(a)(1) to align
the frequency of renewals for all beneficiaries, except as noted below.
We are particularly interested in comments from State agencies on the
administrative impact of conducting eligibility only once every 12
months for non-MAGI beneficiaries and whether or not State agencies
that currently conduct renewals only once every 12 months for all
Medicaid beneficiaries have experienced more stable coverage among non-
MAGI beneficiaries or any program integrity concerns after shifting
from a shorter renewal cycle to a 12-month renewal cycle. We are also
interested in data regarding coverage losses among non-MAGI
beneficiaries due to procedural reasons, such as failure to return
renewal paperwork timely, versus changes to specific factors of
eligibility, such as income or disability status. We are also
interested in hearing from stakeholders and beneficiaries on the impact
of more frequent renewals on maintaining coverage.
Section 1902(e)(8) of the Act provides an option for States to
renew eligibility for QMBs described in section 1905(p)(1) of the Act
more frequently than once every 12 months, but no more frequently than
once every 6 months. Thus, we cannot, propose to limit renewals for
QMBs to once every 12 months, and proposed Sec. 435.916(a)(2)
continues to allow States to conduct more frequent renewals of Medicaid
eligibility for QMBs consistent with section 1902(e)(8) of the Act.
However, States are permitted under current regulations at Sec.
435.916(b) to conduct renewals once every 12 months for QMBs and would
remain able to do so under proposed Sec. 435.916(a)(2). We encourage
States to exercise their flexibility to schedule renewals only once
every 12 months for QMBs to mitigate churn and ease administrative
burden on beneficiaries and States that is associated with more
frequent renewals of eligibility.
Proposed Sec. 435.916(b)(3) also requires States to adopt the
renewal processes at Sec. 435.916(a)(3) of the regulations, as revised
at redesignated Sec. 435.916(b)(2), for non-MAGI beneficiaries when a
State is unable to renew eligibility for an individual based on
information available to the agency. Proposed Sec. 435.916(b)(2) and
(3) would require States to provide all beneficiaries, including non-
MAGI beneficiaries, whose eligibility cannot be renewed in accordance
with proposed Sec. 435.916(b)(1): (1) a renewal form that is pre-
populated with information available to the agency; (2) a minimum of 30
calendar days to return the signed renewal form along with any required
information; and (3) a 90-day reconsideration period for individuals
terminated for failure to return their renewal form but who
subsequently return their form within the reconsideration period. We
believe aligning these renewal procedures would promote continuity of
coverage and simplify the renewal process for non-MAGI beneficiaries in
a manner that is in the best interest of beneficiaries, consistent with
section 1902(a)(19) of the Act, including those in households with
individuals enrolled on both a MAGI and non-MAGI basis who otherwise
may be subject to more burdensome administrative requirements at
renewal. In addition, we believe States will also experience reduced
administrative burden associated with churn if individuals face fewer
administrative barriers to maintaining coverage.
We also propose to eliminate the option States have under current
regulations at Sec. Sec. 435.907(d) and 435.916(b) to require an in-
person interview as part of the application and renewal process for
non-MAGI beneficiaries. Stakeholder feedback on the beneficiary
experience navigating State application and renewal processes indicate
that it can be challenging for individuals who are Medicaid eligible
based on being age 65 or older or having blindness or a disability
status to coordinate, prepare for, and participate in an interview and
missing and/or having to reschedule an interview, particularly when the
process is not flexible for the individual, can result in
determinations of ineligibility and/or terminations based on procedural
reasons.\55\ We believe in-person interview requirements create a
barrier for eligible individuals to obtain and maintain coverage
without yielding any additional information than can be obtained
through other modalities, particularly for individuals without access
to reliable transportation or a consistent schedule.
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\55\ CMS Office of Burden Reduction & Health Informatics (April
2022). Navigating the Medicare Savings Program (MSP) Eligibility
Experience. https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf.
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In addition to eliminating the option to require an in-person
interview, we propose to codify longstanding policy to align enrollment
requirements in the best interest of all applicants. Proposed Sec.
435.907(c)(4) codifies longstanding policy that States accept all MAGI-
exempt applications and supplemental forms provided by applicants
seeking coverage on a non-MAGI basis, through all the modalities listed
in current regulations at Sec. 435.907(a). Eliminating the in-person
interview requirement and codifying the requirements for accepting
MAGI-exempt applications and supplemental forms through all modalities
would further align eligibility and enrollment procedures for MAGI and
non-MAGI applicants and beneficiaries and reduce applicant and
beneficiary burden, consistent with sections 1902(a)(4) and (a)(19) of
the Act.
We propose removing the introductory language at the current Sec.
435.916(b) related to the frequency of and process for renewals of
eligibility for non-MAGI beneficiaries. We propose redesignating
current regulations at Sec. 435.916(b)(1) and (2) (related to the
agency's option to consider blindness and disability as continuing at
renewal) at proposed Sec. 435.916(b)(3)(i) and (ii).
In addition to the policy changes proposed to align application and
renewal processes for MAGI and non-MAGI populations whenever possible,
we propose several additional changes to current Sec. 435.916 to
ensure that the renewal requirements are clear and consistent. We
propose to redesignate current regulations at Sec. 435.916(a)(2)
(related to renewals based on information available to the agency) and
Sec. 435.916(a)(3) (related to renewals that require information from
beneficiaries) to Sec. 435.916(b)(1) and (b)(2), respectively. States
will continue to be required to attempt to renew eligibility for all
Medicaid beneficiaries (MAGI and non-MAGI) based on available
information before requesting information from the individual, as
required at current Sec. 435.916(a)(2) and (b), and to send a renewal
form to, and request information from, beneficiaries for whom the State
does not have sufficient information to redetermine eligibility, and
accept the renewal form through all modalities required at application
at Sec. 435.907(a). (online, by telephone, by mail, or in person). We
propose to modify the header in proposed Sec. 435.916(b)(2) from ``use
of a pre-populated renewal form'' to ``renewals requiring information
from the individual'' since the current regulations describe the steps
States must take when conducting renewals that require information from
the individual, which includes, but is not limited to, the use of pre-
populated renewal forms.
At Sec. 435.916, we also propose to revise current paragraph
(a)(3)(i)(B), redesignated at proposed paragraph (b)(2)(i)(B), to
clarify that the 30 calendar days that States must provide
beneficiaries to return their pre-
[[Page 54783]]
populated renewal form begins on the date the State sends the form.
This would mean that beneficiaries have 30 calendar days from the date
a form is postmarked or, for beneficiaries who elected to receive
electronic notices, the date the electronic is sent. We believe
starting the 30-day period from the date the State sends the form,
instead of the date on the form, will ensure beneficiaries do not lose
time to respond if the form is postmarked or sent after it is dated.
We propose clarifying revisions to current Sec.
435.916(a)(3)(i)(B) (related to renewal form signatures), redesignated
at proposed Sec. 435.916(b)(2)(i)(B), by including a technical change
to explicitly state that beneficiaries must sign their pre-populated
renewal form under penalty of perjury; current regulations at Sec.
435.916(a)(3)(i)(B) includes this requirement only by cross reference
to Sec. 435.907(f).
We propose to revise current Sec. 435.916(a)(3)(iii) (related to
timely processing of renewal forms and information returned during the
reconsideration period), redesignated at proposed Sec.
435.916(b)(2)(iii), to specify explicitly in regulation our current
policy that the returned renewal form and information received during
the reconsideration period serve as an application and require, via
cross reference to Sec. 435.912(c)(3) of the current regulation, that
States determine eligibility within the same timeliness standards
applicable to processing applications, that is, 90 calendar days for
renewals based on disability status and 45 calendar days for all other
renewals. Treatment of renewal forms returned during the 90-day
reconsideration period as an application means that the availability of
retroactive eligibility at Sec. 435.915 can close the gap in coverage
that such beneficiaries otherwise would experience. Adherence to the
timeliness standards applicable to applications will ensure eligible
individuals are furnished coverage with reasonable promptness,
consistent with sections 1902(a)(4) and 1902(a)(8) of the Act and will
minimize the likelihood that individuals will forgo needed care. As
revised, proposed Sec. 435.916(a)(3)(iii) is also consistent with
guidance described in the December 4, 2020, CMCS Informational Bulletin
``Medicaid and Children's Health Insurance Program (CHIP) Renewal
Requirements'' (2020 Renewal CIB) that a renewal form returned within
the reconsideration period serves as an application for the purposes of
adherence to timeliness standards to make determinations of
eligibility.56 57
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\57\ CMCS Informational Bulletin: Medicaid and Children's Health
Insurance Program (CHIP) Renewal Requirements (2020). Available at
https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf.
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We propose to redesignate and revise current regulations at Sec.
435.916(c) and (d), related to redeterminations based on changes in
circumstances, at the new proposed Sec. 435.919. Proposed revisions to
these regulations are discussed in section II.B.2. of this proposed
rule.
With the redesignation of current Sec. 435.916(c) and (d) to
proposed Sec. 435.919, we also propose to redesignate current Sec.
435.916(e) (related to requesting only information from beneficiaries
needed to renew eligibility) at proposed Sec. 435.916(b)(2)(v). We
propose to redesignate current Sec. 435.916(f) (related to determining
eligibility on all bases and transmission of data pertaining to
individuals no longer eligible for Medicaid) and Sec. 435.916(g)
(relating to accessibility of renewal forms and notices) to proposed
Sec. 435.916(d) and (e), respectively. Additionally, we modify current
Sec. 435.916(f)(2), redesignated at Sec. 435.916(d)(2) in this
proposed rule, to ensure that, prior to terminating coverage for an
individual determined ineligible for Medicaid, States determine
eligibility for CHIP and potential eligibility for other insurance
affordability programs (that is, BHP and insurance affordability
programs available through the Exchanges) and transfer the individual's
account in compliance with the procedures set forth in Sec.
435.1200(e), including proposed changes described in section II.B.5. of
this proposed rule. We believe requiring that these actions be
completed prior to termination is necessary to limit gaps in coverage
for individuals transitioning between Medicaid and other insurance
affordability programs, consistent with sections 1902(a)(4) and
1902(a)(19) of the Act. We add a paragraph heading at proposed Sec.
435.916(e) to format the provision consistent with other provisions in
Sec. 435.916.
Finally, as discussed in section II.B.3. of this proposed rule, we
propose to establish time standards for States to complete renewals of
eligibility in proposed Sec. 435.912(c)(4) and add a cross reference
to these proposed time standards in proposed Sec. 435.916(c).
2. Acting on Changes in Circumstances Timeframes and Protections
(Sec. Sec. 435.916, 435.919, and 457.344)
Section 1902(a)(10) of the Act authorizes States to make medical
assistance available under the State plan to individuals who meet
certain eligibility criteria. Once an applicant has been determined
eligible for coverage, Federal regulations include two basic
requirements to ensure that individuals receiving medical assistance
continue to be eligible. First, as described in section II.B.1. of this
proposed rule, States are required to conduct regular renewals of
eligibility per Sec. 435.916(a) and (b) of the current regulations.
Second, per Sec. 435.916(c) and (d) of the current regulations, States
must have a process to obtain information about changes in
circumstances that may impact a beneficiary's eligibility and
redetermine eligibility in between regular renewals when appropriate.
Current regulations at Sec. 435.916(c) require that States have
procedures designed to ensure that beneficiaries make timely and
accurate reports of any changes in circumstances that may affect their
eligibility and that such changes may be reported through any of the
modes for submission of applications described in Sec. 435.907(a).
Current regulations at Sec. 435.916(d) specify that the agency must
promptly redetermine eligibility between regular renewals of
eligibility whenever it receives information about a change in
beneficiary circumstances that may affect eligibility, such as a change
in income or the death of a beneficiary. The regulation does not define
``promptly.''
We are concerned that a number of States are not taking appropriate
steps to follow up on reported or detected changes in beneficiaries'
circumstances within a reasonable period of time or in a manner that
promotes continuity of coverage for eligible beneficiaries. There is a
potential risk to beneficiaries if a State delays processing a change
in circumstances that may entitle a beneficiary to additional
assistance or lower premiums or cost-sharing, as well as risk that
beneficiaries may lose coverage for procedural reasons if States do
follow up with a beneficiary to request additional information but do
not provide sufficient time for the beneficiary to respond. Moreover,
recent U.S. Department of Health and Human Services (HHS) Office of
Inspector General (OIG) reports, as well as CMS audits and data
analyses have cited cases in which States continued to provide coverage
for many months after a change impacting eligibility was identified
that should have prompted a redetermination based on a change in
circumstances and other instances in which States continued to make
[[Page 54784]]
capitated payments to managed care plans for deceased
beneficiaries.\58\
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\58\ https://www.lla.la.gov/PublicReports.nsf/
1CDD30D9C8286082862583400065E5F6/$FILE/0001ABC3.pdf and https://oig.hhs.gov/oas/reports/region7/71604228.pdf; https://oig.hhs.gov/oas/reports/region5/51800026.pdf; https://oig.hhs.gov/oas/reports/region4/41806220.pdf; and https://oig.hhs.gov/oas/reports/region5/51700008.pdf.
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Consistent with section 1902(a)(4) of the Act, to promote the
proper and efficient administration of the Medicaid program, we propose
to add a new Sec. 435.919 to clearly define the responsibilities
States have to act on changes in circumstances. We propose to revise
and redesignate Sec. 435.916(c) of the current regulations (related to
procedures for reporting changes) to new Sec. 435.919(a). We propose
to revise and redesignate current Sec. 435.916(d) (related to promptly
acting on changes in circumstances) to proposed Sec. 435.919(b) and
(c).
Proposed Sec. 435.919(a)(1) would specify that States must have
procedures for beneficiaries to make timely and accurate reports of
changes in circumstances that may affect eligibility. Proposed Sec.
435.919(a)(2) specifies that States must accept both reported changes
in circumstances that may affect eligibility and any other beneficiary
reported information through the same modes for submission of
application at Sec. 435.907(a). We believe this is an important update
that would ensure that beneficiaries can easily report information that
supports continued enrollment in Medicaid, such as updating contact
information or reporting an in-state address change, even if the
information would not constitute a change in circumstances that affects
eligibility.
Proposed Sec. 435.919(b)(1) describes the steps that we believe
States should be required to take in processing changes in
circumstances reported by a beneficiary in between renewals of
eligibility. Under the proposed regulation, States must first evaluate
whether the reported change may result in ineligibility for Medicaid or
a change in the amount of medical assistance for which the beneficiary
is eligible (for example, a change in benefits or higher or lower
premiums or cost sharing charges). If additional information is needed
to determine whether the beneficiary remains eligible, the agency must
redetermine eligibility based on available information, if able to do
so, and if the additional information is not available to the agency,
request such information from the beneficiary. When the agency requests
information from the beneficiary to determine whether a change in
circumstances results in coverage that is more beneficial to the
individual (for example, additional benefits or lower premiums or cost
sharing charges), the agency may not take adverse action if the
beneficiary does not respond. In this situation, the agency would not
provide the more beneficial coverage but would instead continue to
provide the less beneficial coverage for which eligibility was already
established. The agency must send the beneficiary written notice of
this decision consistent with 42 CFR 435.917(b)(1), which must include
information on the beneficiary's right to appeal their eligibility
status or level of benefits and services approved.
If the reported change adversely impacts the beneficiary's
eligibility for Medicaid such that termination may be necessary, the
State must consider whether the beneficiary may remain eligible on any
other basis, as currently required under current regulations at Sec.
435.916(f)(1), which is redesignated at Sec. 435.916(d)(1) in this
proposed rule. If the beneficiary is determined to be ineligible for
Medicaid on any basis, proposed Sec. 435.919(b)(1), cross-referencing
to proposed Sec. 435.919(b)(4), provides that the State must provide
advance notice of termination and fair hearing rights, consistent with
42 CFR part 431, subpart E of the regulations. Prior to making a
determination of ineligibility, the State also must determine potential
eligibility for other insurance affordability programs and transfer the
individual's account, as appropriate, consistent with existing
regulations at Sec. 435.916(f)(2), redesignated at proposed Sec.
435.916(d)(2). If the agency finds that the reported change results in
other adverse action, such as higher premiums or cost sharing charges
or a reduced benefit package, the State must provide advance notice of
the adverse action and fair hearing rights, consistent with the
requirements of 42 CFR part 431, subpart E. We note that, in accordance
with 42 CFR 431.230, if the beneficiary requests a fair hearing prior
to the date of action provided in the advance notice (for example, the
date the individual's eligibility will be terminated), the State may
not implement the adverse action until a fair hearing decision is
rendered.
If a beneficiary-reported change may result in an increase in the
amount of assistance a beneficiary is entitled to, for example, a
reduction in premiums or cost sharing, or additional benefit, the State
must verify the reported information in accordance with Sec. Sec.
435.940 through 435.960 and the State's verification plan prior to
granting additional coverage or assistance. Such verification may
include electronic data or other information available to the agency,
attested information, or documentation from the beneficiary. States may
not terminate the beneficiary's coverage or take other adverse action
if the individual does not respond to requests for additional
information to verify the beneficiary-reported change. If the reported
change has no impact on eligibility or coverage, consistent with
section 1902(a)(4) and (a)(19) of the Act, we propose at Sec.
435.919(b)(1)(iv) that the agency must acknowledge the reported change
by providing the beneficiary with notice acknowledging receipt of the
information and explaining that there is no impact on eligibility or
coverage.
The process we are proposing for States to act on information
obtained from a third party, such as information obtained through an
electronic data match or from another program such as the Supplemental
Nutrition Assistance Program (SNAP), is described at proposed Sec.
435.919(b)(2). This process largely mirrors that described in proposed
Sec. 435.919(b)(1), discussed above. Under proposed Sec.
435.919(b)(2), the agency will need to evaluate the reliability of the
information obtained and, if reliable information from a third party
may result in an adverse action, the State must give the beneficiary an
opportunity to provide information disputing the accuracy of the third-
party information in accordance with Sec. 435.952(d). If the
beneficiary does not respond with the requested information or the
information provided does not establish the beneficiary's continued
eligibility or entitlement to the same level of assistance, the State
must: (1) provide advance notice of termination or other adverse action
and fair hearing rights consistent with part 431, subpart E; and (2)
before terminating the beneficiary's coverage, assess eligibility for
other insurance affordability programs in accordance with proposed
revisions to current Sec. 435.916(f)(2), redesignated at Sec.
435.916(d)(2) in this rulemaking, and transfer the individual's
account, as appropriate.
If a change identified by reliable third-party data may result in
an increase in the amount of coverage or assistance a beneficiary is
entitled to (for example, additional benefits or lower premiums or cost
sharing), States retain flexibility under the proposed rule either to
act on the third-party information without additional follow up or to
contact the beneficiary to determine whether the information received
is accurate. However, States that choose to contact the beneficiary to
verify the accuracy of information prior
[[Page 54785]]
to furnishing additional assistance may not terminate the beneficiary's
coverage or take other adverse action if the individual does not
respond to the request for information. Additionally, if States choose
to contact the beneficiary and the beneficiary does not respond to the
request for information, the State may act on the third-party
information. If third-party information is not reliable (for example,
information is older than other information available to or obtained by
the State or is incomplete) or does not impact the beneficiary's
eligibility, there is no requirement for the agency to take further
action or to provide notice to the beneficiary. Additionally, States
may not take adverse action based on unreliable information.
At Sec. 435.919(c)(1), we propose that States provide a minimum of
30 calendar days from the date a request for information is sent, which
is the date the request is postmarked or the date the notice is sent
electronically if the beneficiary elected to receive electronic
notices, for a beneficiary to obtain and submit information needed in
order for the State to redetermine eligibility based on a change in
circumstances. We believe specifying a minimum timeframe will ensure
all States provide beneficiaries a reasonable time to respond to
requests for information to demonstrate ongoing eligibility and
mitigate churn that would otherwise occur when beneficiaries do not
have sufficient time to respond to such requests. We believe the 30-day
timeframe also provides beneficiaries consistency across program
requirements as this aligns with the minimum timeframe MAGI
beneficiaries are provided to return their renewal form in the current
regulations Sec. 435.916(a)(3)(i)(B) and proposed timeline for all
beneficiaries to return their renewal form at Sec. 435.916(a)(2)(i)(B)
of this proposed rule. As discussed in section II.B.3. of this proposed
rule, we propose to establish time standards for States to promptly act
on changes in circumstances and standards for acting on anticipated
changes in circumstances in proposed Sec. 435.912(c)(5) and (6), and
we cross reference to these proposed time standards in proposed Sec.
435.919(c)(2).
At Sec. 435.919(d), we propose that States provide beneficiaries
whose coverage was terminated due to failure to provide information
requested in accordance with proposed Sec. 435.919(b)(1)(i) and (ii)
with a 90-day reconsideration period. Under the proposal, if a
beneficiary returns requested information within 90 calendar days of
termination, the State would be required to redetermine the
individual's eligibility without requiring a new application. While
States may not require individuals to complete a new application within
the reconsideration period, States may need to request additional
information from the individual that is required at application, such
as additional information needed to determine eligibility or a
signature under penalty of perjury that information provided is
accurate. Consistent with Sec. 435.915(a) of the current regulations,
retroactive coverage during the 90-day period generally would be
available, including for MSP eligibility groups described in section
1902(a)(10)(ii), (iii) and (iv) \59\ of the Act, to help fill any gap
in coverage for eligible individuals for whom retroactive eligibility
may apply. Similar to the 90-day reconsideration period provided to
individuals terminated for failure to complete a regularly-scheduled
renewal under Sec. 435.916(a)(3)(iii) of the current regulations, we
believe this proposed policy is important to reduce gaps in coverage as
well as the administrative burden associated with churn, when
beneficiaries terminated from coverage reapply within a few months
thereafter, particularly beneficiaries enrolled in managed care. We
propose that the application timeliness standards provided under Sec.
435.912(c)(3) would apply to redeterminations initiated during the 90-
day reconsideration period proposed at Sec. 435.919(d). Application of
the timeliness standards at Sec. 435.912(c)(3) in this situation
aligns with the proposed revision of current regulations at Sec.
435.916(a)(3)(iii), redesignated at proposed Sec. 435.916(b)(2)(iii),
to apply the timeliness standards to redeterminations initiated during
the 90-day reconsideration period afforded beneficiaries under current
regulations to return renewal forms. Proposed revisions to current
Sec. 435.916(a)(3)(iii), redesignated at proposed Sec.
435.916(b)(2)(iii), are discussed in section II.B.1. of this proposed
rule.
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\59\ Retroactive eligibility is not available to individuals who
qualify for coverage under the QMB group described in section
1902(a)(10)(E)(i) of the Act. Per section 1902(e)(8) of the Act,
coverage under the QMB group is effective the month following the
month in which the QMB eligibility determination is made.
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Proposed Sec. 435.919(e) includes the requirements in Sec.
435.916(d)(1)(i) and (ii) of current regulation (relating to the
limitation on requests for information to necessary information and the
circumstances under which States may begin a new eligibility period,
which is the period of time between application and renewal or
regularly scheduled renewals, following a change in circumstances). We
propose revisions to current Sec. 435.916(d)(1)(i), redesignated at
Sec. 435.919(e)(1) in this proposed rule, to remove the reference to
MAGI beneficiaries in order to apply the requirement that States
evaluating a change in circumstances must limit requests for additional
information to such change in circumstances to both MAGI and non-MAGI
beneficiaries. We believe this change is necessary to ensure non-MAGI
beneficiaries are not subject to a full renewal of eligibility more
frequently than once every 12 months, consistent with proposed Sec.
435.916(a). We redesignate current Sec. 435.916(d)(1)(ii), which
allows States to begin a new 12-month eligibility period if the agency
has enough information to renew eligibility with respect to all
eligibility criteria when processing a change in circumstances, to
proposed Sec. 435.919(e)(2). We also make technical changes to current
Sec. 435.916(d)(1)(ii), redesignated at proposed Sec. 435.919(e)(2),
to use the term ``eligibility period'' rather than ``renewal period''
and to remove the reference to the ``12-month'' eligibility period to
align the length of the new eligibility period the State may begin for
an individual consistent with the eligibility periods described in
proposed Sec. 435.916(a).
Finally, we propose to redesignate and modify Sec. 435.916(d)(2),
which requires that States act on anticipated changes in circumstances
at the appropriate time as proposed at Sec. 435.919(b)(3), as this
provision also relates to changes in beneficiary circumstances. In
proposed Sec. 435.919(b)(3), we modify language in the current
regulations at Sec. 435.916(d)(2) to require that States act on
anticipated changes at an appropriate time (instead of the appropriate
time) and clarify that this means that the State would need to initiate
a redetermination consistent with timeliness standards for processing
anticipated changes in circumstances at proposed Sec. 435.912(c)(6).
While CMS does not define for each State the appropriate time to act on
an anticipated change in circumstances, we expect States to begin the
process early enough in order to reasonably complete the
redetermination prior to the anticipated change occurring. As discussed
in section II.B.3. of this proposed rule, we propose to establish
timelines for States to redetermine eligibility based on anticipated
changes in circumstances in proposed Sec. 435.912(c)(6). In proposed
[[Page 54786]]
Sec. 435.919(c)(2), we require States to redetermine eligibility for a
beneficiary with an anticipated change in circumstances within the time
standards established in proposed Sec. 435.912(c)(6). We believe
including the cross reference to proposed Sec. 435.912(c)(6) will
ensure States determine the appropriate time to act based on their
processes prior to the anticipated change in circumstances occurring
such that the State can complete the redetermination according to the
time standards in proposed Sec. 435.912(c)(6).
With the proposed creation of Sec. 435.919 and the proposed re-
designation of Sec. 435.916(d), with revisions, to new Sec.
435.919(b), we also propose technical changes at Sec. Sec. 435.911(c)
and 435.1200(e)(1). Current Sec. 435.911(c) applies to individuals who
submit an application described in Sec. 435.907 or whose eligibility
is being renewed in accordance with Sec. 435.916. We propose to add a
new clause to extend the application of this paragraph to individuals
whose eligibility is being redetermined in accordance with Sec.
435.919. At Sec. 435.1200(e)(1), we propose to replace the reference
to Sec. 435.916(d) with a reference to proposed Sec. 435.919(b).
Changes to Sec. 435.1200 are discussed in further detail in section
II.B.5. of this preamble. Additionally, the application of the proposed
requirements of Sec. 435.919 to CHIP is discussed in section II.E.2.
of this preamble.
3. Timely Determination and Redetermination of Eligibility (Sec. Sec.
435.907 and 435.912)
Several regulatory requirements, currently codified in subpart J of
part 435, establish parameters to ensure that applications for coverage
are not unduly burdensome and that new applicants receive a timely
determination of eligibility. Other provisions protect current
beneficiaries from needlessly onerous renewal requirements and ensure
that States keep individuals enrolled while they review potential
Medicaid eligibility on other bases. Section 435.907 of the current
regulations describes the requirements for States to make available an
application for Medicaid, the limitations on the information that may
be requested at application, and the modalities through which
individuals must be able to apply. Similarly, Sec. 435.916 (discussed
in section II.B.1. of this preamble) describes the requirements for
States to conduct renewals and limitations on the information that may
be requested from beneficiaries at renewal, and proposed Sec. 435.919
(discussed in section II.B.2 of this preamble) would redesignate and
revise current Sec. 435.916(c) and (d) with respect to
redeterminations based on changes in circumstances.
The requirements related to the timely determination of
eligibility, including the maximum time period in which individuals are
entitled to a determination of eligibility, exceptions to timeliness
requirements, and considerations for States in establishing performance
standards are found at Sec. 435.912. As described at current Sec.
435.912(c)(3), States are required to determine the eligibility of new
applicants within 90 calendar days if they apply on the basis of
disability and within 45 calendar days for applicants applying on all
other bases. These longstanding timeframes are important for ensuring
eligible applicants receive timely access to coverage. However, the
current regulations do not establish standards to ensure that
applicants have enough time to gather and provide additional
information and documentation requested by a State in adjudicating
eligibility. In addition, the timeframes provided in current Sec.
435.912(c) expressly apply only to new applications; they do not
expressly apply to redeterminations either at renewal or based on
changes in circumstances.
Current regulations at Sec. 435.930(b) require that States
continue furnishing Medicaid benefits to eligible individuals, until
they are found to be ineligible. Under this provision, a beneficiary
may not be disenrolled if the State has not completed a redetermination
of eligibility, even after the end of an individual's scheduled renewal
date. This provision is critical to ensuring that eligible
beneficiaries are not inappropriately terminated from coverage.
However, if completing a renewal is delayed, ineligible individuals may
remain inappropriately enrolled.
Ensuring the integrity of Medicaid and CHIP--both to prevent
inappropriate enrollments and to protect the enrollment of eligible
individuals--is an important component of CMS's work. From a program
integrity perspective, both termination of coverage without an accurate
determination of ineligibility and the extension of coverage beyond a
beneficiary's period of eligibility would constitute an error. Through
PERM, the MEQC program, and other CMS eligibility reviews, we partner
with States to review their eligibility and enrollment processes and
conduct case reviews to ensure that eligible individuals can enroll and
stay enrolled without undue burden and that ineligible individuals are
redirected to the appropriate coverage programs. Through this work, as
well as our ongoing work with States prior to the COVID-19 PHE, we have
become aware that in certain situations, redeterminations can remain
incomplete for several months following the end of a beneficiary's
eligibility period. For example, this may happen when a beneficiary
does not timely return documentation or when a determination on another
basis is required. While we recognize the challenges States may face in
completing redeterminations by the end of a beneficiary's eligibility
period or as quickly as possible when they become aware of a potential
change in circumstances, it is important that States act promptly once
all information and other documentation requested from the individual
is received.
Consistent with sections 1902(a)(4) and (19) of the Act to ensure
the proper and efficient administration of the program and that
eligibility is determined in a manner consistent with simplicity of
administration and best interests of beneficiaries, we propose changes
to Sec. 435.907 and Sec. 435.912 to ensure that applicants and
beneficiaries have adequate time to furnish all requested information
and that States complete initial determinations and redeterminations of
eligibility within a reasonable timeframe at application, at regular
renewals, and following changes in circumstances.
With respect to new applicants, we propose to revise Sec. 435.907
first to redesignate Sec. 435.907(d) (relating to a prohibition on
requiring in-person interviews) as Sec. 435.907(d)(2). As discussed in
section II.B.1 of this preamble, we also propose to revise newly
redesignated paragraph (d)(2) of Sec. 435.907 to remove the clause
that states, ``for a determination of eligibility using MAGI-based
income'' such that the prohibition on requiring in-person interviews
applies to both the MAGI-based and non-MAGI application processes. Then
we propose to establish a new paragraph (d)(1) at Sec. 435.907, which
would require that, if the State agency is unable to determine an
applicant's eligibility based on the information provided on the
application and verified through electronic data sources, and it must
obtain additional information from the applicant, specified
requirements would need to be met. This may occur, for example, if an
applicant fails to complete a section of the application before signing
and submitting it, or if an applicant provides information on the
application that is not reasonably compatible with the
[[Page 54787]]
information available through electronic data sources.
Proposed Sec. 435.907(d)(1)(i)(B) would require the agency to
provide most applicants with at least 15 calendar days, from the date
the request is postmarked or the electronic request is sent, to respond
with the additional information. For applicants whose Medicaid
eligibility is being considered on the basis of a disability, such as
individuals under age 65 who may be eligible for the age and
disability-related poverty level group described at section
1902(a)(10)(A)(ii)(X) of the Act, proposed Sec. 435.907(d)(1)(i)(A)
would require the agency to provide the applicant with at least 30
calendar days, from the date the request is postmarked or the
electronic request is sent, to respond. Additionally, as described at
proposed Sec. 435.907(d)(1)(ii), applicants must be permitted to
provide additional information through any of the modes by which an
application may be submitted at current Sec. 435.907(a). This is
current policy that we are proposing to codify through this proposed
rule.
As discussed in sections II.B.1 and II.B.2 of this preamble,
current Sec. 435.916(a)(3)(i)(B), redesignated at proposed Sec.
435.916(b)(2)(i)(B), and proposed Sec. 435.919(c)(3) would require the
agency to provide current beneficiaries with at least 30 calendar days
from the date the request is postmarked or the electronic request is
sent to submit requested information, beginning on the date the State
sends the request for additional information, which is the date the
request is postmarked or the date the electronic request is sent. This
is longer than the minimum timeframe of 15 calendar days that we
propose for most applicants to furnish additional information or
documentation. We considered establishing a 30-day requirement for all
applicants, consistent with the timeframe proposed at redetermination,
but we believe that a 15-day response period for most applicants is
appropriate for several reasons. First, in determining eligibility for
an applicant, the agency will have recently received information from
the applicant (or a person acting responsibly on their behalf) who is
newly seeking coverage, and we believe the applicant (or such other
person) will typically be expecting a communication from the agency. By
contrast, at renewal and when the agency is acting on information it
has received from other sources, a beneficiary may be less likely to
expect any communication from the State, and therefore, may be less
prepared to respond. Second, while States are required to make
eligibility effective on the date of application, or up to 3 months
prior if the individual would have been eligible retroactively,
applicants may be reluctant to access covered services before the
eligibility determination is completed. Requiring the agency to make a
final determination on applications within the maximum 45 calendar days
permitted for individuals applying on a basis other than disability
status while also providing the individual with at least 30 calendar
days to respond to a request for additional information is
unreasonable. However, to permit States more than 45 calendar days to
complete applications when additional information is required also
could result in eligible individuals delaying needed care. We believe
that a minimum 15 calendar days strikes an appropriate balance for most
applicants and we seek comment on whether States, beneficiaries, and
other interested parties agree that this timeframe is appropriate.
As noted above, we are proposing that States must provide
applicants applying on the basis of disability with at least 30
calendar days, from the date the request is postmarked or the
electronic request is sent, to return additional information or
documentation required by the agency. We believe the longer timeframe
is appropriate because some individuals with disabilities may need more
time to gather documentation related to their disability determination
and since States have up to 90 calendar days to make a final
determination of eligibility on disability-based applications, the
additional time will not undermine States' ability to make a timely
determination.
We are considering aligning the minimum time that States must
provide all applicants to submit additional information or
documentation requested by the State, as well as finalizing a longer
timeframe for all applicants. Timeframes under consideration include 15
calendar days, 20 calendar days, 25 calendar days, and 30 calendar
days. We are also considering a minimum requirement of 30 calendar days
for all applicants, accompanied by a change to the timeliness
requirements for application processing, which would establish an
exception to the 45-day requirement at current Sec. 435.912(c)(3)(ii)
and provide an additional 15 calendar days for a State to complete
application processing when additional information is needed. We seek
comment on the appropriate minimum timeframe for applicants to submit
requested information at proposed Sec. 435.907(d) that will provide
the greatest balance between ensuring that a State determines
eligibility as quickly as possible and that applicants have adequate
time to gather any information or documentation needed by the State to
complete the determination. We also seek comment on whether the final
rule should align the timeframe for all applicants or provide a longer
period for individuals applying on the basis of disability, and whether
a corresponding exception to the 45-day timeliness requirement at Sec.
435.912(c)(3)(ii) should accompany a longer timeframe. In addition, we
request comment on whether calendar days or business days would provide
a more appropriate measure of timeliness here.
Finally, when the State agency cannot determine an applicant's
eligibility for Medicaid without additional information and the agency
denies eligibility because the applicant does not timely respond to a
request for additional information, per current regulations at Sec.
435.917, the State must provide the individual with notice of the
agency's decision. We propose at Sec. 435.907(d)(1)(iiii)(A) that, if
the individual subsequently submits the requested information within 30
calendar days of the date the notice of ineligibility is sent (or a
longer period established by the State), the State must reconsider the
individual's eligibility without requiring the individual to complete
and submit a new, full application. This is similar to the
reconsideration periods provided at current Sec. 435.916(a)(3)(iii)
(redesignated at proposed Sec. 435.916(b)(2)(iii) in this proposed
rule) for individuals whose eligibility is terminated at their
regularly-scheduled renewal and proposed Sec. 435.919(d) for
individuals whose eligibility is terminated following a change in
circumstances due to failure to provide additional information
requested by the agency.
To ensure that a State has adequate time to complete the
determination of eligibility when requested information is submitted
during the reconsideration period, we propose at Sec.
435.907(d)(1)(iii)(B) to begin a new clock for determining timeliness.
This would provide the State with an additional 45 calendar days (or 90
calendar days for disability-related determinations) to complete the
eligibility determination in accordance with proposed Sec.
435.912(c)(3), beginning on the date that the requested information is
submitted. In addition, to protect the needs of applicants, the
effective date of coverage would continue to be determined in
accordance with the date upon which the application was submitted as
described at proposed
[[Page 54788]]
Sec. 435.907(d)(1)(iii)(C). We believe this would provide the best
balance for both the applicant and the State agency, by protecting the
applicant's access to coverage while providing additional time for the
State to complete a timely determination. We seek comment on whether
the effective date of coverage should be determined in accordance with
the application date or whether, consistent with the reconsideration
period at renewal and the proposed reconsideration period following a
change in circumstances (described in section II.B.2. of this
preamble), the return of additional information would effectively
constitute a new application with a new effective date of coverage.
We are proposing a 30-day reconsideration period at application,
rather than a 90-day reconsideration period similar to the 90-day
period proposed at redetermination, because we believe applicants will
generally be expecting a communication from the State regarding the
status of the submitted application and will be less likely than
current beneficiaries to miss requests for additional information. We
also are concerned that a longer reconsideration period for applicants
would mean that a longer period of time will have elapsed between the
date the applicant has attested to information provided on the
application and the date a determination is ultimately made. However,
recognizing that a consistent 90-day period for all reconsiderations--
at application, at renewal, and following a change in circumstances--
may be clearer, we seek comment on whether the length of
reconsideration period at application should align with the 90-day
reconsideration period currently provided at renewal and proposed for
redeterminations based on changes in circumstances in this rulemaking,
or whether the reconsideration period for applicants should be somewhat
longer than 30 calendar days (for example, 45 calendar days or 60
calendar days) but still less than 90 calendar days.
With respect to redeterminations, we propose revisions to Sec.
435.912 to clearly specify expectations for the maximum time States
have to complete redeterminations at regular renewals, as well as when
the State learns of a change in circumstances that may impact an
individual's eligibility. Current Sec. 435.912 requires States to
establish timeliness and performance standards. Paragraph (a) of Sec.
435.912 of the current regulations defines ``timeliness standards'' as
the maximum period of time in which an individual is entitled to a
determination of eligibility and ``performance standards'' as the
overall standards for timely determinations of eligibility. Current
Sec. 435.912(b) lists the types of eligibility determinations for
which States must establish standards, while Sec. 435.912(c) sets
forth criteria which the agency must account for in establishing these
standards. Paragraphs (d) through (g) of current Sec. 435.912 require
the agency to inform individuals of the timeliness standards, to
provide for exceptions to the timeliness standards for determining
eligibility, and to document any delays in completing the required
actions, as well as prohibiting the agency from using the application
time standards either as a waiting period or as a reason to deny
eligibility.
We propose first to revise the definition of ``timeliness
standards'' in Sec. 435.912(a) to specify that these standards must
include not only the maximum time period in which every applicant is
entitled to a determination of eligibility at application in accordance
with Sec. 435.907, but also the maximum period of time in which the
agency must redetermine eligibility at renewal in accordance with Sec.
435.916 and when an anticipated or known change in circumstances occurs
in accordance with proposed Sec. 435.919(b)(3). The ``performance
standards'' defined in current Sec. 435.912(a) would also be revised
to clearly include standards for renewing and redetermining eligibility
in a timely and efficient manner across a pool of beneficiaries.
Section 435.911(c) of the regulations currently requires, in pertinent
part, that agency must, promptly and without undue delay consistent
with timeliness standards established under Sec. 435.912, provide
coverage to individuals who have submitted an application described in
Sec. 435.907 or whose eligibility is being renewed in accordance with
Sec. 435.916. We propose a conforming amendment to the introductory
language in Sec. 435.911(c) to include a cross reference to proposed
Sec. 435.919 to make clear that the terms of Sec. 435.911(c) apply
also to individuals whose eligibility is being redetermined following a
change in circumstances.
Second, we propose to add a paragraph heading for Sec. 435.912(b)
that states, ``State plan requirements'' and expand upon the activities
described in Sec. 435.912(b) for which States would be required to
establish timeliness and performance standards in their State plan.
Specifically, we propose to expand the requirement in current Sec.
435.912(b)(2) to establish timeliness and performance standards to
include not only determinations of eligibility for Medicaid and
assessments of potential eligibility for other insurance affordability
programs, as currently required, but also final determinations of
eligibility for CHIP consistent with changes proposed at Sec.
435.1200(e) and described in section II.B.5. of this preamble. We also
propose to incorporate current paragraph (b)(2) of Sec. 435.912, which
requires States to establish timeliness and performance standards for
determining potential eligibility for and transferring an individual's
electronic account to another insurance affordability program, into
current paragraph (b)(1), such that proposed Sec. 435.912(b)(1) would
require the agency to establish performance and timeliness standards
for determining Medicaid eligibility for individuals who submit an
application to the Medicaid agency, as well as determining eligibility
for CHIP when an individual is determined ineligible for Medicaid (in
accordance with proposed changes discussed in section II.B.5. of this
preamble) and determining potential eligibility for insurance
affordability programs available through the Exchanges as described at
proposed Sec. 435.1200(e).
We propose to redesignate current Sec. 435.912(b)(3) (regarding
determining Medicaid eligibility for individuals transferred from other
insurance affordability programs) as proposed Sec. 435.912(b)(2) and
to add new paragraphs (b)(3), (4), and (5) to Sec. 435.912 as follows:
Proposed Sec. 435.912(b)(3) would require States to
establish specific standards for redetermining eligibility at renewal
in accordance with Sec. 435.916;
Proposed Sec. 435.912(b)(4) would require the
establishment of specific standards for redeterminations of eligibility
related to changes in circumstances reported by a beneficiary or
received from a third party as described at proposed Sec.
435.919(b)(1) and (b)(2) respectively; and
Proposed Sec. 435.912(b)(5) would require the
establishment of specific standards for redeterminations of eligibility
at the time of an anticipated change in circumstances in accordance
with proposed Sec. 435.919(b)(3).
Third, current Sec. 435.912(c)(1) provides that the timeliness and
performance standards adopted by the agency must cover the period from
the date of application, or transfer from another insurance
affordability program, to the date the agency notifies the applicant of
its decision or the date the agency transfers the individual to another
insurance affordability program. We would revise this to specify that
they also include the periods of time covered by the timeliness and
performance standard adopted by the
[[Page 54789]]
agency for renewals and redeterminations of eligibility.
Preliminarily, we propose to redesignate the requirement at current
Sec. 435.912(c)(1) (providing that the standards for these activities
cover the period from the date of application or transfer to the
Medicaid agency through the date that the agency notifies the applicant
of its decision or transfers the account to another insurance
affordability program) as proposed Sec. 435.912(c)(1)(i). Proposed
Sec. 435.912(c)(1)(ii) would provide that timeliness and performance
standards adopted by the agency for conducting regularly-scheduled
renewals must cover the period from the date that the agency initiates
the steps required to renew eligibility on the basis of information
available to the agency, as required under Sec. 435.916(a)(2)
(redesignated as Sec. 435.916(b)(1) in this proposed rule), to the
date that the agency sends the beneficiary notice regarding their
continued eligibility for coverage, or as applicable, terminates
eligibility and transfers the individual to another insurance
affordability program in accordance with Sec. 435.1200(e).
Proposed Sec. 435.912(c)(1)(iii) would provide that timeliness and
performance standards adopted by the agency for conducting
redeterminations of eligibility based on a change in a beneficiary's
circumstances must cover the period from the date that the agency
receives information indicating a potential change in circumstances
that may affect eligibility to the date that the agency sends the
individual a notice regarding their continued eligibility for coverage,
or as applicable, terminates eligibility and transfers the individual's
electronic account to another insurance affordability program in
accordance with Sec. 435.1200(e).
Finally, proposed Sec. 435.912(c)(1)(iv) would provide that
timeliness and performance standards adopted by the agency for
conducting redeterminations of eligibility based on an anticipated
change in a beneficiary's circumstances must cover the period from the
date the agency begins the redetermination of eligibility based on an
anticipated change, as described at Sec. 435.919(b)(3) of this
subpart, to the date the agency notifies the individual of its decision
or, as applicable the date the agency terminates eligibility and
transfers the individual's electronic account to another insurance
affordability program in accordance with Sec. 435.1200(e). We also
propose to add a heading to paragraph (c) that reads, ``Timeliness and
performance standard requirements.''
Current Sec. 435.912(c)(1) also requires States to comply with the
requirements of paragraph (c)(2) (relating to criteria that States must
consider in establishing their timeliness and performance standards) so
as ``to promote accountability and consistency of high-quality consumer
experience among States and between insurance affordability programs.''
We propose to incorporate this requirement into proposed Sec.
435.912(c)(2) and to expand the criteria that States must take into
account to reflect the broader scope of activities for which States
must account for in establishing their timeliness and performance
standards.
Current Sec. 435.912(c)(2) requires that, in establishing their
timeliness and performance standards, States must account for the
capabilities and cost of available systems and technology, the general
availability of electronic data matching and ease of connections to
authoritative sources of information to determine and verify
eligibility, the demonstrated performance and timeliness experience of
other State Medicaid, CHIP and other insurance affordability programs,
and the needs of individuals, including their preferred mode of
application submission and the relative complexity of adjudicating
their eligibility. Proposed revisions to Sec. 435.912(c)(2) would add
to these criteria the time needed by the agency to evaluate information
obtained from electronic data sources and the time needed to provide
advance notice to beneficiaries when the agency makes a determination
that would result in the denial or termination of eligibility or
another adverse action, since an adverse action cannot be effective
until the end of the advance notice period (generally advance notice
must be sent 10 days prior to the date of the action, in accordance
with Sec. Sec. 431.211, 431.213 and 431.214). Proposed Sec.
435.912(c)(2) also would provide that States account for the needs of
beneficiaries, as well as applicants and the complexity of their cases
in establishing their timeliness and performance standards.
Paragraph (c)(3) of Sec. 435.912 provides parameters for States in
setting a standard for the timely determination of Medicaid eligibility
at application and when an account transfer is received from another
insurance affordability program. The parameters in current Sec.
435.912(c)(3), of no more than 90 calendar days for determining
eligibility on the basis of disability and no more than 45 calendar
days for determining eligibility on all other bases, remain unchanged
in this proposed rule. However, we propose several technical changes to
Sec. 435.912(c)(3), including the addition of a paragraph heading and
additional references to the application and account transfer
activities described in proposed paragraphs (b)(1) and (2) of this
section.
We also propose to add new paragraphs (c)(4), (5), and (6) to Sec.
435.912 to establish separate parameters within which States must
establish timeliness standards for the completion of regularly
scheduled renewals, redeterminations based on changes in circumstances,
and redeterminations based on anticipated changes. In establishing the
maximum timeframes in proposed Sec. 435.912(c)(4) within which the
agency must complete a regularly scheduled renewal, we take into
account the additional time that States may need to complete a
redetermination of eligibility when beneficiaries return needed
information near the end of their eligibility period, as well as when
the State may need to make a determination of eligibility on another
basis, as required under Sec. 435.916(f)(1) of the current
regulations, redesignated at Sec. 435.916(d)(1) in this proposed rule.
Based on our experience in working with States, we believe that
once the agency has received all information needed to complete a
redetermination of eligibility, 25 calendar days is ample time for the
agency to process the redetermination and provide the minimum 10 days
of advance notice of termination or other adverse action, if needed.
Therefore, in the case of an individual whose eligibility can be
renewed based on available information or who returns all needed
information at least 25 calendar days or more prior to the end of the
eligibility period, we propose at Sec. 435.912(c)(4)(i) that the
agency be required to complete a redetermination by the end of the
eligibility period.
Recognizing that in certain cases, a State will not receive all of
the information needed to redetermine eligibility until closer to the
end of the eligibility period, proposed Sec. 435.912(c)(4)(ii) would
provide additional time in such cases. If information is returned
before the end of the eligibility period, but with less than 25
calendar days remaining, proposed Sec. 435.912(c)(4)(ii) would provide
the agency with one additional month to complete a timely
redetermination of eligibility. In such cases, the agency would be
required to complete the redetermination, on the basis on which the
beneficiary was last determined eligible, by no later than the end of
the month following the month in which the individual's eligibility
period ends.
[[Page 54790]]
For example, suppose a beneficiary's 12-month eligibility period is
scheduled to end on March 31st, but the individual does not return all
information needed to redetermine eligibility until March 20th. This is
less than 25 days prior to the end of the eligibility period, so in
this example, the State would need to complete the renewal by no later
than April 30th (the end of the month following the month in which the
individual's eligibility period ends). We seek comment on whether
proposed Sec. 435.912(c)(4)(i) and (ii) strike the right balance
between maximizing completion of timely renewals and providing States
with sufficient time to not only complete a renewal but also to provide
advance notice of termination when necessary.
Proposed Sec. 435.912(c)(4)(iii) addresses timelines for renewals
in which eligibility must be considered on another basis. Current Sec.
435.916(f) (redesignated at proposed Sec. 435.916(d)) requires the
agency, when it determines that an individual is no longer eligible on
the basis upon which he or she has been receiving coverage, to consider
eligibility on all bases prior to completing a determination of
ineligibility for Medicaid. When information in the individual's case
record or renewal form indicates that the beneficiary may be eligible
on another basis or bases (for example, an individual determined
ineligible based on MAGI may be eligible based on disability), we
recognize that additional time may be required for States to obtain the
additional information needed to make a determination on such other
basis. Proposed Sec. 435.912(c)(4)(iii)(B) provides the agency with 25
days to make a determination of eligibility for most beneficiaries and
to send advance notice of termination if the individual is ineligible.
However, if a new determination based on disability is necessary, we
propose in Sec. 435.912(c)(4)(iii)(A) a maximum of 90 days for States
to complete a redetermination of eligibility on the basis of
disability. The applicable time period (25 or 90 days) is measured in
calendar days from the date the agency determines the individual not
eligible on the basis on which he or she had been receiving coverage.
We believe that a longer 90-day period is appropriate when a
determination of disability is required because of the additional
complexity in making a disability determination. This is consistent
with the maximum 90 days provided for States making a determination of
eligibility based on disability at initial application as described at
current Sec. 435.912(c)(3)(i). Regulations governing determinations of
disability are found at Sec. 435.541.
These timeliness standards for regularly scheduled renewals are
cross-referenced in proposed Sec. 435.916(c), which requires that a
renewal be completed by the end of the beneficiary's eligibility period
in accordance with proposed Sec. 435.912(c)(4)(i). If an individual
returns the renewal form with less than 25 calendar days remaining
before the end of their eligibility period, proposed Sec.
435.912(c)(4)(ii) would permit the State to complete the renewal by the
end of the month following the month in which the individual's
eligibility period ends. This would be compliant with both the renewal
requirement at proposed Sec. 435.916(c) and the timeliness requirement
at proposed Sec. 435.912(c)(4)(ii). As noted previously, when a
determination of eligibility is completed after the end date of a
beneficiary's eligibility period, current Sec. 435.930(b) requires the
agency to continue furnishing Medicaid to the individual while the
determination of eligibility is pending. This permits the State to
continue providing medical assistance to the individual until the
renewal is completed, and if the individual is no longer eligible for
Medicaid, it provides the State with adequate time to provide advance
notice and fair hearing rights in accordance with part 431 subpart E of
the regulations.
Under proposed Sec. 435.912(c)(5), States must complete
redeterminations based on changes in beneficiary circumstances reported
by an individual or third party no later than the end of the month that
occurs 30 calendar days from the date the State receives information
indicating a potential change in circumstances, if the State has
sufficient information to evaluate any potential impact and to
redetermine eligibility without requesting additional information from
the individual. Because most States continue coverage through the end
of the month, we propose to extend the requirement to the end of the
month in which the 30th day occurs. If additional information from the
beneficiary is needed, we propose at Sec. 435.912(c)(5)(ii) that
States have through the end of the month that occurs 60 calendar days
from the date the State receives information indicating a change in
circumstances that may impact eligibility to make a redetermination of
eligibility. We note that proposed Sec. 435.919(c)(3) would require
States to provide beneficiaries with at least 30 calendar days from the
date the request is postmarked or the electronic request is sent to
provide the information and that the State enable beneficiaries to do
so through any of the modes of submission specified in Sec.
435.907(a). This aligns with the 30 calendar days which States must
provide beneficiaries to return a pre-populated renewal form and any
needed documentation at renewal under current regulation at Sec.
435.916(a)(3)(i)(B), redesignated at proposed Sec.
435.916(b)(2)(i)(B).
Proposed Sec. 435.912(c)(6) establishes requirements for
redeterminations of eligibility based on anticipated changes in
circumstances. As described in Sec. 435.916(d)(2) (redesignated as
proposed Sec. 435.919(b)(3)), anticipated changes are events that the
agency knows about in advance, like a beneficiary's birthday, and
States must act on such changes at an appropriate time such that the
State completes the redetermination prior to the anticipated change
occurring. Thus, while CMS does not specify when a State must begin the
redetermination process for an anticipated change in circumstances,
under our proposal, the agency must determine the amount of time it
needs to act on such changes and to begin the redetermination process
with sufficient time to complete processing the redetermination prior
to the change occurring. As such, we propose to apply the same basic
requirements at proposed Sec. 435.912(c)(6) for States establishing
standards for redeterminations based on anticipated changes in
circumstances as those described at proposed Sec. 435.912(c)(4) for
regularly scheduled renewals. At proposed Sec. 435.912(c)(6)(i), the
agency would be required to complete a redetermination of eligibility
based on an anticipated change in circumstances on or before the date
of the anticipated change or the last day of the month in which the
anticipated change occurs.
When an individual is determined ineligible for Medicaid, States
have flexibility to terminate coverage either on the date on which the
individual becomes ineligible (provided that advance notice has been
provided and other bases of eligibility have been considered) or at the
end of the month. In States that have elected the option to continue
coverage through the end of the month, the redeterminations described
at proposed Sec. 435.912(c)(4), (c)(5), and (c)(6) must be completed
prior to the end of the month. In all other States, the redetermination
must be completed prior to the date specified.
For example, suppose a State has a higher income standard for
younger children in the eligibility group for children under age 19,
and a beneficiary
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whose household income exceeds the standard for children aged 6 through
18 will be turning 6 years old on October 3rd in the middle of their
eligibility period. This beneficiary lives in a State that continues
coverage through the end of the month in which an individual becomes
ineligible. If the State receives all information needed to determine
the individual's continued eligibility (in either the eligibility group
for children under age 19 or another eligibility group) on or before
October 6th (25 days before the end of the month in which the change
occurs), then the agency would be required to complete a timely
redetermination of eligibility by no later than October 31st.
If the State receives the information needed to complete a
redetermination, but does not have at least 25 calendar days to process
the information, then as described at proposed Sec. 435.912(c)(6)(ii),
the State would have 1 additional month to complete a timely
redetermination of eligibility. Using the example above, suppose the
State receives all information needed to determine the individual's
eligibility on or after October 7th, then the agency would be required
to complete a timely redetermination of eligibility by no later than
November 30th. Proposed Sec. 435.912(c)(6)(iii) establishes the same
standards for completing a determination of another basis as that
proposed at Sec. 435.912(c)(4)(iii) for regularly scheduled renewals.
We seek comment on the amount of time provided for States to
complete a redetermination of eligibility at a regularly-scheduled
renewal or based on changes in circumstances at proposed Sec.
435.912(c)(4), (c)(5), and (c)(6), whether the regulations should allow
for a longer or shorter period of time, and whether the use of business
days rather than calendar days would be more appropriate.
Each of the standards proposed in paragraphs (c)(3) through (6)
provides for an exception to the timeliness standards, which is
described in current Sec. 435.912(e), when the agency cannot comply
with the regulatory timelines due to an administrative or other
emergency beyond the agency's control. States that use the timeliness
exception Sec. 435.912(e) must document the reason for delay in the
case record in accordance with Sec. 435.912(f). It is also important
to note that, while the proposed timeliness standards provide maximum
timeframes for completion of redeterminations at renewal or based on
changes in circumstances, they do not constitute additional grace
periods for States or beneficiaries to delay completion of
redeterminations. States are, and will continue to be, expected to
process redeterminations as expeditiously as possible, and additional
time is only authorized beyond the prescribed eligibility period if a
beneficiary responds to a request for information after the date
required by the agency but prior to the date of termination or other
adverse action identified in the beneficiary's advanced notice of
termination or other adverse action.
Finally, we propose a number of technical amendments to paragraphs
(d), (e), (f), and (g) of this section to clearly specify that these
provisions apply to applicants and applications as well as
beneficiaries and redeterminations of eligibility. Because we are
specifying that the timeliness standards in section Sec. 435.912
include both applications and redeterminations, we also propose a
related change to current Sec. 435.912(g). The current provision
prohibits States from using the timeliness standards as a waiting
period for new applicants or as a reason for denying eligibility
because it is not determined within the required timeframe. We propose
to add a new paragraph (g)(3) to Sec. 435.912 that would prohibit
States from using the timeliness standards as a reason for delaying
termination of an individual's coverage or delaying an adverse action.
We propose to apply the same requirements to separate CHIPs through
an existing reference to Sec. 435.912 of the Medicaid regulations in
Sec. 457.340(d)(1). Changes to Sec. Sec. 457.340(d) are discussed in
further detail in section II.E.1. of this preamble.
4. Agency Action on Returned Mail (Sec. Sec. 435.919 and 457.344)
Section 1902(a)(10) of the Act requires States to make medical
assistance available under the State plan to individuals who meet
certain eligibility criteria and provides States with the option to
provide medical assistance to certain other individuals. To ensure that
individuals receiving such assistance continue to meet applicable
eligibility requirements, States must have a process to obtain
information about changes in circumstances and redetermine eligibility
when appropriate, including at annual renewal. In this rulemaking, we
propose at Sec. 435.919(f) certain actions that States must take when
mail sent to a beneficiary is returned to the agency, regardless of
whether the returned mail signals potential ineligibility.
The United States Postal Service (USPS) returns mail sent to
beneficiary when the address used is incorrect, or the individual has
moved and USPS has no record of a forwarding address, or the time-
limited mail forwarding service has expired. That a beneficiary has
moved does not necessarily mean the individual is no longer a State
resident or ineligible on that basis. However, we are concerned that
when a beneficiary's mail is returned to the agency, some States rely
on that information to conclude that the individual cannot be located
and terminate coverage without taking reasonable steps to ascertain the
accuracy of the information received or attempting to locate the
beneficiary and update their address. Additionally, if a State attempts
to contact the beneficiary to verify a new in-state address received
from USPS and the individual does not respond, many States continue to
use the original address in the beneficiary's case record. If the new
address from USPS is correct, the beneficiary has not elected to
receive electronic notices, and an ex parte renewal based on
information available to the agency is not successful, this will result
in termination at the individual's regular renewal because such
beneficiaries will not receive a mailed notice or renewal form and will
be unable to respond as required.
We believe that returned mail may result in a significant number of
beneficiaries who continue to meet all eligibility requirements being
terminated from coverage, and that it is critical for States to take
reasonable steps to locate beneficiaries who may have moved and to
update their address prior to taking any adverse action. Therefore,
consistent with section 1902(a)(4) of the Act, to promote the proper
and efficient administration of the Medicaid program, and section
1902(a)(19) of the Act, to provide such safeguards as may be necessary
to assure simplicity of administration and the best interests of
beneficiaries, we propose adding new paragraph (f) at proposed Sec.
435.919 to specify the steps States must take when beneficiary mail is
returned to the agency.
States rely heavily on communicating with beneficiaries by mail to
facilitate essential eligibility and enrollment actions, such as
renewals and requests for additional information. Returned mail with an
out-of-state or no forwarding address indicates a potential change in
circumstance with respect to State residency, but without additional
follow up by the State, the receipt of returned mail alone is not
sufficient to make a definitive determination as to whether
beneficiaries no longer meet State residency requirements because they
have moved out of State. Returned mail with an in-state forwarding
address is not an indication of a change affecting
[[Page 54792]]
eligibility, but it nonetheless is important for the State to confirm
the accuracy of the information to ensure future ability to contact the
beneficiary, for example, so that the individual can receive and return
a renewal form or other information needed by the State to renew their
eligibility or can receive critical program information.
Under proposed Sec. 435.919(f), when States receive returned
beneficiary mail, they must take proactive steps to verify any
forwarding address provided or to otherwise locate the individual. For
all returned beneficiary mail, including returned mail with an in-
state, an out-of-state, or no forwarding address, we propose at
Sec. Sec. 435.919(f)(1) through 435.919(f)(3), that States conduct a
series of data checks and outreach attempts to locate the beneficiary
and verify their address. If the State is unable to locate or verify a
beneficiary's address after this series of outreach attempts, proposed
Sec. 435.919(f)(4) through (f)(6) outlines required and permissible
State actions based on the location of the address, if any, provided on
the returned mail (that is, in-state or out-of-state). The proposed
steps which States must or may take whenever beneficiary mail is
returned are discussed in more detail, below.
Step 1: Check Available Data Sources for Updated Contact Information
Under proposed Sec. 435.919(f)(1), whenever beneficiary mail is
returned, the State must first check data sources available to the
agency to identify any potential updated mailing address information
available to the State prior to reaching out to the individual. At a
minimum, a State must check for updated mailing contact information
from the following sources: (1) the agency's Medicaid Enterprise System
(MES); (2) the agency's contracted managed care plans, if applicable in
the State; and (3) one or more other third-party data sources,
discussed below.
Updated beneficiary contact information from managed care plans,
enrollment brokers, claims data, and in the case of integrated
eligibility systems, other State administered public benefit systems
may be available in the State's MES, and for this reason we believe it
is critical that States check for potential updated address information
that may be in this system, as reflected at proposed Sec.
435.919(f)(1)(i). Many States have told CMS that individuals enrolled
in a managed care plan are more likely to provide their plan, which
generally has more frequent contact with their beneficiaries than the
State agency, with updated address information. We therefore propose at
Sec. 435.919(f)(1)(ii) that the State must obtain and check the
address on file with the plan for any individual enrolled in a managed
care plan. Finally, there are other third-party data sources available
to State Medicaid agencies, and we propose at Sec. 435.919(f)(1)(iii)
that the State must obtain and check at least one of the following: the
State agency that administers SNAP, the State agency that administers
TANF, the Department of Motor Vehicles, the USPS National Change of
Address (NCOA) database, and other sources specified in the State's
verification plan to determine if a different and more recent address
is available.
Discussed in more detail below, under proposed Sec. 435.919(f)(2)
and 435.919(g), when a State receives a forwarding address on a piece
of returned mail, the State must attempt to contact the individual to
verify the forwarding address and provide them with an opportunity to
confirm or dispute the information.
Step 2: Conduct Outreach Using at Least Two Different Modalities
In verifying a forwarding address provided by USPS under the
proposed rule, States must attempt to contact the beneficiary by both
mail (at proposed Sec. 435.919(f)(2)), as well as a modality other
than mail (at proposed Sec. 435.919(f)(3)), such as by phone,
electronic notice, email, or text message. States have flexibility as
to the order in which they attempt to contact the beneficiary through
the different modalities.
In attempting to contact the beneficiary by U.S. mail, we propose
at Sec. 435.919(f)(2) that the State must send notices to both the
current address on file, the forwarding address (if one is provided by
USPS), and any address more recent than that in the beneficiary's case
records obtained pursuant to proposed Sec. 435.919(f)(1). The notice
must request that the individual confirm their current address. The
State must provide the individual with a reasonable period of time to
verify the accuracy of the new contact information. Consistent with
proposed Sec. 435.919(c)(1), we propose that Sec. 435.919(f)(2)(i)
define this reasonable period of time as 30 calendar days from the date
the notice is sent to the beneficiary. Sending mail to the current
address on file represents a key beneficiary protection to ensure that
initial piece of returned mail was not incorrectly returned.
We propose at Sec. 435.919(f)(3) that, in attempting to contact
the beneficiary using a modality other than mail, the State must make
at least two attempts with at least three business days between the
first and last attempt. In implementing this requirement, States have
flexibility to use any combination of available electronic or
telephonic modalities. Such communications, initiated either directly
by the State agency or through a State contractor or partner, must be
compliant with Federal communications laws such as the Telephone
Consumer Protection Act (47 U.S.C. 227).
If it is not feasible to conduct outreach via an alternative
modality, for example because there is no phone or other electronic
contact information in the case record or obtained from third-party
sources, the State must note that in the case record. For outreach
conducted by electronic or telephonic modalities, States must use the
contact information available on file. States also may leverage the
electronic or telephonic contact information obtained by the State
through data checks pursuant to Sec. 435.919(f)(1) and reach out to
the beneficiary through other modalities pursuant to Sec.
435.919(f)(3).
We note that, under Sec. 435.918, beneficiaries must be provided a
choice to receive notices via mail or in an electronic format. If a
beneficiary has elected to receive notices and communications
electronically, the State must send a notice via the individual's
preferred electronic format and such notice must provide at least 30
calendar days from the date the agency sends the notice to verify the
accuracy of the new contact information. Regardless of the notice
format a beneficiary elects, under the proposed rule States must
attempt to contact individuals for whom they have received returned
mail via both mail and an alternative electronic modality in an effort
to confirm the beneficiary's correct current address. For a beneficiary
who elected to receive electronic notices and communications in
accordance with Sec. 435.918, if a previous electronic communication
attempt failed, the agency cannot use that same electronic modality as
the alternative modality to satisfy the requirement at proposed Sec.
435.919(f)(3). States have flexibility under the proposed rule as to
the order in which they attempt to contact the beneficiary through the
different modalities.
Step 3: State Agency Action Based on Address or No Forwarding Address
if Beneficiary Does Not Respond
If a State agency has exhausted all outreach efforts described in
Sec. Sec. 435.919(f)(1) through (f)(3), then the proposed actions that
a State must or may take depend on whether USPS
[[Page 54793]]
returns an in-state forwarding address, an out-of-state forwarding
address or no forwarding address.
Returned mail with an in-state forwarding address reflects a
potential change in circumstances that does not affect eligibility.
Accordingly, if the beneficiary does not respond to the State's request
to confirm their current address in a reasonable period after the State
has taken the steps required under proposed Sec. Sec. 435.919(f)(1)
through (f)(3), we propose at Sec. 435.919(f)(4)(i) that, consistent
with current Federal policy, the State may not terminate the
beneficiary's coverage if the State does not receive a response to its
requests that the individual confirm their correct current address.
However, while USPS may occasionally return mail sent to a beneficiary
with an erroneous forwarding address, we believe that the USPS
information generally is accurate, and certainly is accurate far more
often than it is inaccurate. This accuracy is buoyed by controls
implemented by USPS, which include charging a fee by credit card to
validate online change of address (COA) requests, requiring individuals
submitting a hardcopy COA request to verify that they understand an
unauthorized COA order is a Federal offense, and sending two
confirmation letters (to the new and old address) to authenticate the
order. Therefore, we propose at Sec. 435.919(f)(4)(ii) that, if the
State does not receive a response from the beneficiary that an in-state
forwarding address provided by USPS is incorrect, the State must accept
the new in-state address and update the beneficiary's account
accordingly.
Similarly, the USPS NCOA database includes the permanent change-of-
address records maintained by the USPS. Every time an individual or
family moves and submits a change-of-address form to their local post
office, their new address is recorded in the NCOA database. States can
establish agreements with USPS to gain access to the NCOA database in
order to utilize these address changes. Therefore, we propose at Sec.
435.919(f)(4)(iv) that, if the State does not receive a response from
the beneficiary that an in-state address provided by NCOA is incorrect,
the State must accept the new in-state address and update the
beneficiary's account accordingly. Additionally, we believe that
updated in-state address information obtained from managed care plans
may be treated as reliable data, provided that the updated contact
information was received by the plan directly from, or was verified
with, the beneficiary. Therefore, we propose at Sec.
435.919(f)(4)(iii) that, if the State does not receive a response from
the beneficiary that an in-state address obtained from a managed care
plan is incorrect, the State must accept the new in-state address and
update the beneficiary's account accordingly. We seek comment on
whether States should be required to update a beneficiary's in-state
address using more recent contact information reflected in a forwarding
address from USPS or an address provided by NCOA or a managed care plan
in this situation, when the beneficiary has not responded to the
State's request to verify their current address.
We note that CMS provided some States with authority under section
1902(e)(14)(A) of the Act to rely on updated contact information from a
reliable third-party source, such as an MCO, without first attempting
to contact the individual and providing them with a reasonable period
of time to verify the accuracy of the new contact information, in
accordance with the State Health Official Letter, ``Promoting
Continuity of Coverage and Distributing Eligibility and Enrollment
Workload in Medicaid, the Children's Health Insurance Program (CHIP),
and Basic Health Program (BHP) Upon Conclusion of the COVID-19 Public
Health Emergency,'' published on March 2, 2022 (SHO letter #22-001). We
seek comment on whether States should be permitted or should be
required to update beneficiary contact information based on information
obtained from an MCO, from the USPS NCOA, or other reliable data
sources without first attempting to contact the beneficiary to provide
them with an opportunity to verify or dispute the new information,
because such third-party data is reliable, and, if so, which data
sources should States be permitted to rely upon without attempting to
contact beneficiaries. We are especially interested in comments from
States that received authority under section 1902(e)(14)(A) of the Act
to update beneficiary contact information based on information received
from a reliable third party without first attempting to contact the
individual, as described in SHO letter #22-001. We also seek comment on
the efficacy of the requirement to send a notice to a beneficiary's
address on file to ensure that initial piece of returned mail was not
incorrectly returned.
Returned mail with an out-of-state forwarding address indicates a
potential change in circumstances (State residency) that may impact
eligibility. Consistent with current requirements under Sec.
435.916(d), we propose at Sec. 435.919(f)(5) that, if a beneficiary
does not respond to the State's requests per proposed Sec.
435.919(f)(1) through (f)(3) for information to verify their current
address, or if information provided does not establish that the
beneficiary continues to satisfy the State residency requirement, the
State must provide advance notice of termination and fair hearing
rights consistent with 42 CFR part 431 subpart E.
Returned mail with no forwarding address. Current regulations at
Sec. 435.916(d) require termination of the eligibility of a
beneficiary for whom an out-of-state forwarding address has been
received if the beneficiary does not respond with information
establishing continued State residency, current regulations at Sec.
431.213(d) provide for an exception to advance notice in the case of a
beneficiary whose ``whereabouts are unknown and the post office returns
agency mail directed to him indicating no forwarding address'' and
current regulations at Sec. 431.231(d) provide for reinstatement of
beneficiaries whose benefits were discontinued due to whereabouts
unknown (``as evidenced by the return of unforwardable agency mail'')
if their whereabouts subsequently become known. However, the current
regulations are unclear with respect to what actions States must take
in the case of beneficiaries who did not respond to the State's
attempts to contact them to confirm their address and for whom the
State has received no forwarding address and was unable to obtain an
updated address from a reliable third-party source.
While it is important that beneficiaries who remain in-state are
not inappropriately terminated, continued enrollment of individuals
whose State residency is unknown, particularly those enrolled in a
managed care plan for whom the State pays a monthly capitation payment,
may result in unnecessary expense to State Medicaid program and Federal
government. To balance these two interests and provide clear
requirements for such situations, we propose revising and redesignating
current regulation at Sec. 431.231(d) at proposed Sec. 435.919(f)(6)
to require that, when a State receives returned beneficiary mail with
no forwarding address, the State must first take reasonable steps to
locate the beneficiary consistent with proposed Sec. Sec.
435.919(f)(1) through (f)(3). If, after taking such steps, the State is
unable to locate the beneficiary, we propose at Sec. 435.919(f)(6)(i)
that States must take appropriate steps to terminate coverage, suspend
coverage, or move the beneficiary into a fee-for-service delivery
system.
Under Sec. 431.231(d) of the current regulations, redesignated at
proposed
[[Page 54794]]
Sec. 435.919(f)(6), States are not required to provide advance notice
of termination in the case of a beneficiary whose whereabouts remain
unknown after the efforts required to locate the individual have been
taken, but are required to provide notice of fair hearing rights.
However, consistent with current regulations at Sec. 431.231(d),
redesignated at proposed at Sec. 435.919(f)(6)(ii)(A), if the
beneficiary's whereabouts become known prior to the beneficiary's
originally-scheduled renewal date, the State must reinstate their
coverage. We propose adding a requirement at Sec. 435.919(f)(6)(ii)(A)
that States must reinstate coverage back to the date of termination if
the individual's whereabouts become known before their next regularly-
scheduled renewal, without the need to verify eligibility. For example,
suppose a beneficiary's eligibility is terminated in April 2023 on the
basis of their whereabouts being unknown. In July 2023, the individual
seeks care, but is told by the provider that their Medicaid coverage
was terminated. If the individual contacts the agency before their next
regularly-scheduled renewal, the agency must immediately reinstate
their coverage retroactive to April 2023. Consistent with current Sec.
435.916(d)(1)(ii), redesignated at proposed Sec. 435.919(e)(2), we are
adding the option at proposed at Sec. 435.919(f)(6)(ii)(B) for States
to begin a new eligibility period (defined in current regulations at
Sec. 435.916(a), redesignated and revised at Sec. 435.916(b) in this
proposed rule) for a beneficiary whose whereabouts become known if the
agency has enough information available to it to renew eligibility with
respect to all eligibility criteria without requiring additional
information from the beneficiary.
Proposed Sec. 435.919(g), describes the steps a State may take if
it obtains updated mailing information from third-party sources other
than returned mail from the USPS. Specifically, we propose at Sec.
435.919(g)(1) that States that obtain updated in-state mailing
information from NCOA or managed care plans may treat such information
as reliable, provided that the State conducts the following outreach.
When updated address information is obtained by the State from NCOA or
from a managed care plan that has a contract with the State, the State
must send a notice to the current address on file with the State and
provide the individual with a reasonable period of time to verify the
accuracy of the new contact information. Consistent with proposed Sec.
435.919(c)(1), we propose that Sec. 435.919(g)(1)(v) define this
reasonable period of time as 30 calendar days from the date the notice
is sent to the beneficiary.
States must also contact the beneficiary through other modalities,
such as via telephone, electronic notice, email, or text message, where
feasible, and must send information to the new address. We propose at
Sec. 435.919(g)(1)(iii) that, in attempting to contact the beneficiary
using a modality other than mail, the State must make at least two
attempts with at least 3 business days between the first and last
attempt. In implementing this requirement, States have flexibility to
use any combination of available electronic or telephonic modalities.
Such communications, initiated either directly by the State agency or
through a State contractor or partner, must be compliant with Federal
communications laws such as the Telephone Consumer Protection Act (47
U.S.C. 227). If it is not feasible to conduct outreach via an
alternative modality, for example because there is no phone or other
electronic contact information in the case record or obtained from
third-party sources, the State must note that in the case record. For
outreach conducted by electronic or telephonic modalities, States must
use the contact information available on file. If the beneficiary does
not respond, the State may update the beneficiary record with the new
contact information. If the beneficiary responds and confirms the new
address, the State must update the beneficiary record with the new
contact information. Critically, States should ensure that managed care
plans only provide updated contact information received directly from
or verified by the beneficiary, and not from a third party or other
source. We remind States that the rules at Sec. Sec. 435.919(b) and
435.952(d) apply for out-of-state address information obtained under
Sec. 435.919(g).
At Sec. 435.919(g)(2), we propose that States may treat updated
in-state address information from other trusted data sources in
accordance with proposed paragraph (g)(1) if the State obtains approval
from the Secretary. At Sec. 435.919(g)(3), we propose the process that
States must follow when obtaining any address information from any
sources not listed in paragraph (g)(1) or (2) of this section. Under
Sec. 435.919(g)(3), the agency must follow the steps outlined in Sec.
435.919(f)(2) through (6), related to returned mail in order to confirm
the address change with the beneficiary. We seek comment on whether
States either should be permitted or should be required to update
beneficiary contact information based on information obtained from an
MCO, from the USPS NCOA, or other reliable data sources, such as Indian
Health Care Providers, Federally Qualified Health Centers, Rural Health
Clinics, Program of All-inclusive Care for the Elderly providers,
Primary Care Case Managers, Accountable Care Organizations, Patient
Centered Medical Homes, Enrollment Brokers, or other State Human
Services Agencies (for example, SNAP), without first attempting to
contact the individual to provide them with an opportunity to verify or
dispute the new information, because such third-party data is reliable,
and, if so, which data sources should States be permitted to rely upon
without attempting to contact beneficiaries. We are especially
interested in comments from States that received authority under
section 1902(e)(14)(A) of the Act to update beneficiary contact
information based on information received from a reliable third party
without first attempting to contact the beneficiary, as described in
SHO letter #22-001. We also seek comment on the efficacy of the
requirement to send a notice to a beneficiary's address on file to
ensure that initial piece of returned mail was not incorrectly
returned, and on the efficacy of the requirement to conduct at least
two outreach attempts to the beneficiary using a modality other than
mail. We also seek comment on the requirements in proposed Sec.
435.919(g)(3) paragraphs (f)(2) through (6), related to processing out-
of-state address information or address information from a source not
identified in Sec. 435.919(g)(1), including whether CMS should
consider including a requirement that a State check the available data
sources outlined in Sec. 435.919(f)(1)(i) and Sec. 435.919(f)(1)(ii).
Finally, we make a conforming amendment to Sec. 431.213(d), which
currently cross references Sec. 431.231(d), to instead reference Sec.
435.919(f). Proposed changes to Sec. 457.344 regarding the
responsibilities of States administering a separate CHIP in the event
of returned mail and when they receive information from a third party
about a change in address for individuals enrolled in a separate CHIP
are discussed in further detail in section II.E.3 of this preamble.
5. Transitions Between Medicaid, CHIP and BHP Agencies (Sec. Sec.
431.10, 435.1200, 600.330)
Section 1943 of the Act requires Medicaid agencies to collaborate
with separate CHIP and BHP agencies, if such agencies exist in the
State, and with the Exchanges to establish a coordinated
[[Page 54795]]
eligibility and enrollment process. Through this process, most
applicants, as well as beneficiaries whose eligibility is being
redetermined, are evaluated for eligibility for each of these insurance
affordability programs and may enroll in the program for which they are
eligible without having to complete separate applications. The
requirements to coordinate eligibility and enrollment among insurance
affordability programs were established in the 2012 eligibility final
rule at Sec. 435.1200. State experience in implementing Sec. 435.1200
has revealed some weaknesses in the requirements, which permit eligible
individuals to experience unnecessary gaps in coverage and periods of
uninsurance. Through this proposed rule, we seek to correct those
weaknesses and reduce coverage gaps wherever possible.
One weakness in the current requirements occurs when an agency has
information indicating that a beneficiary is no longer Medicaid
eligible and likely eligible for another insurance affordability
program, but the individual does not respond to confirm this
information. As discussed in sections II.B.1. and II.B.2. of this
preamble, when the agency receives information reported by a
beneficiary or from a reliable third-party source which may affect
eligibility, the agency must promptly redetermine the individual's
eligibility. If the third-party information would result in an adverse
action, the agency must contact the beneficiary and request additional
information to verify or dispute the information. Similarly, when a
State accesses available information in attempting to renew an
individual's eligibility during a regularly-scheduled renewal and
obtains information indicating the individual may no longer be
eligible, it must send the beneficiary a renewal form (which must be
prepopulated for MAGI-based beneficiaries under the current
regulations) and provide sufficient time for the individual to return
the form and any other information or documentation needed to establish
continued eligibility (at least 30 calendar days for MAGI-based
beneficiaries under the current regulations). When a beneficiary or a
beneficiary's representative does not respond to such requests, the
agency must provide the individual with advance notice of termination
and fair hearing rights, consistent with part 431 subpart E of the
regulations.
For most individuals determined ineligible for Medicaid, current
Sec. 435.1200(e) requires the agency to determine potential
eligibility for other insurance affordability programs and, as
appropriate, transfer the individual's electronic account to the
appropriate program. However, because this requirement applies only to
a beneficiary who ``submits an application or renewal to the agency
which includes sufficient information to determine Medicaid
eligibility,'' the agency is not required to transfer an individual's
account in all cases. When a beneficiary does not submit a required
renewal form or other information needed to redetermine or renew
eligibility, the Medicaid agency must send such advance notice of
termination but is not required to transfer the individual's account to
another insurance affordability program.
These terminations, without a resulting transfer to another
insurance affordability program, can create major disruptions in health
insurance coverage for otherwise eligible individuals. For example, a
family may receive notification of potential income ineligibility for
Medicaid, but may not respond because the information described in the
notification is correct, and the family does not understand that they
need to confirm their increased income so their account will be
transitioned to CHIP, BHP, or the Exchange in their State in accordance
with current Sec. 435.1200(e).
Disenrollment from health insurance coverage without a
corresponding transition to enrollment in another insurance
affordability program is a troubling outcome, particularly since
regulatory requirements at Sec. 435.1200 for Medicaid, Sec. Sec.
457.348 and 457.350 for CHIP, Sec. 600.330 for BHP, and 45 CFR 155.302
for Exchanges were designed to ensure coordination of coverage and
smooth transitions between insurance affordability programs. Losses of
coverage are even more troubling when different programs share an
eligibility system and a determination of eligibility for one program
could be completed seamlessly as the individual is determined
ineligible for another program.
When developing the coordination requirements currently published
at Sec. Sec. 435.1200, 457.348 and 457.350, and 600.330, and 45 CFR
155.302, we recommended, but did not require States to utilize a shared
eligibility system or service for all insurance affordability programs.
Today, we believe every State with separate programs for Medicaid and
CHIP \60\ utilizes a single eligibility system or shared eligibility
service for eligibility determinations based on MAGI. As such, when a
Medicaid beneficiary is determined ineligible due to an increase in
household income, and the individual is screened for potential CHIP
eligibility, the system effectively makes a determination of financial
eligibility for CHIP. We believe the Medicaid agency could complete the
determination of CHIP eligibility based on available information, so
the individual does not need to be screened and then transferred to the
separate CHIP agency before a determination of CHIP eligibility can be
completed.
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\60\ As of June 1, 2022, 40 States have a separate CHIP; this
includes 2 States with only a separate CHIP and 38 States with both
a Medicaid expansion and a separate CHIP.
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Additionally, while Medicaid and CHIP are separate programs, both
use MAGI-based methodologies described at section 1902(e)(14) of the
Act, further detailed at Sec. Sec. 435.603 for Medicaid and cross-
referenced at Sec. 457.315 for CHIP, to determine financial
eligibility. Further, States can, and often do, utilize the same
policies and procedures to verify MAGI-based income eligibility for
Medicaid and CHIP. In fact, current Sec. 435.1200(d)(4) requires the
Medicaid agency to accept findings related to eligibility criteria made
by a separate CHIP agency without further verification if that program
applies the same verification policies as those used by the Medicaid
agency. A similar requirement applies to CHIP at Sec. 457.348(c)(4).
Because the same financial methodologies are used for each program, if
the same verification requirements apply, a determination of financial
eligibility used to determine CHIP eligibility must be accepted by the
Medicaid agency in determining financial eligibility for Medicaid and
vice versa.
Through this rule, we propose changes to Sec. 435.1200 to improve
transitions between Medicaid and a separate CHIP; corresponding changes
to CHIP are described in section II.E.5 of this preamble. We note that
these changes would apply only to transitions between Medicaid and a
separate CHIP. They would not apply to transitions between title XIX
funding and title XXI funding within Medicaid in States that implement
CHIP through a Medicaid expansion, either in whole or in part.
Current Sec. 435.1200 implements the ACA requirements established
at section 1943(b) of the Act relating to the coordination of
enrollment among insurance affordability programs. The general
requirements for coordination are described at Sec. 435.1200(b).
Paragraph (b)(1) requires the Medicaid agency to fulfill the general
responsibilities described in later paragraphs, while paragraph (b)(2)
requires the agency to certify, for the
[[Page 54796]]
other insurance affordability programs, the criteria for determining
Medicaid eligibility. Current Sec. 435.1200(b)(3) requires the agency
to enter into an agreement with the agency or agencies administering a
separate CHIP, BHP, and the Exchange operating in the State; such
agreement(s) must include a clear delineation of the responsibilities
of each program with respect to eligibility determinations, notices,
and fair hearings. Paragraphs (c) and (d) describe the Medicaid
agency's responsibilities for eligibility and enrollment when an
individual has been determined Medicaid eligible (paragraph (c)) or
assessed as potentially Medicaid eligible (paragraph (d)) by a separate
CHIP, BHP, or Exchange. Paragraph (e) of current Sec. 435.1200
describes the responsibilities of the Medicaid agency to evaluate an
individual's eligibility for CHIP, BHP, and coverage through the
Exchanges when an individual is determined not eligible for Medicaid
(Sec. 435.1200(e)(1)) or is undergoing a Medicaid eligibility
determination on a non-MAGI basis (Sec. 435.1200(e)(2)). Paragraphs
(f) through (i) of current Sec. 435.1200 describe the coordination
requirements for an enrollment website, appeals, and notices.
Among the requirements for enrollment simplification and
coordination described in section 1943(b) of the Act, paragraph
(b)(1)(F) specifically requires outreach and enrollment of underserved
populations eligible for Medicaid. One of the populations called out
for focused outreach and enrollment is children, including subsets of
particularly underserved children, as well as racial and ethnic
minorities, rural populations, and individuals with mental health and/
or substance use disorders. While the increase in uninsurance among
children known to be eligible for Medicaid or another insurance
affordability program has leveled off since 2020 when the PHE went into
effect, likely due in large measure to the continuous enrollment
condition under the FFCRA discussed in the background section of this
preamble, in order to reduce the likelihood of future increases in
uninsurance, we propose a new approach to implementing the coordination
requirements in section 1943(b) of the Act.
Section 1902(a)(19) of the Act requires that the Medicaid State
plan include safeguards to ensure that eligibility is determined in a
manner that is consistent with the simplicity of administration and the
best interests of beneficiaries. We believe the language and
requirements in Sec. 435.1200, which do not require transition of
otherwise eligible individuals from one program to another when
beneficiaries have failed to provide requested information to confirm
or dispute third-party data indicating a change in eligibility, have
contributed to an increase in uninsurance among individuals losing
coverage under Medicaid and CHIP, even though they meet the eligibility
requirements for another one of those programs. This result is
inconsistent with both the simplicity of administration of the Medicaid
program and the best interest of Medicaid beneficiaries.
Utilizing the authority provided in sections 1902(a)(19) and
1943(b)(1)(F) of the Act, we propose to revise paragraphs (b), (c),
(e), and (h) of Sec. 435.1200 to improve enrollment of underserved
populations and to reduce unnecessary administrative barriers to
coverage by requiring Medicaid agencies, in States with a separate
CHIP, to:
Provide for an agreement with the separate CHIP agency to
seamlessly transition the eligibility of beneficiaries between Medicaid
and CHIP when their eligibility status changes;
Accept determinations of MAGI-based Medicaid eligibility
made by a separate CHIP;
Establish procedures to receive determinations of Medicaid
eligibility completed by a separate CHIP;
Complete determinations of eligibility for a separate CHIP
for individuals who are determined ineligible for Medicaid based on
reliable third-party data; and
Issue a combined notice indicating ineligibility for
Medicaid and eligibility for CHIP when appropriate.
In section II.E.4. of this preamble, we discuss proposed changes to
the CHIP regulations that correspond with these proposed requirements
for Medicaid agencies. When proposed changes to the Medicaid and CHIP
regulations are read together, they would ensure that (1) when an
individual is determined ineligible for Medicaid, the individual would
receive a determination of CHIP eligibility (from the Medicaid agency)
and, if eligible for CHIP, the individual's electronic account would be
transferred from the Medicaid agency to the separate CHIP agency, with
the separate CHIP agency completing any enrollment-related activities
such as collection of an applicable enrollment fee or premium and/or
plan selection; and (2) when CHIP determines that an enrollee has
become ineligible for CHIP, the individual would receive a
determination of MAGI-based Medicaid eligibility, and, if eligible for
Medicaid, the individual's electronic account would be transferred from
the separate CHIP agency to the Medicaid agency, with the Medicaid
agency completing any enrollment related activities such as issuing a
Medicaid card.
We believe these changes could address potential declines in
enrollment that may result from eligible individuals not being
seamlessly transitioned to Medicaid from CHIP and from Medicaid to CHIP
when available information indicates eligibility for the other program.
We propose the following specific revisions to the coordination
requirements for States with a separate CHIP.
Preliminarily, we propose to add a new requirement to the list of
requirements in current Sec. 435.1200(b)(3) that must be addressed in
agreements between the Medicaid agency and other insurance
affordability programs. Proposed Sec. 435.1200(b)(3)(vi) would require
the Medicaid agency to include in its agreement with the State's
separate CHIP agency, procedures for seamlessly transitioning the
eligibility of individuals from Medicaid to CHIP when they are
determined ineligible for Medicaid and eligible for CHIP. The agreement
would also include procedures for seamlessly transitioning the
eligibility of individuals from CHIP to Medicaid when they are
determined ineligible for CHIP by that program and eligible for
Medicaid. The agreement required under Sec. 435.1200(b)(3) would
describe the responsibilities for each State agency administering
Medicaid and CHIP to effectuate the required coordination.
We propose to add a requirement at Sec. 435.1200(b)(4) that the
Medicaid agency must accept a determination of MAGI-based Medicaid
eligibility made by the State agency administering a separate CHIP (See
section II.E.5. of this preamble for a discussion of the proposed
requirements for agencies administering a separate CHIP to determine
MAGI-based Medicaid eligibility.). There are a number of different
options that the Medicaid agency could use to effectuate this
requirement in compliance with the single State agency's responsibility
to determine Medicaid eligibility described at Sec. 431.10(b)(3).
If the separate CHIP is administered by the single State
agency that administers the Medicaid program, then the single State
agency itself can determine Medicaid eligibility at the same time as it
is determining CHIP ineligibility.
If the separate CHIP is not part of the single State
agency, then as described at proposed Sec. 435.1200(b)(4)(i), the
Medicaid and
[[Page 54797]]
CHIP agencies could agree to utilize the same MAGI-based methodologies
under Sec. Sec. 435.603 and 457.315, and verification policies and
procedures under Sec. Sec. 435.940 through 435.956 and 457.380, such
that the Medicaid agency would accept any finding relating to a
criterion of eligibility made by a separate CHIP agency without further
verification in accordance with current regulations at Sec.
435.1200(d)(4).
As described at proposed Sec. 435.1200(b)(4)(ii), the
agency may use a shared eligibility service that allows the Medicaid
agency to maintain responsibility for the rules and requirements used
to determine Medicaid eligibility, while permitting the separate CHIP
agency to determine Medicaid eligibility by running the rules in the
shared eligibility service maintained by the Medicaid agency when
ineligibility for CHIP is determined. In such cases, any functions
performed by the separate CHIP agency would be solely administrative in
nature, and not reflective of a delegation of authority to make
Medicaid eligibility determinations.
If the separate CHIP agency does not use the same MAGI-
based methodologies and verification procedures as those used by
Medicaid, and the two programs do not share an eligibility service with
the Medicaid agency, we propose at Sec. 435.1200(b)(4)(iii) that the
Medicaid agency may enter into an agreement in accordance with Sec.
431.10(d) of the regulations, as amended in this proposed rule, and
Sec. 431.10(c) under which the Medicaid agency delegates authority to
make final Medicaid eligibility determinations to the entity that makes
eligibility determinations for a separate CHIP agency. To effectuate
this option, we propose to add the State agencies that administer the
separate CHIP and BHP programs to the list of entities in Sec.
431.10(c)(1)(i)(A) to which the Medicaid agency may delegate authority
to make determinations of Medicaid eligibility. A separate BHP agency
is added to the list of entities to which Medicaid may delegate
eligibility determinations to accommodate either an option or a
requirement for a State's BHP to complete determinations of Medicaid
eligibility.
Finally, at proposed Sec. 435.1200(b)(4)(iv), we would
provide States with the option to utilize a different policy or
procedure approved by the Secretary.
We request comment on whether there are different ways that States
with a separate CHIP agency should be permitted to effectuate a
seamless transition of eligibility into Medicaid for individuals
determined ineligible for CHIP.
We also propose to expand the scope of paragraph (c) of Sec.
435.1200, which provides for the provision of Medicaid to individuals
determined eligible by another insurance affordability program. Current
Sec. 435.1200(c) applies only to States that have entered into an
agreement under which the Exchange or another insurance affordability
program makes final determinations of Medicaid eligibility. We propose
to amend Sec. 435.1200(c) to require Medicaid agencies, which must
accept final determinations of Medicaid eligibility completed by a
separate CHIP agency in accordance with proposed paragraph (b)(4), to
do so in accordance with the requirements of paragraph (c), as
described below.
Current Sec. 435.1200(c)(1) through (c)(3) require the Medicaid
agency to establish procedures to receive electronic accounts from
another insurance affordability program; comply with the requirements
of Sec. 435.911 (relating to determinations of Medicaid eligibility)
to the same extent as if the Medicaid agency had received the
application in an account transferred to it; and maintain proper
oversight of the Medicaid program. We propose to redesignate the
responsibilities described at current Sec. 435.1200(c)(1) through
(c)(3) as paragraphs (c)(1)(i) through (iii), to delete the current
introductory language in Sec. 435.1200(c), and to add a new paragraph
(c)(2) to describe the individuals who would be subject to the
requirements set out in proposed paragraph (c)(1).
Specifically, proposed Sec. 435.1200(c)(2)(i) describes the
individuals currently subject to the requirements in Sec.
435.1200(c)--that is, individuals determined Medicaid eligible by the
Exchanges or other insurance affordability programs (for example, a
BHP), including as a result of a decision made by the appeals entity
for such program, if the agency has entered into an agreement under
which the Exchange or other insurance affordability program may make
final determinations of Medicaid eligibility. Proposed Sec.
435.1200(c)(2)(ii) describes individuals who are determined Medicaid
eligible by a separate CHIP agency, including as the result of a
decision made by a CHIP review entity in accordance with proposed
435.1200(b)(4).
Because we propose to require all States with a separate CHIP to
fulfill the responsibilities of proposed Sec. 435.1200(c), not just
those States that choose to enter into an agreement with another
insurance affordability program, we also propose to revise the general
requirement at Sec. 435.1200(b)(1) (which currently provides that the
Medicaid agency fulfill the requirements set forth in Sec. 435.1200(d)
through (h)) to include paragraph (c) in the list of requirements in
Sec. 435.1200 which the Medicaid agency must fulfill. Similarly, we
propose to revise Sec. 435.1200(b)(3)(ii), which provides that the
agreements established between the Medicaid agency and other insurance
affordability programs must ensure compliance with Sec. 435.1200(d)
through (h), to include paragraph (c) of Sec. 435.1200.
We do not propose to make any changes to Sec. 435.1200(d) in this
proposed rule. Paragraph (d) requires the Medicaid agency to accept a
determination of potential Medicaid eligibility made by another
insurance affordability program. Because this rule would not require
the Medicaid agency to enter into an agreement to accept eligibility
determinations made by a BHP or Exchange or to make determinations of
eligibility for BHP or for insurance affordability programs available
through the Exchanges, we believe this paragraph will continue to be
necessary in these cases. In addition, we recognize that there may be
cases in which a separate CHIP agency does not have access to all
information needed to determine eligibility for Medicaid (for example,
on a non-MAGI basis), but may be able to complete a determination of
potential eligibility and transfer the individual's electronic account
to the Medicaid agency to request the additional information and
complete the determination.
The proposed revisions to Sec. 435.1200(c) aim to improve the
seamless transition of individuals from a separate CHIP to Medicaid. We
also propose changes to Sec. 435.1200(e) to improve the seamless
transitioning of individuals from Medicaid to a separate CHIP. Current
Sec. 435.1200(e)(1) describes the requirements that, for individuals
determined ineligible for Medicaid, the Medicaid agency determine
potential eligibility for and, as appropriate, transfer via a secure
electronic interface the individual's electronic account to another
insurance affordability program (that is, CHIP, BHP or Exchange).
As mentioned previously, current Sec. 435.1200(e)(1) does not
require the agency to transfer an individual's account to another
insurance affordability if the individual fails to submit a ``renewal
to the agency which includes sufficient information to determine
Medicaid eligibility[.]'' We propose to remove reference to submission
of a renewal form, such that
[[Page 54798]]
the Medicaid agency would be required to transfer the account of an
individual who, during a regularly-scheduled renewal or redetermination
based on a change in circumstances, has been determined ineligible for
Medicaid and determined eligible, or potentially eligible, for another
insurance affordability program based on available information. We note
that this does not change the agency's obligation to provide
individuals with an opportunity to dispute the information obtained by
the agency indicating Medicaid ineligibility before the agency
terminates their Medicaid eligibility, as required at current Sec.
435.952(d), or to provide advance notice of termination and fair
hearing rights in accordance with part 431 subpart E of the
regulations.
We also propose to revise Sec. 435.1200(e)(1) by breaking it into
two paragraphs--paragraphs (e)(1)(i) and (ii)--establishing separate
requirements for situations in which the Medicaid agency completes a
determination of eligibility for a separate CHIP agency and situations
in which the Medicaid agency makes a determination of potential
eligibility for BHP or for insurance affordability programs available
through the Exchanges.
At proposed Sec. 435.1200(e)(1)(i), we would require that in a
State that operates a separate CHIP, when the Medicaid agency
determines an individual to be ineligible for Medicaid, it must also
determine whether the individual is eligible for CHIP using information
available to the agency. Information on the individual's financial
eligibility will already be available in the eligibility system, along
with certain non-financial eligibility factors such as State residency
and citizenship or eligible immigration status. Other eligibility
criteria which may be applicable to determining eligibility for CHIP,
which are not relevant in a Medicaid determination, include enrollment
in other insurance coverage and access to State employee health
insurance. We believe State Medicaid agencies have access to other
reliable data sources from which they can obtain any additional
information that may be needed about these criteria. State Medicaid
agencies have information on other insurance coverage that a
beneficiary may have, which States are required to obtain from insurers
for purposes of third-party liability and coordination of benefits per
section 1902(a)(25)(I) of the Act. State Medicaid agencies also can
access information on the availability of State employee health
coverage from the State agency which administers such coverage. We
believe it is consistent with simplicity of administration and the best
interests of beneficiaries for the agency to be expected to access
these data sources to make a determination of eligibility for CHIP.
We recognize that it may be easier for some States to identify
access to State employee health coverage than others. For example, in
some States, a single State agency may administer the employee health
plan for all State employees, and the plan may be available only to
State employees and their dependents. While in other States,
particularly those in which the government is more decentralized or in
which local government agencies also participate in State employee
health coverage, we believe it may be more difficult to access such
information. We seek comment on State Medicaid agencies' ability to
collect information on access to State employee health coverage,
particularly if a child is not already enrolled in such coverage,
without requiring additional information from the family.
Ideally, an individual's enrollment in CHIP would be effectuated at
the same time the State terminates coverage in Medicaid so the
individual would not experience a period of uninsurance. However, we
recognize that the separate CHIP agency may require payment of an
enrollment fee or premium or other action, like plan selection, before
enrollment can be completed. A combined notice, discussed later in this
section, may mitigate some risk of a coverage gap by notifying the
individual about the CHIP enrollment fee or premium requirement at the
same time advance notice of Medicaid termination is issued, providing
some additional time for families to make the required CHIP payment
before Medicaid coverage ends. We seek comment on challenges States may
face in smoothly transitioning enrollment from Medicaid to CHIP and
processes that could be implemented to address these challenges. We
also seek comment on whether there are situations in which the Medicaid
agency would be able to complete only a determination of potential
eligibility for CHIP, such that the final regulation would need to
allow for situations in which the Medicaid agency would transfer the
individual's electronic account to the agency administering a separate
CHIP to finalize the determination for its own program.
Proposed Sec. 435.1200(e)(1)(ii) would require that when the
Medicaid agency determines an individual to be ineligible for both
Medicaid and CHIP, the agency must determine potential eligibility for
BHP if the State operates a BHP and if ineligible for BHP, the agency
must determine potential eligibility for insurance affordability
programs available through the Exchanges. This is consistent with the
current regulatory requirement at Sec. 435.1200(e)(1).
As important as it is to transition an individual from one
insurance affordability program to another when eligibility changes, it
is equally important to ensure that such individual receives clear and
consistent information about the transition, both before the change is
effectuated and when the transition occurs. It can be very confusing
for individuals to receive separate notices from the Medicaid program
and CHIP, particularly when they arrive at different times.
Accordingly, we propose to require that individuals be provided with a
combined eligibility notice when either the Medicaid agency determines
the individual ineligible for Medicaid and eligible for CHIP or the
separate CHIP agency determines the individual eligible for Medicaid
and ineligible for CHIP.
A ``combined eligibility notice'' is defined at current Sec. 435.4
as an eligibility notice that informs an individual or multiple family
members of a household of eligibility for each of the insurance
affordability programs, for which a determination or denial of
eligibility was made, as well as any right to request a fair hearing or
appeal related to the determination made for each program. A combined
notice must meet the general requirements described at Sec.
435.917(a), along with the more specific requirements at Sec. Sec.
435.917(b) (relating to required content) and 435.917(c) (relating to
pursuing eligibility on a non-MAGI basis), except that information
described in Sec. Sec. 435.917(b)(1)(iii) (relating to medically needy
coverage) and 435.917(b)(1)(iv) (relating to covered benefits and
services) may be included either in a combined notice issued by another
insurance affordability program or in a supplemental notice provided by
the agency. A combined eligibility notice must be issued in accordance
with the agreement(s) between the agency and other insurance
affordability program(s) per Sec. 435.1200(b)(3).
Current Sec. 435.1200(h)(1) requires that, to the maximum extent
feasible, individuals and households receive a single notice rather
than separate notices from each applicable insurance affordability
program, communicating the determination of eligibility as required
under Sec. Sec. 435.917 and 457.340. In the preamble to the 2016 final
rule,
[[Page 54799]]
we noted concerns from a number of commenters about the ability of
State systems to issue a combined notice and described several
considerations when looking at the feasibility of issuing combined
notices. These considerations included whether the State uses a shared
eligibility service, whether the State relies on a Federally-
facilitated Exchange to make determinations of Medicaid eligibility,
and the maturity of the State's systems with greater use of combined
eligibility notices expected as systems mature. In the 2016 final rule,
we explained that it should be feasible to issue a combined notice when
a single eligibility system or shared eligibility service is making
determinations for multiple programs. As such, we believe that when the
agency is enrolling an individual in Medicaid based on a determination
of eligibility completed by another program, or vice versa, issuance of
a combined eligibility notice should always be feasible.
Therefore, we propose to revise Sec. 435.1200(h)(1) to require in
all cases that individuals determined ineligible for Medicaid and
eligible for CHIP in States with separate CHIP and Medicaid agencies in
accordance with proposed Sec. 435.1200(e)(1)(i) receive a combined
eligibility notice informing them that: (1) they have been determined
no longer eligible for Medicaid; and (2) they have been determined
eligible for CHIP. Similarly, we propose to require the Medicaid agency
to ensure that an individual determined eligible for Medicaid by a
separate CHIP agency also receives a combined notice. We propose to
effectuate this requirement through a new paragraph (h)(1)(i) at Sec.
435.1200, which would require that the Medicaid agency include in its
agreement with a separate CHIP agency (as described in Sec.
435.1200(b)(3) and revised in this rulemaking), that either the
Medicaid agency or the CHIP agency will provide such combined
eligibility notice explaining both the termination of eligibility for
Medicaid and the determination of eligibility for CHIP or vice versa.
States that operate its CHIP and Medicaid programs under the same
agency and eligibility system that already provide a seamless, combined
Medicaid and CHIP notice, may not need to make any changes. Note that
regardless of which entity sends the combined notice, per the
definition of combined notice in Sec. 435.4 of the current
regulations, the Medicaid content of the notice must comply with the
requirements set forth in Sec. 435.917.
Proposed Sec. 435.1200(h)(1)(ii) would maintain the requirement in
current Sec. 435.1200(h)(1) that, to the maximum extent feasible, a
combined eligibility notice be issued in all other cases (that is,
situations not described at proposed Sec. 435.1200(h)(1)(i)),
consistent with current regulations. This provision would apply to
situations in which the Medicaid agency has determined an individual to
be potentially eligible for a BHP or insurance affordability programs
available through the Exchanges, and to situations in which an
Exchange, CHIP or BHP has made an assessment of potential Medicaid
eligibility, including on a non-MAGI basis, but not a final
determination. In addition, as currently required, when more than one
individual is included on an application or renewal, Medicaid and the
other insurance affordability programs would be expected to provide a
single combined notice for all household members to the extent
possible, even if members are eligible for different programs.
We recognize that State eligibility systems still continue to
mature and many States are still working through a backlog of system
changes to correct issues arising from changes made in response to
earlier rulemaking. We seek comment on the feasibility of implementing
a combined notice for Medicaid and CHIP eligibility determinations, as
well a combined notice with determinations of BHP and insurance
affordability programs available through the Exchanges, both in States
using a fully integrated eligibility system or shared system and in
States utilizing separate systems. We also seek comment on the time
that would be required for States to implement these changes if they
are not already issuing combined eligibility notices.
Finally, we propose one overarching policy change and several
technical amendments to Sec. 435.1200. With respect to the policy
change, we propose to clarify that the requirements at proposed Sec.
435.1200(e)(1) (related to determining eligibility or potential
eligibility for other insurance affordability programs) apply not only
to individuals who have been determined ineligible for Medicaid on all
bases, but also to individuals who have been determined ineligible for
Medicaid coverage that is considered minimum essential coverage as
defined at Sec. 435.4. We would effectuate this requirement through a
new paragraph (e)(4) at Sec. 435.1200. Consider for example, an
individual covered under the eligibility group for children under age
19 (described at Sec. 435.118), which provides minimum essential
coverage. If the agency determines that the individual's MAGI-based
household income has increased such that it exceeds the income standard
for that eligibility group and the only group for which that individual
is eligible is the eligibility group in which coverage is limited to
family planning and family planning-related services (described at
Sec. 435.214), which does not provide minimum essential coverage, then
in accordance with proposed Sec. 435.1200(e)(1), the agency would be
required to determine that individual's eligibility for a separate
CHIP. If the State either does not offer a separate CHIP, or the
individual does not meet the eligibility requirements for that program,
then the agency would need to determine that individual's potential
eligibility for BHP and for insurance affordability programs available
through the Exchanges and transfer the individual's account in
accordance with proposed Sec. 435.1200(e)(1)(iii).
Regarding the technical amendments, first we propose to remove
``and definitions'' from the title of Sec. 435.1200(b), as definitions
are currently included in Sec. 435.1200(a), and we propose to correct
the spelling of ``programs'' in Sec. 435.1200(b)(3)(i). Second, we
propose a technical change to 435.1200(e)(1) to replace the reference
to Sec. 435.916(d) with a reference to proposed Sec. 435.919 to
reflect the re-designation of current Sec. 435.916(d) at Sec. 435.919
in this proposed rule. And third, we propose to correct a numbering
error in Sec. 435.1200(h). The paragraph following Sec.
435.1200(h)(3)(i)(B) was incorrectly numbered as (i), and we propose to
renumber this paragraph as Sec. 435.1200(h)(3)(ii).
In summary, the proposed changes to Sec. 435.1200 would require
the Medicaid agency to:
Ensure that the agreement between the agency and the
separate CHIP agency includes procedures for the seamless transition of
eligibility between programs;
Accept determinations of Medicaid eligibility made by a
separate CHIP agency;
Make determinations of CHIP eligibility and transfer
eligible individuals to the separate CHIP agency; and
Provide for the issuance of a combined notice to an
individual who is determined ineligible for Medicaid and eligible for
CHIP or eligible for Medicaid and ineligible for CHIP.
We considered applying these same changes to BHP agencies.
Currently, the BHP regulation at Sec. 600.330(a) requires the BHP
agency to establish eligibility and enrollment mechanisms and
procedures to maximize coordination with the Exchange, Medicaid, and
CHIP.
[[Page 54800]]
Additionally, it requires a State BHP agency to fulfill the
requirements of Sec. 435.1200(d) and (e), and if applicable, paragraph
(c) for BHP eligible individuals. In this proposed rule, we propose to
revise Sec. 600.330(a) to limit the Medicaid requirements that a BHP
agency must fulfill to those in Sec. 435.1200(d), (e)(1)(ii) and
(e)(3). Paragraph (c) of Sec. 435.1200 would still be required when
applicable (that is, when the BHP agency has entered into an agreement
with another insurance affordability program to make final
determinations of BHP eligibility).
We seek comment on whether it is appropriate to apply the changes
designed to create seamless transitions between Medicaid and a separate
CHIP to BHP as well. This would include maintaining the current
language in Sec. 600.330(a) and revising paragraphs (b), (c), (e), and
(h) of Sec. 435.1200 to require the Medicaid agency to amend its
agreement with the BHP agency to seamlessly transition eligibility
between programs, to accept determinations of Medicaid eligibility made
by the BHP agency, to make determinations of BHP eligibility, and to
provide for the issuance of a combined Medicaid and BHP eligibility
notice. or to maintain current coordination requirements, such that
BHPs are required only to evaluate potential eligibility for Medicaid
and CHIP and to accept determinations of potential BHP eligibility made
by a Medicaid or separate CHIP agency. This would not prohibit a BHP
from entering into an agreement with Medicaid and/or CHIP in which each
agency completes determinations of eligibility for the other. These
changes would require the State Medicaid agency to make a determination
of eligibility for BHP based on information available through
electronic or other data sources. We seek comment on whether it is
possible for the Medicaid agency to gather the information necessary to
complete such a determination, specifically, information on other
affordable insurance coverage available to an individual.
6. Optional Group for Reasonable Classification of Individuals Under 21
Who Meet Criteria for Another Optional Group (Sec. 435.223)
Section 1902(a)(10)(A)(ii) of the Act authorizes States to provide
Medicaid to one or more of the categorical populations described in
section 1905(a) of the Act who also meet the requirements described in
section 1902(a)(10)(A)(ii) of the Act (which lists the optional
categorically needy eligibility groups). With specific regard to the
categorical population described in section 1905(a)(i) of the Act--
individuals under age 21 or, at State option, under age 20, 19 or 18--
the introductory language in section 1902(a)(10)(A)(ii) of the Act
permits States to extend medical assistance to ``reasonable
categories'' of such individuals. Section 435.222 implemented optional
coverage of individuals under the age of 21, 20, 19, or 18, or a
reasonable category of such individuals (referred to as ``reasonable
classifications'' in the regulations) who meet the AFDC income and
resource requirements, as described in section 1902(a)(10)(A)(ii)(I) of
the Act. Prior to January 1, 2014, and the implementation of MAGI-based
methodologies under the ACA, States also were permitted to raise the
effective income standard for eligibility for coverage under this group
through adoption of income disregards under section 1902(r)(2) of the
Act and Sec. 435.601(d) of the regulations. Many States used a
combination of these authorities to provide Medicaid to all individuals
under age 21, as well as to various State-defined reasonable
classifications of such individuals up to varying income standards
under their State plan.
Revisions finalized in the 2016 eligibility and enrollment final
rule reflect the adoption of MAGI-based methodologies in determining
financial eligibility for most individuals under Medicaid, including
individuals under age 21 eligible under Sec. 435.222. The elimination
of income disregards under MAGI-based methodologies (see Sec.
435.603(g)) also effectively limits the flexibility States previously
had to raise the effective income standard for coverage under Sec.
435.222 to meet the needs of new reasonable classifications of
individuals under age 21 who are not eligible under the mandatory group
for children at Sec. 435.118 or, in the case of 19 and 20-year-olds,
under the adult group at Sec. 435.119. Other flexibilities, however,
are provided in the statute which States may wish to employ to meet the
coverage needs of reasonable classifications of children who are
excepted from mandatory application of MAGI-based methods under the
statute and regulations or otherwise fall outside the scope of Sec.
435.222 (for example, individuals under age 21 seeking coverage on the
basis of a disability or blindness or who meet a specified level-of-
care need).
As noted above, States have the flexibility to provide coverage to
individuals under age 21 (or, at State option, under age 20, 19 or 18)
or to reasonable classifications of such individuals who meet the
requirements of any subparagraph of section 1902(a)(10)(A)(ii) of the
Act, which includes, but is not limited to, clause (I) of such section.
For example, a State that has selected the eligibility category
described in section 1902(a)(10)(A)(ii)(I) of the Act for individuals
who meet AFDC requirements could define a reasonable classification of
individuals under age 21 to include individuals who meet a level-of-
care need for HCBS. A State that has not selected the eligibility
category described in section 1902(a)(10)(A)(ii)(I) of the Act but has
instead selected the eligibility category described in section
1902(a)(10)(A)(ii)(X) of the Act, relating to individuals who have
disabilities or are 65 years old or older, could similarly define a
reasonable classification of individuals who are under 21 and meet an
HCBS-related level of care.
The terms of the current Sec. 435.222, however, do not accommodate
the adoption of such reasonable classifications, either because the
regulation requires application of an income test that is based on
``household income,'' which generally is defined in Sec. 435.4 to mean
MAGI-based income, or limits inclusion of ``reasonable
classifications'' to the eligibility categories described in section
1902(a)(10)(A)(ii)(I) and (IV) of the Act (or both).
To reflect the flexibility that we believe States are afforded
under the statute, we are proposing to add a new Sec. 435.223 under
which States may provide coverage to all individuals under age 21, 20,
19, or 18, or to a reasonable classification of such individuals, who
meet the requirements of any clause of section 1902(a)(10)(A)(ii) of
the Act (as implemented in subpart C of part 435 of the regulations to
the extent to which a given clause is so implemented).
While coverage under proposed Sec. 435.223 is not expressly
limited to individuals excepted from MAGI under Sec. 435.603(j), we
believe that, as a practical matter, this will most typically be the
case, as coverage for a reasonable classification of individuals under
age 21 who are not excepted from the mandatory use of MAGI-based
methodologies is already permitted by Sec. 435.222. Considering this
and the need to distinguish Sec. 435.222 and the proposed Sec.
435.223, we propose to change the heading for Sec. 435.222 to read,
``Optional eligibility for reasonable classifications of individuals
under 21 with income below a MAGI-equivalent standard.''
For individuals excepted from the mandatory use of MAGI-based
methodologies, Sec. 435.601 generally
[[Page 54801]]
requires that States apply the financial methodologies and requirements
of the cash assistance program that is most closely categorically
related to the individual's status. In the case of individuals who are
under age 21 and who have blindness or disabilities, this generally
means application of SSI-related financial methodologies. In the case
individuals under age 21 who do not have blindness or disabilities,
this means application of the financial methodologies in the State's
former AFDC program.
Because of the elimination of the AFDC program in 1996 and the
replacement of AFDC-based methodologies with MAGI-based methodologies
for determining financial eligibility for individuals not excepted from
MAGI-based methods under the ACA, in the 2012 eligibility final rule,
we provided States with flexibility under Sec. 435.831(b)(1)(ii) to
apply either AFDC-based methodologies or MAGI-like methodologies, with
limited exception, in determining eligibility for medically needy
individuals under age 21, pregnant individuals, and parents and other
caretaker relatives. Without this flexibility, States would be required
to apply AFDC-based methodologies to these medically needy populations,
even though the AFDC program ceased to exist over 25 years ago and
those methodologies have no other applicability. Proposed Sec.
435.601(f)(1)(i) and (ii) similarly provides States with flexibility to
apply, at State option, either AFDC-based methods or MAGI-like methods
in determining income eligibility for individuals under age 21, for
whom the most closely categorically related cash assistance program is
AFDC.
The limited exception to application of ``true'' MAGI-based
methodologies described in Sec. 435.603 of the regulations to
medically needy individuals under Sec. 435.831(b)(1)(ii) stems from
section 1902(a)(17)(D) of the Act. This statutory provision,
implemented at Sec. 435.602 of the regulations, prohibits States from
taking into account the financial responsibility of any individual in
determining eligibility for any applicant or beneficiary under the
State plan unless such applicant or recipient is the individual's
spouse or the individual's child who is under age 21, or with blindness
or disability. This limitation continues to apply to all individuals
excepted from mandatory application of MAGI-based methods under section
1902(e)(14)(D) of the Act, implemented at Sec. 435.603(j). Therefore,
similar to the limitation on the flexibility afforded States under
Sec. 435.831(b)(1)(ii) to apply MAGI-based methodologies for otherwise
AFDC-related medically needy individuals, proposed Sec.
435.601(f)(1)(ii)(B) requires that, in applying MAGI-based
methodologies, States must ensure that there is no deeming of income or
attribution of financial responsibility that would conflict with the
requirements of section 1902(a)(17)(D) of the Act; that is, in
determining eligibility under proposed Sec. 435.223 for an individual
under age 21 who is described in Sec. 435.603(j) as exempt from the
MAGI methodologies set forth in Sec. 435.603, no income other than the
income of the individual or his or her parent(s) and/or spouse, would
be counted, even if the income of someone else would be counted under
the MAGI-based methods defined in Sec. 435.603.
We also propose two technical changes related to the amendment of
Sec. 435.601(f). In paragraphs (b)(2) and (d)(1) of Sec. 435.601, we
replace the cross reference to Sec. 435.831(b)(1) (which provides an
exception to the general rule to use the methods of the most closely
categorically related cash assistance program) with a reference to the
new subparagraph (f)(1)(ii)(B), which provides for the same exception.
Note that, under section 1902(r)(2) of the Act and Sec. 435.601(d), a
State also could apply less restrictive methodologies than either AFDC
or the MAGI-like methodologies adopted in accordance with the option at
proposed Sec. 435.601(e), including application of income disregards.
By disregarding all resources, States, at their option, also could
effectively eliminate application of an asset test for individuals
excepted from MAGI-based methods in accordance with Sec. 435.603(j)
who are seeking coverage under an optional coverage group adopted in
accordance with proposed Sec. 435.223.
C. Eliminating Barriers to Access in Medicaid
1. Remove Optional Limitation on the Number of Reasonable Opportunity
Periods (Sec. Sec. 435.956 and 457.380)
Sections 1902(a)(46)(B), 1902(ee)(1)(B)(ii), 1903(x)(4), and
1137(d)(4)(A) of the Act, implemented at Sec. 435.956(b) for Medicaid
and through a cross-reference at Sec. 457.380(b)(1)(ii) for CHIP, set
forth the requirement for States to provide a reasonable opportunity
period (ROP) for individuals who have attested to citizenship or
satisfactory immigration status, and for whom the State is unable to
verify citizenship or satisfactory immigration status when the
individual meets all other eligibility requirements, in accordance with
Sec. 435.956(a).
During the ROP, the State agency must continue efforts to complete
verification of the individual's citizenship or satisfactory
immigration status, or request documentation, if necessary. In
accordance with Sec. 435.956(b)(2), during the ROP, the State agency
must furnish Medicaid benefits to individuals who meet all other
eligibility requirements, and may elect to do so effective as of the
date of application or the first day of the month of application,
consistent with Sec. 435.915(b).
In the November 30, 2016 Federal Register, we issued the ``Medicaid
and Children's Health Insurance Programs: Eligibility Notices, Fair
Hearing and Appeal Processes for Medicaid and Other Provisions Related
to Eligibility and Enrollment for Medicaid and CHIP'' Final Rule \61\
(81 FR 86382) (referred to hereafter as the ``2016 eligibility and
enrollment final rule''), which set forth regulations governing the ROP
at Sec. 435.956. At Sec. 435.956(b)(4), we provided an option for
States to limit the number of ROPs that a given individual may receive,
if the State demonstrates that the lack of limits jeopardizes program
integrity and receives approval of a State plan amendment (SPA) prior
to implementing such limits. This option to limit an individual's
number of ROPs applies to individuals who re-apply for coverage after
they have been determined to be ineligible for Medicaid due to failure
to verify citizenship, U.S. national status, or satisfactory
immigration status during the ROP provided in connection with a prior
application.
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We finalized this State option in the 2016 eligibility and
enrollment final rule in response to public comments that we received
on the ``Medicaid, Children's Health Insurance Programs, and Exchanges:
Essential Health Benefits in Alternative Benefit Plans, Eligibility
Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange
Eligibility Appeals and Other Provisions Related to Eligibility and
Enrollment for Exchanges, Medicaid and CHIP, and Medicaid Premiums and
Cost Sharing'' proposed rule that published in the January 22, 2013,
Federal Register (78 FR 4593).\62\ In particular, one commenter stated
that
[[Page 54802]]
the proposed rule could be interpreted to allow multiple (and
unlimited) ROPs through the submission of subsequent applications
despite the failure of verification of the individual's citizenship or
immigration status. Another commenter questioned whether CMS considered
limiting the number of ROPs that can be provided. In response to these
comments, Sec. 435.956(b)(4) of the final rule established the State
option to limit the number of ROPs, provided that before the State
implements such a limitation, the State: (1) demonstrates that the lack
of limits jeopardizes program integrity; and (2) receives approval of a
SPA electing the option.
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Since the option was finalized, only one State has submitted a SPA
requesting to implement this option, which we approved as a one-year
pilot program to provide the State with an opportunity to demonstrate
that not limiting the number of ROPs jeopardized program integrity in
the State. The State's pilot program limited individuals to two ROPs
during the 12-month pilot period. During the pilot, the State monitored
requests for multiple ROPs, and collected data on the frequency and
characteristics of individuals who re-applied after failing to complete
verification of their status during their first ROP. From its data
analysis of the pilot period, the State observed that the number of
repeat ROPs provided by the State was minimal and concluded that the
availability of multiple ROPs posed negligible risk to program
integrity. Following the pilot, the State suspended the policy of
limiting the ROP period and removed the policy from its State Plan.
Other than the one State, CMS has not received any inquiries about
establishing such a limitation or raising program integrity concerns
related to ROPs.
Sections 1902(a)(46)(B), 1902(ee)(1)(B)(ii), 1903(x)(4), and
1137(d)(4)(A) of the Act do not expressly limit the number of ROPs an
individual may receive, nor do these provisions expressly provide
discretion for States to establish such a limit. In light of the
absence of any indication that the availability of multiple ROPs poses
significant risks to program integrity, we believe that removing the
option for States to impose limits on the number of ROPs that an
individual may receive is warranted. Therefore, we are interpreting the
ambiguity in 1902(a)(46)(B), 1902(ee)(1)(B)(ii), 1903(x)(4), and
1137(d)(4)(A) of the Act with respect to this question of limiting the
number of ROPs to remove the State option to limit the number of ROPs
an applicant may receive after re-applying for benefits. We also find
this proposal to be consistent with both section 1902(a)(19) of the
Act, which requires that States provide safeguards as necessary to
ensure that eligibility for care and services under the State plan are
provided in a manner consistent with simplicity of administration and
the best interests of the recipients, and section 1902(a)(8) of the
Act, which requires that all individuals who wish to apply for Medicaid
have the opportunity to do so. The ROP is integral to the Medicaid
application process and ensuring prompt access to services for eligible
individuals who have attested to U.S. citizenship, national, or
satisfactory immigration status, but whose status cannot be promptly
verified electronically. We note that an individual's status may change
between the filing of applications or new information or evidence
regarding U.S. citizenship/national status or satisfactory immigration
status may become available. This policy revision supports the health
and well-being of immigrants and their families in accordance with
Executive Order 13993 ``Revision of Civil Immigration Enforcement
Policies and Priorities'' and provides access to health coverage in
Medicaid and CHIP for U.S. citizens and immigrants who are eligible to
receive such coverage during a Reasonable Opportunity Period in
accordance with Executive Order 14070 ``Continuing To Strengthen
Americans' Access to Affordable, Quality Health Coverage.''
Therefore, we propose to revise Sec. 435.956(b)(4) to remove the
option for States to establish limits on the number of ROPs. Under
proposed Sec. 435.956(b)(4) for Medicaid and the existing cross-
reference at Sec. 457.380(b)(1)(ii) for CHIP, States would be
prohibited from imposing limitations on the number of ROPs that an
individual may receive.
2. Remove or Limit Requirement To Apply for Other Benefits (Sec.
435.608)
Under Sec. 435.608(a) (relating to ``Applications for other
benefits''), State Medicaid agencies must require that all Medicaid
applicants and beneficiaries, as a condition of their eligibility, take
all necessary steps to obtain other benefits to which they are
entitled, unless they can show good cause for not doing so. Paragraph
(b) of Sec. 435.608 describes such benefits to include, but not be
limited to, annuities, pensions, retirement, and disability benefits.
(Veterans' compensation and pensions, Social Security disability
insurance and retirement benefits, and unemployment compensation are
specifically identified as examples). This requirement applies to all
Medicaid applicants and beneficiaries, without regard to the basis of
their eligibility or the financial eligibility methodology used to
determine their eligibility.
This provision was originally promulgated in 1978 (see 43 FR 9810)
and codified at the time at 42 CFR 448.3(b)(1)(ii) and
448.21(a)(2)(i)(C). It was redesignated later in 1978 at Sec. 435.603
(see 43 FR 45204), and redesignated again in 1993 at Sec. 435.608 (see
58 FR 4931). When the rule was established in 1978, we noted that:
``Section 1902(a)(17) of the Act requires that available income and
resources must be considered in determining eligibility, except for
amounts that would be disregarded (or set aside for future needs) by
the AFDC [Aid to Families with Dependent Children] or SSI programs.
Those programs require applicants and recipients to accept other cash
benefits which are available to them; see: section 407(b)(2) of the Act
and 45 CFR 233.20(a)(3)(ix) regarding AFDC; and section 1611(e)(2) of
the Act and 20 CFR 416.230 and 416.1330 regarding SSI. Thus, this
amendment conforms Medicaid requirements to those of the AFDC and SSI
programs.'' (43 FR 9812).
Section 1902(a)(17)(B) of the Act directs that a State plan ``must
provide for taking into account only such income and resources as are,
as determined in accordance with standards prescribed by the Secretary,
available to the applicant or recipient and . . . as would not be
disregarded (or set aside for future needs) in determining his
eligibility for such aid, assistance or benefits'' under various
Federal cash assistance programs, including the SSI program and the
former AFDC program (emphasis added). This statutory language prohibits
State Medicaid agencies from taking into account income and resources
not counted in determining eligibility for various Federal cash
assistance programs described in section 1902(a)(17)(B) of the Act.
However, section 1902(a)(17)(B) of the Act does not mandate that States
must take into account all types or sources of income and resources
that are counted in the eligibility determinations for those programs.
Instead, the language specifically provides discretion to the Secretary
to establish the standards under which income and resources not
disregarded by the various Federal cash assistance programs should be
considered ``available,'' that is, taken into account, in determining
an individual's Medicaid eligibility.
[[Page 54803]]
Thus, while section 1902(a)(17)(B) of the Act authorizes the
Secretary to consider as ``available'' income or resources Medicaid
applicants and beneficiaries might receive if they applied for certain
benefits, section 1902(a)(17)(B) of the Act does not require the
Secretary to do so. Nor does section 1902(a)(17)(B) of the Act compel
the Secretary to apply either the requirement in section 1611(e)(2) of
the Act (that individuals seeking SSI apply for other benefits) or the
requirement in former section 407(b)(2) of the Act (that individuals
seeking AFDC benefits apply for AFDC) to individuals seeking Medicaid.
Adoption of the rule imposed in the SSI and AFDC programs to
Medicaid was reasonable in 1978, given that the primary path to
Medicaid eligibility at the time was receipt of SSI or AFDC benefits;
the Medicaid eligibility pathways available for individuals not
receiving assistance from a Federal cash assistance program, or deemed
to be receiving assistance from such programs, were very limited.
However, Medicaid has significantly changed in the intervening
years. For example, Medicaid eligibility was ``de-linked'' from cash
assistance for a significant portion of the Medicaid population when
the AFDC program was repealed and replaced with the Temporary
Assistance for Needy Families (TANF) program in section 103 of the
Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) of 1996 (Pub. L. 104-193). Unlike AFDC, eligibility for TANF
does not confer automatic eligibility for Medicaid. Additionally,
numerous eligibility groups have since been authorized under the
statute, including groups for children, pregnant individuals, parents
and caretaker relatives, and other adults with income higher than the
income standard for cash assistance programs and eligibility groups
that have no income test, such as the mandatory eligibility group for
former foster care children described in section 1902(a)(10)(A)(i)(IX)
of the Act (implemented in the regulations at Sec. 435.150), and the
optional group serving individuals in need of breast or cervical cancer
treatment described in section 1902(a)(10)(A)(ii)(XVIII) of the Act
(implemented in the regulations at Sec. 435.213).
Further, whereas financial eligibility for all eligibility groups
previously had been based on the financial methodologies applied by a
cash assistance program (primarily AFDC or SSI), effective January 1,
2014, the ACA directed States to apply an entirely different financial
methodology in determining eligibility for most individuals seeking
Medicaid coverage, based on Federal income tax rules in the Internal
Revenue Code. This methodology, based on MAGI as defined under section
36B(d)(2) of the Internal Revenue Code, generally considers only
amounts actually received by an individual and the individual's
household members, and does not consider other amounts or benefits that
the individual or other household members could receive if proactive
steps were taken. Thus, there is no statutory mandate for the rule in
Sec. 435.608(a) that currently requires application for other benefits
by Medicaid applicants and beneficiaries.
We have received a number of inquiries from States about the
requirement to apply for other benefits. Some States specifically have
requested flexibility to avoid applying this requirement to individuals
otherwise eligible for the eligibility group for former foster care
children which, as noted above, does not have an income test. These
States noted that individuals who otherwise meet all requirements to be
enrolled or remain enrolled in this group were losing Medicaid coverage
due to failure to provide information on application for other
benefits, such as unemployment compensation. Some States received
beneficiary complaints related to the burden of this requirement and
the impact on individuals who are required to apply for Social Security
benefits before reaching their full retirement age. These States, in
turn, reached out to CMS for guidance.
Given that the Medicaid program has largely outgrown the foundation
upon which Sec. 435.608 was based--that is, a close connection between
Medicaid and cash assistance programs--and the barrier to coverage the
requirement poses for some individuals, we believe it is appropriate to
revisit this regulation. Specifically, we propose to reinterpret the
meaning of ``such income and resources as are, as determined in
accordance with standards prescribed by the Secretary, available to the
applicant or recipient'' in section 1902(a)(17)(B) of the Act to
encompass only the actual income and resources within the applicant's
or beneficiary's immediate control, but not to encompass such income
and resources that might be available if such individuals applied for,
and were found eligible for, other benefits. This means that
eligibility for Medicaid would no longer require that applicants and
beneficiaries apply for benefits for which they may be entitled. We
believe this interpretation is consistent with section 1902(a)(19) of
the Act, which provides that eligibility be determined in a manner
consistent with simplicity of administration and the best interests of
recipients.
In developing our proposal, we are considering several alternative
options to address the requirement to apply for other benefits. These
alternatives are not mutually exclusive and could be used in
combination with one another.
We are considering revising the requirement in Sec.
435.608 to include benefits that would count as income under the
financial methodology used to determine the applicant or beneficiary's
income. Individuals whose financial eligibility is determined using
MAGI-based methodologies would not be required to apply for other
benefits that would not count as income. For example, such a person
would not be required to apply for benefits such as TANF or veterans'
benefits as a condition of Medicaid eligibility because those benefits
are not counted as income under MAGI-based methodologies. Additionally,
individuals who are eligible for, or applying for coverage under, a
Medicaid eligibility group that does not include an income test, would
not be required to apply for other benefits, as receipt of other
benefits would not impact an individual's income for purposes of
Medicaid eligibility because it would not impact their eligibility.
This would be true of, for example, individuals who are eligible for
the former foster care children eligibility group and the eligibility
group serving individuals in need of breast or cervical cancer
treatment. This would also be true of individuals who are eligible for
Medicaid on the basis of their receipt of assistance under title IV-E
of the Act (see Sec. 435.145). Under this option, however, individuals
seeking coverage under an eligibility group applying the financial
methodologies of the SSI program would be required, as a condition of
eligibility, to apply for benefits that count as income in determining
eligibility for SSI. For some individuals, in the course of processing
an application, States must apply both the MAGI and non-MAGI
methodologies before the most appropriate outcome is determined (see
Sec. 435.911(c)); eliminating the requirement to apply for other
benefits for MAGI-based individuals but maintaining the requirement for
non-MAGI individuals could be administratively burdensome for States.
Therefore, we consider a proposal to eliminate the requirement for all
Medicaid applicants and beneficiaries to be the better approach.
We also are considering exempting SSI beneficiaries from
the requirement
[[Page 54804]]
to apply for other benefits, including SSI beneficiaries in States that
have elected their option under section 1902(f) of the Act to apply
eligibility criteria more restrictive than the SSI program for
individuals who seek eligibility on the basis of being 65 years old or
older or who have blindness or disabilities (that is, 209(b) States),
but not other applicants and beneficiaries whose financial eligibility
is based on SSI financial methodologies. As mentioned above, Federal
law requires SSI applicants and beneficiaries to apply for other
benefits for which they may be eligible. This means that an SSI
beneficiary who applies for Medicaid will have already applied for
other benefits for which the individual may be eligible, except where
the SSA itself has determined: (a) that it does not believe that there
are other benefits for which the individual may be eligible; or (b)
that, even if there are potentially other such benefits, receipt of
such benefits would not affect the individual's underlying SSI
eligibility or payment amount (see 20 CFR 416.210 and SI 00510.001
(``Overview of the Filing for Other Program Benefits Requirement'') in
the SSA POMS). With this in mind, we believe that imposing the
requirement in Sec. 435.608(a) on SSI recipients would be duplicative.
We acknowledge that it may be theoretically possible that, in non-1634
States (that is, criteria States and 209(b) States, as described
above), there could be an SSI beneficiary who may be eligible for a
benefit for which the SSA ultimately did not require the individual to
apply but which could potentially affect the individual's Medicaid
eligibility. However, we believe that such circumstances would be rare
and do not outweigh the interests of the vast majority of individuals
in 209(b) and criteria States, or simplicity of administration,
consistent with section 1902(a)(19) of the Act, or efficiency of
administration, consistent with section 1902(a)(19) of the Act. Even
so, if the requirement were eliminated for all SSI beneficiaries, in
addition to MAGI-based individuals, but preserved for non-SSI
beneficiaries whose eligibility is based on either SSI methodologies or
a 209(b) State's more restrictive methodologies, this approach could
similarly create administrative burden for States. Therefore, we
believe that a proposal to eliminate the requirement for all Medicaid
populations is superior to this option as well.
We invite comment on these possible alternatives. If CMS were to
adopt an alternative to the proposal to eliminate the requirement to
apply for other benefits in its entirety, we would consider making
several modifications to such requirement, as follows:
For those for whom we would maintain the requirement to apply for
other benefits as a condition of eligibility, we are considering making
the operation of the requirement a post-enrollment activity. Such a
policy would be similar to, for example, the requirement that
applicants attest that they will cooperate, while beneficiaries must
cooperate, with identifying liable third parties under section
1902(a)(25) of the Act, as implemented at Sec. 435.610(a)(2). Thus,
applicants would need to attest to their agreement to apply for other
benefits for which they may be eligible at application unless,
consistent with the current regulation at Sec. 435.608(a), they can
show good cause for not doing so. States would follow up with the
individual on compliance with the requirement post-enrollment, and non-
cooperation by a beneficiary without good cause would be grounds for
termination (subject to requirements for advance notice and fair
hearing rights in 42 CFR part 431, subpart E).
We are considering revising the ``good cause'' exception at Sec.
435.608(a) to incorporate language included in the ``good reason''
exception in the SSI regulations at 20 CFR 416.210(e)(2). Specifically,
we are considering including two examples of situations satisfying the
good cause exemption that are in the SSI provision: (a) where an
individual is incapacitated; or (b) where it ``would be useless'' for
an individual to apply for other benefits because the individual has
previously applied for the other benefits and been denied and has not
experienced a relevant change in circumstances since that time.
Additionally, the SSI policy also excuses compliance with the
requirement to apply for other benefits where an individual will not
receive a benefit that will affect eligibility. Therefore, we are
considering adding these specific examples in the reference in the
``good cause'' exception in Sec. 435.608.
We are considering requiring States to provide written notice to
each individual who is subject to the requirement in Sec. 435.608 of
the benefits for which the State believes the individual may be
eligible and that the individual's Medicaid eligibility may be affected
by the individual's failure to apply for such benefits. This is the
SSA's approach in requiring that SSI applicants and beneficiaries file
for other benefits, as described in 20 CFR 416.210(c), and we would
consider this to be a reasonable condition precedent to imposing the
requirement.
We seek comment on this proposal related to Sec. 435.608 and how
CMS can update the regulation to reduce unnecessary barriers to
enrollment and to reduce burden on individuals and States. We are
interested, for example, in whether or not it is the experience of
State agencies that imposition of the existing rule commonly results in
applicants or beneficiaries receiving additional eligibility-altering
income. We are also interested in the experiences of applicants and
beneficiaries in their compliance with this rule, such as whether it
commonly delays favorable eligibility determinations, and, by extension
access to care. We are mindful that the requirement imposed by Sec.
435.608(a) is not similarly imposed in eligibility determinations for
CHIP, the BHP, or insurance affordability programs available through
the Exchanges, and we are interested in comments on the whether the
approach of the latter programs is more practical. We also welcome
comments on each of the alternatives we are considering that might be
adopted in a final rule based on comments received.
In consideration of the foregoing analysis, we propose in this
rulemaking to remove the requirement at Sec. 435.608 entirely for all
Medicaid applicants and beneficiaries to apply for other benefits to
which they are entitled.
D. Recordkeeping (Sec. Sec. 431.17, 435.914, and 457.965)
Comprehensive recordkeeping is essential to the proper and
efficient administration of any State Medicaid program, consistent with
section 1902(a)(4) of the Act. State Medicaid agencies must maintain
records needed to justify and support the decisions made regarding all
applicants and beneficiaries, defend decisions challenged by an
applicant or beneficiary who requests a fair hearing, enable State and
Federal auditors and reviewers to conduct appropriate oversight, and
support the State's own quality control processes. Applicants and
beneficiaries (or their authorized representative) must also be able to
review the content of their case record prior to a fair hearing
challenging an agency's decision.
Regulations at Sec. Sec. 431.17 and 435.914 currently require that
State Medicaid agencies' records for applicants and beneficiaries
include sufficient content to substantiate the eligibility
determination made by the State. However, these regulations are largely
outdated and unclear. In many instances, the requirements lack the
specificity reflective of the range of
[[Page 54805]]
records and information used by today's Medicaid programs. The
requirements do not reflect modern technology, specifically the use of
electronic data, and do not specify how long applicant and beneficiary
case records must be retained, resulting in a range of retention
periods across States. Over the years, we have received questions from
Medicaid agencies requesting clarification on record retention policy,
storage modalities, and retention periods.
HHS OIG reports also raise concerns about the adequacy of the case
records maintained across State Medicaid agencies.\63\ The HHS OIG
reports identified case records that lack documentation of income,
citizenship, or immigration status verification and found case records
in which auditors could not access documents needed to evaluate the
accuracy of a State's determination of eligibility. Additionally, PERM
eligibility reviews in the FYs 2019, 2020, and 2021 cycles found that
insufficient documentation was a leading cause of eligibility
errors.\64\
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\63\ California Made Medicaid Payments on Behalf of Non-Newly
Eligible Beneficiaries Who Did Not Meet Federal and State
Requirements, Office of Inspector General, 2018. Available at
https://oig.hhs.gov/oas/reports/region9/91702002.pdf; New York Did
Not Correctly Determine Medicaid Eligibility for Some newly Enrolled
Beneficiaries, Office of Inspector General, 2018. Available at
https://oig.hhs.gov/oas/reports/region2/21501015.pdf; Kentucky Did
Not Always Perform Medicaid Eligibility Determinations for Non-Newly
Eligible Beneficiaries in Accordance with Federal and State
Requirements, Office of Inspector General, 2017. Available at
https://oig.hhs.gov/oas/reports/region4/41608047.pdf; Colorado Did
Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled
Beneficiaries, Office of Inspector General, 2019. Available at
https://oig.hhs.gov/oas/reports/region7/71604228.pdf.
\64\ Fiscal Year 2019 Agency Financial Report, US Department of
Health and Human Services, 2019. Available at https://www.hhs.gov/sites/default/files/fy2019-hhs-agency-financial-report.pdf.
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To help States meet the requirement to maintain appropriate,
comprehensive, and accessible records, consistent with section
1902(a)(4) of the Act, we propose to revise Sec. 431.17 to more
clearly delineate the types of information State Medicaid agencies must
maintain in case records and to prescribe a minimum retention period.
Reflecting modern forms of technology, we also propose to revise the
regulations to require that States store their case records in an
electronic format.
We propose revisions to Sec. 431.17(b)(1) to detail the specific
records and documentary evidence that must be retained as part of each
applicant's and beneficiary's case record to support the determinations
made by State Medicaid agencies. These records, which are critical to
demonstrating that States are providing the proper amount of medical
assistance to eligible individuals, include:
All information provided on the initial application
submitted by, or on behalf of, an applicant regardless of the modality
through which a person applies for Medicaid (for example, online, by
phone, in person or through the Exchange), including the signature and
date of application;
The electronic account and any information or
documentation received from another insurance affordability program in
accordance with Sec. 435.1200(c) and (d);
Any changes in circumstances reported by the individual
and any actions taken by the agency in response to such reports;
All renewal forms and information returned by or on behalf
of the beneficiary to the agency in accordance with Sec. 435.916,
including the signature on any returned renewal form and the date the
form was received;
The date of and basis for any determination, denial, or
other adverse action, including decisions made at application, at
renewal, and as a result of a change in circumstance, affecting an
applicant or beneficiary, as well as all documents or other evidence to
support such action, including all information provided by, or on
behalf of, the applicant or beneficiary and all information obtained
electronically or otherwise by the agency or third-party sources. This
includes information received from data sources as described in the
regulations at Sec. Sec. 435.940 through 435.960.
The provision of, and payment for, services, items and
other medical assistance. This includes services or items provided and
dates that the services or items were provided; diagnoses related to
services or items provided; names of the providers rendering or
referring/prescribing the services or items (as applicable), including
their National Provider Identifier; the full amounts billed and paid or
reimbursed for the services or items; and any liable third party and
the amount of such liabilities;
All notices provided to the applicant or beneficiary under
Sec. Sec. 431.206, 435.917 or 435.918;
All records pertaining to any fair hearings requested by,
or on behalf of, the applicant or beneficiary, including each request
submitted and the date of such request, the complete record of the
hearing decision, as described in Sec. 431.244(b), and the final
administrative action taken by the agency following the hearing
decision and date of such action; and
The disposition of information received by the agency when
conducting verifications per regulations at Sec. Sec. 435.940 through
435.960, including evidence that no information was returned from a
given data source. In documenting the disposition of information
received through this process, the disposition of information received
by the agency includes documentation that the agency determined that
information received was not useful to verifying eligibility.
Neither the statute nor current regulations specify how long
Medicaid records must be maintained. We believe that the length of
record retention also is a critical factor to effective administration
of the State plan and propose to revise Sec. 431.17(c) to require that
States maintain all records described in this regulation for the period
that the applicant or beneficiary's case is active, plus a minimum of 3
years thereafter. In establishing this minimum time period, we assessed
the areas of the Medicaid program for which there are time limits that
would impact record retention, such as the PERM program, which operates
on a 3-year cycle, and Medicaid timely filing, described at section
1132(a)(2) of the Act, which requires that States file any claim for
payment no later than 2 years from the calendar quarter of the
expenditure. We consider 3 years to be a reasonable minimum based on
these factors. We consider a case to be active starting at the date of
application. For applicants determined ineligible (that is, the
application is denied), the case would be active through the date that
a determination of ineligibility is made. For applicants determined
eligible (that is, the application is approved), the case would be
active until their eligibility is terminated or coverage otherwise
ends. A case would also remain active for any applicant or beneficiary
who has a pending fair hearing or appeal. In the event that a case
becomes active again prior to the expiration of the 3-year period, the
records retention clock would restart. In this case, under the proposed
rule, the State would need to retain all prior records until 3 years
after the individual's eligibility is again terminated or their
coverage otherwise ends. For example, if a beneficiary, who initially
applied for coverage in 2020, is terminated in 2022 due to an increase
in income and in 2024 (2 years later) reapplies and is determined
eligible, the case would become active again. The records retention
clock would restart, and all of the individual's records from
[[Page 54806]]
his or her initial application and enrollment from 2020 to 2022 must be
retained during the new retention period.
We believe that tying the retention period to the period of time
that the case is active plus an additional 3 years will ensure that
applicant and beneficiary records will be available for all
circumstances in which such records may be needed, including after an
individual is no longer enrolled in the Medicaid program. For example,
if a formerly enrolled applicant reapplies to Medicaid 2 years after
they lost coverage, States should rely on previously verified
citizenship and immigration status unless the State has reason to
believe something has changed. In order to rely on information
previously verified, that information must be retained in the case
record. Additionally, under the estate recovery program authorized by
section 1917(b)(1) of the Act, States may recover payments for all
Medicaid covered services. Therefore, States may need to access claims
data in order to tally the cost of covered services for extended
periods, depending on the length of the applicant's enrollment. We seek
comment on the proposed retention period, as well as on whether a
shorter or longer retention period should be required for certain types
of records, including those pertaining to the provision of, and payment
for, services, items and other medical assistance, or whether a shorter
or longer period should be required for all records--for example, a
period of 10 years for all records, similar to our policy regarding
enrollee records for Medicare,\65\ as well as the record retention
policy applied to managed care organizations under Sec. 438.3(u). We
also seek comment on whether the retention period should be tied to the
individual or the active case.
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\65\ CMS Records Schedule. Available at https://www.cms.gov/Regulations-and-Guidance/Guidance/CMSRecordsSchedule/index.html.
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Current Sec. 431.17(d) contains outdated regulation text that
references obsolete or rarely used technology, including microfilm
systems. We propose to update this paragraph to require that State
Medicaid agencies store records in an electronic format and that the
State Medicaid agency make records available to the Secretary or other
appropriate parties, such as State and Federal auditors, within 30
calendar days of the date records are requested, if not otherwise
specified. We seek comment on whether States should retain flexibility
to maintain records in paper or other formats that reflect evolving
technology. While each of the records and documentary evidence
described in this section are considered part of the case record, we do
not propose that these records must be stored in a single system.
Finally, we propose conforming revisions to Sec. 431.17(a),
relating to basis and purpose of Sec. 431.17. We also propose
revisions to Sec. 435.914 of the current regulations, which also
relates to case documentation, to reflect the full scope of records
required under the proposed rule for both applicants and beneficiaries.
Section 435.914(a) currently requires that States include in each
applicant's case record facts to support the agency's decision on the
application. Section 435.914(b) currently requires States to dispose of
each application by either: (1) making a finding of eligibility or
ineligibility; (2) documenting in the case record that the applicant
voluntarily withdrew the application, and documenting that the agency
sent a notice confirming such withdrawal; or (3) including an entry in
the case record that the applicant has died or cannot be located. We
propose to revise Sec. 435.914(a) to apply to both applicant and
beneficiary case records and to provide that the records maintained in
each individual's case record include all those described in Sec.
431.17(b)(1), as revised in this proposed rule. We propose to revise
Sec. 435.914(b) to provide that States must dispose of all
applications and renewals by a finding of eligibility or ineligibility
unless one of the three circumstances described above applies. The
applicability of these requirements to a separate CHIP, including
proposed changes to Sec. 457.965, is discussed further in section
II.E.5 of this preamble.
E. CHIP Proposed Changes--Streamlining Enrollment and Promoting
Retention and Beneficiary Protections in CHIP
Current CHIP regulations adopt many of the Medicaid eligibility
regulations, which require that States have methods of establishing and
continuing eligibility, including coordinated and streamlined
eligibility and enrollment processes between CHIP and other insurance
affordability programs. In order to retain the alignment with Medicaid
and other insurance affordability programs, we propose to adopt the
same proposed policies for CHIP as are proposed for Medicaid in this
proposed rule, except where otherwise noted. We discuss each of these
proposed changes as they apply to CHIP below. We seek comment on
whether there are any special considerations applicable to CHIP that
warrant adoption of a different policy for CHIP than the proposed
alignments with Medicaid requirements, which would include the various
policies on which we specifically seek comment in the preamble
discussing the proposed revisions to the Medicaid regulations.
1. Timely Determination and Redetermination of Eligibility and Related
Reviews (Sec. Sec. 457.340 and 457.1170)
As discussed in section II.B.3 of this proposed rule, we propose
changes to Sec. Sec. 435.907(d) and 435.912 of the Medicaid
regulations to ensure applicants are provided a meaningful opportunity
to provide additional information needed by the State to make an
eligibility determination and to establish specific timeliness
standards for completion of regularly-scheduled renewals and
redeterminations of eligibility due to changes in circumstances,
including when a State receives information needed to redetermine
eligibility too close to the end of an enrollee's eligibility period to
complete a redetermination of eligibility prior to the end of the
eligibility period.
To ensure continued coordination between Medicaid and CHIP
enrollment and renewal processes, as required by section 2102(b)(2)(E)
of the Act, we propose to apply these changes equally to CHIP, except
where otherwise noted. As discussed in section II.B.3 of this proposed
rule, we propose revisions at Sec. 435.907(d) to require that, if a
State cannot determine Medicaid eligibility based on the information
provided on the application and the State needs additional information
from the applicant, the State must: (1) give applicants for whom a
disability determination is not needed at least 15 calendar days from
the date the request is postmarked or electronic request is sent to
provide the requested information and 30 calendar days from the date
the request is postmarked or electronic request is sent for applicants
whose eligibility is being determined on the basis of disability; (2)
allow applicants to respond through any of the modes of submission that
must be available for submission of the application; and (3) reconsider
the eligibility of individuals whose application is denied for failure
to provide needed information if the individual provides the needed
information within 30 calendar days from the date the denial notice is
postmarked or electronic notice is sent without requiring the
individual to submit a new application. The terms of Sec. 435.907(d)
are applicable to CHIP through an existing reference in Sec. 457.330
to Sec. 435.907. Therefore, these
[[Page 54807]]
proposed changes would apply equally to CHIP, except as noted below
with regard to a determination of disability, and no additional
revisions to the CHIP regulations are needed.
We note that, unlike Medicaid, there are no distinct eligibility
groups in CHIP for which a determination of disability is needed. Some
States, however, have established a separate CHIP for children with
special health care needs (CSHCN). We seek comment on whether the
longer time to return additional information requested by the State at
application at proposed Sec. 435.907(d)(1)(i)(A) for individuals
applying for Medicaid based on disability (a minimum of 30 calendar
days), should be applied to children applying for a separate CHIP if a
determination that the child qualifies as a CSHNC is required, as these
families may similarly need more time to provide additional
documentation or other information needed by the State to make a final
determination on their application. We also seek comment on whether a
minimum of 15 calendar days from the date the State's request for
additional information is postmarked or electronically sent is
sufficient for applicants generally (that is, regardless of any need
for a determination of CSHCN status) or whether a longer timeframe,
such as 20, 25, or 30 calendar days from the date the request is
postmarked or electronically sent, similar to the longer time (30
calendar days) proposed for individuals applying for Medicaid on the
basis of disability, is appropriate. As discussed in section II.B.3 of
this proposed rule, we are also considering a minimum requirement of 30
calendar days from the date the request is postmarked or electronically
sent for all applicants to provide additional information, along with
an exception to the 45-day requirement at current Sec.
435.912(c)(3)(ii) to provide States with an additional 15 calendar days
to complete application processing if the State requested additional
information from the applicant, which would apply to CHIP by existing
references at Sec. 457.340(d). We also seek comment regarding whether
States should be afforded additional time to make a determination of
eligibility for applicants seeking coverage under a separate CHIP for
CSHCN, similar to the additional time (maximum of 90 calendar days)
provided at Sec. 435.912c)(3)(i)) for States to make a final
determination of eligibility for individuals applying for Medicaid
coverage based on disability and, if so, whether an a maximum of 60,
75, or 90 calendar days is appropriate for determining eligibility for
a separate CHIP for CSHCN. Additionally, we seek comment on whether
calendar or business days would be better suited as an appropriate
timeliness measure. Finally, we also seek comment on whether a longer
reconsideration period of 45 calendar days, or 90 calendar days, would
be appropriate, similar to the proposed 90-day reconsideration period
discussed in section II.B.1 and II.B.2 of this preamble if a
beneficiary provides the requested information within 90 calendar days
of termination without requiring a new application.
As also discussed in section II.B.3 of this proposed rule, we
propose revisions to Sec. 435.912 to specify that States must
establish timeliness and performance standards for conducting
regularly-scheduled renewals, as well as redeterminations of
eligibility due to changes in enrollee circumstances, including maximum
timeframes within which States must complete these actions. Proposed
revisions to Sec. 435.912 also specify the minimum timeframes that
States must provide to enrollees to respond to requests for information
when completing renewals. Similar to Medicaid, we also seek comment on
the amount of time provided for States to complete a redetermination of
eligibility at a regularly-scheduled renewal or based on changes in
circumstances at proposed Sec. 435.912(c)(4), (c)(5), and (c)(6),
whether the regulations should allow for a longer or shorter period of
time, and whether the use of business days rather than calendar days
would be more appropriate. Section 435.912 of the Medicaid regulations
is applicable to CHIP through an existing reference at Sec.
457.340(d). Therefore, these proposed changes would apply equally to
CHIP, except that we propose to revise Sec. 457.340(d)(1) to exclude
application of certain Medicaid requirements that are not applicable to
CHIP. The Medicaid requirements not applicable to CHIP include Sec.
435.912(c)(4)(iii) and (c)(6)(iii) (relating to timelines for
completing renewals and redeterminations when States must consider
other bases of eligibility per Sec. 435.916(f)(1), which is
redesignated as Sec. 435.916(d)(1) in this proposed rule). We also
propose to revise the title of Sec. 457.340(d) to clarify that the
timeliness standards apply both at application and renewal.
Finally, in order to support effective and efficient eligibility
procedures, consistent with sections 2101(a) and 2102(b)(2) of the Act,
we propose to modify section Sec. 457.1170 to require that States
ensure the opportunity for continued enrollment in CHIP during a review
of a State's failure to make a timely determination of eligibility.
Currently, States using a program specific review process for separate
CHIP must only provide the opportunity for continued enrollment in CHIP
pending the completion of a review for a suspension or termination of
CHIP eligibility. We believe this proposed change to Sec. 457.1170
will support a CHIP enrollee's rights during a review if a State fails
to meet the proposed timeliness standards at both application and
renewal consistent with proposed changes in Sec. 435.912, as
referenced in Sec. 457.340(d).
Additionally, we propose to modify Sec. 457.1170 to clarify that
continuation of enrollment includes the continued provision of health
benefits during the review period. Currently, Sec. 457.1170 provides
that States must ensure the opportunity for continuation of enrollment
pending the completion of review of a suspension or termination of
enrollment. While we acknowledge that, consistent with our definition
of ``enrollee'' at Sec. 457.10, coverage of health benefits is
intrinsic to enrollment, we propose to add explicit reference to
benefits at Sec. 457.1170 to emphasize that continued enrollment
without provision of benefits pending completion of a review of a
termination or suspension of coverage does not satisfy the requirement
at Sec. 457.1170. Finally, we propose to make explicit references to
continuation of benefits in Sec. Sec. 457.1140 and 457.1180 when
describing the process for continuation of enrollment or referencing in
notices.
As discussed above in section II.B.3 of the preamble, we seek
comment for both Medicaid and CHIP on whether proposed Sec.
435.912(c)(4)(ii) (incorporated in CHIP through Sec. 457.340(d))
balances maximizing the completion of timely renewals prior to the end
of an enrollee's eligibility period and providing States with
sufficient time to complete redeterminations and provide notice for
enrollees who return needed documentation or other information prior to
the end of their eligibility period, but not by the date requested by
the agency to ensure completion of a timely renewal. The notice
requirements for CHIP are located at Sec. 457.340(e)(1).
2. Changes in Circumstances (Sec. Sec. 457.344 and 457.960)
As discussed in sections II.B.2 of this proposed rule, we propose
to revise and redesignate paragraphs (c) and (d) of current Sec.
435.916, related to changes in circumstances, to a new Sec. 435.919
that is devoted specifically to State and enrollees' responsibilities
for acting on changes in circumstances. Proposed Sec. 435.919 includes
procedures for
[[Page 54808]]
enrollees to report changes to the Medicaid agency and specific steps
States must take in promptly processing such changes.
We propose at Sec. 435.919(c)(1) that States must provide a
minimum of 30 calendar days for beneficiaries to respond to a request
for additional information needed to determine eligibility based on a
change in circumstances. We also propose at Sec. 435.919(d) that State
Medicaid agencies provide beneficiaries whose coverage is terminated
due to failure to provide information needed to redetermine eligibility
following a change in circumstances with a 90-day reconsideration
period. During this 90-day period, if a beneficiary returns the
requested information, the agency would be required to redetermine the
individual's eligibility without requiring a new application.
Consistent with section 2102(b) of the Act related to a State's
eligibility standards and methodologies, we propose to apply the
changes at proposed Sec. 435.919 to CHIP. Regulations governing
changes in circumstances for CHIP beneficiaries are currently found in
Sec. 457.960. For greater transparency, we propose to remove Sec.
457.960 in its entirety and incorporate the terms of proposed Sec.
435.919 into a new Sec. 457.344. Some of the provisions in current
Sec. 435.916 (redesignated at proposed Sec. 435.919) are not
applicable to CHIP and we are not proposing to adopt them through
proposed changes to Sec. 457.344. Specifically, we propose to not
incorporate into Sec. 457.344 the requirement proposed at Sec.
435.919(b)(4)(i) (currently at Sec. 435.916(f)(1)) related to
determining eligibility upon all other bases. We do not believe this
requirement is relevant for CHIP because the eligibility of all CHIP
beneficiaries is based on MAGI, but we seek comment on whether it
should be applied to CHIP in cases where a State has more than one
separate CHIP population and an enrollee could transition between
populations. For example, some States have a separate CHIP program
specific to CSHCN or elect to provide coverage to other eligibility
groups in CHIP, such as targeted low-income pregnant women.
Currently Sec. 457.343 references Sec. 435.916, in its entirety
as applicable. For example, the current regulations specify where noted
that other CHIP regulations regarding verification and noticing
requirements apply in place of Medicaid regulations referenced in Sec.
435.916. Outside the redesignation of Sec. 435.916 (c) and (d) to
Sec. 435.919, as discussed above, the remaining changes to the
regularly-scheduled renewal requirements at proposed Sec. 435.916 will
also apply to CHIP through this cross-reference. However, there are
several proposed revisions to Sec. 435.916 that would not be
applicable to CHIP populations, such as proposed Sec. Sec.
435.916(a)(2) related to Medicare beneficiaries, 435.916(b)(3) related
to non-MAGI determinations, and 435.916(d)(1) (a redesignation of
current Sec. 435.916(f)(1)) related to considering eligibility on all
bases prior to terminating a beneficiary.
3. Returned Mail (Sec. 457.344)
As discussed in section II.B.4 of the preamble, we propose
requirements at Sec. 435.919(f) describing the actions that States
must take to verify an individual's address when the State receives
returned mail, including the minimum amount of time States must provide
to individuals to respond to such requests. Under this proposed rule,
in addition to sending notices to the current address on file and the
new address provided by USPS, the State must also attempt to contact
the individual using other means, such as by telephone, email, text, or
other electronic notice. Proposed Sec. Sec. 435.919(f)(1), (2), and
(3) specify the actions States must take to verify an individual's
address, and proposed Sec. Sec. 435.919(f)(4), (5) and (6) describe
the actions States must take if an individual fails to confirm their
address based on whether the forwarding address is in-state or out-of-
state or there is no forwarding address. This rule also re-designates
existing Medicaid requirements at Sec. 431.231(d) as proposed Sec.
435.919(f)(6). Under these requirements, States must reinstate coverage
if an individual's whereabouts become known before their next renewal
date. Finally, this rule proposes Sec. 435.919(g), which describes the
actions States may and must take when they receive updated in-state
address information from the USPS NCOA database or the State's
contracted managed care entities as well as requirements when they
receive updated address information from other third-party sources,
regardless of whether those data sources have or have not been approved
by the Secretary.
Consistent with the section II.E.2 of the preamble, we are
proposing that CHIP adopt the substance of proposed Sec. 435.919 as
Sec. 457.344 with some exceptions. We also propose to apply the
Medicaid provisions related to receipt of updated address information
from returned mail, the USPS NCOA, a State's contracted managed care
plans, and other third-party sources under Sec. 435.919(f) and (g)
equally to CHIP. Additionally, we clarify at Sec. 457.344(f)(5) and
(g)(1)(vii) that if any separate CHIP population is not available
Statewide and the updated address lies outside of the specific
geographic areas in which the State's separate CHIP provides coverage,
the State is required to treat the newly identified address as out-of-
state and take the appropriate actions when trying to verify an
enrollee's address, regardless of whether the address is obtained due
to returned mail or obtained from another third-party data source.
We seek also comment on several requirements in proposed Sec.
457.344(f) and (g). Similar to the request for comments on proposed
Sec. 435.919(f), we seek comment with respect to proposed Sec.
457.344(f) on whether States should be required to update an enrollee's
in-state address using more recent contact information reflected in a
forwarding address from USPS or an address provided by NCOA or a
managed care plan in this situation, when the enrollee has not
responded to the State's request to verify their current address.
Additionally, we seek comment on whether States should be permitted or
should be required to update enrollee contact information based on
information obtained from an MCO, from the USPS NCOA, or USPS
forwarding without first attempting to contact the enrollee to provide
them with an opportunity to verify or dispute the new information,
because such third-party data is reliable, and, if so, which data
sources should States be permitted to rely upon without attempting to
contact enrollees. We are especially interested in comments from States
that received authority under section 1902(e)(14)(A) of the Act (which
applies to CHIP through section 2107(e)(1)(I) of the Act) to update
enrollee contact information based on information received from a
reliable third party (for example, an MCO, USPS NCOA or USPS forwarding
address) without first attempting to contact the individual, as
described in SHO letter #22-001. States that received such authority
were temporarily permitted to accept updated enrollee contact
information from designated reliable sources without first contacting
the individual in an effort to verify the accuracy of the new contact
information. We also seek comment on the efficacy of the requirement to
send a notice to an enrollee's address on file to ensure that initial
piece of returned mail was not incorrectly returned.
We also seek comment on whether all States have a Medicaid
Enterprise
[[Page 54809]]
System that encompasses both Medicaid and CHIP, as we have assumed
under proposed Sec. 457.344(f)(1)(i). Finally, inasmuch as proposed
Sec. 435.919(f)(6) (relating to individuals whose whereabouts become
known) includes regulation text from an existing Medicaid regulation at
Sec. 431.231(d), we seek comment on whether any provisions of Sec.
435.919(f)(6) should not be applied to CHIP at proposed Sec.
457.344(f)(6). We believe there may be operational challenges States
may face when implementing these provisions and we seek further comment
on the potential impact of these provisions.
Finally, similar to Medicaid, we seek comment on whether under
proposed Sec. 457.344(g) States either should be permitted or should
be required to update enrollee contact information based on information
obtained from an MCO, from the USPS NCOA, or other reliable data
sources, such as Indian Health Care Providers, Federally Qualified
Health Centers, Rural Health Clinics, Program of All-inclusive Care for
the Elderly providers, Primary Care Case Managers, Accountable Care
Organizations, Patient Centered Medical Homes, Enrollment Brokers, or
other State Human Services Agencies (for example, SNAP), without first
attempting to contact the individual to provide them with an
opportunity to verify or dispute the new information, because such
third-party data is reliable, and, if so, which data sources should
States be permitted to rely upon without attempting to contact
enrollees.
We are especially interested in comments from States that received
authority under section 1902(e)(14)(A) of the Act (which applies to
CHIP through section 2107(e)(1)(I) of the Act) to update enrollee
contact information based on information received from a reliable third
party without first attempting to contact the enrollee, as described in
SHO letter #22-001. We also seek comment on the efficacy of the
requirement to send a notice to an enrollee's address on file to ensure
that initial piece of returned mail was not incorrectly returned, and
on the efficacy of the requirement to conduct at least two outreach
attempts to the enrollee using a modality other than mail. We also seek
comment on the requirements in proposed Sec. 457.344(g)(3) cross
referencing Sec. 457.344(f)(2) through (6), related to processing out-
of-state address information or address information from a source not
identified in Sec. 457.344(g)(1) or (2).
4. Transitions Between CHIP and Medicaid (Sec. Sec. 457.340, 457.348,
and 457.350)
As discussed in section II.B.5. of this preamble, every State with
separate programs for Medicaid, CHIP, and BHP, and many States with a
State-based Marketplace utilize a single eligibility system or shared
eligibility service. As such, when an enrollee is determined ineligible
for one program, and the individual is screened for potential
eligibility in another program, the system is effectively making a
determination of eligibility for the other program. An individual who
applies at the Medicaid agency does not need to be screened and then
transferred to the CHIP agency before a determination of CHIP
eligibility can be completed, even if the CHIP agency operates
separately from the Medicaid agency in the State. To improve
transitions between programs and reduce the likelihood of individuals
experiencing gaps in coverage, we proposed changes to the Medicaid
transition requirements at Sec. 435.1200. As discussed in detail in
section II.B.5., these changes would require the Medicaid agency to
determine eligibility for CHIP when an individual is determined
ineligible for Medicaid, and seamlessly transition the individual's
electronic account to the separate CHIP agency when determined eligible
for CHIP; these changes would also require the Medicaid agency to
accept determinations of MAGI-based Medicaid eligibility made by
separate CHIP agencies and enroll those eligible individuals into
Medicaid, through one of the mechanisms described in Sec.
435.1200(b)(4). We also propose changes to the Medicaid regulations at
Sec. 435.1200(h)(1) to require States to provide a combined
eligibility notice to individuals determined ineligible for Medicaid
and eligible for separate CHIP. We similarly propose changes to Sec.
457.340 to require the use of a combined notice for transitions between
separate CHIP and Medicaid. Additionally, we propose changes to
Sec. Sec. 457.340, 457.348, and 457.350 to improve transitions between
separate CHIP and Medicaid, as described below.
To help prevent children who are eligible for CHIP from becoming
uninsured when their Medicaid eligibility is terminated, we propose to
make several changes to current Sec. 457.348, which establishes
requirements for the State to coordinate transitions of eligibility
between and with other insurance affordability programs. First, we
propose to add a new paragraph to Sec. 457.348 regarding agency
responsibilities for transitioning eligibility. Paragraph (a) of
current Sec. 457.348 requires the State to enter into agreements with
the agencies administering other insurance affordability programs to
fulfill a number of requirements in this section, such as minimizing
burden on individuals during the eligibility process, and ensuring
prompt determination of eligibility and enrollment in the appropriate
program without undue delay. We propose to revise Sec. 457.348(a) to
require that these agreements provide for not only coordination of
notices, but also for a combined eligibility notice with other
insurance affordability programs. We also propose to add a new
paragraph (a)(6) to Sec. 457.348, which would require the State to
have an agreement with the Medicaid agency which clearly describes the
responsibilities of each agency for ensuring a seamless transition
between separate CHIP and Medicaid when an individual is determined
ineligible for one program and eligible for another program. This is
consistent with the proposed Medicaid revision at Sec.
435.1200(b)(3)(vi).
Second, we propose to modify Sec. 457.348(b) to require the CHIP
agency to accept determinations of separate CHIP eligibility made by
Medicaid. Current Sec. 455.348(b) describes the responsibilities of
the CHIP agency for individuals found CHIP eligible by another
insurance affordability program, if the agency has elected to accept
eligibility determinations made by other programs. We propose to
require that the agency accept eligibility determinations made by
Medicaid but retain the option to enter into an agreement with a BHP or
Marketplace operating in the State to accept eligibility determinations
made by those entities. To effectuate this change in regulation, and to
improve clarity of existing regulations, we propose to delete the
introductory language in current paragraph (b) and redesignate the
requirements in current Sec. 457.348(b)(1) through (3) at proposed
Sec. 457.348(b)(1)(i) through (iii). We propose to add a new paragraph
(b)(2) to describe the individuals who are subject to the requirements
in proposed paragraph (b)(1). Specifically, proposed Sec.
457.348(b)(2)(i) describes the individuals who are subject to the
requirements in paragraph (b) in the current regulations--that is,
individuals determined eligible for CHIP by the Marketplace or another
insurance affordability program (including as a result of a decision
made by a Marketplace appeals entity), if the agency has entered into
an agreement
[[Page 54810]]
under which the Exchange makes final determinations of CHIP
eligibility. Proposed Sec. 457.348(b)(2)(ii) describes individuals who
are determined CHIP eligible by a separate Medicaid (including as the
result of a decision made by a Medicaid appeals entity). We also
propose to add new introductory language at proposed Sec.
457.348(b)(1) to explain that the requirements in proposed paragraph
(b)(1) apply to individuals described in proposed paragraph (b)(2).
Paragraph (c) of current Sec. 457.348(c) describes the CHIP
agency's responsibilities when individuals are transferred from other
insurance affordability programs based on their potential eligibility
for CHIP. We are not proposing any revisions to these requirements,
since they will continue to apply in States that do not elect to accept
determinations of eligibility made by BHP or the Marketplace.
Similarly, we do not propose any changes to current Sec. 457.384(d),
which specifies that a State must certify for the Exchange and other
insurance affordability programs the criteria applied in determining
CHIP eligibility.
Third, we propose to add a new paragraph (e) to Sec. 457.348 to
clarify that the State must accept a determination of CHIP eligibility
made by a separate Medicaid program. Similar to the proposed changes to
the Medicaid regulations discussed in section II.B.5. of this rule, in
order to comply with this requirement, we propose that the agency may:
(1) apply the same MAGI-based methodologies without further
verification as Medicaid; (2) enter into an agreement under which the
State delegates authority to the Medicaid agency to make final
determinations of CHIP eligibility; or (3) adopt other procedures
approved by the Secretary. These options are described at proposed
Sec. 457.348(e)(1), (2), and (3) respectively. We seek comment on
whether these options encompass the full range of processes that a
State may establish to accept determinations of eligibility made by
Medicaid.
When accepting a determination of CHIP eligibility made by
Medicaid, we expect States to enroll the individual in separate CHIP as
quickly and seamlessly as possible. Any action the State requires the
individual to take prior to enrollment, such as payment of an
enrollment fee or selection of a plan, should be described in the
combined notice provided to the individual and the individual should be
given adequate time to respond to prevent or minimize a gap in
coverage. We request comment on the challenges a State may face in
seamlessly transitioning eligibility from another program, as well as
strategies to mitigate those challenges.
Next, we propose changes to Sec. 457.350, which currently focuses
on screening individuals for potential eligibility for other insurance
affordability programs. We propose to require separate CHIP agencies to
complete MAGI-based eligibility determinations for Medicaid and to
screen for potential non-MAGI Medicaid, as well as eligibility for BHP
and insurance affordability programs available through the Exchanges.
As proposed, when a CHIP enrollee is determined ineligible due to a
decrease in household income, the separate CHIP agency would also
complete a determination of eligibility for Medicaid. The individual
would no longer be screened for potential MAGI Medicaid eligibility,
transferred to the Medicaid agency, and then receive a determination of
Medicaid eligibility, as required by current Sec. 457.350(b). The
separate CHIP agency must utilize the option the Medicaid agency has
elected to accept determinations of MAGI-based Medicaid eligibility
made by a separate CHIP. The options for the Medicaid agency to accept
a CHIP eligibility determination and continue to comply with Medicaid
single State agency responsibilities are discussed in section II.B.5 of
the Medicaid preamble. We are proposing to add a new paragraph (b)(3)
at 457.350 to require the State to ensure that Medicaid eligibility
determinations are conducted in accordance with the option elected by
the Medicaid agency at proposed Sec. 435.1200(b)(4) and that this be
reflected in the agreement between the State and the Medicaid agency
that is required at Sec. 457.348(a). We seek comment on the
feasibility of a contractor for the separate CHIP agency having the
ability to conduct the Medicaid determination in accordance with the
options specified at Sec. 435.1200(b)(4).
These changes correspond with the changes proposed to the Medicaid
regulations at Sec. 435.1200(e). In addition to the changes related to
Medicaid eligibility determinations, we also propose to restructure
Sec. 457.350 in order to improve the clarity of both existing and
proposed requirements for separate CHIP agencies evaluating eligibility
for other insurance affordability programs. These proposed changes are
effectuated as follows. Specifically, we propose:
To amend Sec. 457.350(a)(2) to clarify that the State
plan must describe how enrollment is facilitated for applicants found
either potentially eligible for another insurance affordability program
(that is, BHP or insurance affordability programs available through the
Exchanges) or eligible for Medicaid in accordance with this section.
To revise Sec. 457.350(b) to require States to determine
an applicant's eligibility for MAGI Medicaid and to determine potential
eligibility for non-MAGI Medicaid, BHP, or insurance affordability
programs available through the Exchanges for individuals who are not
eligible for MAGI-based Medicaid. Current Sec. 457.350(b) requires a
State to identify potential eligibility for other insurance
affordability programs (specifically MAGI-based Medicaid, non-MAGI
Medicaid, and other insurance affordability programs), promptly and
without undue delay and consistent with the State's timeliness
standards, when an individual is determined ineligible for separate
CHIP at application, at renewal, based on a change in circumstances, or
following a review. At Sec. 457.350(b)(1) we propose to retain the
introductory language at current Sec. 457.350(b) that a State act
promptly and without undue delay, consistent with the timeliness
standards established by the State, but we would add a new paragraph
(b)(1)(i) requiring the State to determine eligibility for MAGI-based
Medicaid. At proposed Sec. 457.350(b)(1)(ii), we would require a
State, if unable to make a determination of eligibility for MAGI-based
Medicaid to determine potential eligibility for non-MAGI Medicaid, BHP,
or insurance affordability programs available through the Exchanges.
Proposed Sec. 457.350(b)(2) would apply the requirements of proposed
paragraphs (b)(1)(i) and (ii) to applicants, enrollees whose
eligibility is being redetermined at renewal or based on a change in
circumstances, and to individuals determined ineligible for separate
CHIP as a result of a review conducted in accordance with subpart K of
this part. This is consistent with the application of current paragraph
(b) of Sec. 457.350, as described in the current introductory
language.
Technical changes to paragraph (c) of this section.
Current Sec. 457.350(c) describes the income eligibility test that
States must apply when determining an individual's eligibility for
MAGI-based Medicaid, or potential eligibility for BHP or insurance
affordability programs available through the Exchanges. We propose to
revise the references to paragraph (b) to reflect the change at
proposed Sec. 457.350(b)(1)(i) requiring the State to determine
eligibility for MAGI-based Medicaid and the redesignation of the
requirement to determine potential eligibility for BHP and insurance
affordability programs available through the Exchanges at proposed
Sec. 457.350(b)(1)(ii).
[[Page 54811]]
To redesignate current paragraph (f) at proposed Sec.
457.350(d), which is currently reserved. Current Sec. 457.350(f)
applies to individuals determined by the separate CHIP agency to be
potentially eligible for Medicaid based on MAGI and requires the State
to transfer the individual's account to the Medicaid agency, find the
applicant provisionally ineligible for CHIP until the Medicaid
determination is completed, and redetermine CHIP eligibility if the
individual is found ineligible when the Medicaid agency completes the
determination. Because we propose to require States to complete
determinations, rather than potential determinations, of eligibility
for Medicaid based on MAGI, we propose several changes to Sec.
457.350(f) (redesignated at proposed Sec. 457.350(d)). First, we
propose to modify the title for proposed Sec. 457.350(d) to clarify
that this provision applies to actions that States must take when
determining an individual eligible for Medicaid based on MAGI, rather
than actions the State must take for individuals found potentially
eligibility for Medicaid. Next, we propose to amend the citation in the
introductory language to reflect the changes proposed at paragraph
(b)(1) of this section. We propose to revise Sec. 457.350(f)(2)
(redesignated at Sec. 457.350(d)(2)) to require that the State find
the applicant ineligible for CHIP (as opposed to provisionally
ineligible for CHIP until the Medicaid determination is completed).
Finally, we propose to delete current paragraph (f)(3), which requires
the State to determine or redetermine eligibility when the Medicaid
agency returns a determination of ineligibility for an individual whom
the separate CHIP agency screened as potentially Medicaid eligible,
since under proposed Sec. 457.350(b) the CHIP agency will have
completed a determination of eligibility for MAGI-based Medicaid and
proposed Sec. 435.1200(c) would require the Medicaid agency to accept
the determination of eligibility made by the separate CHIP agency.
To redesignate current Sec. 457.350(j), describing the
requirements for individuals determined potentially eligible for non-
MAGI Medicaid, as proposed Sec. 457.350(e). Current Sec. 457.350(j)
requires the State to transfer the individual's account to the Medicaid
agency, complete a determination of CHIP eligibility and evaluate
eligibility for other insurance affordability programs if ineligible
for CHIP, include coordinated content in the CHIP eligibility notice,
and disenroll the individual from CHIP if they ultimately are
determined eligible for Medicaid. We propose several technical changes
to paragraph (j) (redesignated as proposed paragraph (e)). We propose
to revise the title to clarify that this paragraph applies not only to
applicants but also to individuals whose eligibility is being
redetermined at renewal or based on a change in circumstances and to
individuals who are determined ineligible for CHIP upon review; we note
that this is not a change in policy but simply a correction to the
title. Then we propose to revise existing cross-references to align
with proposed changes to paragraphs (b), (e), and (g) in Sec. 457.350.
To redesignate, at Sec. 457.350, current paragraph (e) as
paragraph (f). Current Sec. 457.350(e) applies only to States that use
a screening procedure other than a full Medicaid eligibility
determination and requires the State to provide certain information to
the family when a child is found potentially ineligible for Medicaid.
We propose to revise the title of Sec. 457.350(e) (redesignated at
Sec. 457.350(f)) to clarify that, in accordance with other changes
proposed to this section, this paragraph would apply to individuals who
are determined ineligible for MAGI-based Medicaid and found potentially
ineligible for Medicaid on a basis other than MAGI. We also propose to
update the existing cross-reference in this paragraph to reflect the
redesignation of current paragraph (e) as new paragraph (f).
To delete current paragraph (g) of Sec. 457.350 in its
entirety and to redesignate current Sec. 457.350(i) at proposed Sec.
457.350(g). Currently, paragraph (g) describes information States must
provide to help families make informed decisions about applying for
Medicaid coverage. We believe that the separate CHIP agency is already
required to provide similar information to families of children that
may potentially be eligible for Medicaid on a non-MAGI basis in Sec.
457.350(e) (redesignated as proposed Sec. 457.350(f)). Therefore, we
propose to eliminate the current requirements at Sec. 457.350(g).
Current Sec. 457.350(i) (which is revised in this rulemaking to remove
references to individuals subject to a period of uninsurance, as
discussed in section II.F.2 of this proposed rule) sets forth
procedures that the State must undertake when an individual is found
potentially eligible for another insurance affordability program,
including transferring the individual's electronic account to the other
program. We propose to revise Sec. 457.350(i) of the current
regulations (redesignated as proposed Sec. 457.350(g)) as discussed in
section II.F.2. of this preamble.
To redesignate requirements at current Sec. 457.350(k)
and (h) as proposed Sec. 457.350(h) and (i) respectively. Current
paragraph (k) (redesignated at proposed paragraph (h)) permits the
separate CHIP agency to make determinations of eligibility for advance
payments of the premium tax credit and cost sharing reductions on
behalf of the Exchange; we are not proposing any changes to this
paragraph. Current Sec. 457.350(h) (redesignated at proposed Sec.
457.350(i)) describes procedures for waiting lists, enrollment caps,
and closed enrollment; we propose only a technical change to this
section to update the cross-reference to reflect other changes proposed
in this section.
Similar to Medicaid, we seek comment on information that the
separate CHIP agency would not be able to access through electronic or
other data sources when determining MAGI-based eligibility for Medicaid
and for which it may need to contact the individual before completing a
determination of eligibility. Additionally, we seek comment on whether
there are cases in which the separate CHIP agency would be able to
complete only a determination of potential MAGI-based eligibility for
Medicaid, types of situations that would result in only a determination
of potential eligibility, and whether the separate CHIP agency may need
the option to transfer the individual's electronic account to the
separate Medicaid agency to finalize the determination.
Similar to the proposed changes for coordination of notices in the
Medicaid regulations at Sec. 435.1200(h), discussed in section II.B.5
of this proposed rule, we propose changes to Sec. 457.340(f) related
to coordination of notices with other programs. These changes
correspond with Medicaid changes at Sec. 435.1200(h) to ensure that
individuals receive a combined notice regardless of the agency that
completes the eligibility determination or transfers the individual's
electronic account to another insurance affordability program for a
final eligibility determination. Providing individuals with a combined
notice will be critical to ensuring that they understand the changes in
coverage that are occurring and any additional obligations that may be
imposed by the program to which their coverage is being transitioned.
As previously mentioned above in the section related to transitions
from Medicaid to CHIP, States that operate its CHIP and Medicaid
programs under the same agency and eligibility system that
[[Page 54812]]
already provide a seamless, combined Medicaid and CHIP notice, may not
need to make any changes.
To effectuate this change to the combined notice requirements, we
propose changes to Sec. 457.340(f)(1). Current Sec. 457.340(f)(1)
requires States to provide combined notices, to the maximum extent
feasible, to individuals and to multiple members of the same household
who are included on the same application or renewal form; this
paragraph also requires the State to include coordination of notices in
its agreement with other insurance affordability programs as described
at Sec. 457.348(a). We propose to separate current Sec. 457.340(f)(1)
into three separate requirements--proposed paragraphs (f)(1)(i), (ii)
and (iii)--each of which must be included in the agreement into which
the State enters into, in accordance with Sec. 457.348(a). Proposed
Sec. 457.340(f)(1)(i) would establish a new requirement for the State
to ensure that individuals are provided with a combined notice when
their Medicaid eligibility is determined by the separate CHIP agency,
or their CHIP eligibility is determined by the agency administering
Medicaid. Proposed Sec. 457.340(f)(1)(ii) and (iii) would restate the
requirements currently described in paragraph (f)(1)--that is, at
proposed Sec. 457.340(f)(1)(ii) to provide a combined notice to
individuals transferred between the State and another insurance
affordability program to the maximum extent feasible; and at proposed
Sec. 457.340(f)(1)(iii) to require a combined notice for multiple
members of the same household to the maximum extent feasible. We do not
propose to make any changes to Sec. 457.340(f)(2). We seek comment on
States' ability to issue a combined notice in accordance with proposed
Sec. 457.340(f)(1)(i).
Consistent with these changes to Sec. 457.350, we propose a
conforming change to Sec. 457.348(a), which describes the agreements
that States must establish with other insurance affordability programs.
We propose to revise Sec. 457.348(a) to require that these agreements
provide for not only coordination of notices, but also for a combined
eligibility notice with other insurance affordability programs.
5. Recordkeeping (Sec. 457.965)
As discussed in section II.D of this preamble, we propose to revise
Sec. 431.17(b) to clearly detail the specific types of information
that Medicaid agencies must retain as part of each applicant and/or
enrollee's case records. We also propose changes to Sec. 431.17(c) to
specify the minimum duration of time that the information that should
be retained for both applicant and enrollee files. Finally proposed
revisions at Sec. 431.17(d) would provide that States must be able to
provide stored information within 30 calendar days after a request has
been made if not otherwise specified. Additionally, we clarified in
section II.D. of this preamble that we do not propose that all of the
information that could be considered part of the case record be stored
in a single system.
To ensure effective and efficient administration of the CHIP
program, consistent with section 2101(a) of the Act, we propose to
modify existing CHIP documentation requirements at Sec. 457.965 by
adopting the same requirements as we are proposing for Medicaid at
Sec. 431.17, except that cross-references to other Medicaid
regulations in proposed Sec. 431.17 are replaced with corresponding
cross-references to existing CHIP regulations. As with Medicaid, we
seek comment regarding whether 3 years is an appropriate minimum
duration of time for States to retain case records after the case is
active; additionally, we seek comment whether any longer or shorter
duration would be appropriate for certain types of information, such as
those related to payment and provision of child health assistance, to
remain in the case records. We are also particularly interested in
comments on whether the retention period should be tied to the
individual or the active case. Finally, we seek comment whether States
should retain flexibility to maintain records in paper or other formats
that reflect evolving technology.
F. Eliminating Access Barriers in CHIP
Following passage of the ACA, CMS focused on aligning methodologies
and procedures in order to create a streamlined, coordinated
eligibility and enrollment process across insurance affordability
programs. In such rulemaking, we left in place certain flexibilities
available to States in administering separate CHIPs which are not
permitted in Medicaid, including the option to specify a period of time
that CHIP beneficiaries whose families fail to pay required premiums
are not permitted to reenroll in CHIP coverage or ``lock out'' such
beneficiaries; the option to impose a waiting period prior to
enrollment for beneficiaries previously enrolled in other coverage; and
the option to impose annual and lifetime limits on benefits. Each of
these policies, if adopted by a State, poses a barrier to obtaining and
retaining coverage for CHIP beneficiaries who otherwise meet the
eligibility requirements for the State's program. As discussed further
below, we propose to eliminate each of these State options.
1. Prohibit Premium Lock-Out Periods (Sec. Sec. 457.570 and
600.525(b)(2))
Premium payment policies can directly influence the difficulty, or
ease, eligible children and pregnant individuals face when enrolling in
and retaining CHIP coverage. Under section 2103(e)(3)(C) of the Act,
States must provide enrollees with a grace period of at least 30 days
from the beginning of a new coverage period to make premium payments
before the child or targeted low-income pregnant woman's coverage is
terminated. If the premium remains unpaid at the end of the grace
period, States must also offer the family an opportunity to show their
income has decreased such that the CHIP enrollee may qualify for a
lower premium payment in CHIP or be eligible for Medicaid. States also
currently have the option under Sec. 457.570 to impose a premium lock-
out period, which is a specified period that a child or a pregnant
individual must wait until being allowed to reenroll in the CHIP
program after non-payment of premiums. There is no statutory provision
expressly requiring CMS to provide States with the option to institute
a premium lock-out period after non-payment of premiums.
Under Medicaid, premiums are authorized under sections 1902(a)(14),
1916, and 1916A of the Act, and implementing regulations at 42 CFR
447.50 through 447.57. Medicaid permits disenrollment for failure to
pay premiums is at 447.55(b)(2), but does not permit premium lock-out
periods.
Premium lock-out periods, by design, require children or pregnant
individuals to go without coverage for a specified period. While not
focused on the CHIP beneficiary populations specifically, a review of
the literature on Medicaid lock-out periods previously authorized under
section 1115 demonstrations indicates that premium lock-out periods
pose a barrier to coverage and hinder access to care. Research on the
impact of premium lock-out periods on access to care for Medicaid
[[Page 54813]]
beneficiaries authorized under section 1115(a) of the Act also shows
that Medicaid beneficiaries who experience lock-outs are more likely to
skip or delay provider visits, not fill prescriptions, and report
financial barriers to accessing care.\66\ One study found that
individuals who experienced interruptions in coverage had higher
hospitalization rates for conditions, such as asthma and diabetes, that
could have been managed in outpatient settings with consistent access
to treatment.\67\ Gaps in coverage also make it less likely that
families establish sustained relationships with health care providers,
which also can undermine the quality of care they receive.\68\ The
literature also shows that premium lock-out periods disproportionately
affect non-White populations compared to White populations, which may
further exacerbate existing disparities in health outcomes.
Additionally, there is no evidence to demonstrate that lock-out periods
incentivize families to comply with requirements.
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\66\ Ku, L., & Ross, D.C. (2002). Staying covered: the
importance of retaining health insurance for low-income families.
Commonwealth Fund, Task Force on the Future of Health Insurance.
https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_fund_report_2002_dec_staying_covered__the_importance_of_retaining_health_insurance_for_low_income_families_ku_stayingcovered_586_pdf.pdf.
\67\ Bindman, A.B., Chattopadhyay, A., & Auerback, G.M. (2008).
Interruptions in Medicaid coverage and risk for hospitalization for
ambulatory care-sensitive conditions. Annals of internal medicine,
149(12), 854-860.
\68\ Ku, L., & Ross, D.C. (2002). Staying covered: the
importance of retaining health insurance for low-income families.
Commonwealth Fund, Task Force on the Future of Health Insurance.
https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_fund_report_2002_dec_staying_covered__the_importance_of_retaining_health_insurance_for_low_income_families_ku_stayingcovered_586_pdf.
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In order to improve continuity of care and align with Medicaid
rules in this area, we propose to eliminate premium lock-out periods in
CHIP. Section 2101(a) of the Act requires States to provide access to
health care in an effective and efficient manner that is coordinated
with other sources of health benefits coverage. In addition, the April
5, 2022 Executive Order 14070, ``Continuing to Strengthen Americans'
Access to Affordable, Quality Health Coverage'' requires agencies to
identify ways to expand the availability of affordable health coverage,
improve quality of coverage, and to strengthen benefits. Specifically,
we propose to revise Sec. 457.570(c)(1) to prohibit States from
imposing premium lock-out periods; to remove current paragraph (c)(2),
and to redesignate and revise paragraph (c)(3) at paragraph (c)(2) to
prohibit States from requiring collection of past due premiums or
enrollment fees as a condition of eligibility for reenrollment once a
lock-out period is over if an individual was terminated for failure to
pay premiums.
There are a multitude of promising practices described in the
literature for helping to prevent late or missed premium payments,
thereby avoiding even short-term disruptions to coverage,\69\ such as:
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\69\ Brooks, T. (2013). Handle with Care: How Premiums Are
Administered in Medicaid, CHIP and the Marketplace Matters.
Georgetown University Center for Children and Families. https://ccf.georgetown.edu/wp-content/uploads/2013/12/Handle-with-Care-How-Premiums-Are-Administered.pdf.
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Conducting new member calls to ensure that families
understand their payment obligations and options.
Ensuring eligibility staff who work directly with families
are trained and knowledgeable about payment policies and procedures,
and can explain them to people, particularly those experiencing a
language or cultural barrier.
Generating frequent payment notices and reminders.
Providing multiple and convenient options for paying
premiums.
Providing advance payment incentives (such as pay for a
certain number of months and permitting 1 free month).
Another possible approach for States to reduce the disruptive
effect of non-payment of premiums is to apply an affordable annual
enrollment fee or provide families with the choice between paying
monthly premiums or an annual enrollment fee. Similar to premiums,
States may provide varying fees based on family income level to ensure
that families at a lower income can afford the enrollment fee. We note
that an annual enrollment fee would need to meet the conditions
specified at section 2103(e)(3)(A)(i) of the Act relating to
limitations on premiums and enrollment fees for children under 150
percent of the FPL, section 2103(e)(3)(B) of the Act for all other
children, and section 2112(b)(6) of the Act for targeted low-income
women. To be affordable, an annual fee would likely need to be
substantially lower than the equivalent of 12 monthly premium
payments.\70\ For example, some States with a separate CHIP charge an
annual enrollment fee of $50 for one child or $100 for a family with
two or more children. Requiring a single affordable annual payment may
improve retention, reduce disenrollment rates, and simplify program
administration, for example, by reducing the cost of billing,
collecting and processing premium payments.\71\ We solicit comments on
the potential parameters for ensuring that an annual fee is affordable.
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\70\ Ku, L., & Ross, D.C. (2002). Staying covered: the
importance of retaining health insurance for low-income families.
Commonwealth Fund, Task Force on the Future of Health Insurance.
https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_fund_report_2002_dec_staying_covered__the_importance_of_retaining_health_insurance_for_low_income_families_ku_stayingcovered_586_pdf.
\71\ Ibid.
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States will continue to have the option to disenroll children or
targeted low-income pregnant women from coverage due to non-payment of
premiums, including enrollment fees, as long as the State provides
families a minimum 30-day premium grace period, which is required under
2103(e)(3)(C) of the Act. States must inform an individual, seven days
after the first day of the grace period, that failure to make a payment
within the premium grace period will result in termination of coverage,
and of the individual's right to challenge the termination. Because
States would no longer be able to require collection of past due
premiums or enrollment fees as a condition of eligibility, a family
could re-apply for coverage immediately following disenrollment. States
retain the flexibility to determine whether families will be required
to complete a new application in order to reenroll in coverage after
disenrollment. Other States allow a period of time after disenrollment
for families to make a payment and have coverage reinstated without
requiring the submission of a new application.
We note that, under 42 CFR 600.320(d), States that operate a BHP
have the option to enroll eligible individuals in their BHP during
enrollment and special enrollment periods that are no more restrictive
than those required for an Exchange at 45 CFR 155.410 and 155.420 or
follow the Medicaid and CHIP rules to permit continuous open enrollment
throughout the year. Under Sec. 600.525(b)(2), States that elect to
allow continuous open enrollment throughout the year must comply with
the reenrollment standards set forth in the CHIP regulations at Sec.
457.570(c). Thus, by eliminating the State option to impose a premium
lock-out period in CHIP, we effectively would be eliminating the
premium lock-out period for States with a BHP that allows continuous
open enrollment throughout the year.
As such, we propose to remove the requirement at Sec.
600.525(b)(2) for a BHP State to define the length of the
[[Page 54814]]
premium lock-out period in its BHP Blueprint, as premium lock-out
periods will no longer be permissible. We propose this change using our
authority in section 1331(c)(4) of the ACA, which requires a State that
operates a BHP to coordinate the administration of, and provision of
benefits under its BHP with the State Medicaid, CHIP, and other State-
administered health programs to maximize the efficiency of such
programs and to improve the continuity of care. We request comment
regarding whether BHPs should be allowed to continue operating a
premium lock-out period.
We are also considering the option of permitting a 30-day lock-out
period and invite comments on this option.
2. Prohibit Waiting Periods (Sec. Sec. 457.65, 457.340, 457.350,
457.805, and 457.810)
Currently, the CHIP regulations permit States to impose a ``period
of uninsurance,'' or ``waiting period,'' on individuals who have
recently disenrolled from a group health plan prior to allowing them to
enroll in a separate CHIP. Section 457.805 provides some limitations on
the use of waiting periods. Our experience in implementing the ACA
provisions designed to increase access for families under Medicaid and
CHIP and expand coverage through the Exchanges calls into question
whether the use of waiting periods in CHIP continues to be appropriate.
Waiting periods are a State option unique to CHIP programs, as waiting
periods are not permitted in Medicaid, BHP, and individual market
Exchange plans.\72\ Historically, we have interpreted section
2102(b)(3)(C) of the Act, which requires States to ensure that coverage
provided under CHIP does not substitute for (or ``crowd out'') coverage
under group health plans, to permit States to adopt a waiting period.
Corresponding regulations at Sec. 457.805 specify that State plans
must include a description of ``reasonable procedures'' to prevent
substitution.
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\72\ U.S. Department of Health and Human Services. (2016, May).
Frequently Asked Questions on Health Insurance Market Reforms and
Marketplace Standards. Retrieved from: https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Waiting-period-FAQ-05262016-Final-.pdf.
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Currently, 11 States use a waiting period in CHIP as a mechanism
for preventing substitution. Children are denied eligibility under CHIP
if they recently had group health coverage, within a State-prescribed
waiting period, and have not qualified for a Federal or State-specified
exception. Currently, States impose waiting periods that range from one
month to 90 days. CHIP regulations at Sec. 457.805 provide that a
waiting period may not exceed 90 days.
At the inception of CHIP in 1997, employer-sponsored health
insurance was the main alternative source of coverage for children in
families within the CHIP income range. With passage of the ACA,
coverage in a QHP through the Exchanges became available, and families
may now qualify for premium tax credits to purchase coverage from the
Exchange for their children while they wait for CHIP coverage during a
waiting period.
Waiting periods, which have historically resulted in a period of
uninsurance between the end of private health coverage and the
beginning of CHIP enrollment, were seen as a deterrent to families
dropping private coverage in order to enroll their children in CHIP.
However, the availability of coverage through the Exchanges during a
waiting period warrants reconsideration of the use of waiting periods
in CHIP.\73\
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\73\ Under current Treasury regulations, some children may not
qualify for Exchange premium tax credits if they are deemed eligible
for affordable health coverage through a family member's employer,
based on whether the cost of self-only coverage for the family
member is affordable. The Treasury Department has published a Notice
of Proposed Rulemaking that would change this rule. 87 FR 20354
(Apr. 7, 2022).
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The availability of Exchange coverage increases the complexity of
implementing CHIP waiting periods, as coordinating coverage between the
Exchanges and CHIP creates challenges that can lead to loss of coverage
when affected children must transition from Exchange coverage to
CHIP.\74\ As noted, families with children who are ineligible for CHIP
during a waiting period are eligible for advance payments of the
premium tax credit to enroll the child in a QHP through the Exchange,
if they meet other applicable requirements. However, after a child is
determined eligible for enrollment in a QHP, additional time is needed
for the family to select and enroll in a health plan. By the time a
child is enrolled in a health plan through the Exchange, the CHIP
waiting period often will have expired, or be close to expiring, at
which point the child is eligible for CHIP, and the CHIP agency and
family must act to move the child from Exchange coverage to the State's
CHIP program. Under current regulations at Sec. 457.350(i), the CHIP
agency is expected to notify both the Exchange and family of the
child's potential eligibility for CHIP at the end of the waiting
period. The complexities of tracking waiting periods, sending notices
to families, and requiring families to take additional steps to
transition coverage likely result in children who are eligible for CHIP
being unenrolled.75 76 77 Furthermore, health policy experts
in a number of States that continue to implement waiting periods
indicate that the burden imposed on families in some cases prevents
them from seeking public coverage again, even once the children are
eligible after the waiting period is over.78 79
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\74\ Brooks, Tricia. Now is the time to remove CHIP waiting
periods and welcome kids into coverage. April 17, 2020. Retrieved
from https://ccf.georgetown.edu/2020/04/17/now-is-the-time-to-remove-chip-waiting-periods-and-welcome-kids-into-coverage/.
\75\ Medicaid and CHIP Payment and Access Commission. March
2017. ``Chapter 1: The Future of CHIP and Children's Coverage'' in
Report to Congress on Medicaid and CHIP. Retrieved from https://www.macpac.gov/wp-content/uploads/2017/03/The-Future-of-CHIP-and-Childrens-Coverage.pdf.
\76\ Foster, Leslie. January 2016. ``Research Brief 3:
Stakeholder perspectives from Texas'' in Health Care Coverage and
Access for Children in Low-income Families. Mathematica Policy
Research, funded by the David & Lucile Packard Foundation.
\77\ Bruce, Giles. February 13, 2020. ``Why Do Some States Still
Require Long Waits Before Kids Can Get Health Insurance?'' in
Children's Health Matters. University of Southern California, Center
for Health Journalism. Retrieved from https://centerforhealthjournalism.org/2020/01/30/why-do-some-states-still-require-long-waits-kids-can-get-health-insurance.
\78\ Medicaid and CHIP Payment and Access Commission. March
2017. ``Chapter 1: The Future of CHIP and Children's Coverage'' in
Report to Congress on Medicaid and CHIP. Retrieved from https://www.macpac.gov/wp-content/uploads/2017/03/The-Future-of-CHIP-and-Childrens-Coverage.pdf.
\79\ Foster, Leslie. January 2016. ``Research Brief 3:
Stakeholder perspectives from Texas'' in Health Care Coverage and
Access for Children in Low-income Families. Mathematica Policy
Research, funded by the David & Lucile Packard Foundation.
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Even for families that successfully navigate the administrative
hurdles of moving from Exchange to CHIP coverage, coverage transitions
create care complexities. A move from the Exchange to CHIP may
necessitate a change of providers and/or managed care plans, which
interrupt care. These potential changes in coverage may limit a child's
access to needed services following a waiting period.
The 2013 eligibility final rule amended CHIP regulations at Sec.
457.805(b)(1) to impose some limitations on waiting periods, including
a 90-day maximum as mentioned above. Subsequent to this rule, the
majority (23 of 36) of States elected to eliminate their CHIP waiting
period. No state that has eliminated a waiting period has reported a
substitution problem to CMS through their monitoring efforts. Eleven
states still implement CHIP waiting periods; nine States have a 90-day
waiting
[[Page 54815]]
period, one State has a 2-month waiting period, and one State has a one
month waiting period. In the 2013 final rule, we also amended Sec.
457.805(b)(3) to require that States adopt certain exemptions to any
waiting period. Under this regulation, States may not apply a waiting
period if:
The premium paid by the family for coverage of the child
under the group health plan exceeds 5 percent of household income;
The child's parent is determined eligible for advance
payments of the premium tax credit for enrollment in a QHP through the
Exchange because the employer-sponsored insurance in which the family
was enrolled is determined unaffordable in accordance with 26 CFR
1.36B-2(c)(3)(v);
The cost of family coverage that includes the child
exceeds 9.5 percent of the household income;
The employer stopped offering coverage of dependents (or
any coverage) under an employer-sponsored health insurance plan;
A change in employment, including involuntary separation,
resulted in the child's loss of employer-sponsored insurance (other
than through full payment of the premium by the parent under COBRA);
The child has special health care needs; or
The child lost coverage due to the death or divorce of a
parent.
In addition to the Federally required exemptions to CHIP waiting
periods listed above, the majority of States apply other State-specific
exemptions to the waiting period. Requirements at Sec. 457.810 apply
the same 90-day maximum and Federal exceptions to waiting periods for
CHIP premium assistance programs. As a result of these exceptions,
States have anecdotally reported that few children are subject to
waiting periods.
Sections 2102(b)(1)(B)(iii), 2102(b)(1)(B)(iv) and 2112 (b)(5) of
the Act reference circumstances in which waiting periods may not be
applied to CHIP populations or coverage. These provisions, included in
the statute when it was first enacted in 1997, place certain
limitations on the use of waiting periods, which were implicitly
recognized at the time as one of the potential strategies states could
use to fulfill the requirement at section 2102(b)(3)(C) of the Act to
address substitution of coverage. Since the inception of CHIP, the
health coverage landscape has significantly changed, including the
addition of the Exchange coverage option. Any gap in coverage created
by a waiting period or the administrative process to transfer children
between different coverage options, such as the Exchange, can
compromise child health and development and access to preventive and
primary health care during childhood and adolescence. As noted above,
waiting periods have never been allowed under Medicaid and are not
permitted in the Exchanges, either. Nor are waiting periods permitted
in the private insurance market, for example, for individuals with pre-
existing conditions. These changes call into question the
appropriateness of waiting periods as a tool to address substitution of
coverage.
In addition, Executive Order 14070 of April 5, 2022 titled
``Continuing to Strengthen Americans' Access to Affordable, Quality
Health Coverage'' instructs agencies to identify policy changes to
ensure that enrollment and retention in coverage can be more easily
navigated by consumers. The navigation of waiting periods for families
is challenging, and CHIP is now an outlier among insurance providers
compared to Medicaid and private insurance plans providing EHB coverage
in allowing waiting periods to be applied before individuals can enroll
in coverage. In addition, moving children between CHIP and the Exchange
is not an efficient or effective use of State and Federal resources. In
order to align with other programs, and consistent with the requirement
in section 2101(a) of the Act to provide access for children to health
care in an effective and efficient manner that is coordinated with
other sources of health benefits coverage, as well as Executive Order
number 14070 of April 5, 2022, we are proposing to eliminate all
waiting periods in separate CHIPs. States will be required to continue
monitoring efforts to prevent substitution of coverage in accordance
with section 2012(b)(3)(c) of the Act.
Specifically, we propose to revise Sec. 457.805(b) to provide that
States may not impose a waiting period before enrolling eligible
individuals in CHIP. We also propose the following conforming changes
to other regulatory provisions to remove language referring to waiting
periods.
Revise Sec. 457.65 to remove references to State plan
amendments that implement or extend the length of a required period of
uninsurance.
Remove Sec. 457.340(d)(3) (relating to facilitating
enrollment in CHIP after a State-required period of uninsurance).
Revise Sec. 457.350(i) (redesignated at proposed Sec.
457.350(g) as discussed in section II.E.4. of this proposed rule) to
remove references to individuals subject to a State-required period of
uninsurance, and to remove paragraphs (2) and (3) of Sec. 457.350(i)
(redesignated at proposed Sec. 457.350(g)) relating to State notices
for individuals found eligible for other insurance affordability
programs during the waiting period).
Remove Sec. 457.805(b)(2) and (b)(3) (relating to Federal
exceptions to waiting periods).
Amend Sec. 457.810(a) to specify that waiting periods may
not be applied to CHIP premium assistance programs and remove
paragraphs (a)(1) and (2) (relating to the 90-day limit for, required
exemptions from, waiting periods applied to CHIP premium assistance
programs).
Under the proposed rule, States would be required to continue to
monitor the prevalence of substitution of coverage, consistent with
requirements at Sec. 457.805, and to report annually to CMS on the
effectiveness of strategies used to prevent substitution of coverage
pursuant to Sec. 457.750(b)(2). In the preamble of the July 15, 2013
final rule (78 FR 42159), we explained that effective January 1, 2014,
monitoring of substitution is a sufficient approach for addressing
substitution at all income levels. There are a number of ways States
monitor substitution of coverage, such as matching applicants to a
database that identifies sources of other coverage, including questions
on the single streamlined application about private and group health
coverage, and tracking the number of applicants that reported other
coverage and are later enrolled in CHIP. We expect that if this
monitoring demonstrates a high rate of substitution, a State will
consider strategies such as offering premium assistance to children
enrolled in group health plan coverage, and improving public outreach
about the range of health coverage options that are available in that
State. We are available to provide technical assistance to develop
additional strategies to reduce crowd out if it is determined through
monitoring activities that substitution of coverage exceeds an
acceptable threshold determined by the State.
We invite comments on our proposal to eliminate waiting periods to
effectively balance the goal of preventing coverage gaps for children
while ensuring that CHIP coverage does not substitute for coverage
available under group health plans. We are also considering the option
of permitting a 30-day waiting period for States that are able to
demonstrate that high rates of substitution are a problem, and invite
comments on this proposal.
[[Page 54816]]
3. Prohibit Annual and Lifetime Limits on Benefits (Sec. 457.480)
Section 1001 of the ACA added section 2711 to the Public Health
Service Act (PHS Act), which prohibits annual and lifetime limits on
the provision of essential health benefits (EHBs), as defined in
section 1302(b) of the ACA, by group health plans and health insurance
issuer. As such, annual and lifetime limits are not permitted for
individuals enrolled in QHPs through the Exchanges. Medicaid also does
not permit annual or lifetime limits. However, the CHIP regulations do
not prohibit annual or lifetime limits, and a number of States have
implemented annual and lifetime limits on CHIP benefits. Specifically,
12 States place an annual dollar limit on at least one CHIP benefit,
and six States place a lifetime dollar limit on at least one benefit.
Most commonly, annual and lifetime benefits are placed on dental, or
specifically orthodontia, coverage. Ten States limit dental coverage to
$500-$2,000 annually, and four States limit lifetime orthodontia
coverage to $725-$1,250. These limits may present barriers to children
receiving necessary dental and orthodontia care. Research on childhood
oral health care indicates that dental care is the most common unmet
treatment need in children.\80\ Many low-income families face barriers
such as accessibility and costs that deter them from seeking oral care
services, leading to increased risk of dental diseases or dental
emergencies.\81\ Children in low-income families, including those
covered by Medicaid and CHIP, are twice as likely to have untreated
tooth decay compared to children with higher incomes.\82\ Thus, annual
and lifetime limits further exacerbate unmet treatment needs for CHIP
children by placing a financial burden on low-income families.
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\80\ Newacheck, P. W., Hughes, D. C., Hung, Y. Y., Wong, S., &
Stoddard, J. J. (2000). The unmet health needs of America's
children. Pediatrics, 105(4 Pt 2), 989-997.
\81\ U.S. Department of Health and Human
Services.(2004,October). Guide to children's dental care in
Medicaid. Centers for Medicare and Medicaid Services. Retrieved
from: https://www.medicaid.gov/sites/default/files/2019-12/child-dental-guide.pdf.
\82\ Dye, B. A., Mitnik, G. L., Iafolla, T. J., & Vargas, C. M.
(2017). Trends in dental caries in children and adolescents
according to poverty status in the United States from 1999 through
2004 and from 2011 through 2014. Journal of the American Dental
Association (1939), 148(8), 550-565.e7. Retrieved from: https://doi.org/10.1016/j.adaj.2017.04.013.
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While many States limit specific benefits to an annual or lifetime
dollar amount, currently, no State imposes an aggregate annual or
lifetime limit on all CHIP benefits. However, some States did impose
such limits in previous years. Section 2103(f)(2) of the Act requires
that coverage offered under a separate CHIP comply with the
requirements of subpart 2 of part A of Title XXVII of the PHS Act
insofar as such requirements apply with respect to a health insurance
issuer that offers group health insurance coverage. Because section
2711 of the PHS Act is in subpart 2 of part A of Title XXVII of the PHS
Act, which applies to separate CHIPs (by cross-reference in section
2103(f)(2) of the Act), States cannot impose annual or lifetime limits
in the provision of any EHBs covered under a separate CHIP.
Under section 2103(a) of the Act, States may elect to provide
benchmark coverage, benchmark-equivalent coverage, existing
comprehensive State-based coverage, or Secretary-approved coverage to
their separate population (where applicable). Regardless of the type of
coverage provided, there are several required benefit categories that
States must offer, including well-baby and well-child visits; dental
benefits; mental health and substance use disorder services; testing,
treatment, and vaccination for COVID-19; and age-appropriate
immunizations.
In accordance with section 2101(a) of the Act, which calls for the
provision of CHIP in a manner that is effective and efficient and
coordinated with other sources of health benefits coverage for
children, and section 2103(f)(2) of the Act which generally prohibits
annual and lifetime limits on EHBs, we are proposing to revise the
regulations at Sec. 457.480 to prohibit all annual and lifetime dollar
limits on all benefits in CHIP. Although title XXI of the Act does not
apply EHB rules under a separate CHIP, the services which must be
covered under title XXI also are EHBs. Specifically, pediatric services
(including dental and vision services) and maternity and newborn care
are EHBs. Because we believe that all of the benefits provided to
children or targeted low-income pregnant women under a CHIP State plan
are inherently pediatric, maternity, or newborn care services, we
believe it is appropriate--indeed, the better application of the
incorporated requirements in section 2711 of the PHS Act to separate
CHIPs--to prohibit annual and lifetime limits on all covered CHIP
benefits.
We propose that this prohibition be applied both to aggregate
annual and lifetime limits on all benefits, as well as annual and
lifetime limits on specific benefits (for example, dental services).
Such limits construct barriers for families to access health coverage
and result in a lack of coverage for children with the greatest medical
needs. Additionally, these limits create a financial hardship on low-
income families and/or an increase in uncompensated care that could
raise costs for all health coverage payers. We note that the proposed
prohibition on annual and lifetime dollar limits would not apply to
non-monetary annual or lifetime limits on specific benefits. For
example, a State could still implement a limitation on the number of
physical therapy visits or eyeglasses that will be covered each year,
provided such limitations are in compliance with all other Federal
requirements. We encourage States to maintain processes that allow
beneficiaries to exceed these non-financial limitations when medically
necessary.
We propose to redesignate current paragraphs (a) and (b) of Sec.
457.480, as paragraphs (b) and (c) respectively, and to add a new
paragraph (a) to prohibit annual and lifetime dollar limits in the
provision of all CHIP medical and dental benefits.
III. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.) we are required to provide 60-day notice in the Federal Register
and solicit public comment before a ``collection of information''
requirement is submitted to the Office of Management and Budget (OMB)
for review and approval. For the purposes of the PRA and this section
of the preamble, collection of information is defined under 5 CFR
1320.3(c) of the PRA's implementing regulations.
In order to fairly evaluate whether an information collection
should be approved by OMB, section 3506(c)(2)(A) of the PRA requires
that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this rule that contain information collection
requirements. Comments, if received, will be responded to within the
subsequent final rule.
A. Wage Estimates
To derive average costs, we used data from the U.S. Bureau of Labor
Statistics'
[[Page 54817]]
May 2021 National Occupational Employment and Wage Estimates for all
salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this
regard, the following table presents the BLS' mean hourly wage, our
estimated cost of fringe benefits and overhead (calculated at 100
percent of salary), and our adjusted hourly wage.
[GRAPHIC] [TIFF OMITTED] TP07SE22.000
Wages for State Governments. As indicated, we are adjusting our
employee hourly wage estimates by a factor of 100 percent. This is
necessarily a rough adjustment, both because fringe benefits and
overhead costs vary significantly from employer to employer, and
because methods of estimating these costs vary widely from study to
study. Nonetheless, we believe that doubling the hourly wage to
estimate total cost is a reasonably accurate estimation method.
Cost to State Governments. To estimate State costs, it was
important to take into account the Federal government's contribution to
the cost of administering the Medicaid, CHIP, and BHP programs. The
Federal government provides funding based on a Federal Medical
Assistance Percentage (FMAP) that is established for each State, based
on the per capita income in the State as compared to the national
average. FMAPs range from a minimum of 50 percent in States with higher
per capita incomes to a maximum of 76.25 percent in States with lower
per capita incomes. States receive an ``enhanced'' FMAP for
administering their CHIP programs, ranging from 65 to 83 percent. For
Medicaid, all States receive a 50 percent FMAP for administration. As
noted previously, States also receive higher Federal matching rates for
certain services and now for systems improvements or redesign, so the
level of Federal funding provided to a State can be significantly
higher. As such, in taking into account the Federal contribution to the
costs of administering the Medicaid, CHIP, and BHP programs for
purposes of estimating State burden with respect to collection of
information, we elected to use the higher end estimate that the States
would contribute 50 percent of the costs, even though the burden will
likely be much smaller.
Wages for Individuals. For enrollees, we believe that the burden
will be addressed under All Occupations (at $28.01/hr) since the group
of individual respondents varies widely from working and nonworking
individuals and by respondent age, location, years of employment, and
educational attainment, etc. Unlike our State adjustment to the
respondent hourly wage, we did not adjust this figure for fringe
benefits and overhead since the individuals' activities will occur
outside the scope of their employment.
B. Proposed Information Collection Requirements (ICRs)
1. ICRs Regarding Facilitating Enrollment Through Medicare Part D Low-
Income Subsidy ``Leads'' (Sec. Sec. 435.601, 435.911, and 435.952)
With the exception of the proposed changes under Sec.
435.952(e)(4), the following changes will be submitted to OMB for
review under control number 0938-1147 (CMS-10410), regarding the
collection of eligibility data from State Medicaid and CHIP agencies.
The proposed Sec. 435.952(e)(4) changes will be submitted to OMB under
control number 0938-0467 (CMS-R-74), regarding the collection of
information for income verification.
OMB Control Number 0938-1147 (CMS-10410)
Proposed Sec. 435.911(e) focuses on using the SSA data from
processing LIS applications ``leads data'' to streamline MSP
eligibility determinations. Section 435.911(e)(1) would require States
to accept, via secure electronic interface, the SSA LIS leads data,
while Sec. 435.911(e)(2) would require that States treat receipt of
the leads data as an application for Medicaid and promptly and without
undue delay determine MSP eligibility without requiring submission of a
separate application. Section 435.911(e)(4) would require States to
refrain from requesting information from individuals already provided
through leads data unless information available to the agency is not
reasonably compatible with information provided by or on behalf of the
individual, while Sec. 435.911(e)(5) requires States to accept
information provided through the leads data relating to a criterion of
eligibility without further verification.
We estimate that States would be able to adjudicate over 90 percent
of MSP applications for LIS enrollees without gathering additional
documentation from the applicants. Therefore, if there are about
400,000 new LIS applicants
[[Page 54818]]
approved annually in 51 States,\83\ we estimate that 90 percent of
those applicants or 360,000 (400,000 x 0.9) would be able to enroll in
an MSP without providing additional income and resource related
documentation, and without the State receiving and adjudicating such
data.
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\83\ Over the past 5 years (2017-2021), SSA approved an average
of 394,025 LIS applications annually. https://www.ssa.gov/open/data/Data-about-Extra-Help-with-Medicare-Prescription-Drug-Plan-Cost.html.
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The provisions in Sec. 435.911(e) are associated with a reduction
in burden for States and beneficiaries associated with application
completion and eligibility determinations or redeterminations at the
State Medicaid agency, including: reduced verification work for States
that do not need to adjudicate the leads data for approximately 360,000
new LIS applicants; reduced paperwork to submit for the LIS enrollees
applying to MSPs in 51 States; reduced time and costs for enrollees who
were previously expended to obtain, print, copy, mail and fax documents
to the State to support the State's verification of income and
resources; and reduced enrollee burden related to the need for public
transportation and cell phone usage in relation to said document
activities (obtaining, printing, copying, mailing and faxing).
We estimate that the provisions in Sec. 435.911(e) would save an
Eligibility Interviewer 25 minutes (0.42 hr = 25 min/60 min) per
eligibility determination at $46.14/hr for the 360,000 new LIS
applicants from reduced paperwork to review because of the proposed
self-attestation requirements and reduced verification work due to
considering the leads data as verified. In aggregate, we estimate an
annual savings of minus 151,200 hours (360,000 applicants x 0.42 hr)
and minus $6,976,368 (151,200 hr x $46.14/hr). Taking into account the
50 percent Federal contribution to Medicaid and CHIP program
administration, the estimated State savings would be minus $3,488,184.
We estimate these provisions would reduce the time needed for LIS
enrollees applying to MSPs to submit paperwork from 4 hours to 15
minutes, for a savings of 3.75 hours per enrollee per year across all
51 States. In aggregate, we estimate an annual savings of minus
1,350,000 hours (360,000 applicants x 3.75 hr) and minus $37,813,500
(1,350,000 hr x $28.01/hr). We also estimate enrollee non-labor savings
from the changes to Sec. 435.911(e) from public transportation,
printing, copying, postage, and fax expenses to be about $10 [($4.50
postage for small package or $1.75/page for faxing) + $4 roundtrip bus
ride (from home to printing/copying place to post office and back home)
+ $0.13/page for printing/copying)] per LIS enrollee per year for all
51 States. In aggregate, we estimate an annual non-labor savings of
minus $3,600,000 (360,000 enrollees x $10/enrollee).
Under proposed Sec. 435.952(e)(1) through (e)(4), States would be
required to accept self-attestation of certain income and resources for
MSP applicants and beneficiaries, including dividend and interest
income, burial funds of spouse and individual, and the face value of
life insurance policy. Because 10 States (about 20 percent of all
States) do not have asset tests and do not require documentation to
complete an eligibility determination or redetermination at the State
Medicaid agency, we expect the savings from the self-attestation
proposals would only apply to approximately 8.4 million individuals (80
percent of 11 million applications/renewals \84\ minus 400,000
individuals who applied to LIS counted above) in the other 41 States.
We estimate that under proposed Sec. 435.952(e)(1) through (e)(4),
these 8.4 million individuals would see a reduction from 4 hours to 2
hours, for a savings of 2 hours per individual, to complete an
application/renewal in all 41 States. In aggregate, we estimate an
annual savings of minus 16,800,000 hours (8,400,000 individuals x 2 hr)
and minus $470,568,000 (16,800,000 hr x $28.01/hr). We estimate the
non-labor savings under proposed Sec. 435.952(e)(1) through (e)(4)
derived $10 [($4.50 postage for small package or $1.75/page for faxing)
+ $4 roundtrip bus ride (to/from post office, printing/copying place
and home) + $0.13/page for printing/copying)] per MSP applicant/renewal
per year for all 51 States. In aggregate, we estimate an annual non-
labor savings of minus $84,000,000 (8,400,000 beneficiaries x $10/
beneficiary).
---------------------------------------------------------------------------
\84\ Based on States adjudicating 1.5 million new applications
and 10 million for redetermination annually.
---------------------------------------------------------------------------
We also estimate that the proposal under Sec. 435.952(e)(1)
through (e)(4) would save an Eligibility Interviewer 15 minutes (0.25
hr) per eligibility determination or renewal for these 8,400,000
applicants/beneficiaries. In aggregate, we estimate an annual labor
savings for States of minus 2,100,000 hours (8,400,000 applicants x
0.25 hr) and minus $96,894,000 (2,100,000 hr x $46.14/hr). Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State savings would be minus
$48,447,000.
OMB Control Number 0938-0467 (CMS-R-74)
We are also proposing to revise Sec. 435.952(e)(4) to require
States to develop a verification process to determine the cash
surrender value of life insurance policies over $1,500. We anticipate
this proposal would be a change for 10 States in their process for
verifying the cash surrender value of life insurance policies over
$1,500. We do not anticipate an impact in the following 16 States
because they are using authority in section 1902(r)(2) of the Act to
disregard the cash surrender value of life insurance in whole or part:
Alabama, Arizona, California, Connecticut, Delaware, Louisiana,
Mississippi, Nevada, New Mexico, New York, North Carolina, Oregon,
South Carolina, Vermont, Wyoming, and Washington, DC. Seventy percent
of the remaining States would choose to use authority in section
1902(r)(2) of the Act to disregard the cash surrender value of life
insurance rather than opting to verify the cash surrender value of life
insurance. As such, we expect that this change would only impact 20
percent of all 50 States and Washington, DC (or 10 States).\85\ Based
on enrollment in past years, we anticipate that all States would
adjudicate 1,000,000 new MSP applications a year plus 10 million
renewals. However, we anticipate this policy would only affect 2
percent of applicants and beneficiaries across 10 States because of the
small number of people who could both afford this type of life
insurance (which is much more expensive than term life insurance) and
also likely to apply for MSPs (which tends to be lower-income
individuals) 44,000 individuals [(11,000,000 individuals x 0.02 x 0.2].
---------------------------------------------------------------------------
\85\ We are not including impacts for territories in these
estimates because territories do not have any enrollment in MSPs.
---------------------------------------------------------------------------
The burden associated with proposed changes to Sec. 435.952(e)(4)
would consist of the time and effort for eligibility workers in 10
States to collect information regarding the cash surrender value of
life insurance from 44,000 applicants; eligibility workers in 10 States
not having to spend time coaching 44,000 applicants how to gather and
find information on the cash surrender value of life insurance; and
eligibility workers in 10 States not having to review life insurance
documents for individuals with life insurance less than $1,500.
We estimate that under proposed Sec. 435.952(e)(4) it would take
an
[[Page 54819]]
Eligibility Interviewer about 1 hour at $46.14/hr to verify the cash
surrender value of each life insurance policy over $1,500. In
aggregate, we estimate an annual burden of 44,000 hours (1 hr x 44,000
individuals) at a cost of $2,030,160 (44,000 hr x $46.14/hr). Taking
into account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $1,015,080.
We estimate the proposal under proposed Sec. 435.952(e)(4) would
save Eligibility Interviewers an average 45 minutes (0.75 hr) per
applicant from not needing to coach applicants on how to gather and
find information on the cash surrender value of life insurance. In
aggregate, we estimate an annual savings of minus 33,000 hours (44,000
applicants x 0.75 hr) and $1,522,620 (33,000 hr x $46.14/hr). Taking
into account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State savings would be minus
$761,310.
We also estimate State savings under proposed Sec. 435.952(e)(4)
from eligibility workers not having to review life insurance documents
for individuals with life insurance less than $1,500. We anticipate it
would take an eligibility worker about 10 minutes (0.167 hr) to review
a life insurance document and that this savings would affect 3 percent
of applicants and beneficiaries or individuals (66,000 individuals =
11,000,000 individuals x 0.03 x 0.2) across 10 States. In aggregate, we
estimate an annual savings of minus 11,022 hours (66,000 individuals x
-0.167 hr) and minus $508,555 (-11,022 hr x $46.14/hr). Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State savings would be minus
$254,278.
In total, taking into account the Federal contribution, we estimate
a State annual burden reduction of minus $51,935,692 (-$3,488,184 + -
$48,447,000 + $1,015,080 + -$761,310 + -$254,278).
For individuals, we estimate an annual burden reduction of minus
18,150,000 hours (-1,350,000 + -16,800,000 hr) and minus $595,981,500
(-$37,813,500 + -$3,600,000 + -470,568,000 +-$84,000,000).
2. ICRs Regarding Defining ``Family of the Size Involved'' for the
Medicare Savings Program Groups using the Definition of ``Family Size''
in the Medicare Part D Low-Income Subsidy Program (Sec. 435.601)
The following proposed changes will be submitted to OMB for review
under control numbers 0938-1188 (CMS-10434 #15) regarding the
submission of a State plan amendment (SPA) and 0938-1147 (CMS-10410)
regarding Medicaid application changes.
OMB 0938-1188 (CMS-10434 #15)
Proposed Sec. 435.601 would align the definition of ``family
size'' for purposes of MSP eligibility with that of the LIS program.
Specifically, ``family of the size involved'' would be defined to
include at least the individuals included in the definition of ``family
size'' in the LIS program: the applicant, the applicant's spouse, and
all other individuals living in the same household who are related to
and dependent on the applicant or applicant's spouse. While some States
either already define family size to match the LIS definition or use a
family size that is less restrictive than this definition, we estimate
that 10 States use SSI methodologies to determine family size, which
means that these States only use an individual or couple and any other
deemed individuals as part of the family size. As such, we estimate
that 10 States would need to submit a SPA to change their definition of
family size for MSP eligibility groups to comply with this regulation.
We estimate that it would take each State 3 hours to submit a SPA
to update the definition of ``family size'' in their Medicaid State
plans. Of those 3 hours, we estimate it would take a Business
Operations Specialist 2 hours at $77.28/hr and a General Operations
Manager 1 hour at $110.82/hr to update and submit each SPA to CMS for
review. In aggregate, we estimate a one-time burden of 30 hours (10
States x 3 hr) at a cost of $2,654 (10 States x ([2 hr x $77.28/hr] +
[1 hr x $110.82/hr]) for completing the necessary SPA updates. Taking
into account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State cost would be $1,327.
OMB 0938-1147 (CMS-10410)
We estimate that it would take each State 200 hours to develop and
code the changes to its Medicaid application to add questions to
identify other third parties in prospective MSP group households. We
note that these changes do not create additional burden on
beneficiaries as the new questions would be in lieu of prior questions.
As such, the changes require the programming change reflected here with
a neutral impact on applicants. Of those 200 hours, we estimate it
would take a Database and Network Administrator and Architect 50 hours
at $98.50/hr and a Computer Programmer 150 hours at $92.92/hr. In
aggregate, we estimate a one-time burden of 2,000 hours (10 States x
200 hr) at a cost of $188,630 (10 States x [(50 hr x $98.50/hr) + (150
hr x $92.92/hr)]) for completing the necessary updates to the Medicaid
application. Taking into account the 50 percent Federal contribution to
Medicaid and CHIP program administration, the estimated State cost
would be $94,315.
In total, taking into account the Federal contribution, we estimate
a one-time State cost of $95,642 ($1,327 + $94,315).
3. ICRs Regarding Automatically Enrolling Certain SSI Recipients Into
the Qualified Medicare Beneficiaries Group (Sec. 435.909)
The following proposed changes will be submitted to OMB for review
under control number 0938-1147 (CMS-10410).
The proposal under Sec. 435.909 would require that States deem
certain individuals who are eligible for Medicare Part A and SSI
eligible for QMB without requiring an application. In particular, we
propose that: (1) States with 1634 agreements must deem Supplemental
Security Income (SSI) recipients who are entitled to premium-free
Medicare Part A; (2) all other States must deem SSI recipients who are
entitled to premium-free Medicare Part A and have been determined
eligible for Medicaid under either Sec. 435.120 or Sec. 435.121; and
(3) Part A buy-in States must deem if the individual is determined
eligible for Medicaid under either Sec. 435.120 or Sec. 435.121,
entitled to SSI, only qualifies for premium Part A, and is enrolled in
Part B. To implement these new requirements, States would need to
identify Medicare-eligible SSI recipients in order to enroll them in
the MSPs. States would also need to trigger deeming of Medicare-
eligible SSI recipients to QMB by making eligibility systems changes to
trigger QMB enrollment once the SSI-individual is Medicare eligible.
Current regulations do not allow State Medicaid agencies to forgo an
eligibility determination for Medicaid beneficiaries who are eligible
for SSI when they become newly eligible for Medicare Part A and B.
Therefore, this new requirement would mean system changes for all 50
States and the District of Columbia, (altogether, 51 ``States'').
While these deeming provisions are intended to enroll more SSI
recipients in QMB, this rulemaking would not reach all SSI recipients
eligible for QMB. We estimate currently 16 percent or 566,556
(3,540,975 x 0.16) SSI recipients are eligible but not enrolled
[[Page 54820]]
in QMB, and nearly 500,000 new SSI recipients who are enrolled in
Medicaid under either Sec. 435.120 or Sec. 435.121 would enroll in
QMB as a result of the proposal under Sec. 435.909. As discussed in
section II.A.3. of this proposed rule, in the 34 States with a 1634
agreement, the Medicaid agency automatically enrolls the SSI recipients
in Medicaid following a data exchange with SSA and then CMS
automatically initiates Part B buy-in for the individual through the
``buy-in data exchange.'' In the remaining States, individuals must
submit a separate application to the State Medicaid agency to be
determined eligible for Medicaid. CMS does not automatically initiate
Part B buy-in for SSI individuals who live in SSI criteria and 209(b)
States; rather, States must initiate Part B buy-in once the SSI
recipient has separately applied for and been determined eligible for
the mandatory SSI or 209(b) group. Additionally, SSI recipients who
live in group payer States and are eligible for premium Part A are
still required to go through a complicated two-step application process
to establish QMB eligibility once an individual is determined eligible
for the mandatory SSI or 209(b) groups and has been enrolled in Part B
pursuant to the State's buy-in agreement. Under the proposed rule, the
application process for SSI recipients who live in criteria and 209(b)
States would remain the same and so would the two-step application
process to establish QMB eligibility for SSI recipients living in group
payer States and having premium part A.
Based on SSA data and internal CMS analysis of the 566,556 SSI
recipients eligible for QMB but not enrolled, we estimate almost 83
percent (469,820) were likely eligible for premium-free Part A while
approximately 17 percent (96,736) were eligible for premium Part A. Of
the 469,820 who were eligible for premium-free Part A, we estimate
405,963 reside in States with 1634 agreements, and 63,857 reside in
209(b) or SSI criteria States. Because Medicaid is automatic in States
with 1634 agreements, we estimate that 405,963 individuals (all of the
above-mentioned SSI recipients in 1634 States) would be automatically
enrolled in QMB under this new provision.
In contrast, we estimate that only 65 percent of the above-
mentioned 63,857 SSI recipients in 209(b) or SSI criteria States, or
41,507 individuals, would be enrolled under the new provision. This is
because it is unlikely that all SSI recipients who live in SSI or
209(b) States would complete the Medicaid application process in their
State. Of the 96,736 eligible for premium Part A, we estimate 33
percent (31,923) are in Part A buy-in States and 67 percent (64,813) of
those eligible for premium Part A are in group payer States, where
deeming would be optional. We estimate that 95 percent (30,327) of
individuals in Part A buy-in States who are eligible for premium Part A
would enroll as a result of the new provision because we estimate that
all of those individuals live in States with 1634 agreements. However,
for the individuals eligible for premium Part A in group payer States
where deeming would be optional, we expect some more populous States to
use this option, so we are estimating 33 percent (21,388 = 64,813 x
0.33) of all individuals with premium Part A living in group payer
States would newly enroll.
Therefore, we estimate a total of 499,185 individuals (405,963 +
41,507 + 30,327 + 21,388) would newly enroll without the need to
complete an application. We estimate that those individuals would each
save 2 hours from not filling out Medicaid applications and compiling
associated documentation (going from 2 to zero hours) at $28.01/hr. We
estimate an annual savings of minus 998,370 hours (499,185 individuals
x 2 hr) and minus $27,964,344 (998,370 hr x $28.01/hr).
All 51 States would need to make eligibility systems changes to
deem an SSI individual in QMB once they are eligible for Medicare. We
estimate it would take a Computer Programmer an average of 180 hours
per State at $92.92/hr to make systems changes to set their systems to
search for Medicare eligibility in Federal systems and then enroll that
individual in QMB. In aggregate, we estimate a one-time burden of 9,180
hours (51 States x 180 hr) at a cost of $853,006 (9,180 hr x $92.92/
hr). Taking into account the 50 percent Federal contribution to
Medicaid and CHIP program administration, the estimated State share
would be $426,503.
We also estimate that this provision would result in an annual
reduction of burden for the State to no longer review and adjudicate
QMB applications from SSI recipients. We estimate that this proposal
would save an Eligibility Interviewer 1 hour (going from 1 hour to
zero) per QMB determination at $46.14/hr. We also estimate that States
conduct QMB eligibility determinations for approximately 250,000 SSI
individuals across 51 States, which would no longer be necessary. In
aggregate, we estimate an annual burden savings of minus 250,000 hours
(250,000 individuals x -1 hr/response) and minus $11,535,000 (-250,000
hr x $46.14/hr). Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State savings would be minus $5,767,500.
In total, for the ICRs related to Sec. 435.601 under OMB control
number 0938-1147 (CMS-10410), taking into account the Federal
contribution, we estimate an annual State burden reduction of minus
$5,340,997 ($426,503 + -$5,767,500).
4. ICRs Regarding Facilitating Enrollment by Allowing Medically Needy
Individuals To Deduct Prospective Medical Expenses (Sec. 435.831)
The following proposed changes will be submitted to OMB for review
under control 0938-TBD (CMS-10819). At this time, the control number is
to be determined (TBD). OMB will assign the control number upon their
clearance of the proposed rule's new information collection request.
The new control number will be set out in the final rule.
The amendments proposed under Sec. 435.831(g) would permit States
to project certain additional services that the State can determine
with reasonable certainty will be constant in order to prevent those in
the medically needy group from cycling on and off Medicaid, and
preventing the occurrence of an eligibility start date each budget
period that is not predictable to either the institutionalized
individual or State agency. Over time, this would reduce the burden on
the State by eliminating the need to process a new application or
renewal each month for each individual in the medically needy group.
This would also reduce the burden on the individual who would not need
to reapply each month but instead would remain continuously enrolled.
However, there would be an up-front cost to the States to program their
eligibility systems to project the cost of care for the medically needy
group and to remove the triggers to renew eligibility each month once
the spenddown amount is reached.
We estimate that all 56 States (50 States, 5 territories, and the
District of Columbia; hereinafter ``56 States'') would need to make
system changes to program their eligibility systems to project the cost
of care for the medically needy group and to remove the triggers to
renew eligibility each month once the spenddown amount is reached. We
estimate it would take an average of 200 hours per State to develop and
code the changes to each State's system to reschedule renewals for
medically needy beneficiaries no more frequently than once every 12
months. Of those 200 hours, we estimate it would take a
[[Page 54821]]
Database and Network Administrator and Architect 50 hours at $98.50/hr
and a Computer Programmer 150 hours at $92.92/hr. Therefore, we
estimate a one-time burden of 11,200 hours (56 States x 200 hr) at a
cost of $1,056,328 (56 States x [(50 hr x $98.50/hr) + (150 hr x
$92.92/hr)]) for completing the necessary system changes. Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $528,164.
We estimate that under proposed Sec. 435.831(g), each of all 56
States would no longer need to process a new application or renewal
each month for 25 individuals in the medically needy group annually. We
estimate it currently takes an Eligibility Interviewer, Government
Programs, 2 hours at $46.14/hr and an Interpreter and Translator 1 hour
at $56.16/hr to help process a new application or renewal each month
for 6 months per year per beneficiary. Therefore, each State would save
450 hours (3 hr x 6 months/year x 25 beneficiaries) and $22,266 (6
months/year x 25 beneficiaries x [(2 hr x $46.14/hr) + (1 hr x $56.16/
hr)]) annually by not processing a new application or renewal each
month for each individual in the medically needy group. In aggregate,
we estimate this provision would save all States minus 25,200 hours
(450 hr x 56 States) and minus $1,246,896 ($22,266 x 56 States). When
taking into account the 50 percent Federal contribution to Medicaid and
CHIP program administration, the estimated State savings would be minus
$623,448.
Likewise, we estimate that under proposed Sec. 435.831(g), those
same 25 beneficiaries would no longer need to reapply each month but
instead would remain continuously enrolled, thus reducing the burden on
the individuals. We estimate that it currently takes a beneficiary 2
hours at $28.01/hr to reapply each month in an average of 6 months per
year. Therefore, beneficiaries in each State would save a total of 300
hours (2 hr x 6 months/year x 25 beneficiaries/State) and $8,403 (300
hr x $28.01/hr) annually. In aggregate, under this provision,
beneficiaries across all 56 States would save 16,800 hours (300 hr x 56
States) and $470,568 ($8,403 x 56 States) annually.
In total, for the ICRs related to Sec. 435.831 under OMB control
number 0938-TBD (CMS-10819), taking into account the Federal
contribution, we estimate a one-time State cost of minus $95,284
($528,164 + -$623,448).
5. ICRs Regarding Application of Primacy of Electronic Verification and
Reasonable Compatibility Standard for Resource Information (Sec. Sec.
435.952 and 435.940)
The following proposed changes will be submitted to OMB for review
under control number 0938-0467 (CMS-R-74).
States have asked whether they are permitted to request additional
documentation from applicants and beneficiaries related to resources
that can be verified through the State's asset verification system
(AVS), or if they can apply a reasonable compatibility standard for
resources when resource information returned from an electronic data
source is compared to the information provided by the applicant or
beneficiary. We believe the requirements at Sec. 435.952(b) and (c),
which require States to apply a reasonable compatibility test to income
determinations, apply to resource determinations as well. We believe
that clearly applying the requirements at Sec. 435.952(b) and (c) to
resources will help streamline enrollment for individuals applying for
Medicaid on a non-MAGI basis, such as on the basis of age, blindness,
or disability, and decrease burden for both States and beneficiaries.
The amendments proposed under Sec. Sec. 435.952 and 435.940 would
clarify that, if information provided by an individual is reasonably
compatible with information returned through an AVS, the State must
determine or renew eligibility based on that information. They would
also clarify that States must consider asset information obtained
through an AVS to be reasonably compatible with attested information if
either both are above or both are at or below the applicable resource
standard or other relevant resource threshold.
Under the proposed changes to Sec. Sec. 435.952 and 435.940, we
estimate that the States would save an Eligibility Interviewer 1 hour
per beneficiary at $46.70/hr to no longer reach out to 10,000
individuals per State for additional information to verify their
resources. In aggregate, we estimate a savings for all States of
510,000 hours (51 States x 10,000 individuals/State x 1 hr) and
$23,531,400 (510,000 hr x $46.14/hr). When taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State savings would be minus $11,765,700
($23,531,400 x 0.5).
Under the proposed changes to Sec. Sec. 435.952 and 435.940, we
estimate that 10,000 individuals per State would save on average 1 hour
each at $28.01/hr to no longer need to submit additional information to
verify their resources. In aggregate for individuals in all States, we
estimate a savings of minus 510,000 hours (1 hr x 10,000 individuals/
State x 51 States) and minus $14,285,100 (510,000 hr x $28.01/hr).
6. ICRs Regarding Verification of Citizenship and Identity (Sec.
435.407)
The following proposed changes will be submitted to OMB for review
under control number 0938-0467 (CMS-R-74).
The amendments proposed under Sec. 435.407 would simplify
eligibility verification procedures by considering verification of
birth with a State vital statistics agency or verification of
citizenship with SAVE as stand-alone evidence of citizenship. Likewise,
under this provision, separate verification of identity would not be
required. This proposed revision is not intended to require a State to
develop a match with its vital statistics agency if it does not already
have one in place. However, if a State already has established a match
with a State vital statistics agency or it would be effective to
establish such capability in accordance with the standard set forth in
Sec. 435.952(c)(2)(ii), the State must utilize such match before
requesting paper documentation from the applicant. We estimate this
provision would apply to the roughly 100,000 applicants per year for
whom States cannot verify U.S. citizenship with SSA.
We estimate that the amendments proposed under Sec. 435.407 would
take a Management Analyst 15 minutes (0.25 hr) per applicant at $96.66/
hr to check the State's vital statistics agency for verification of
U.S. citizenship of an applicant. In aggregate for all 56 States, this
provision would add a burden of 25,000 hours (0.25 hr x 100,000
applicants) and $2,416,500 (25,000 hr x $96.66/hr). Taking into account
the 50 percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $1,208,250.
In contrast, we estimate that the amendments proposed under Sec.
435.407 would save an Eligibility Interviewer 45 minutes (0.75 hr) at
$46.70/hr by no longer needing to request and process paper
documentation of citizenship. In aggregate, all 56 States would save
minus 75,000 hours (0.75 hr x 100,000 applicants) and minus $3,460,500
(75,000 hr x $46.14/hr). Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
[[Page 54822]]
State savings would be minus $1,730,250.
In total for the ICRs related to Sec. 435.407 under OMB control
number 0938-0467 (CMS-R-74), taking into account the Federal
contribution, we estimate an annual State savings of minus $522,000
($1,208,250 + -$1,730,250). For individuals, we estimate that the
amendments proposed under Sec. 435.407 would save each applicant 1
hour at $28.01/hr plus an average of $10 in miscellaneous costs [($4.50
postage for small package or $1.75/page for faxing) + $4 roundtrip bus
ride (from home to printing/copying place to post office and back home)
+ $0.13/page for printing/copying], to no longer need to gather and
submit paper documentation of citizenship. In aggregate, all 100,000
applicants would save 100,000 hours (1 hr x 100,000 applicants) and
$2,801,000 (100,000 hr x $28.01/hr) in labor and + $1,000,000 ($10.00 x
100,000 applicants) in non-labor related costs.
7. ICRs Regarding Aligning Non-MAGI Enrollment and Renewal Requirements
With MAGI Policies (Sec. 435.916)
The following proposed changes will be submitted to OMB for review
under control number 0938-1147 (CMS-10410).
The amendments proposed under Sec. 435.916(a) would align the
frequency of renewals for non-MAGI beneficiaries with the current
requirement for MAGI beneficiaries, which allows for renewals no more
frequently than every 12 months. Proposed Sec. 435.916(b) also
requires States to adopt the existing renewal processes required for
MAGI beneficiaries for non-MAGI beneficiaries when a State is unable to
renew eligibility for an individual based on information available to
the agency. Proposed Sec. 435.916(b)(2) would require States to
provide all beneficiaries, including non-MAGI beneficiaries, whose
eligibility cannot be renewed without contacting the individual in
accordance with proposed Sec. 435.916(b)(1), a renewal form that is
pre-populated with information available to the agency, a minimum of 30
calendar days to return the signed renewal form along with any required
information, and a 90-day reconsideration period for individuals
terminated for failure to return their renewal form but who
subsequently return their form within the reconsideration period.
Proposed Sec. 435.916(b)(2) no longer permits States to require an in-
person interview for non-MAGI beneficiaries as part of the renewal
process.
We estimate that in 2021, six States--Minnesota, New Hampshire,
Texas, Utah, Washington, and West Virginia--have policies in place to
conduct regularly-scheduled renewals for at least some non-MAGI
beneficiaries more frequently than once every 12 months. One other
State conducts more frequent renewals for non-MAGI populations during
normal operations, but elected to conduct renewals only once every 12-
months for all beneficiaries during the COVID-19 PHE. We excluded the
State from these estimates as it would have needed to make changes for
the temporary authority in effect as of 2021 during the PHE.
Under proposed Sec. 435.916(a), we estimate it would take an
average of 200 hours per State to develop and code the changes to each
State's system to reschedule renewals for non-MAGI beneficiaries no
more frequently than once every 12 months. Of those 200 hours, we
estimate it would take a Database and Network Administrator and
Architect 50 hours at $98.50/hr and a Computer Programmer 150 hours at
$92.92/hr. In aggregate, we estimate a one-time burden of 1,200 hours
(6 States x 200 hr) at a cost of $113,178 (6 States x [(50 hr x $98.50/
hr) + (150 hr x $92.92/hr)]) for completing the necessary system
changes. Taking into account the 50 percent Federal contribution to
Medicaid and CHIP program administration, the estimated State share
would be $56,589.
We also estimate that 21 States do not pull available non-MAGI
beneficiary information to prepopulate a renewal form.\86\ Under
proposed Sec. 435.916(b)(2), we estimate it would take an average of
200 hours per State to develop and code the changes to each State's
system to pull the existing non-MAGI beneficiary information to
prepopulate a renewal form. Of those 200 hours, we estimate it would
take a Business Operations Specialist 50 hours at $77.28/hr and a
Management Analyst 150 hours at $96.66/hr. In aggregate, we estimate a
one-time burden of 4,200 hours (21 States x 200 hr) at a cost of
$385,592 (21 States x [(50 hr x $77.25/hr) + (150 hr x $96.66/hr)] for
completing the necessary system changes and designing the form. Taking
into account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $192,796.
---------------------------------------------------------------------------
\86\ Kaiser Family Foundation. Medicaid Financial Eligibility
for Seniors and People with Disabilities: Findings from a 50-State
Survey. Available at: https://files.kff.org/attachment/Issue-Brief-Medicaid-Financial-Eligibility-for-Seniors-and-People-with-Disabilities-Findings-from-a-50-State-Survey.
---------------------------------------------------------------------------
While we do not have evidence of how many States currently require
an in-person interview, to calculate this burden, we will assume all 56
States do so, with the understanding that the actual State savings will
be much less. In 2020, there were about 2,688,386 non-MAGI
beneficiaries \87\ for whom States would no longer need to conduct an
in-person interview for non-MAGI beneficiaries as part of the renewal
process. Under proposed Sec. 435.916(b)(2), we estimate that an
Eligibility Interviewer would save on average 0.5 hours per beneficiary
at $46.14/hr. In aggregate, we estimate this would save States minus
1,344,193 hours (0.5 hr x 2,688,386 beneficiaries) and minus
$62,021,065 (1,344,193 hr x $46.14/hr). Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State savings would be minus $31,010,533.
---------------------------------------------------------------------------
\87\ Major Eligibility Group Information for Medicaid and CHIP
Beneficiaries by Year, accessed from: https://data.medicaid.gov/dataset/267831f3-56d3-4949-8457-f6888d8babdd.
---------------------------------------------------------------------------
In total for the ICRs related to Sec. 435.916 under OMB control
number 0938-1147 (CMS-10410), taking into account the Federal
contribution, we estimate a one-time State savings of minus $30,761,148
($56,589 + $192,796 - $31,010,533) with an annual savings of minus
$31,010,533. We estimate that in the six States--Minnesota, New
Hampshire, Texas, Utah, Washington, and West Virginia--that currently
have policies to conduct regularly-scheduled renewals for non-MAGI
beneficiaries more frequently than once every 12 months during normal
operations, in 2020, there were about 2,688,386 non-MAGI beneficiaries
\88\ who would no longer need to submit a renewal under proposed Sec.
435.916(a). Assuming impacted beneficiaries are evenly distributed
across these six States, and assuming it currently takes each
beneficiary 1 hour at $28.01/hr to submit a renewal form, in aggregate,
beneficiaries across these six States would save minus 2,688,386 hours
(2,688,386 non-MAGI beneficiaries x 1 hr) and minus $75,301,692 (-
2,688,386 hr x $28.01/hr).
---------------------------------------------------------------------------
\88\ Ibid.
---------------------------------------------------------------------------
While we do not have evidence of how many States currently require
an in-person interview, to calculate this burden, we will assume all 56
States do so, with the understanding that the actual individual burden
will be much less. In 2020, there were about 2,688,386 non-MAGI
beneficiaries \89\ who would
[[Page 54823]]
no longer need to travel to a Medicaid office to complete an in-person
interview in order to maintain coverage under proposed Sec.
435.916(b)(2). Assuming impacted beneficiaries are evenly distributed
across these 56 States and assuming it currently takes each beneficiary
1 hour to travel to and participate in an in-person interview, plus on
average $10/person in travel expenses, in aggregate, beneficiaries
across these 56 States would save minus 2,688,386 hours (2,688,386
beneficiaries x 1 hr) and minus $75,301,692 (2,688,386 hr x $28.01/hr)
in labor and minus $26,883,860 (2,688,386 non-MAGI beneficiaries x
$10.00) in non-labor related costs.
---------------------------------------------------------------------------
\89\ Ibid.
---------------------------------------------------------------------------
Under proposed Sec. 435.916(b)(2), we estimate 37 States will need
to establish a reconsideration period for non-MAGI beneficiaries or
extend the timeframe of their existing reconsideration period for non-
MAGI beneficiaries to 90 calendar days. In 2020, there were up to
2,688,386 non-MAGI beneficiaries in 56 States \90\ who would newly not
need to complete a new application to regain coverage after being
terminated for coverage for failure to return their renewal form under
this provision. Approximately 4.2 percent of beneficiaries are
disenrolled from coverage and reenroll within 90 days.\91\ Therefore,
we estimate 74,603 beneficiaries (2,688,386 beneficiaries/56 States x
0.042 x 37 States) would newly not need to complete a full application
to reenroll in coverage because they would be in a 90-day
reconsideration period under proposed Sec. 435.916(b)(2). Assuming
impacted beneficiaries are evenly distributed across the 37 States and
assuming it currently takes each beneficiary 1 hour at $28.01/hr to
submit a new full application, this provision would save, in aggregate,
beneficiaries across these 37 States a total of minus 74,603 hours
(74,603 beneficiaries x 1 hr) and minus $2,089,630 (74,603 hr x $28.01/
hr).
---------------------------------------------------------------------------
\90\ Ibid.
\91\ Kaiser Family Foundation (2021). Medicaid Enrollment Churn
and Implications for Continuous Coverage Policies. https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-churn-and-implications-for-continuous-coverage-policies/.
---------------------------------------------------------------------------
For beneficiaries, we estimate a total burden reduction of minus
$179,576,874 (-$75,301,692-$102,185,552 -$2,089,630).
8. ICRs Regarding Acting on Changes in Circumstances (Sec. Sec.
435.916, 435.919, and 457.344)
The following proposed changes will be submitted to OMB for review
under control number 0938-1147 (CMS-10410).
The amendments proposed under Sec. 435.919 would, if the State
cannot redetermine the individual's eligibility after a change in
circumstance using third party data and information available to the
agency, allow beneficiaries at least 30 calendar days from the date the
State sends a request for additional information to provide such
information. In addition, the amendments would require States to
provide beneficiaries terminated due to failure to provide information
requested after a change in circumstance with a 90-day reconsideration
period.
Because the proposed requirements under Sec. Sec. 435.912,
435.919, and 457.344 would result in more time for beneficiaries to
respond to the State's request for additional information, it is likely
that fewer beneficiaries would lose eligibility as a result of this
provision. As well, because the proposed amendments would, for the
first time, provide a 90-day reconsideration period after a change in
circumstance for all approximately 85,809,179 Medicaid and CHIP
beneficiaries (in the 51 States that reported enrollment data for
November 2021),\92\ to submit additional information to maintain their
eligibility, it is likely that beneficiaries would not need to complete
and States would not need to process full applications for 4.2 percent
of those individuals or 3,603,986 beneficiaries (85,809,179
beneficiaries x 0.042) who lose coverage and later reenroll.\93\
---------------------------------------------------------------------------
\92\ CMS, November 2021 Medicaid & CHIP Enrollment. Available at
https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
\93\ Kaiser Family Foundation. (2021). Medicaid Enrollment Churn
and Implications for Continuous Coverage Policies. https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-churn-and-implications-for-continuous-coverage-policies/.
---------------------------------------------------------------------------
Assuming the 40 States with a separate CHIP agency can adapt
language from the Medicaid notice for their purposes, we estimate it
would not take as long for those 40 States to revise the notice
requesting additional information from beneficiaries regarding their
eligibility after a change in circumstance to include language allowing
the beneficiary 30 calendar days to respond. Therefore, we estimate it
would take an average of 6 hours per State Medicaid agency and 3 hours
per separate CHIP agency to complete this task. Of the 6 Medicaid
hours, we estimate it would take a Business Operations Specialist 4
hours (and 2 hr for CHIP) at $77.28/hr and a Management Analyst 2 hours
(and 1 hr for CHIP) at $96.66/hr. We estimate an aggregate, one-time
burden of 426 hours [(51 Medicaid States \94\ x 6 hr) + (40 CHIP States
x 3 hr)] at a cost of $35,673 (51 States x [(4 hr x $77.28/hr) + (2 hr
x $96.66/hr)] + (40 States x [(2 hr x $77.28/hr) + (1 hr x $96.66/hr)])
for revising the notice requesting additional information. Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $17,837.
---------------------------------------------------------------------------
\94\ While this provision applies to all States, Washington, DC,
and the 5 territories, we are only estimating the burden for the 51
States for which we have current enrollment data, per the November
2021 CMS enrollment snapshot, available at https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/october-november-2021-medicaid-chip-enrollment-trend-snapshot.pdf.
---------------------------------------------------------------------------
We also estimate it would take each State 6 hours to revise the
termination notice to beneficiaries who did not respond to the State's
request for additional information regarding their eligibility after a
change in circumstance to include language allowing the beneficiary a
90-day reconsideration period. Of those 6 hours, we estimate it would
take a Business Operations Specialist an average of 4 hours at $77.28/
hr and a Management Analyst 2 hours at $96.66/hr. In aggregate, we
estimate a one-time burden of 336 hours (56 States x 6 hr) at a cost of
$28,137 (56 States x [(4 hr x $77.28/hr) + (2 hr x $96.66/hr)] for
revising the termination notice. Taking into account the 50 percent
Federal contribution to Medicaid and CHIP program administration, the
estimated State share would be $14,068.
We also estimate that it would save each State 50 hours to process
full applications annually for beneficiaries who would no longer lose
coverage and later reenroll. Specifically, we estimate it would save an
Eligibility Interviewer 40 hours at $46.14/hr and an Interpreter and
Translator 10 hours at $56.16/hr. In aggregate, we estimate an annual
savings of minus 2,800 hours (56 States x 50 hr) and minus $134,803
([(40 hr x $46.14/hr) + (10 hr x $56.16/hr)] x 56 States) for
processing fewer full applications. Taking into account the 50 percent
Federal contribution to Medicaid and CHIP program administration, the
estimated State savings would be minus $67,402.
In total, for ICRs related to Sec. 435.919 under OMB control
number 0938-1147 (CMS-10410), taking into account the Federal
contribution, we estimate a total State savings of minus $35,497
($17,837 + $14,068-$67,402).
[[Page 54824]]
We estimate that it would save each beneficiary who is disenrolled
after a change in circumstance 2 hours at $28.01/hr to no longer submit
a full application. As stated above, approximately 4.2 percent of
beneficiaries are disenrolled from coverage and reenroll within 90
days.\95\ Because this provision applies to all beneficiaries, which
numbered approximately 85,809,179 individuals for Medicaid and CHIP (in
the 51 States that reported enrollment data for November 2021),\96\ we
estimate approximately 3,603,986 beneficiaries (85,809,179
beneficiaries x 0.042) would save this time not reapplying after a
change in circumstance. In aggregate, we estimate that this provision
would save beneficiaries minus 7,207,972 hours (3,603,986 beneficiaries
x 2 hr) and minus $201,895,296 (7,207,972 hr x $28.01/hr).
---------------------------------------------------------------------------
\95\ Kaiser Family Foundation (2021). Medicaid Enrollment Churn
and Implications for Continuous Coverage Policies. https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-churn-and-implications-for-continuous-coverage-policies/.
\96\ CMS, November 2021 Medicaid & CHIP Enrollment. Available at
https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
---------------------------------------------------------------------------
9. ICRs Regarding Timely Determination and Redetermination of
Eligibility in Medicaid (Sec. 435.912) and CHIP (Sec. 457.340)
The following proposed changes will be submitted to OMB for review
under control number 0938-1188 (CMS-10434 #15) for the State plan
changes and 0938-1147 (CMS-10410) for the remaining burden related to
updating notices and systems.
OMB Control Number 0938-1188 (CMS-10434 #15)
The amendments in this section would establish standards to ensure
that applicants have enough time to gather and provide additional
information and documentation requested by a State in adjudicating
eligibility. In addition, the proposed amendments would apply to
redeterminations either at renewal or based on changes in
circumstances, the current requirements which apply at application. To
address the current situation where redeterminations remain unprocessed
for several months following the end of a beneficiary's eligibility
period due to the beneficiary failing to return needed information to
the State, these proposed amendments would require States to establish
timeliness standards for both beneficiaries to return requested
information to the State, as well as for the State to complete a
redetermination of eligibility when the beneficiary returns information
too late to process before the end of the eligibility period. In
addition, these proposed amendments would require States to establish
performance and timeliness standards for determining Medicaid
eligibility, as well as determining eligibility for CHIP and BHP when
an individual is determined ineligible for Medicaid.
Lastly, the amendments proposed under Sec. 435.912 would for the
first time establish set timeframes for when States must complete
existing requirements related to acting on change in circumstances. The
amendments would require States to process a redetermination within 30
calendar days from the date the State receives information indicating a
potential change in a beneficiary's circumstance if no information is
needed from the individual to redetermine eligibility and within 60
calendar days if the State needs to request additional information from
the individual.
We estimate that it would take each State 3 hours to update their
Medicaid State plans via a SPA to establish timeliness standards for
the State to process redeterminations. Of those 3 hours per SPA, we
estimate it would take a Business Operations Specialist 2 hours at
$77.28/hr and a General Operations Manager 1 hour at $110.82/hr to
update and submit each SPA to CMS for review. In aggregate, we estimate
a one-time burden of 168 hours (56 States x 3 hr) at a cost of $14,861
(56 responses x ([2 hr x $77.28/hr] + [1 hr x $110.82/hr])) for
completing the necessary SPA updates. Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $7,431.
OMB Control Number 0938-1147 (CMS-10410)
We estimate that it would take each State 6 hours to update their
notices to inform beneficiaries of the newly established timeframes
within which they must return requested additional information in order
for the State to process their redeterminations. Of those 6 hours, we
estimate it would take a Business Operations Specialist 4 hours at
$77.28/hr and a Computer Programmer 2 hours at $92.92/hr. In aggregate,
we estimate a one-time burden of 336 hours (56 States x 6 hr) and
$27,718 (56 States x ([4 hr x $92.92/hr] + [2 hr x $77.28/hr])) for all
States to update the notices. Taking into account the 50 percent
Federal contribution to Medicaid and CHIP program administration, the
estimated State share would be $13,859.
We also estimate it would take an average of 200 hours per State to
develop and code the changes to each State's system to remove the edit
to disenroll those beneficiaries who fail to return additional
information within the newly established timeframes. Of those 200
hours, we estimate it would take a Business Operations Specialist 50
hours at $77.28/hr and a Management Analyst 150 hours at $96.66/hr. In
aggregate, we estimate a one-time burden for all States of 11,200 hours
(56 States x 200 hr) at a cost of $1,028,244 ([(50 hr x $77.25/hr) +
(150 hr x $96.66/hr)] x 56 States) for completing the necessary system
changes. Taking into account the 50 percent Federal contribution to
Medicaid and CHIP program administration, the estimated State share
would be $514,122.
In total for the ICRs related to Sec. Sec. 435.912 and 457.340
under OMB control number 0938-1188 (CMS-10434 #15) and 0938-1147 (CMS-
10410), taking into account the Federal contribution, we estimate a
total one-time State cost of $535,412 ($7,431 + $13,859 + $514,122).
10. ICRs Regarding Returned Mail (Sec. Sec. 435.919 and 457.344)
The following proposed changes will be submitted to OMB for review
under control number 0938-1147 (CMS-10410).
This rule proposes to specify the steps States must take when
beneficiary mail is returned to the agency. States would be required to
first conduct a series of data checks to identify updated beneficiary
contact information, including the State's Medicaid Enterprise System
(MES), managed care plans, enrollment brokers, claims data, and other
State administered public benefit systems, like TANF, SNAP, the DMV, as
well as the NCOA. If updated contacted information is found, States
must send a notice to that new address. Second, based on this
information available to the State agency, the State must attempt to
contact the beneficiaries by both mail, as well as a modality other
than mail, such as by phone, electronic notice, email, or text message,
as permissible. This provision also requires the State to send notices
to both the current address on file and the forwarding address, if one
is provided on the returned mail, requesting that the beneficiary
confirm the new address. Third, only after the above has occurred with
no response may the State take action, including updating the
beneficiary's in-state address, terminating or suspending the
[[Page 54825]]
beneficiary's enrollment, or moving the beneficiary from managed care
to fee-for-service Medicaid.
We estimate that it would take all 42 Medicaid managed care States
(and 34 States with managed care in separate CHIP) 40 hours to update
their managed care contracts to enter into regular data-sharing
arrangements with their MCOs to obtain up-to-date beneficiary contact
information. While some of these States have both Medicaid and CHIP
managed care and may even contract with the same plans for both
programs, we assume there is no overlap for purposes of this estimate.
Of those 40 hours, we estimate it would take a Procurement Clerk 10
hours at $43.20/hr and a Management Analyst 30 hours at $96.66/hr. In
aggregate, we estimate this would create a one-time burden for States
of 3,040 hours [40 hr x (42 Medicaid States + 34 CHIP States] at a cost
of $253,217 [(10 hr x $43.20/hr) + (30 hr x $96.66/hr) x 76 State
agencies]. Taking into account the 50 percent Federal contribution to
Medicaid and CHIP program administration, the estimated State share
would be $126,609.
We estimate, using CMS' own analysis, that about half of all States
(56 States/2 = 28 States) currently check DMV data for updated
beneficiary information, such as contact information, as a part of
their routine verification plans. Using this as a proxy for whether the
State has an agreement with third-party sources, for example, NCOA,
DMV, etc., we estimate that it would take 28 States each 40 hours to
establish these data-sharing agreements. Of those 40 hours, we estimate
it would take a Procurement Clerk 10 hours at $43.20/hr and a
Management Analyst 30 hours at $96.66/hr. In aggregate, we estimate a
one-time burden of 1,120 hours (40 hr x 28 States) at a cost of $93,290
([(10 hr x $43.20/hr) + (30 hr x $96.66/hr)] x 28 States). Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $46,645.
Assuming 15 percent \97\ of all Medicaid beneficiaries (12,871,377
beneficiaries = 85,809,179 beneficiaries x 0.15) \98\ generate returned
mail each year, we estimate that it would take 51 States each 30
seconds (approximately 0.0083 hr) per notice to send one additional
notice by mail not only to the current address on file, but also to the
forwarding address, if one is provided. We estimate that it would take
a Management Analyst in each State 0.0083 hr/notice at $96.66/hr to
program the sending of these extra notices for a total of 106,832 hours
(0.0083 hr x 12,871,377 beneficiaries) at a cost of $10,326,381
(106,832 hr x $96.66/hr). We also estimate this amendment would create
additional burden in postage costs for all States and all beneficiaries
totaling $7,722,826 ($0.60/notice \99\ x 12,871,377 \100\). Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $9,024,603.
---------------------------------------------------------------------------
\97\ KHN, November 9, 2019, ``Return to Sender: A Single
Undeliverable Letter Can Mean Losing Medicaid.'' Available at
https://khn.org/news/tougher-returned-mail-policies-add-to-medicaid-enrollment-drop/.
\98\ Centers for Medicare & Medicaid Services, ``October and
November 2021 Medicaid and CHIP Enrollment Trends Snapshot,'' March
28, 2022. Available at https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/october-november-2021-medicaid-chip-enrollment-trend-snapshot.pdf.
\99\ This amount is based on the current USPS postage rate for
standard letters.
\100\ While this provision applies to all States, Washington,
DC, and the 5 territories, we are only estimating the burden for the
51 States for which we have current enrollment data, per the
November 2021 CMS enrollment snapshot available at https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/october-november-2021-medicaid-chip-enrollment-trend-snapshot.pdf.
---------------------------------------------------------------------------
We estimate that it would take an Eligibility Interviewer an
average of 5 minutes (5/60 = approximately 0.083 hr) per beneficiary at
$46.14/hr to make one additional outreach attempt using a modality
other than mail to the estimated 12,871,377 beneficiaries per year for
whom the State receives returned mail. In aggregate, we estimate this
would add a burden of 1,068,324 hours (0.083 hr x 12,871,377
beneficiaries) at a cost of $49,292,469 (1,068,324 hr x $46.14/hr).
Taking into account the 50 percent Federal contribution to Medicaid and
CHIP program administration, the estimated State share would be
$24,646,235.
In total for the ICRs related to Sec. Sec. 435.919 and 457.344
under OMB control number 0938-1147 (CMS-10410), and taking into account
the 50 percent Federal contribution, we estimate a total State cost of
$33,844,092 ($126,609 + $46,645 + $9,024,603 + $24,646,235).We estimate
that current State policies on returned mail may have contributed to
approximately 2.125 percent drop in enrollment.\101\ Applying that
change, we estimate that 273,517 beneficiaries (12,871,377
beneficiaries x 0.02125) would no longer be disenrolled after non-
response to a State notice generated by returned mail and would no
longer need to reapply to Medicaid. Therefore, we estimate that these
amendments would lead to a reduction in burden for 273,517
beneficiaries who would otherwise be disenrolled after generating
returned mail. We estimate that these beneficiaries at $28.01/hr would
each save 2 hours of time not needed to reapply for Medicaid. In
aggregate, we estimate this amendment would save beneficiaries in all
States minus 547,034 hours (273,517 beneficiaries x 2 hr) and minus
$15,322,422 (547,034 hr x $28.01/hr).
---------------------------------------------------------------------------
\101\ KHN, November 9, 2019, ``Return to Sender: A Single
Undeliverable Letter Can Mean Losing Medicaid.'' Available at
https://khn.org/news/tougher-returned-mail-policies-add-to-medicaid-enrollment-drop/.
---------------------------------------------------------------------------
11. ICRs Regarding Improving Transitions Between Medicaid and CHIP
(Sec. Sec. 435.1200, 457.340, 457.348, 457.350, and 600.330)
The following proposed changes will be submitted to OMB for review
under control number 0938-1147 (CMS-10410).
In States with separate Medicaid and CHIP programs, proposed Sec.
435.1200 would require both the Medicaid and CHIP agencies to make
system changes to more seamlessly transition the eligibility of
individuals from one program to the other. We have not included a
burden estimate for changes to the BHP regulations, since revisions to
the Medicaid cross-references are intended to maintain current BHP
policies.
We estimate that proposed Sec. 435.1200 would take each of the 40
States with a separate CHIP 40 hours to execute a delegation agreement
between the Medicaid and CHIP agencies to implement more seamless
coverage transitions. Of those 40 hours, we estimate it would take a
Procurement Clerk 10 hours at $43.20/hr and a Management Analyst 30
hours at $96.66/hr. In aggregate, we estimate a one-time burden of
1,600 hours (40 hr x 40 States) at a cost of $133,272 [(10 hr x $43.20/
hr) + (30 hr x $96.66/hr) x 40 States]. Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $66,636.
We estimate that it would take all 40 States with a separate CHIP
an average of 42 hours each to review any policy differences between
their Medicaid and CHIP programs and make any necessary administrative
actions to permit coordination of enrollment, such as a delegation of
eligibility determinations or alignment of financial eligibility
requirements between the two programs approximately. Of those 42 hours,
we estimate it would take a Business Operations Specialist 22 hours at
$77.28/hr and a Management Analyst 20 hours at $96.66/hr. In aggregate,
we
[[Page 54826]]
estimate a one-time burden of 1,680 hours (40 States x 42 hr) at a cost
of $145,334 ([(22 hr x $77.28/hr) + (20 hr x $96.66/hr)] x 40 States)
to review and make necessary policy changes. Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $72,667.
We estimate that it would take all 40 States with a separate CHIP
200 hours to make changes to their shared eligibility system or service
to determine, based on available information, whether the individual is
eligible for Medicaid or CHIP when determined ineligible for the other
program and before a notice of ineligibility is sent. Of those 200
hours, we estimate it would take a Business Operations Specialist 50
hours at $77.28/hr and a Management Analyst 150 hours at $96.66/hr. In
aggregate, we estimate a one-time burden for all 40 States of 8,000
hours (40 States x 200 hr) at a cost of $734,520 ([(50 hr x $77.28/hr)
+ (150 hr x $96.66/hr)] x 40 States) for completing the necessary
system changes. Taking into account the 50 percent Federal contribution
to Medicaid and CHIP program administration, the estimated State share
would be $367,260.
We estimate that 25 percent of States with a separate CHIP (40
States x 0.25 = 10) are already using combined notices and would see no
additional burden from this provision. For the 30 of the 40 States with
separate CHIPs who do not currently use a combined notice, we estimate
that it would take 6 hours to develop or update a combined eligibility
notice for individuals determined ineligible for Medicaid and eligible
for CHIP or vice versa and 40 hours to make the system changes
necessary to implement it. Of those 46 hours, we estimate that it would
take a Business Operations Specialist 14 hours at $77.28/hr and a
Management Analyst 32 hours at $96.66/hr. In aggregate, we estimate a
one-time burden of 1,380 hours (30 States x 46 hr) at a cost of
$125,251 ([(14 hr x $77.28/hr) + (32 hr x $96.66/hr)] x 30 States) to
develop the notice. Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State share would be $62,626.
In total for the ICRs related to Sec. Sec. 435.1200, 457.340,
457.348, 457.350, and 600.330 under OMB control number 0938-1147 (CMS-
10410), and taking into account the Federal contribution, we estimate a
total cost of $1,138,377.60 ($66,636 + $72,667 + $367,260 + $62,626).We
also estimate that this provision would save each beneficiary on
average 3 hours to no longer submit a renewal form once they have been
determined ineligible for one program and determined potentially
eligible for another insurance affordability program based on available
information. Assuming 1 percent of beneficiaries (85,809,179
beneficiaries x 0.01 = 858,092 beneficiaries) currently submit a
Medicaid renewal for this reason, in aggregate, we estimate an annual
saving for beneficiaries in all States of minus 2,574,276 hours (3 hr x
858,092 individuals) and minus $72,105,471 (2,574,276 hr x $28.01/hr).
We estimate that it would save each beneficiary 4 hours previously
spent reapplying for coverageAssuming 0.25 percent of beneficiaries
(214,523 beneficiaries = 85,809,179 beneficiaries x 0.0025) currently
lose coverage for failure to return a renewal form when no longer
eligible, instead of being transitioned to the program for which they
are eligible, we estimate an annual saving for beneficiaries in all
States of minus 858,092 hours (4 hr x 214,523 individuals) and minus
$24,035,157 (858,092 hr x $28.01/hr).
For beneficiaries, we estimate a total savings of minus $96,140,628
(-$72,105,471-$24,035,157).12. ICRs Regarding Eliminating Requirement
to Apply for Other Benefits (Sec. 435.608)
With regard to the burden associated with developing and coding the
changes to each State's application system to eliminate the trigger for
the Medicaid applicant to apply for other benefit programs, the
proposed requirement and burden will be submitted to OMB for review
under control number 0938-TBD (CMS-10819). At this time, the control
number is to be determined (TBD). OMB will assign the control number
upon their clearance of the proposed rule's new information collection
request. The new control number will be set out in the final rule.
This rule proposes to remove the requirement at Sec. 435.608 that
State Medicaid agencies must require all Medicaid applicants and
beneficiaries, as a condition of their eligibility, to take all
necessary steps to obtain any benefits to which they are entitled. The
requirement applies to adults only, which equates to approximately
46,000,000 Medicaid applicants.\102\ Most individuals already apply for
other benefits such as Veterans' compensation and pensions, Social
Security disability insurance and retirement benefits, and unemployment
compensation, because they want to receive them. As such, the
requirement only impacts those individuals who only applied for a
benefit because they had to in order to get or keep Medicaid.
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\102\ CMS, November 2021 Medicaid & CHIP Enrollment. Available
at https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
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If we estimate that, in a given year, 5 percent of beneficiaries
need to apply for another benefit, that would be 2,300,000 people to
whom the requirement would no longer apply by removing this provision.
However, the burden of this requirement on beneficiaries with respect
to the collection of information relates to the application
requirements of other agencies, and therefore an estimate of burden
reduction is not reflected in this section.
We estimate it would take an average of 200 hours per State to
develop and code the changes to each State's application system to
eliminate the trigger for the Medicaid applicant to apply for other
benefit programs. Of those 200 hours, we estimate it would take a
Database and Network Administrator and Architect 50 hours at $98.50/hr
and a Computer Programmer 150 hours at $92.92/hr. For States, we
estimate a total one-time burden of 11,200 hours (56 States x 200 hr)
at a cost of $1,056,328 ([(50 hr x $98.50/hr) + (150 hr x $92.92/hr)] x
56 States) to complete the necessary system changes.
Taking into account the 50 percent Federal contribution to Medicaid
and CHIP program administration, the estimated State share would be
$528,164.
13. ICRs Regarding Removing Optional Limitation on the Number of
Reasonable Opportunity Periods (Sec. 435.956)
This provision does not create any new or revised reporting,
recordkeeping, or third party disclosure requirements or burden. The
requirements and burden are addressed as part of the single streamlined
application that is approved by OMB under control number 0938-1191
(CMS-10440).
We propose to revise Sec. 435.956(b)(4) to remove the option for
States to establish limits on the number of ROPs. Under proposed Sec.
435.956(b)(4), all 56 States would be prohibited from imposing
limitations on the number of ROPs that an individual may receive.
Since the option was finalized, only one State submitted a SPA
requesting to implement this option, and implemented via a 12-month
pilot. Following the pilot, the State suspended the policy of limiting
the ROP period and removed the option from its State Plan. Other than
the one State, CMS has not received any inquiries about establishing
such a limitation. Therefore, we estimate that the
[[Page 54827]]
proposed amendments to Sec. 435.956(b)(4) will not lead to any change
in burden on States.
14. ICRs Regarding Recordkeeping (Sec. Sec. 431.17 and 457.965)
The following proposed changes will be submitted to OMB for review
under control number 0938-TBD (CMS-10819). At this time, the control
number is to be determined (TBD). OMB will assign the control number
upon their clearance of the proposed rule's new information collection
request. The new control number will be set out in the final rule.
The amendments proposed under Sec. Sec. 431.17 (Medicaid) and
457.965 (CHIP) would clearly delineate the types of information that
States must maintain in Medicaid and CHIP case records while the case
is active in addition to the minimum retention period of 3 years. This
proposal clearly defines the records, such as the date and basis of any
determination and the notices provided to the applicant/beneficiary.
While current regulations do not include a timeframe for records
retention, proposed Sec. Sec. 431.17(c) and 457.965(c) would establish
a minimum retention period of 3 years, and proposed Sec. Sec.
431.17(d) and 457.965(d) would require that records be stored in an
electronic format and that such records be made available to
appropriate parties within 30 days of a request if not otherwise
specified.
We recognize that States are in various stages of electronic
recordkeeping today and that a portion of non-MAGI beneficiary case
records are currently stored in a paper-based format, along with a
small portion of MAGI-based beneficiary case records. Therefore, under
proposed Sec. Sec. 431.17(c) and 457.965(c), we estimate it would take
an average of 20 hours per State for a Management Analyst at $96.66/hr
to update each State's policies and procedures to retain records
electronically for 3 years minimum. In aggregate, we estimate a one-
time burden of 1,120 hours (56 States x 20 hr) at a cost of $108,259
(1,120 hr x $96.66/hr) for completing the necessary updates.
Taking into account the 50 percent Federal contribution to Medicaid
and CHIP program administration, the estimated State share would be
$54,130 ($108,259 x 0.5).
15. ICRs Regarding Prohibiting Premium Lock-Out Periods and
Disenrollment for Failure To Pay Premiums (Sec. Sec. 457.570 and
600.525(b)(2))
The following proposed CHIP State plan changes will be submitted to
OMB for review under control number 0938-1147 (CMS-10410). The BHP
Blueprint changes will be submitted to OMB for review under control
number 0938-1218 (CMS-10510).
OMB Control Number 0938-1147 (CMS-10410)
The amendments proposed to Sec. Sec. 457.570 and 600.525(b)(2)
would eliminate the option for States to impose premium lock-out
periods in CHIP and in States with a BHP that allows continuous open
enrollment throughout the year.
Under proposed Sec. 457.570, we estimate it would take a
Management Analyst 2 hours at $96.66/hr and a General and Operations
Manager 1 hour at $110.82/hr in all 15 States that currently impose
lock-out periods to amend their CHIP State plans to remove the lock-out
period and submit in MMDL for review. We estimate an aggregate one-time
burden of 45 hours (15 States x 3 hr) at a cost of $4,562 (([2 hr x
$96.66/hr] + [1 hr x $110.82/hr]) x 15 States). Taking into account the
50 percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $2,281.
OMB Control Number 0938-1218 (CMS-10510)
Our proposed amendments would require BHP States to revise their
BHP Blueprints to remove the premium lock-out period. Under proposed
Sec. 600.525(b)(2), in the one BHP State that imposes a lock-out
period, we estimate it would take a Management Analyst 2 hours at
$96.66/hr and a General and Operations Manager 1 hour at $110.82/hr to
revise their BHP Blueprints to remove the premium lock-out period. We
estimate an aggregate one-time burden of 3 hours (1 State x 3 hr) at a
cost of $304 (([2 hr x $96.66/hr] + [1 hr x $110.82/hr]) x 1 State).
In total for the ICRs related to Sec. Sec. 457.570 and
600.525(b)(2) under OMB control numbers 0938-1147 (CMS-10410), and OMB
Control Number 0938-1218 (CMS-10510), taking into account the Federal
contribution for the CHIP-related changes, we estimate a total one-time
cost for the State of $2,585 ($2,281+ $304).
16. ICRs Regarding Prohibiting Waiting Periods in CHIP (Sec. Sec.
457.65, 457.340, 457.350, 457.805, and 457.810)
The following proposed changes will be submitted to OMB for review
under control number 0938-1147 (CMS-10410).
The amendments proposed to Sec. Sec. 457.65, 457.340, 457.350,
457.805, and 457.810 would eliminate the State option to impose a
waiting period for families with children eligible for CHIP who were
recently enrolled in a group health plan. Currently, 11 States with a
separate CHIP program impose waiting periods between 1 month and 90
days. We estimate that the proposed amendments would require these 11
States to process CHIP applications earlier than under current rules
and without evaluating whether the applicant just lost coverage through
a group health plan. Therefore, these States would need to update their
applications to eliminate the question asking for attestation of
recently lost coverage and all related follow-up questions, such as to
evaluate whether the person falls into an exception for a waiting
period. If the State uses a data source to check for other coverage,
the State would need to update the application to remove the trigger to
query the data source.
We estimate it would take an average of 200 hours in each of these
11 States to develop and code the changes to each State's application
to remove all questions and queries related to recently lost coverage.
Of those 200 hours, we estimate it would take a Database and Network
Administrator and Architect 50 hours at $98.50/hr and a Computer
Programmer 150 hours at $92.92/hr. In aggregate, we estimate a one-time
burden of 2,200 hours (11 States x 200 hr) at a cost of $207,493 ([(50
hr x $98.50/hr) + (150 hr x $92.92/hr)] x 11 States) for completing the
necessary system changes. Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State share would be $103,747.
We estimate it would take an average of 3 hours in each of 11
unique States to update each State's CHIP SPAs in MMDL to document the
other strategy(ies) the states will use to monitor substitution of
coverage. We estimate it would take a General and Operations Mgr. 1
hour at $110.82/hr and a Business Operations Specialist 2 hours at
$77.25/hr for a per State total of $265. In aggregate, we estimate a
one-time burden for all States of 33 hours (11 States x 3 hr) and
$2,915 ([(1 hr x $110.82/hr) + (2 hr x $77.25/hr)] x 11 States) for
completing the necessary SPA updates. Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $1,458.
In total for the ICRs related to Sec. Sec. 457.65, 457.340,
457.350, 457.805,
[[Page 54828]]
and 457.810, and taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State share would be $105,205 ($103,747 + $1,458).
17. ICRs Regarding Prohibiting Annual and Lifetime Limits on Benefits
(Sec. 457.480)
The following proposed CHIP State plan changes will be submitted to
OMB for review under control number 0938-1148 (CMS-10398 #17) as they
relate to updating CHIP SPAs and under control number 0938-TBD (CMS-
10819) as they relate to programming in necessary system changes. At
this time, the control number for CMS-10819 is to be determined (TBD).
OMB will assign the control number upon their clearance of the proposed
rule's new information collection request. The new control number will
be set out in the final rule.
OMB Control Number 0938-TBD (CMS-10819)
The amendments proposed to Sec. 457.480 would prohibit annual and
lifetime dollar limits in the provision of all CHIP medical and dental
benefits. Currently, 13 unique States place either an annual or
lifetime dollar limit on at least 1 CHIP benefit. Twelve of the 13
States place an annual dollar limit on at least one CHIP benefit (AL,
AR, CO, IA, MI, MS, MT, OK, PA, TN, TX, and UT), and 6 of the 13 States
place a lifetime dollar limit on at least one benefit (CO, CT, MS, PA,
TN, and TX). We estimate that the proposed amendments would require 13
States to update their systems and their CHIP SPAs to eliminate annual
or lifetime benefit limits.
We estimate it would take an average of 20 hours to develop and
code the changes to remove just 1 limit on either an annual or lifetime
benefit. Of those 20 hours, we estimate it would take a Database and
Network Administrator and Architect 5 hours at $98.50/hr and a Computer
Programmer 15 hours at $92.92/hr. In aggregate, we estimate a one-time
burden across all 13 States of 260 hours (20 hr x 13 States) and
$24,522 ([(5 hr x $98.50/hr) + (15 hr x $92.92/hr)] x 13 States) for
completing the necessary system changes. Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share would be $12,261.
OMB Control Number 0938-1148 (CMS-10398 #17)
The amendments proposed to Sec. 457.480 would require States
submit updated CHIP SPAs. We estimate it would take an average of 3
hours in each of 13 unique States to update each State's CHIP SPAs in
MMDL to remove 21 different limits on annual and/or lifetime benefits
(calculated as 21/13, or approximately 1.62, limits per State). Of
those 3 hours, we estimate it would take a General and Operations Mgr.
1 hour at $110.82/hr and a Business Operations Specialist 2 hours at
$77.25/hr for a per State total of 5 hours (3 hr/limit x 1.62 limits).
In aggregate, we estimate a one-time burden for all States of 65 hours
(13 States x 5 hr) and $5,573 ([(1 hr x $110.82/hr) + (2 hr x $77.25/
hr)] x 21 limits) for completing the necessary SPA updates. Taking into
account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share would be $2,786.
In total for the ICRs related to Sec. 457.480 under control
numbers 0938-TBD (CMS-10819) and 0938-1148 (CMS-10398 #17), taking into
account the 50 percent Federal contribution, we estimate a total one-
time State cost of $15,047 ($12,261 + $2,786).
C. Summary of Proposed Burden Estimates
In Table 2, we present a summary of the proposed requirements and
burden estimates.
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[[Page 54833]]
D. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection requirements. The
requirements are not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections discussed above, please visit the CMS
website at www.cms.hhs.gov/PaperworkReductionActof1995, or call the
Reports Clearance Office at 410-786-1326.
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the DATES and ADDRESSES section of this
proposed rule and identify the rule (CMS-2421-P), the ICR's CFR
citation, and OMB control number.
IV. Response to Comments
Because of the large number of public comments, we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
V. Regulatory Impact Analysis
A. Statement of Need
We have learned through our experiences in working with States and
other stakeholders that there are gaps in our regulatory framework
related to Medicaid, CHIP, and BHP eligibility and enrollment. While we
have made great strides in expanding access to coverage over the past
decade, certain policies continue to result in unnecessary burdens and
create barriers to enrollment and retention of coverage. In response to
the President's Executive Order on Continuing to Strengthen Americans'
Access to Affordable, Quality Health Coverage, we reviewed existing
regulations to look for areas where access could be improved.
In this rulemaking, we seek to eliminate obstacles that make it
harder for eligible people to remain enrolled, particularly those
individuals who are exempted from MAGI and did not benefit from many of
the enrollment simplifications in our 2012 and 2013 eligibility final
rules. We seek to streamline enrollment for individuals known to be
Medicaid eligible, like current enrollees who are also eligible for but
not enrolled in the MSPs. We seek to remove coverage barriers, like
premium lock-out periods and waiting periods that are not permitted
under other insurance affordability programs, and to reduce coverage
gaps as individuals transition from one insurance affordability program
to another. Together, the changes in this proposed rule would
streamline Medicaid, CHIP and BHP eligibility and enrollment processes,
reduce administrative burden on States and enrollees, expand coverage
of eligible applicants, increase retention of eligible enrollees, and
improve health equity.
B. Overall Impact
We have examined the impacts of this rule as required by E.O. 12866
on Regulatory Planning and Review (September 30, 1993), E.O. 13563 on
Improving Regulation and Regulatory Review (January 18, 2011), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96354),
section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform
Act (UMRA) of 1995 (March 22, 1995; Pub. L. 104-4), E.O. 13132 on
Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) (having
an annual effect on the economy of $100 million or more in any 1 year,
or adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action(s) or with economically significant
effects ($100 million or more in any 1 year). Based on our estimates,
OMB's Office of Information and Regulatory Affairs has determined this
rulemaking is ``economically significant'' as measured by the $100
million threshold. Accordingly, we have prepared a Regulatory Impact
Analysis that to the best of our ability presents the costs and
benefits of the rulemaking.
The aggregate economic impact of this proposed rule is estimated to
be $61.93 billion (in real FY 2023 dollars) over 5 years. This
represents additional health care spending made by the Medicaid and
CHIP programs on behalf of Medicaid and CHIP beneficiaries, with $41.41
billion paid by the Federal government and $20.52 billion paid by the
States.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
less than $8.0 million to $41.5 million in any one year. Individuals
and States are not included in the definition of a small entity. Since
this proposed rule would only impact States and individuals, therefore,
we do not believe that this proposed rule will have a significant
economic impact on a substantial number of small businesses. We seek
comment on the relevant impact.
In addition, section 1102(b) of the Act requires CMS to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 603 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside a Metropolitan Statistical Area and has fewer than
100 beds. This proposed rule applies to State Medicaid and CHIP
agencies and would not add requirements to rural hospitals or other
small providers. Therefore, we are not preparing an analysis for
section 1102(b) of the Act because we have determined, and the
Secretary certifies, that this proposed rule would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the UMRA also requires that agencies assess
anticipated costs and benefits before issuing any rule whose mandates
require spending in any one year of $100 million in 1995 dollars,
updated annually for inflation.
[[Page 54834]]
In 2022, that is approximately $165 million. We believe that this
proposed rule would have such an effect on spending by State, local, or
tribal governments but not by private sector entities.
Overall Assumptions
In developing these estimates, we have relied on several global
assumptions. All estimates are based on the projections from the
President's FY 2023 Budget. We have assumed that new enrollees would
have the same average costs as current enrollees by eligibility group,
unless specified in the description of the estimates (for example, some
enrollees only would receive Medicare premium assistance). We have
assumed that the rule would be effective on April 1, 2023. In addition,
we have relied on the data sources and assumptions described in the
next section to develop estimates for specific provisions of this
proposed rule.
C. Anticipated Effects
1. Facilitate Enrollment Through Medicare Part D LIS Leads Data
To calculate the impact of easing enrollment for persons already
receiving the LIS benefit, we analyzed data from the Medicare
Integrated Data Repository (IDR) from July 2020. We determined the
number of people who were enrolled in the LIS program by: (1) State;
(2) the category of LIS benefit they received; and (3) whether or not
they were also enrolled in Medicaid. We identified 13.1 million persons
receiving the Part D LIS, of which 11.1 million were enrolled in
Medicaid and 2.0 million were not.
We developed a regression using the percentage of LIS enrollees who
were also enrolled as dual eligibles as the dependent variable, and
used several policy factors as independent variables: State use of
MIPPA applications; verification policies and procedures; grace period
for providing verifications after initial denial; redetermination grace
period; counting children towards income; income disregard; and asset
disregard. While the latter three policies would not change under the
proposed rule, we believed that they may explain some of the variation
in the percentage of LIS recipients who are dual eligibles. We found
that this model explained some amount of the variation in the
percentage of LIS enrollees who are enrolled as dual eligibles, and
that the most significant variable was the State use of MIPPA
applications. Other policies appeared to have weak correlations. The
model suggested that the use of these policies--and in particular the
use of the Part D LIS leads data--would result in an average increase
in the percentage of LIS recipients who are dual eligible enrollees
from 84.6 percent to 88.0 percent (an increase of 3.4 percentage
points). We estimated that about 0.44 million additional persons would
have been enrolled in Medicaid as a result of these changes, had they
been made in 2020.
We assumed these enrollees, as QMBs, would receive payment for the
Medicare Part B premium. The premium is $170.10 per month in 2022.
To calculate future impacts to enrollment, we assumed that the
increase in enrollment due to this provision would grow at the same
rate as Medicaid enrollment among aged persons and persons with
disabilities. We estimate that this would increase enrollment by about
0.52 million persons by FY 2027, and would increase total Medicaid
spending by $4.84 billion from FY 2023 through FY 2027. Detailed
estimates are shown in Table 3.
[GRAPHIC] [TIFF OMITTED] TP07SE22.005
2. Automatically Enroll Certain SSI Recipients Into QMB Program
To calculate the impact of automatically enrolling SSI recipients
into QMB Medicaid coverage, we examined data on SSI recipients and
their health care coverage.\103\ As of 2017, about 17 percent of all
SSI recipients had Medicare coverage but were not dually enrolled in
Medicaid.
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\103\ https://www.census.gov/content/dam/Census/library/publications/2021/demo/p70br-171.pdf.
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First, we estimated how many persons would enroll who already
receive Medicare Part A without paying a premium. We estimated that
there are 2.6 million people enrolled in SSI who are enrolled in Part A
and do not pay the premium. Of these, we estimated about 67 percent
reside in ``1634 States'' (about 1.7 million) and therefore are
automatically enrolled in Medicaid. Of the remaining 0.9 million, we
have assumed that 90 percent would enroll in the QMB group and receive
Medicare Part B premium and cost-sharing assistance. We estimated those
benefits to be about $5,000 per enrollee per year for 2022.
Second, we estimated how many persons would enroll who receive
Medicare Part A but have to pay a premium. We estimate that there are
5.2 million such people enrolled in SSI. We estimated that 27 percent
of this population lives in States that do not automatically enroll
these individuals in the QMB group. Of States that do not automatically
enroll these individuals in the QMB group, we assumed that about 20
percent of States would use the option provided in this proposed rule,
and that about 50 percent of this population would be enrolled in the
QMB group as a result. In total, this would result in an increase of
about 0.15 million enrollees in the QMB group. We assumed these
beneficiaries would receive Medicare Part B premium and cost-sharing
assistance as well as Medicare Part A premium assistance. We estimated
those benefits would be about $11,000 per enrollee per year in 2022.
[[Page 54835]]
[GRAPHIC] [TIFF OMITTED] TP07SE22.006
3. Other Provisions To Facilitate Medicaid Enrollment
For other provisions that would facilitate Medicaid enrollment
(including the definition of family size; making the QMB effective date
earlier; the electronic verification and reasonable compatibility
standard; and the verification of citizenship and identity), we assumed
that these provisions would increase enrollment by about 0.1 percent
among aged enrollees and enrollees with disabilities, and would have a
negligible impact on other categories of enrollees. We estimated that
this would increase enrollment by about 20,000 person-year equivalents
by 2027.
[GRAPHIC] [TIFF OMITTED] TP07SE22.007
It is likely that those SSI enrollees newly gaining Medicaid
coverage would also have higher Medicare costs following enrollment.
Primarily, receiving cost-sharing assistance for Medicare would lead to
these individuals seeking out more care that may have been difficult to
afford previously, also known as induction.
To estimate these impacts, we reviewed research on the effects of
changing out of pocket costs on total health care costs, and
specifically on Medicare. In general, we have historically estimated
that reductions in out of pocket costs would increase total spending by
$0.60 to $1.30 for every $1.00 reduction in out of pocket costs. Among
research on health care costs, we relied primarily on research that
examined the impacts on changing Medicare out of pocket costs.\104\
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\104\ B Garrett, A Gangopadhyaya, A Shartzer, and D Arnos, ``A
Unified Cost-Sharing Design for Medicare: Effects on Beneficiary and
Program Spending,'' The Urban Institute, July 2019. https://www.urban.org/sites/default/files/publication/100528/a_unified_cost-sharing_design_for_medicare_effects_on_beneficiary_an_1.pdf.
[Accessed August 3 2022].
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This research is useful, particularly because of the analysis
reviewing cost-sharing among those Medicare enrollees without any other
coverage, those with supplemental coverage (such as ``Medigap'' plans
or retiree health benefits), and those with Medicaid. First, the
analysis found that Medicare enrollees without other coverage had an
average of $13,693 in costs, of which $2,399 was paid out of pocket (18
percent). Among those with supplemental coverage, average costs were
$14,349, with $594 paid out of pocket (4 percent) and $2,095 paid
through supplemental coverage (15 percent). Enrollees with Medicaid
coverage had $26,181 in average costs, with $209 paid out of pocket (1
percent) and $3,190 paid by Medicaid (12 percent). A significant amount
of cost differences is likely due to health status. Most notably, those
with Medicaid coverage are on average older and more likely to have a
disability or chronic condition, which would result in higher costs
regardless of who pays for care.
The analysis also examines the effect of changing Medicare cost-
sharing structures on total, Medicare, and out of pocket spending.
While the specific proposed benefit changes are not related to this
proposed rule, it does provide the relative magnitude of changes
between Medicare and out of pocket costs. The analysis found a larger
change in costs for those without any other coverage than those with
supplemental coverage. For those without other coverage, out of pocket
costs decreased by $428 while total costs increased by $764 (or $1.80
for every $1.00 reduction in out of pocket costs). For those with
supplemental coverage, there was a decrease of $158 in out of pocket
costs and an increase of $130 in total costs (or $0.80 for every $1.00
reduction in out of pocket costs).
We also reviewed how many Medicare enrollees have supplemental
coverage or Medicaid. Research from the Kaiser Family Foundation
recently looked at this.\105\ This analysis found that 26 percent of
Medicare beneficiaries had annual income of less than $20,000 (which is
reasonably close to the SSI income limit of $1,767 monthly, which would
be $21,204 annually). Of these beneficiaries, 37 percent had Medicaid
and 11 percent had supplemental coverage. Excluding those with Medicaid
and assuming the two groups are mutually exclusive, 17 percent of low-
income beneficiaries without Medicaid had supplemental coverage. We
believe it is reasonable to assume that very few beneficiaries had both
Medicaid and other supplemental coverage.
---------------------------------------------------------------------------
\105\ W Koma, J Cubanski, and T Neuman, ``A Snapshot of Coverage
Among Medicare Beneficiaries in 2018,'' Kaiser Family Foundation,
March 23 2021. https://www.kff.org/medicare/issue-brief/a-snapshot-of-sources-of-coverage-among-medicare-beneficiaries-in-2018/.
[Accessed August 3 2022].
---------------------------------------------------------------------------
We estimated the impact assuming that the overall increase in total
costs would be $0.80 for every $1.00 reduction in out of pocket costs.
For
[[Page 54836]]
those without supplemental coverage, this would be expected to result
in an increase of 14 percent in total costs and 20 percent in Medicare
costs, and for those without supplemental coverage, increases of 3
percent for total costs and 10 percent for Medicare costs. Using the
analysis on SSI enrollees and coverage, this is a weighted average of
an 18 percent increase in Medicare costs for those newly gaining
Medicaid.
To calculate the annual impacts, we multiply the Medicare per
enrollee costs each year by 18 percent and by the number of SSI
enrollees newly receiving Medicaid, and then adjust for cost-sharing to
calculate the Federal Medicare spending amounts. Using total Medicare
per enrollee costs (as projected in the 2022 Trustees Report),\106\ we
project that this would increase Medicare spending by $11.1 billion
over 2023 to 2027 under this proposed rule. Annual impacts are shown in
Table 6.
---------------------------------------------------------------------------
\106\ ``2022 Annual Report of the Boards of Trustees of the
Federal Hospital Insurance and Federal Supplementary Medical
Insurance Trust Funds.'' https://www.cms.gov/files/document/2022-medicare-trustees-report.pdf. [Accessed August 3 2022].
[GRAPHIC] [TIFF OMITTED] TP07SE22.008
There is a wide range of possible costs due to this effect of the
proposed rule. Most notably, and described previously in this section,
is that the impact of reducing out of pocket costs could have different
impacts than estimated here. Thus, individuals could use greater or
lesser levels of additional services, resulting in different levels of
Medicare spending changes than estimated here. This uncertainty is
addressed in the high and low range estimates provided in the
accounting statement (see section V.F. of this proposed rule).
4. Promoting Enrollment and Retention of Eligible Individuals
These provisions are expected to increase coverage by assisting
persons with gaining and maintaining Medicaid coverage. We have
considered several effects of the provisions in this proposed rule.
First, we estimated the impacts of aligning non-MAGI enrollment and
renewal requirements with MAGI policy. We anticipate that this
provision would increase the number of member months of coverage among
enrollees eligible based on non-MAGI criteria (older adults and persons
with disabilities). In an analysis of dually eligible enrollees from
2015 to 2018, CMS found that about 29 percent of new dually eligible
enrollees lost coverage for at least 1 month in the first year of
coverage, and about 24 percent lost coverage for at least 3 months.
While some of this loss of coverage is likely due to enrollees no
longer being eligible, we expect that many enrollees may still be
eligible despite losing coverage, and that this provision would assist
enrollees in continuing coverage. We assumed that this provision would
increase enrollment among aged enrollees and enrollees with
disabilities by about 1 percent.
For all other provisions under this section, we assumed that they
would increase coverage for children by about 1 percent and for all
other enrollees by about 0.75 percent. In particular, we assumed that
provisions for acting on changes in circumstances, timely eligibility
determinations and redeterminations, and action on returned mail would
all contribute to modest increases in enrollment (mostly through
continuing coverage for persons already enrolled) and that the
provision to improve transitions between Medicaid and CHIP would
further increase Medicaid enrollment.
In total, we estimated these provisions would increase enrollment
by about 880,000 person-year equivalents by 2027.
[GRAPHIC] [TIFF OMITTED] TP07SE22.009
[[Page 54837]]
5. Eliminating Barriers To Access in Medicaid
We assumed that removing or limit requirements to apply for other
benefits as a condition of Medicaid enrollment would lead to an
increase in Medicaid coverage. We have not assessed the impacts across
different benefits (that is, SSI, TANF, etc.). We assumed that this
would increase overall enrollment by about 0.5 percent, or about
410,000 person-year equivalents by 2027.
We have assumed that removing optional limitations on the number of
reasonable opportunity periods would have a negligible impact on
Medicaid enrollment and expenditures.
[GRAPHIC] [TIFF OMITTED] TP07SE22.010
6. CHIP Proposed Changes and Eliminating Access Barriers in CHIP
We estimated that proposed changes to CHIP enrollment (including
timely determinations and redeterminations, acting on changes in
circumstances, acting on returned mail, and improving transitions
between CHIP and Medicaid) would increase CHIP enrollment by about 1
percent. These are comparable to the impacts on Medicaid children of
the comparable Medicaid provisions.
For prohibitions on premium lockout periods and waiting periods,
there are currently 14 States that have such lockout periods and 11
States that have waiting periods for CHIP enrollment. We assumed that
in those States, removing these barriers to coverage would increase
enrollment by about 1 percent. We assumed that prohibiting annual and
lifetime limits on benefits in CHIP would have a negligible impact.
In total, we estimate these provisions would increase enrollment by
about 120,000 by 2027.
[GRAPHIC] [TIFF OMITTED] TP07SE22.011
7. Impacts on the Marketplaces
We anticipate that many of the enrollees that would either be
gaining Medicaid or CHIP coverage or retaining Medicaid or CHIP
coverage as a result of this proposed rule would have had other
coverage under current policies. In particular, we expect that many of
the children and adults would have enrolled in the Marketplace and been
eligible for subsidized care (excluding those age 65 or older and those
with disabilities who are enrolled in Medicare).
To estimate the impacts this proposed rule would have on
Marketplace expenditures, we started by calculating the cost of care
and Federal subsidy payments for different households shifting from
Marketplace coverage to Medicaid and CHIP. We made the following
assumptions. We estimated that health care prices are 30 percent higher
in Marketplace plans than in Medicaid and CHIP, and that the average
percentage of costs for non-benefit costs in managed care was 10
percent--this also considers that some beneficiaries receive all or
part of their care outside of managed care. Next, we assumed that
individuals would reduce health spending by 10 percent in the
Marketplace due to increased cost sharing requirements. We used an
actuarial value of 70 percent, consistent with silver level plans on
the Marketplace, and assumed that the average percentage of non-benefit
costs in Marketplace plans was 20 percent. Finally, we assumed that the
average income of persons shifting from Marketplace coverage to
Medicaid and CHIP would be 125 percent of the Federal poverty level
(FPL) and that the premium tax credits would be calculated assuming
that they would not have to pay any contribution in 2023, 2024, and
2025 under the Inflation Reduction Act of 2022, and that they would
have to pay 2 percent of income for coverage for 2026 and beyond.
We calculated the amount of Federal subsidies (measured by premium
tax credits) for households of one adult, two adults, one adult and one
child, one adult and two children, and two adults and two children, and
then calculated the total Federal cost of Marketplace coverage to be
consistent with the distribution of projected enrollment change in
Medicaid and CHIP under the proposed rule. We made a final assumption
that 60 percent of individuals would have enrolled in Marketplace
coverage, and the remaining 40 percent would have either received other
coverage or become uninsured.
We estimated that Marketplace costs would have decreased by $3.8
billion in 2022 under the policies in the proposed rule. To project
costs for future years that would be affected by the proposed rule, we
assumed that per capita costs,
[[Page 54838]]
premiums, and Federal subsidies would increase consistent with the
projected growth rates in the President's Budget with adjustments to
account for the impacts of the Inflation Reduction Act of 2022, and
that enrollment would increase consistent with the projections made for
the Medicaid and CHIP provisions of this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP07SE22.012
There is a wide range of possible savings due to this effect of the
proposed rule. For these estimates, participation in the Marketplace
and health care costs and prices may vary from what we assumed here.
Thus, actual savings could be greater or lesser than estimated here.
This uncertainty is addressed in the high and low range estimates
provided in the accounting statement (see section V.F. of this proposed
rule).
8. Total
In total, we project that these provisions would increase Medicaid
enrollment by 2.81 million by 2027, and would increase total Medicaid
spending by $99,290 million from 2023 through 2027. Of that amount, we
estimate that $60,280 million would be paid by the Federal government
and $39,010 million would be paid by the States. We expect the majority
of the additional enrollment and cost to be provided for older adults
and persons with disabilities. We also estimate that CHIP enrollment
would increase by 0.12 million by 2027, and that total CHIP
expenditures would increase by $1,690 million from 2023 to 2027 ($1,170
Federal and $520 million State costs). Table 11 shows the net impacts
for Medicaid and for CHIP.
[GRAPHIC] [TIFF OMITTED] TP07SE22.013
[GRAPHIC] [TIFF OMITTED] TP07SE22.014
In addition to the effects on Medicaid and CHIP, we have also
estimated impacts on Medicare and the Federal subsidies for Marketplace
coverage. Table 13 shows the net impact on Federal spending for
Medicaid, CHIP, Medicare, and Federal Marketplace subsidies.
[[Page 54839]]
[GRAPHIC] [TIFF OMITTED] TP07SE22.015
9. Administrative Burden
We anticipate a reduction in administrative burden for States
resulting from the proposed elimination of the requirement to apply for
other benefits outlined in the preamble of this proposed rule.
Specifically, we estimate that this provision would save State
Eligibility Interviewers on average 1 hour per enrollee at $46.70/hr
from no longer needing to prepare and send notices and requests for
additional information about applying for other benefits, or to process
requests for good cause exemptions. In aggregate for all States, we
estimate an annual savings of minus 2,300,000 hours (1 hr x 2.3M
enrollees) and minus $106,122,000 (2,300,000 hrs x $46.70/hr).
We also estimate that this provision would save each enrollee who
otherwise meets all requirements to be enrolled or remain enrolled in
Medicaid but who, absent this provision, would lose Medicaid coverage
due to failure to provide information on application for other benefits
on average 2 hours at $28.01/hr. In aggregate, we estimate that
enrollees in all States would save minus 4,600,000 hours (2 hrs x
2,300,000 enrollees) and $128,846,000 (4,600,000 hrs x $28.01/hr)
annually.
D. Alternatives Considered
In developing this proposed rule, the following alternatives were
considered:
1. Not Proposing the Rule
We considered not proposing this rule and maintaining the status
quo. However, we believe this proposed rule will lead to more eligible
individuals gaining access to coverage and maintaining their coverage
across all States. In addition, we believe that provisions in this
proposed rule, such as updates to the recordkeeping requirements, will
reduce the incidence of improper payments and improve the integrity of
the Medicaid program and CHIP.
2. Providing States With Discretion Regarding the Date of Application
for QMBs
Section 406.26 describes enrollment in Medicare Part A through the
buy-in process. We considered proposing modifications to Sec.
406.26(b) to provide States with discretion to use the Part A
conditional enrollment filing date as the date of the Medicaid
application for QMB eligibility. As background, the QMB eligibility
group covers Part A premiums for individuals who do not qualify for
premium-free Part A. However, to apply for the QMB eligibility group,
an individual must be entitled to Part A--and many cannot afford the
monthly premium ($499 in 2022). Such individuals have to navigate a
complex two-step process where they first apply for conditional
enrollment in Part A at SSA, then go to the State Medicaid agency to
apply for the QMB eligibility group. Providing States the option to use
the date of application at SSA for conditional enrollment as the date
of application for a QMB application could permit States to offer an
earlier effective date for QMB. We chose not to propose a regulatory
change at this time because we do not have enough information to
accurately assess its impact. However, we seek comments on this
alternative considered that might be adopted in the final rule based on
comments received.
3. Maintaining Records in Paper Format
We considered allowing States, which have not yet transitioned
their enrollee records into an electronic format, to continue to
maintain a paper-based record keeping system. As documented by the OIG
and PERM eligibility reviews, many existing enrollee case records lack
adequate information to verify decisions of Medicaid eligibility. A
move to electronic recordkeeping will not only help States to ensure
adequate documentation of their eligibility decisions, but will also
make it easier to report such information to State auditors and other
relevant parties. Therefore, we proposed to require State Medicaid
agencies to store records in electronic format (estimated above, in the
Collection of Information section, as a one-time cost of $108,260) and
sought comment on whether States should retain flexibility to maintain
records in paper or other formats that reflect evolving technology.
E. Limitations of the Analysis
There are a number of caveats to these estimates. Foremost, there
is significant uncertainty about the actual effects of these
provisions. Each of these provisions could be more or less effective
than we have assumed in developing these estimates, and for many of
these provisions we have made assumptions about the impacts they would
have. In many cases, determining the reasons why a person may not be
enrolled despite being eligible for Medicaid or CHIP is difficult to do
in an analysis such as this. Therefore, these assumptions rely heavily
on our judgment about the impacts of these provisions. While we believe
these are reasonable estimates, we note that this could have a
substantially greater or lesser impact than we have projected.
Second, there is uncertainty even under current policy in Medicaid
and CHIP. Due to the COVID-19 pandemic and legislation to address the
pandemic, Medicaid enrollment (and to a lesser extent, CHIP enrollment)
have experienced significant increases in enrollment since the
beginning of 2020. Actual underlying economic and public health
conditions may differ than what we assume here.
In addition to the sources of uncertainty described previously,
there are other reasons the actual impacts of these provisions may
differ from the estimates. There may be differences in the impacts of
these provisions across eligibility groups or States that are not
reflected in these estimates. There may also be different costs per
enrollee than we have assumed here--those gaining coverage altogether
or keeping coverage for longer durations of time may have different
costs than those who were already assumed to be enrolled in the
program. Lastly, to the extent that States have discretion in
provisions that are
[[Page 54840]]
optional in this proposed rule or in the administration of their
programs more broadly, States' efforts to implement these provisions
may lead to larger or smaller impacts than estimated here.
To address these limitations, we have developed a range of impacts.
We believe that the actual impacts would likely fall within a range 50
percent higher or lower than the estimates we have developed. While
this is a significant range, we would note that in the context of the
entire Medicaid program ($743 billion in FY 2021), this is still a
relatively narrow range.
F. Accounting Statement
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in
Table 14 showing the classification of the transfer payments with the
provisions of this proposed rule. These impacts are classified as
transfers, with the Federal government and States incurring additional
costs and beneficiaries receiving medical benefits and reductions in
out-of-pocket health care costs.
This provides our best estimates of the transfer payments outlined
in the ``Section C. Detailed Economic Analysis'' above. To address the
significant uncertainty related to these estimates, we have assumed
that the costs could be 50 percent greater than or lesser than we have
estimated here. We recognize that this is a relatively wide range, but
we note several reasons for uncertainty regarding these estimates.
First, there are numerous provisions that affect Medicaid and CHIP in
this rule. For several provisions, we have limited information,
analysis, or comparisons to prior experience to use in developing our
estimates. Thus, the range reflects that impacts of these provisions
could be greater or lesser than we assume. In addition, given the
number of provisions, there may be cases where multiple provisions
would help an individual maintain coverage. This could lead to these
estimates ``double counting'' some effects. We also note that there are
expected impacts on Medicare and the Marketplace subsidies; we believe
this range adequately accounts for the potential variation in costs or
savings to those programs as well. Finally, given the significant
effects of the COVID-19 pandemic and legislation intended to address
this, the current outlook for Medicaid and CHIP are less certain than
typically. We provide this wider range to account for this uncertainty
as well. This range provides the high cost and low cost ranges shown in
Table 14.
[GRAPHIC] [TIFF OMITTED] TP07SE22.016
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on August 25, 2022.
List of Subjects
42 CFR Part 406
Diseases, Health facilities, Medicare.
42 CFR Part 431
Grant programs--health, Health facilities, Medicaid, Privacy,
Reporting and recordkeeping requirements.
42 CFR Part 435
Aid to Families with Dependent Children, Grant programs--health,
Medicaid, Reporting and recordkeeping requirements, Supplemental
Security Income (SSI), Wages.
42 CFR Part 457
Administrative practice and procedure, Grant programs--health,
Health insurance, Reporting and recordkeeping requirements.
42 CFR Part 600
Administrative practice and procedure, Health care, Health
insurance, Intergovernmental relations, Penalties, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:
PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT
0
1. The authority citation for part 406 is revised to read as follows:
Authority: 42 U.S.C. 1302, 1395i-2, 1395i-2a, 1395p, 1395q and
1395hh.
0
2. Section 406.21 is amended by adding paragraph (c)(5) to read as
follows:
Sec. 406.21 Individual enrollment.
* * * * *
(c) * * *
(5) If an individual resides in a State that pays premium hospital
insurance for Qualified Medicare Beneficiaries under Sec. 406.32(g)
and enrolls or reenrolls during a general enrollment period after
January 1, 2023, QMB coverage is effective the month entitlement begins
(if the individual is determined eligible for QMB before the month
following the month of enrollment), or a month later than the month
entitlement begins (if the individual is determined eligible for QMB
the month entitlement begins or later).
* * * * *
PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION
0
3. The authority citation for part 431 is revised to read as follows:
Authority: 42 U.S.C. 1302.
0
4. Section 431.10 is amended by--
0
a. Redesignating paragraphs (c)(1)(i)(A)(2) and (3) as (c)(1)(i)(A)(4)
and (5), respectively; and
0
b. Adding new paragraphs (c)(1)(i)(A)(2) and (3).
The additions read as follows:
[[Page 54841]]
Sec. 431.10 Single State agency.
* * * * *
(c) * * *
(1) * * *
(i) * * *
(A) * * *
(2) The separate Children's Health Insurance Program agency;
(3) The Basic Health Program agency;
* * * * *
0
5. Section 431.17 is revised to read as follows:
Sec. 431.17 Maintenance of records.
(a) Basis and purpose. This section, based on section 1902(a)(4) of
the Act, prescribes the kinds of records a Medicaid agency must
maintain, the minimum retention period for such records, and the
conditions under which those records must be provided or made
available.
(b) Content of records. A State plan must provide that the Medicaid
agency will maintain or supervise the maintenance of the records
necessary for the proper and efficient operation of the plan. The
records must include all of the following--
(1) Individual records on each applicant and beneficiary that
contain all of the following:
(i) All information provided on the initial application submitted
through any modality described in Sec. 435.907 of this subchapter by,
or on behalf of, the applicant or beneficiary, including the signature
on and date of application.
(ii) The electronic account and any information or other
documentation received from another insurance affordability program in
accordance with Sec. 435.1200(c) and (d) of this subchapter.
(iii) The date of, basis for, and all documents or other evidence
to support any determination, denial, or other adverse action,
including decisions made at application, renewal, and as a result of a
change in circumstance, taken with respect to the applicant or
beneficiary, including all information provided by, or on behalf of,
the applicant or beneficiary, and all information obtained
electronically or otherwise by the agency from third-party sources.
(iv) The provision of, and payment for, services, items and other
medical assistance, including the service or item provided, relevant
diagnoses, the date that the service or item was provided, the
practitioner or provider rendering, providing or prescribing the
service or item, including their National Provider Identifier, and the
full amount paid or reimbursed for the service or item, and any third-
party liabilities.
(v) Any changes in circumstances reported by the individual and any
actions taken by the agency in response to such reports.
(vi) All renewal forms and documentation returned by, or on behalf
of, a beneficiary, to the Medicaid agency in accordance with Sec.
435.916 of this subchapter, regardless of the modality through which
such forms are submitted, including the signature on the form and date
received.
(vii) All notices provided to the applicant or beneficiary in
accordance with Sec. 431.206 and Sec. Sec. 435.917 and 435.918 of
this subchapter.
(viii) All records pertaining to any fair hearings requested by, or
on behalf of, the applicant or beneficiary, including each request
submitted and the date of such request, the complete record of the
hearing decision, as described in Sec. 431.244(b), and the final
administrative action taken by the agency following the hearing
decision and date of such action.
(ix) The disposition of income and eligibility verification
information received under Sec. Sec. 435.940 through 435.960 of this
subchapter, including evidence that no information was returned from an
electronic data source.
(2) Statistical, fiscal, and other records necessary for reporting
and accountability as required by the Secretary.
(c) Retention of records. The State plan must provide that the
records required under paragraph (b) of this section will be retained
for the period when the applicant or beneficiary's case is active, plus
a minimum of 3 years thereafter.
(d) Accessibility and availability of records. The agency must--
(1) Maintain the records described in paragraph (b) of this section
in an electronic format; and
(2) Make the records available to the Secretary, Federal and State
auditors and other parties who request, and are authorized to review,
such records within 30 calendar days of the request, if not otherwise
specified, and to the extent permissible by Federal law.
Sec. 431.213 [Amended]
0
6. Section 431.213 is amended by removing and reserving paragraph (d).
PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA
0
7. The authority citation for part 435 is revised to read as follows:
Authority: 42 U.S.C. 1302.
0
8. Section 435.4 is amended by adding a definition for ``Low Income
Subsidy Application data (LIS leads data)'' in alphabetical order to
read as follows:
Sec. 435.4 Definitions and use of terms.
* * * * *
Low-Income Subsidy Application data (LIS leads data) means data
from an individual's application for low-income subsidies under section
1860D-14 of the Act that the Social Security Administration
electronically transmits to the appropriate State Medicaid agency as
described in section 1144 (c)(1) of the Act.
* * * * *
0
9. Section 435.222 is amended by revising the section heading to read
as follows:
Sec. 435.222 Optional eligibility for reasonable classifications of
individuals under age 21 with income below a MAGI-equivalent standard.
* * * * *
0
10. Section 435.223 is added as follows:
Sec. 435.223 Other optional eligibility for reasonable
classifications of individuals under age 21.
(a) Basis. This section implements section 1902(a)(10)(A)(ii) of
the Act.
(b) Eligibility. The agency may provide Medicaid to individuals
under age 21 (or, at State option, under age 20, 19, or 18) or to one
or more reasonable classifications of individuals under age 21 who meet
the requirements described in any clause of section 1902(a)(10)(A)(ii)
of the Act and implementing regulations in this subpart, if any.
0
11. Section 435.407 is amended by--
0
a. Adding paragraphs (a)(7) and (8);
0
b. Removing paragraphs (b)(2) and (11);
0
c. Redesignating paragraphs (b)(3) through (b)(10) as paragraphs (b)(2)
through (b)(9), and paragraphs (b)(12) through (b)(18) as paragraphs
(b)(10) through (b)(16), respectively; and
0
d. In newly redesignated paragraph (b)(16), removing the reference to
paragraph ``(17)'' and adding in its place a reference to paragraph
``(15)''.
The additions read as follows:
Sec. 435.407 Types of acceptable documentary evidence of
citizenship.
(a) * * *
(7) Verification with a State vital statistics agency documenting a
record of birth.
(8) A data match with the Department of Homeland Security
Systematic Alien Verification for Entitlements (SAVE) Program or any
other process
[[Page 54842]]
established by DHS to verify that an individual is a citizen.
* * * * *
0
12. Section 435.601 is amended--
0
a. In paragraph (b)(2) by removing the phrase ``specified in paragraphs
(c) and (d) of this section or in Sec. 435.121 or as permitted under
Sec. 435.831(b)(1), in determining'' and adding in its place the
phrase ``specified in paragraphs (c) through (e) of this section or in
Sec. 435.121 of this part or as permitted under (f)(1)(ii)(B) of this
paragraph, in determining'';
0
b. In paragraph (d)(1) introductory text by removing the phrase
``permitted under Sec. 435.831(b)(1) in determining eligibility'' and
adding in its place the phrase ``permitted under paragraph (e) or
(f)(1)(ii)(B) of this section in determining eligibility'';
0
c. By adding paragraph (e); and
0
d. By revising paragraph (f).
The addition and revision read as follows:
Sec. 435.601 Application of financial eligibility methodologies.
* * * * *
(e) Procedures for determining eligibility for the Medicare Savings
Program groups. When a State determines eligibility for a Medicare
Savings Program group, for income eligibility the agency must include
at least the individuals described in Sec. 423.772 in determining
family of the size involved.
(f) State plan requirements. (1)(i) The State plan must specify
that, except to the extent precluded in Sec. 435.602, in determining
financial eligibility of individuals, the agency will apply the cash
assistance financial methodologies and requirements, unless the agency
chooses the option described in paragraph (f)(1)(ii)(B) of this
section, or chooses to apply less restrictive income and resource
methodologies in accordance with paragraph (d) of this section, or
both.
(ii) In the case of individuals for whom the program most closely
categorically-related to the individual's status is AFDC (individuals
under age 21, pregnant individuals and parents and other caretaker
relatives who are not disabled, blind or age 65 or older), the agency
may apply--
(A) The financial methodologies and requirements of the AFDC
program; or
(B) The MAGI-based methodologies defined in Sec. 435.603, except
that, the agency must comply with the terms of Sec. 435.602.
(2) [Reserved]
Sec. 435.608 [Removed and Reserved]
0
13. Section 435.608 is removed and reserved.
0
14. Section 435.831 is amended by--
0
a. Redesignating paragraphs (g)(2) and (3) as paragraphs (g)(3) and
(4), respectively; and
0
b. Adding new paragraph (g)(2).
The addition reads as follows:
Sec. 435.831 Income eligibility.
* * * * *
(g) * * *
(2) May include expenses for services that the agency has
determined are reasonably constant and predictable, including, but not
limited to, services identified in a person-centered service plan
developed pursuant to Sec. 441.301(b)(1)(i), Sec. 441.468(a)(1),
Sec. 441.540(b)(5), or Sec. 441.725 and expenses for prescription
drugs, projected to the end of the budget period at the Medicaid
reimbursement rate.
* * * * *
0
15. Section 435.907 is amended by adding paragraph (c)(4) and revising
paragraph (d) to read as follows:
Sec. 435.907 Application.
* * * * *
(c) * * *
(4) Any MAGI-exempt applications and supplemental forms must be
accepted through all modalities described at 435.907(a).
(d)(1) If the agency needs to request additional information from
the applicant to determine and verify eligibility in accordance with
Sec. 435.911, the agency must--
(i) Provide the applicant with no less than the following number of
days, measured from the date the agency sends the request, to respond
and provide any necessary information:
(A) Thirty (30) calendar days for applicants who apply for Medicaid
on the basis of disability, and
(B) Fifteen (15) calendar days for all other applicants;
(ii) Allow applicants to provide requested information through any
of the modes of submission specified in paragraph (a) of this section;
and
(iii)(A) In the case of an individual who is denied eligibility for
failure to submit requested information and who subsequently submits
the requested information within the period allowed by the agency in
accordance with paragraph (d)(1)(ii) of this section, reconsider
eligibility without requiring a new application;
(B) For purposes of the application timeliness standards at Sec.
435.912(c)(3) of this subpart, the date of application for individuals
described in paragraph (d)(1)(iv)(A) of this section is considered the
date upon which the individual submits the additional information
requested by the agency; and
(C) For purposes of the effective date of eligibility under Sec.
435.915 of this subpart, the date of application for individuals
described in paragraph (d)(1)(iiii)(A) of this section is date on which
the original application was submitted.
(2) The agency may not require an in-person interview as part of
the application process.
* * * * *
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16. Section 435.909 is revised to read as follows:
Sec. 435.909 Automatic entitlement to Medicaid following a
determination of eligibility under other programs.
(a) Automatic enrollment of certain individuals in Medicaid. The
agency must not require a separate application for Medicaid from an
individual, if the agency has an agreement with the Social Security
Administration (SSA) under section 1634 of the Act for determining
Medicaid eligibility; and--
(1) The individual receives SSI;
(2) The individual receives a mandatory State supplement under
either a federally-administered or State-administered program; or
(3) The individual receives an optional State supplement and the
agency provides Medicaid to beneficiaries of optional supplements under
Sec. 435.230.
(b) Automatic enrollment of SSI recipients in the Qualified
Medicare Beneficiary group. (1) The agency must deem individuals
eligible for the Qualified Medicare Beneficiary group as described in
Sec. 400.200 of this chapter if the individual receives SSI and is
determined eligible for medical assistance under Sec. 435.120 or Sec.
435.121 and--
(i) The individual is entitled to Part A under part 406, subpart B
of this chapter; or
(ii) The individual is entitled to Part A under Sec. 406.20 of
this chapter and the agency has a State buy-in agreement authorized
under section 1843 of the Act and modified under section 1818(g) of the
Act.
(2) The agency may deem individuals eligible for the Qualified
Medicare Beneficiary group as described in Sec. 400.200 of this
chapter if the individual receives SSI and is determined eligible for
medical assistance under Sec. 435.120 or Sec. 435.121; and--
(i) The individual is entitled to Part A under Sec. 406.5(b) of
this chapter; and
(ii) The agency uses the group payer arrangement under Sec.
406.32(g) of this chapter to pay Part A premiums for Qualified Medicare
Beneficiaries.
(3) The automatic enrollment of SSI recipients in the Qualified
Medicare
[[Page 54843]]
Beneficiaries group described in paragraphs (b)(1) and (2) of this
section is effective no earlier than the effective date of coverage
under a buy-in agreement for individuals described in Sec. 407.47(b)
of this chapter.
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17. Section 435.911 is amended by revising paragraph (c) introductory
text and adding paragraph (e) to read as follows:
Sec. 435.911 Determination of eligibility.
* * * * *
(c) For each individual who has submitted an application described
in Sec. 435.907, whose eligibility is being renewed in accordance with
Sec. 435.916, or whose eligibility is being redetermined in accordance
with Sec. 435.919 and who meets the non-financial requirements for
eligibility (or for whom the agency is providing a reasonable
opportunity to verify citizenship or immigration status in accordance
with Sec. 435.956(b)), the State Medicaid agency must comply with the
following--
* * * * *
(e) The agency must--
(1) Accept, via secure electronic interface, Low Income Subsidy
application data (LIS leads data) transmitted to the agency from the
Social Security Administration;
(2) Treat received LIS leads data relating to an individual as an
application for eligibility under section 1902(a)(10)(E) of the Act
and, promptly and without undue delay, consistent with timeliness
standards established under Sec. 435.912, determine the eligibility of
the individual under such section, without requiring submission of
another application;
(3) Request additional information needed by the agency to make a
determination of eligibility for the Medicare Savings Programs;
(4) Not request information or documentation from the individual
already provided to SSA through the LIS application and included in the
transmission to the agency by the Social Security Administration; and
(5) Accept any information verified by SSA, without further
verification, if the information provided through the LIS leads data
supports a determination of eligibility under section 1902(a)(10)(E) of
the Act.
(6) Collect such additional information as may be needed--
(i) Consistent with Sec. 435.907(b), to determine whether such
individual is eligible for Medicaid on the basis of the applicable
modified adjusted gross income standard, and furnish Medicaid on such
basis;
(ii) Consistent with Sec. 435.907(c), to determine whether such
individual is eligible for Medicaid benefits on any basis other than
the applicable modified adjusted gross income standard or under section
1902(a)(10)(E) of the Act, and furnish Medicaid on such basis; and
(iii) Consistent with Sec. 435.956, to verify an individual's U.S.
citizenship or satisfactory immigration status, including providing the
required reasonable opportunity period under 435.956(b).
(7) If any of the LIS leads data does not support a determination
of eligibility under section 1902(a)(10)(E) of the Act, the agency
must--
(i) Determine whether additional information is needed to make a
determination of eligibility under section 1902(a)(10)(E) of the Act;
(ii) If such information is needed, notify the individual that they
may be eligible for assistance with their Medicare premium and/or cost
sharing charges, but that additional information is needed for the
agency to make a determination of such eligibility;
(iii) Provide the individual with a minimum of 30 days to furnish
information any information needed by the agency to make such
determination of eligibility; and
(iv) Verify the individual's eligibility under section
1902(a)(10)(E) of the Act in accordance with the agency's verification
plan developed in accordance with Sec. 435.945(j).
0
18. Section 435.912 is revised to read as follows:
Sec. 435.912 Timely determination and redetermination of eligibility.
(a) Definitions. For purposes of this section--
Performance standards are overall standards for determining,
renewing and redetermining eligibility in an efficient and timely
manner across a pool of applicants or beneficiaries, and include
standards for accuracy and consumer satisfaction, but do not include
standards for an individual applicant's determination, renewal, or
redetermination of eligibility.
Timeliness standards refer to the maximum periods of time, subject
to the exceptions in paragraph (e) of this section and in accordance
with Sec. 435.911(c), in which every applicant is entitled to a
determination of eligibility, a redetermination of eligibility at
renewal, and a redetermination of eligibility based on a change in
circumstances.
(b) State plan requirements. Consistent with guidance issued by the
Secretary, the agency must establish in its State plan timeliness and
performance standards for, promptly and without undue delay--
(1) Determining eligibility for Medicaid for individuals who submit
applications to the single State agency or its designee in accordance
with Sec. 435.907, including determining eligibility or potential
eligibility for, and transferring individuals' electronic accounts to,
other insurance affordability programs pursuant to Sec. 435.1200(e);
(2) Determining eligibility for Medicaid for individuals whose
accounts are transferred from other insurance affordability programs,
including at initial application, as well as at a regularly-scheduled
renewal or due to a change in circumstances;
(3) Redetermining eligibility for current beneficiaries at
regularly-scheduled renewals in accordance with Sec. 435.916,
including determining eligibility or potential eligibility for, and
transferring individuals' electronic accounts to, other insurance
affordability programs pursuant to 435.1200(e);
(4) Redetermining eligibility for current beneficiaries based on a
change in circumstances reported by the beneficiary in accordance with
Sec. 435.919(b)(1) or received from a third party in accordance with
Sec. 435.919(b)(2), including determining eligibility or potential
eligibility for, and transferring individuals' electronic accounts to,
other insurance affordability programs pursuant to 435.1200(e); and
(5) Redetermining eligibility for current beneficiaries based on
anticipated changes in circumstances in accordance with Sec.
435.919(b)(3), including determining eligibility or potential
eligibility for, and transferring individuals' electronic accounts to,
other insurance affordability programs pursuant to 435.1200(e).
(c) Timeliness and performance standard requirements--(1) Period
covered. The timeliness and performance standards adopted by the agency
under paragraph (b) of this section must--
(i) For determinations of eligibility at initial application or
upon receipt of an account transfer from another insurance
affordability program, as described in paragraphs (b)(1) and (2) of
this section, cover the period from the date of application or transfer
from another insurance affordability program to the date the agency
notifies the applicant of its decision or the date the agency transfers
the individual's electronic account to another insurance affordability
program in accordance with Sec. 435.1200(e);
[[Page 54844]]
(ii) For regularly-scheduled renewals of eligibility under Sec.
435.916, cover the period from the date that the agency initiates the
steps required to renew eligibility on the basis of information
available to the agency, as required under Sec. 435.916(b)(1), to the
date the agency sends the individual notice required under Sec.
435.916(b)(1)(i) or (b)(2)(i)(C) of its decision to approve their
renewal of eligibility or, as applicable, to the date the agency
terminates eligibility and transfers the individual's electronic
account to another insurance affordability program in accordance with
Sec. 435.1200(e);
(iii) For redeterminations of eligibility due to changes in
circumstances under Sec. 435.919(b), cover the period from the date
the agency receives information reported by the beneficiary, as
described at Sec. 435.919(b)(1)(i), or received from the third party,
as described at Sec. 435.919(b)(2)(i), to the date the agency notifies
the individual of its decision or, as applicable, to the date the
agency terminates eligibility and transfers the individual's electronic
account to another insurance affordability program in accordance with
Sec. 435.1200(e); and
(iv) For redeterminations of eligibility based on anticipated
changes in circumstances under Sec. 435.919(b)(3), cover the period
from the date the agency begins the redetermination of eligibility, to
the date the agency notifies the individual of its decision or, as
applicable, to the date the agency terminates eligibility and transfers
the individual's electronic account to another insurance affordability
program in accordance with Sec. 435.1200(e).
(2) Criteria for establishing standards. To promote accountability
and a consistent, high quality consumer experience among States and
between insurance affordability programs, the timeliness and
performance standards included in the State plan must address--
(i) The capabilities and cost of generally available systems and
technologies;
(ii) The general availability of electronic data matching, ease of
connections to electronic sources of authoritative information to
determine and verify eligibility, and the time needed by the agency to
evaluate information obtained from electronic data sources;
(iii) The demonstrated performance and timeliness experience of
State Medicaid, CHIP and other insurance affordability programs, as
reflected in data reported to the Secretary or otherwise available;
(iv) The needs of applicants and beneficiaries, including
preferences for mode of application and submission of information at
renewal or redetermination (such as through an internet website,
telephone, mail, in-person, or other commonly available electronic
means), the time needed to return a renewal form or any additional
information needed to complete a determination of eligibility at
application or renewal, as well as the relative complexity of
adjudicating the eligibility determination based on household, income
or other relevant information; and
(v) The advance notice that must be provided to beneficiaries in
accordance with Sec. Sec. 431.211, 431.213, and 431.214 of this
subchapter when the agency makes a determination resulting in
termination or other action as defined in Sec. 431.201 of this
subchapter.
(3) Standard for new applications and transferred accounts. Except
as provided in paragraph (e) of this section, the determination of
eligibility for any applicant or individual whose account was
transferred from another insurance affordability program may not
exceed--
(i) Ninety (90) days for applicants who apply for Medicaid on the
basis of disability; and
(ii) Forty-five (45) days for all other applicants.
(4) Standard for renewals. Except as provided in paragraph (e) of
this section, the redetermination of eligibility for a beneficiary at a
regularly-scheduled renewal may not exceed--
(i) The end of the beneficiary's eligibility period, in the case of
a beneficiary whose eligibility can be renewed based on information
available to the agency as described at Sec. 435.916(b)(1) or in the
case of a beneficiary whose renewal requires additional information and
who returns a renewal form 25 or more calendar days prior to the end of
the eligibility period described in Sec. 435.916(a);
(ii) The end of the month following the end of the beneficiary's
eligibility period, in the case of a beneficiary whose eligibility is
being redetermined on the basis for which the beneficiary has been
receiving Medicaid (the applicable modified adjusted gross income
standard described in Sec. 435.911(b)(1) and (2) or another basis) and
who returns a renewal form less than 25 calendar days prior to the end
of the beneficiary's eligibility period; and
(iii) The following time periods, in the case of a beneficiary who
is determined ineligible on the basis for which they are currently
receiving Medicaid and for whom the agency is considering eligibility
on another basis--
(A) Ninety (90) calendar days from the date the agency determines
the beneficiary is not eligible on the current basis, if eligibility is
being determined on the basis of disability;
(B) Twenty-five (25) calendar days from the date the agency
determines the beneficiary is not eligible on the current basis, for
all bases of determination other than the basis of disability.
(5) Standard for redeterminations based on changes in
circumstances. Except as provided in paragraph (e) of this section, the
redetermination of eligibility for a beneficiary based on a change in
circumstances reported by the beneficiary or received from a third
party may not exceed the end of the month that occurs--
(i) Thirty (30) calendar days following the agency's receipt of
information related to the change in circumstances, unless the agency
needs to request additional information from the beneficiary; and
(ii) Sixty (60) calendar days following the agency's receipt of
information related to the change in circumstances if the agency must
request additional information from the beneficiary.
(6) Standard for redeterminations based on anticipated changes.
Except as provided in paragraph (e) of this section, the
redetermination of eligibility for a beneficiary based on an
anticipated change in circumstances, may not exceed--
(i) The date of the anticipated change, or at State option the last
day of the month in which the anticipated change occurs, in the case of
a beneficiary who returns requested information or documentation 25 or
more calendar days prior to the date of the change (or the last day of
the month if elected by the State);
(ii) The end of the month following the month in which the
anticipated change occurs, in the case of a beneficiary whose
eligibility is being redetermined on the basis for which the
beneficiary has been receiving Medicaid (the applicable modified
adjusted gross income standard described in Sec. 435.911(b)(1) and (2)
or another basis, as described in Sec. 435.911(c)(2)) and who returns
requested information or documentation less than 25 calendar days prior
to the date of the change (or the last day of the month if elected by
the State); and
(iii) The following time periods, in the case of a beneficiary who
is determined ineligible on the basis for which they are currently
receiving Medicaid and for whom the agency is considering eligibility
on another basis--
[[Page 54845]]
(A) Ninety (90) calendar days from the date the agency determines
the beneficiary is not eligible on the current basis, if eligibility is
being determined on the basis of disability;
(B) Twenty-five (25) calendar days from the date the agency
determines the beneficiary is not eligible on the current basis, for
all other beneficiaries.
(d) Availability of information. The agency must inform individuals
of the timeliness standards adopted in accordance with this section.
(e) Exceptions. The agency must determine or redetermine
eligibility within the standards except in unusual circumstances, for
example--
(1) When the agency cannot reach a decision because the applicant
or beneficiary, or an examining physician, delays or fails to take a
required action, or
(2) When there is an administrative or other emergency beyond the
agency's control.
(f) Case documentation. The agency must document the reason(s) for
delay in the applicant's or beneficiary's case record.
(g) Prohibitions. The agency must not use the timeliness
standards--
(1) As a waiting period before determining eligibility;
(2) As a reason for denying or terminating eligibility (because it
has not determined or redetermined eligibility within the timeliness
standards); or
(3) As a reason for delaying termination of a beneficiary's
coverage or taking other adverse action.
Sec. 435.914 [Amended]
0
19. Section 435.914 is amended--
0
a. In paragraph (a), by removing the phrase ``case record facts to
support the agency's decision on his application'' and adding in its
place the phrase ``and beneficiary's case record the information and
documentation described in Sec. 431.17(b)(1) of this subchapter''; and
0
b. In paragraph (b) introductory text, by removing the phrase ``by a
finding of eligibility or ineligibility'' and adding in its place the
phrase ``and renewal by a finding of eligibility or ineligibility''.
0
20. Section 435.916 is revised to read as follows:
Sec. 435.916 Regularly-scheduled renewals of Medicaid eligibility.
(a) Frequency of renewals. Except as provided in Sec. 435.919:
(1) The eligibility of all Medicaid beneficiaries not described in
paragraph (a)(2) of this section must be renewed once every 12 months,
and no more frequently than once every 12 months.
(2) The eligibility of qualified Medicare beneficiaries described
in section 1905(p)(1) of the Act must be renewed at least once every 12
months, and no more frequently than once every 6 months.
(b) Renewals of eligibility. (1) Renewal on basis of information
available to agency. The agency must make a redetermination of
eligibility for all Medicaid beneficiaries without requiring
information from the individual if able to do so based on reliable
information contained in the individual's account or other more current
information available to the agency, including but not limited to
information through any data bases accessed by the agency under
Sec. Sec. 435.948, 435.949, and 435.956. If the agency is able to
renew eligibility based on such information, the agency must,
consistent with the requirements of this subpart and subpart E of part
431 of this subchapter, notify the individual--
(i) Of the eligibility determination, and basis; and
(ii) That the individual must inform the agency, through any of the
modes permitted for submission of applications under Sec. 435.907(a),
if any of the information contained in such notice is inaccurate, but
that the individual is not required to sign and return such notice if
all information provided on such notice is accurate.
(2) Renewals requiring information from the individual. If the
agency cannot renew eligibility for beneficiaries in accordance with
paragraph (b)(1) of this section, the agency --
(i) Must provide the individual with--
(A) A pre-populated renewal form containing information, as
specified by the Secretary, available to the agency that is needed to
renew eligibility.
(B) At least 30 calendar days from the date the agency sends the
renewal form to respond and provide any necessary information through
any of the modes of submission specified in Sec. 435.907(a), and to
sign the renewal form under penalty of perjury in a manner consistent
with Sec. 435.907(f);
(C) Notice of the agency's decision concerning the renewal of
eligibility in accordance with this subpart and subpart E of part 431
of this chapter;
(ii) Must verify any information provided by the beneficiary in
accordance with Sec. Sec. 435.945 through 435.956;
(iii) If the individual subsequently submits the renewal form or
other needed information within 90 calendar days after the date of
termination, or a longer period elected by the State, must treat the
renewal form as an application and reconsider the eligibility of an
individual whose coverage is terminated for failure to submit the
renewal form or necessary information in accordance with the
application time standards at Sec. 435.912(c)(3) without requiring a
new application;
(iv) Not require an individual to complete an in-person interview
as part of the renewal process.
(v) May request from beneficiaries only the information needed to
renew eligibility. Requests for non-applicant information must be
conducted in accordance with Sec. 435.907(e).
(3) Special rules related to beneficiaries whose Medicaid
eligibility is determined on a basis other than modified adjusted gross
income.
(i) The agency may consider blindness as continuing until the
reviewing physician under Sec. 435.531 determines that a beneficiary's
vision has improved beyond the definition of blindness contained in the
plan; and
(ii) The agency may consider disability as continuing until the
review team, under Sec. 435.541, determines that a beneficiary's
disability no longer meets the definition of disability contained in
the plan.
(c) Timeliness of renewals. The agency must complete the renewal of
eligibility in accordance with this section by the end of the
beneficiary's eligibility period described in paragraph (a) of this
section and in accordance with the time standards in Sec.
435.912(c)(4).
(d) Determination of ineligibility and transmission of data
pertaining to individuals no longer eligible for Medicaid. (1) Prior to
making a determination of ineligibility, the agency must consider all
bases of eligibility, consistent with Sec. 435.911.
(2) Prior to terminating coverage for individuals determined
ineligible for Medicaid, the agency must determine eligibility or
potential eligibility for other insurance affordability programs and
comply with the procedures set forth in Sec. 435.1200(e).
(e) Accessibility of renewal forms and notices. Any renewal form or
notice must be accessible to persons who are limited English proficient
and persons with disabilities, consistent with Sec. 435.905(b).
0
21. Section 435.919 is added to read as follows:
Sec. 435.919 Changes in circumstances.
(a) Procedures for reporting changes. The agency must:
(1) Have procedures designed to ensure that beneficiaries
understand the importance of making timely and accurate reports of
changes in
[[Page 54846]]
circumstances that may affect their eligibility; and
(2) Accept reports made under paragraph (a)(1) of this section and
any other beneficiary reported information through any of the modes
permitted for submission of applications under Sec. 435.907(a);
(b) Agency action on information about changes. Consistent with the
requirements of Sec. 435.952, the agency must promptly redetermine
eligibility between regularly-scheduled renewals of eligibility
required under Sec. 435.916(a) whenever it receives information about
a change in a beneficiary's circumstances.
(1) Changes reported by the beneficiary. When a beneficiary reports
information about a change in circumstances, the agency must:
(i) Evaluate whether the reported change may impact the
beneficiary's eligibility for Medicaid or the amount of medical
assistance for which the beneficiary is eligible, premiums or cost
sharing charges. If additional information is needed to determine
whether the beneficiary is no longer eligible due to the reported
change, the agency must redetermine eligibility based on available
information, if able to do so, and if the additional information is not
available to the agency, request such information from the beneficiary;
(ii) If the agency determines that the reported change results in
an adverse action, as defined in Sec. 431.201 of this subchapter, take
appropriate action in accordance with paragraph (b)(4) of this section.
(iii) If the agency finds that the reported change may result in
eligibility for additional medical assistance or lower premium or cost
sharing charges, the agency must verify the reported change in
accordance with Sec. Sec. 435.940 through 435.960 and the agency's
verification plan developed under Sec. 435.945(j) prior to furnishing
additional assistance or lowering applicable premiums or cost sharing
charges. The agency may not terminate the beneficiary's coverage if the
beneficiary does not respond to agency requests for additional
information under this paragraph;
(iv) If the agency's evaluation pursuant to paragraph (b)(1)(i) of
this section indicates that the reported change has no impact on
eligibility, the agency must provide the beneficiary with notice
acknowledging receipt of the information from the beneficiary and
explaining that the beneficiary's eligibility is not impacted.
(2) Information received from a third party. If the agency receives
information regarding a beneficiary's change in circumstances from a
third party, the agency must:
(i) Evaluate the reliability of the information received and
determine whether, if accurate, the information received would impact
the beneficiary's eligibility, the amount of medical assistance for
which the beneficiary is eligible, premiums or cost sharing charges;
(ii) If the agency finds that the third-party information is
reliable and may adversely impact the beneficiary, the agency must
request information from the beneficiary to verify or dispute the
information received, consistent with Sec. 435.952. If the agency
determines that the reported change results in an adverse action, take
appropriate action in accordance with paragraph (b)(4) of this section.
(iii) If the agency determines that the third-party information is
reliable and results in eligibility for additional medical assistance
or lower premium or cost sharing charges, the agency must notify the
beneficiary of such determination. Prior to providing such notice or
additional medical assistance or lowering premium or cost sharing
charges, the agency may verify third-party information with the
beneficiary; the agency may not terminate the beneficiary's coverage if
the beneficiary does not respond to the agency's request for additional
assistance under this paragraph (b). The agency may accept the third-
party information if the beneficiary does not respond to agency
requests for additional information under this paragraph (b);
(iv) Except as provided in paragraphs (f) and (g) of this section,
if the agency determines that the third-party information is not
reliable or does not impact the beneficiary's eligibility, no action is
required.
(3) Anticipated changes. If the agency has information about
anticipated changes in a beneficiary's circumstances that may affect
his or her eligibility, it must initiate a redetermination of
eligibility at an appropriate time based on such changes consistent
with the timeliness standards at Sec. 435.912(c)(6).
(4) Determination of ineligibility and transmission of data
pertaining to individuals no longer eligible for Medicaid. (i) The
agency must comply with the requirements at Sec. 435.916(d)(1)
(relating to consideration of eligibility on other bases) and Sec.
435.916(d)(2) (relating to determining potential eligibility for other
insurance affordability programs) prior to terminating a beneficiary in
accordance with this section.
(ii) The agency must provide advance notice of adverse action and
fair hearing rights, in accordance with the requirements of part 431,
subpart E of this chapter, prior to taking any adverse action resulting
from a change in a beneficiary's circumstances.
(c) Response times and time standards--(1) Beneficiary response
times. The agency must--
(i) Provide beneficiaries with at least 30 days from the date the
agency sends the notice requesting the beneficiary to provide the
agency with any additional information needed for the agency to
redetermine eligibility.
(ii) Allow beneficiaries to provide any requested information
through any of the modes of submission specified in Sec. 435.907(a).
(2) Time standards for redetermining eligibility. The agency must
redetermine eligibility within the time standards described in Sec.
435.912(c)(5) and (6), except in unusual circumstances, such as those
described in Sec. 435.912(e); States must document the reason for
delay in the individual's case record.
(d) Ninety (90)-day reconsideration period. If an individual
terminated for not returning requested information in accordance with
this section subsequently submits the information within 90 days after
the date of termination, or a longer period elected by the State, the
agency must--
(1) Reconsider the individual's eligibility without requiring a new
application in accordance with the application timeliness standards
established under Sec. 435.912(c)(3).
(2) Request additional information needed to determine eligibility
consistent with Sec. 435.907(e) and obtain a signature under penalty
of perjury consistent with Sec. 435.907(f) if such information or
signature is not available to the agency or included in the information
described in this paragraph (d).
(e) Scope of redeterminations following a change in circumstance.
For redeterminations of eligibility for Medicaid beneficiaries
completed in accordance with this section--
(1) The agency must limit any requests for additional information
under this section to information relating to a change in circumstance
that may impact the beneficiary's eligibility.
(2) If the agency has enough information available to it to renew
eligibility with respect to all eligibility criteria, the agency may
begin a new eligibility period, as defined in Sec. 435.916(a).
(f) Agency action on returned mail: Whenever beneficiary mail is
returned
[[Page 54847]]
to the agency by the United States Postal Service (USPS), the agency--
(1) Must check the following sources for updated mailing address
and other contact information--
(i) The agency's Medicaid Enterprise System;
(ii) The agency's contracted managed care plans, if applicable; and
(iii) One or more of the following: the State agency that
administers Supplemental Nutrition Assistance Program; the State agency
that administers Temporary Assistance for Needy Families; the State
Department of Motor Vehicles; the USPS National Change of Address
(NCOA) database; or other sources specified in the State's verification
plan described in Sec. 435.945(j).
(2) Must send the beneficiary a notice by mail to the address
currently on file in the beneficiary's case record, the forwarding
address (if provided on the returned mail), and any address identified
by the agency per paragraph (f)(1) of this section.
(i) Consistent with paragraph (c)(1) of this section, the agency
must provide beneficiaries with at least 30 days from the date the
agency sends the notice to verify the accuracy of the new contact
information.
(ii) [Reserved]
(3) Must send the beneficiary at least two notices, by one or more
modalities other than mail, such as by phone, electronic notice, email
or text messaging.
(i) For a beneficiary who elected to receive electronic notices and
communications in accordance with Sec. 435.918, at least one
communication attempt must use the beneficiary contact information on
file via the preferred electronic format and such notice must provide
at least 30 days from the date the agency sends the notice to verify
the accuracy of the new contact information. If there is a failed
electronic communication attempt then the agency cannot use that same
electronic modality as the alternative modality to satisfy this
proposed requirement and may use telephonic or electronic contact
information obtained in (f)(1) of this section, as feasible.
(ii) The notices required under this paragraph must be sent to the
contact information in the beneficiary's case record, if available, and
may be sent to other contact information obtained by the agency per
paragraph (f)(1) of this section.
(iii) The agency may elect to utilize any combination or order of
other modalities.
(iv) The first and last such notice must be separated by no less
than 3 business days.
(v) If the agency does not have contact information for any
alternative modality, the agency must make a note of that fact in the
beneficiary's case record.
(4) In the case of beneficiary mail returned with an in-state
forwarding address, whose current address the agency is unable to
confirm pursuant to paragraphs (f)(1) through (3) of this section--
(i) May not terminate a beneficiary's coverage for failure to
respond to a request to confirm their address or State residency.
(ii) Must accept and update the beneficiary's case record with--
(A) The in-state forwarding address provided on the returned
beneficiary mail;
(B) An in-state address obtained from the managed care organization
pursuant to paragraph (f)(1)(i) or (ii) of this section, provided that
such address was received by the plan directly from, or was verified
with, the beneficiary; or
(C) The in-state address obtained from the USPS NCOA database
pursuant to paragraph (f)(1)(iii) of this section.
(5) In the case of a beneficiary mail returned with an out-of-state
address, whose current address the agency is unable to confirm pursuant
to paragraphs (f)(1) through (3) of this section, the agency must
provide advance notice of termination and fair hearing rights
consistent with 42 CFR part 431, subpart E.
(6) If a beneficiary's whereabouts are unknown, as indicated by the
return of beneficiary mail with no forwarding address and the
beneficiary's failure to respond to the notices described in paragraphs
(f)(2) and (3) of this section, and the agency has not updated the
beneficiary's address based on a reliable third-party source pursuant
to paragraph (f)(1) of this section, the agency must take appropriate
steps to terminate or suspend the beneficiary's coverage or move the
beneficiary to a fee-for-service delivery system.
(i) If the agency elects to terminate or suspend coverage in
accordance with this paragraph, the agency must send notice to the
beneficiary's last known address or via electronic notification, in
accordance with the beneficiary's election under Sec. 435.918 of this
subpart, no later than the date of termination or suspension and
provide notice of fair hearing rights in accordance with 42 CFR part
431 subpart E.
(ii) If whereabouts of a beneficiary whose coverage was terminated
or suspended in accordance with this paragraph become known within the
beneficiary's eligibility period, as defined in Sec. 435.916(b), the
agency--
(A) Must reinstate coverage back to the date of termination without
requiring the individual to provide additional information to verify
their eligibility, unless the agency has other information available to
it that indicates the beneficiary may not meet all eligibility
requirements.
(B) May begin a new eligibility period, consistent paragraph (e)(2)
of this section, if the agency has sufficient information available to
it to renew eligibility with respect to all eligibility criteria
without requiring additional information from the beneficiary.
(g) Agency action on updated address information from other
sources. (1) Whenever the agency obtains updated in-state mailing
address information from the United States Postal Service National
Change of Address (NCOA) or agency's contracted managed care plans, the
agency--
(i) In the case of updated mailing address information from a
contracted managed care plan, must ensure that an address was received
by the plan directly from, or was verified with, the beneficiary;
(ii) Must send the beneficiary a notice by mail to both the address
currently on file in the beneficiary's case record and the new in-state
address and provide the individual with a reasonable period of time to
verify the accuracy of the new contact information;
(iii) Must send the beneficiary at least two notices, by one or
more modalities other than mail, such as by phone, electronic notice,
email or text messaging consistent with paragraph (f)(3) of this
section;
(iv) May not terminate a beneficiary's coverage for failure to
respond to a request to confirm an in-state change of address;
(v) May accept the in-state address as the beneficiary's new
address and update the beneficiary's case record accordingly, if the
beneficiary does not respond to a request to confirm their address or
State residency, provided the beneficiary is given at least 30 days
from the date the agency sent the notice; and
(vi) Must accept the in-state address as the beneficiary's new
address and update the beneficiary's case record accordingly, if the
beneficiary confirms their address or State residency.
(2) Upon approval from the Secretary, the agency may treat updated
in-state address information from other trusted data sources in
accordance with paragraph (g)(1) of this section.
(3) Whenever the agency obtains updated mailing address information
[[Page 54848]]
from any source not listed in paragraph (g)(1) or (2) of this section,
including out-of-state mailing address information, the agency must
follow the steps outlined in paragraphs (f)(2) through (6) of this
section.
0
22. Section 435.940 is revised as follows:
Sec. 435.940 Basis and scope.
The income and eligibility verification requirements set forth in
this section and Sec. Sec. 435.945 through 435.960 are based on
sections 1137, 1902(a)(4), 1902(a)(19), 1902(a)(46)(B), 1902(ee),
1903(r)(3), 1903(x), 1940, and 1943(b)(3) of the Act, and section 1413
of the Affordable Care Act. Nothing in the regulations in this subpart
should be construed as limiting the State's program integrity measures
or affecting the State's obligation to ensure that only eligible
individuals receive benefits, consistent with parts 431 and 455 of this
subchapter, or its obligation to provide for methods of administration
that are in the best interest of applicants and beneficiaries and are
necessary for the proper and efficient operation of the plan,
consistent with Sec. 431.15 of this subchapter and section 1902(a)(19)
of the Act.
0
23. Section 435.952 is amended by revising paragraphs (b) and (c) and
adding paragraph (e) to read as follows:
Sec. 435.952 Use of information and requests for additional
information from individuals.
* * * * *
(b) If information provided by or on behalf of an individual (on
the application or renewal form or otherwise) is reasonably compatible
with information obtained by the agency, including information obtained
in accordance with Sec. 435.948, Sec. 435.949, or Sec. 435.956, the
agency must determine or renew eligibility based on such information.
(c) An individual must not be required to provide additional
information or documentation unless information needed by the agency in
accordance with Sec. 435.948, Sec. 435.949, or Sec. 435.956 cannot
be obtained electronically or information obtained electronically is
not reasonably compatible, as provided in the verification plan
described in Sec. 435.945(j), with information provided by or on
behalf of the individual.
(1) Income and resource information obtained through an electronic
data match shall be considered reasonably compatible with income and
resource information provided by or on behalf of an individual if both
are either above or at or below the applicable standard or other
relevant threshold.
(2) [Reserved]
* * * * *
(e) When determining eligibility for individuals applying for the
Medicare Savings Programs specified in sections 1902(a)(10)(E)(i),
(iii), and (iv) and 1905(p) of the Act, the agency must accept
attestation (either self-attestation by the individual or attestation
by an adult who is in the applicant's household, as defined in Sec.
435.603(f), or family, as defined in section 36B(d)(1) of the Internal
Revenue Code, an authorized representative, or, if the individual is a
minor or incapacitated, someone acting responsibly for the individual)
of the following income and asset information without requiring further
information (including documentation) from the individual:
(1) Income and interest income. (i) Except as provided in paragraph
(e)(1)(ii) of this section, the agency must accept an applicant's
attestation of the value of any dividend and interest income earned on
resources owned by the applicant or the applicant's spouse.
(ii) If the agency has information that is not reasonably
compatible with an applicant's attestation, the agency must seek
additional information from the individual in accordance with paragraph
(c) of this section.
(iii) The agency may verify interest and dividend income after the
agency has determined that an applicant is eligible for the Medicare
Savings Programs, in accordance with paragraph (c) of this section. If
the agency requests documentation in accordance with this paragraph,
the agency must provide the individual with at least 90 days from the
date of the request to provide any necessary information requested and
must allow the individual to submit such documentation through any of
the modalities described in Sec. 435.907(a).
(2) Non-liquid resources. (i) Except as provided in paragraph
(e)(2)(ii) of this section, the agency must accept an applicant's
attestation of the value of any non-liquid resources owned.
(ii) If the agency has information that is not reasonably
compatible with an applicant's attestation, the agency must seek
additional information from the individual in accordance with paragraph
(c) of this section.
(iii) The agency may verify the value of non-liquid resources after
the agency has determined that an applicant is eligible for the
Medicare Savings Programs, in accordance with paragraph (c) of this
section. If the agency requests documentation in accordance with this
paragraph, the agency must provide the individual with at least 90 days
from the date of the request to provide any necessary information
requested and must allow the individual to submit such documentation
through any of the modalities described in Sec. 435.907(a).
(3) Burial funds. (i) Except as provided in paragraph (e)(3)(ii) of
this section, the agency must accept an applicant's attestation that up
to $1,500 of their resources, and up to $1,500 of their spouse's
resources, are set aside in a separate account and are not countable as
resources when determining eligibility for the Medicare Savings
Programs.
(ii) If the agency has information that is not reasonably
compatible with an applicant's attestation, the agency must seek
additional information from the individual in accordance with paragraph
(c) of this section.
(iii) The agency may verify resources in burial funds after the
agency has determined that an applicant is eligible for the Medicare
Savings Programs, in accordance with paragraph (c) of this section. If
the agency requests documentation in accordance with this paragraph,
the agency must provide the individual with at least 90 days from the
date of the request to provide any necessary information requested and
must allow the individual to submit such documentation through any of
the modalities described in Sec. 435.907(a).
(4) Life insurance policies. (i) Except as provided in paragraph
(e)(4)(ii) of this section, the agency must accept an applicant's
attestation of the face value of life insurance.
(A) If an individual attests to a face value of life insurance
policy that is above $1,500, the State may accept an attestation of the
cash surrender value of the life insurance policy for the purpose of
determining resource eligibility for the Medicare Savings Programs.
(ii) If the agency has information about either the face value or
the cash surrender value that is not reasonably compatible with an
applicant's attestation, the agency must seek additional information
from the individual in accordance with paragraph (c) of this section,
which may include a reasonable explanation of the discrepancy or
documentation.
(iii) The agency may verify the face value of a life insurance
policy after the agency has determined that an applicant is eligible
for a Medicare Savings Program, in accordance with paragraph (c) of
this section.
(iv)(A) When an individual must provide documentation of the cash
surrender value of a life insurance policy, the agency must assist the
individual with obtaining this information and documentation by
requesting that the individual provide
[[Page 54849]]
the name of the insurance company and policy number and authorize the
agency to obtain such documentation from the issuer of the policy on
the individual's behalf. The agency may also request, but may not
require, additional information from the applicant to assist the agency
is obtaining the needed documentation, such as the name of an agent.
(B) If the individual does not provide the information and
authorization in paragraph (e)(4)(iv)(A), the agency may require that
the individual provide documentation of the cash surrender value.
(C) The agency must allow the individual to submit documentation
through any of the modalities described in Sec. 435.907(a) and provide
the individual with at least 15 days to provide information or
documentation described in this paragraph if such information or
documentation is requested pursuant to paragraph (e)(4)(i) or (ii) of
this section and at least 90 days if required pursuant to paragraph
(e)(4)(iii) of this section.
0
24. Section 435.956 is amended by revising paragraph (b)(4) to read as
follows:
Sec. 435.956 Verification of other non-financial information.
* * * * *
(b) * * *
(4) The agency may not limit the number of reasonable opportunity
periods an individual may receive.
* * * * *
0
25. Section 435.1200 is amended--
0
a. By revising the heading for paragraph (b) introductory text;
0
b. By revising paragraph (b)(1);
0
c. In paragraph (b)(3)(i), by removing the phrase ``one or more
insurance affordability program'' and adding in its place the phrase
``one or more insurance affordability programs'';
0
d. By revising paragraph (b)(3)(ii);
0
e. By adding paragraphs (b)(3)(vi) and (b)(4);
0
f. By revising paragraphs (c) and (e)(1);
0
g. By adding paragraph (e)(4);
0
h. By revising paragraphs (h)(1) and (h)(3)(i) introductory text; and
0
i. By redesignating the ``(i)'' paragraph following (h)(3)(i)(B) as
paragraph (h)(3)(ii).
The revisions and additions read as follows:
Sec. 435.1200 Medicaid agency responsibilities for a coordinated
eligibility and enrollment process with other insurance affordability
programs.
* * * * *
(b) General requirements. * * *
(1) Fulfill the responsibilities set forth in paragraphs (c)
through (h) of this section.
* * * * *
(3) * * *
(ii) Ensure compliance with paragraphs (c) through (h) of this
section;
* * * * *
(vi) Seamlessly transition the eligibility of beneficiaries between
Medicaid and the Children's Health Insurance Program (CHIP) when an
agency administering one of these programs determines that a
beneficiary is eligible for the other program.
(4) Accept a determination of eligibility for Medicaid made using
MAGI-based methodologies by the State agency administering a separate
CHIP in the State. In order to comply with this requirement, the agency
may:
(i) Apply the same MAGI-based methodologies in accordance withSec.
435.603, and verification policies and procedures in accordance with
Sec. Sec. 435.940 through 435.956 as those used by the separate CHIP
in accordance with Sec. Sec. 457.315 and 457.380 of subchapter D, such
that the agency will accept any finding relating to a criterion of
eligibility made by a separate CHIP without further verification, in
accordance with this paragraph (d)(4);
(ii) Utilize a shared eligibility service through which
determinations of Medicaid eligibility are governed exclusively by the
Medicaid agency and any functions performed by the separate CHIP are
solely administrative in nature;
(iii) Enter into an agreement in accordance with Sec. 431.10(d) of
this chapter under which the Medicaid agency delegates authority to the
separate CHIP in accordance with Sec. 431.10(c) of this chapter to
make final determinations of Medicaid eligibility; or
(iv) Adopt other procedures approved by the Secretary.
(c) Provision of Medicaid for individuals found eligible for
Medicaid by another insurance affordability program. (1) For each
individual determined Medicaid eligible in accordance with paragraph
(c)(2) of this section, the agency must--
(i) Establish procedures to receive, via secure electronic
interface, the electronic account containing the determination of
Medicaid eligibility;
(ii) Comply with the provisions of Sec. 435.911 to the same extent
as if an application had been submitted to the Medicaid agency; and
(iii) Comply with the provisions of Sec. 431.10 of this chapter to
ensure it maintains oversight for the Medicaid program.
(2) For purposes of paragraph (c)(1) of this section, individuals
determined eligible for Medicaid in this paragraph include:
(i) Individuals determined eligible for Medicaid by another
insurance affordability program, including the Exchange, pursuant to an
agreement between the agency and the other insurance affordability
program in accordance with Sec. 431.10(d) of this chapter (including
as a result of a decision made by the program or the program's appeals
entity in accordance with paragraph (g)(6) or (g)(7)(i)(A) of this
section); and
(ii) Individuals determined eligible for Medicaid by a separate
CHIP (including as the result of a decision made by a CHIP review
entity) in accordance with paragraph (b)(4) of this section.
* * * * *
(e) * * *
(1) Individuals determined not eligible for Medicaid. For each
individual who submits an application to the agency which includes
sufficient information to determine Medicaid eligibility or whose
eligibility is being renewed in accordance with Sec. 435.916
(regarding regularly-scheduled renewals of eligibility) or Sec.
435.919 (regarding changes in circumstances) and whom the agency
determines is ineligible for Medicaid, and for each individual
determined ineligible for Medicaid in accordance with a fair hearing
under subpart E of part 431 of this chapter, the agency must promptly
and without undue delay, consistent with timeliness standards
established under Sec. 435.912:
(i) Determine eligibility for a separate CHIP if operated in the
State, and if eligible, transfer the individual's electronic account,
via secure electronic interface, to the separate CHIP agency and ensure
that the individual receives a combined eligibility notice as defined
at Sec. 435.4; and
(ii) If not eligible for CHIP, determine potential eligibility for
BHP (if offered by the State) and coverage available through the
Exchange, and if potentially eligible, transfer the individual's
electronic account, via secure electronic interface, to the program for
which the individual is potentially eligible.
* * * * *
(4) Ineligible individuals. For purposes of paragraph (e)(1) of
this section, an individual is considered ineligible for Medicaid if
they are not eligible for any eligibility group covered by the agency
that provides minimum essential coverage as defined at Sec. 435.4. An
individual who is eligible only for
[[Page 54850]]
a limited benefit group, such as the eligibility group for individuals
with tuberculosis described at Sec. 435.215, would be considered
ineligible for Medicaid for purposes of paragraph (e)(1).
* * * * *
(h) * * *
(1) Include in the agreement into which the agency has entered
under paragraph (b)(3) of this section that a combined eligibility
notice, as defined in Sec. 435.4, will be provided:
(i) To an individual, by either the agency or a separate CHIP, when
a determination of Medicaid eligibility is completed for such
individual by the State agency administering a separate CHIP in
accordance with paragraph (b)(4) of this section, or a determination of
CHIP eligibility is completed by the Medicaid agency in accordance with
paragraph (e)(1)(i) of this section; and
(ii) To the maximum extent feasible to an individual who is not
described in paragraph (i) of this section but who is transferred
between the agency and another insurance affordability program by the
agency, Exchange, or other insurance affordability program, as well as
to multiple members of the same household included on the same
application or renewal form.
* * * * *
(3) * * *
(i) Provide the individual with notice, consistent with Sec.
435.917, of the final determination of eligibility on all bases,
including coordinated content regarding, as applicable.
* * * * *
PART 457--ALLOTMENTS AND GRANTS TO STATES
0
26. The authority citation for part 457 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
27. Section 457.65 is amended by revising paragraph (d) to read as
follows:
Sec. 457.65 Effective date and duration of State plans and plan
amendments.
* * * * *
(d) Amendments relating to enrollment procedures. A State plan
amendment that institutes or extends the use of waiting lists,
enrollments caps or closed enrollment periods is considered an
amendment that restricts eligibility and must meet the requirements in
paragraph (b) of this section.
* * * * *
0
28. Section 457.340 is amended by--
0
a. Revising the paragraph (d) heading;
0
b. Revising paragraph (d)(1);
0
c. Removing paragraph (d)(3); and
0
d. Revising paragraph (f)(1),
The revisions read as follows:
Sec. 457.340 Application for and enrollment in CHIP.
* * * * *
(d) Timely determination and redetermination of eligibility. (1)
The terms in Sec. 435.912 of this chapter apply equally to CHIP,
except that--
(i) The terms of Sec. 435.912(c)(4)(iii) and (c)(6)(iii) of this
chapter (relating to timelines for completing renewals and
redeterminations when States must consider other bases of eligibility)
do not apply; and
(ii) The standards for transferring electronic accounts to other
insurance affordability programs are pursuant to Sec. 457.350 and the
standards for receiving applications from other insurance affordability
programs are pursuant to Sec. 457.348.
* * * * *
(f) * * *
(1) Include in the agreement into which the State has entered under
Sec. 457.348(a) that, a combined eligibility notice, as defined in
Sec. 457.10, will be provided:
(i) To an individual, by the State agency administering a separate
CHIP or the Medicaid agency, when a determination of CHIP eligibility
is completed for such individual by the State agency administering
Medicaid in accordance with Sec. 457.348(e), or a determination of
Medicaid eligibility is completed by the State in accordance with Sec.
457.350(b)(1);
(ii) To the maximum extent feasible, to an individual who is not
described in paragraph (f)(1)(i) of this section but who is transferred
between the State and another insurance affordability program in
accordance with Sec. 457.348 or Sec. 457.350; and
(iii) To the maximum extent feasible, to multiple members of the
same household included on the same application or renewal form.
* * * * *
0
29. Section 457.344 is added to read as follows:
Sec. 457.344 Changes in circumstances.
(a) Procedures for reporting changes. The State must:
(1) Have procedures designed to ensure that enrollees understand
the importance of making timely and accurate reports of changes in
circumstances that may affect their eligibility; and
(2) Accept reports made under paragraph (a)(1) of this section and
any other enrollee reported information through any of the modes
permitted for submission of applications under Sec. 435.907(a), as
referenced at Sec. 457.330.
(b) State action on information about changes. Consistent with the
requirements of Sec. 457.380(f), the State must promptly redetermine
eligibility between regularly-scheduled renewals of eligibility
required under Sec. 457.343, whenever it receives information about a
change in an enrollee's circumstances.
(1) Changes reported by the enrollee. When an enrollee reports
information about a change in circumstances, the State must:
(i) Evaluate whether the reported change may impact the enrollee's
eligibility for CHIP or the amount of child health assistance or
pregnancy-related assistance for which the enrollee is eligible,
premiums or cost sharing charges. If additional information is needed
to determine whether the enrollee is no longer eligible due to the
reported change, the State must redetermine eligibility based on
available information, if able to do so, and if the additional
information is not available to the State, request such information
from the enrollee;
(ii) If the State determines that the reported change results in an
adverse action, take appropriate action in accordance with paragraph
(b)(4) of this section.
(iii) If the State finds that the reported change may result in
eligibility for additional child health or pregnancy-related assistance
or lower premium or cost sharing charges, the State must verify the
information in accordance with Sec. 457.380 and the State's
verification plan prior to furnishing additional assistance or lowering
applicable premiums or cost sharing charges. The State may not
terminate the enrollee's coverage if the enrollee does not respond to
agency requests for additional information under this paragraph (b).
(iv) If the State's evaluation pursuant to paragraph (b)(1)(i) of
this section indicates that the reported change has no impact on
eligibility, the State must provide the enrollee with notice
acknowledging receipt of the information from the enrollee and
explaining that the enrollee's eligibility is not impacted.
(2) Information received from a third party. If the State receives
information regarding an enrollee's change in circumstances from a
third party, the State must:
(i) Evaluate the reliability of the information received and
whether, if accurate, the information received would impact the
enrollee's eligibility for CHIP, the amount of child health assistance
or pregnancy-related
[[Page 54851]]
assistance for which the enrollee is eligible, premiums or cost sharing
charges.
(ii) If the State finds that the third-party information is
reliable and may adversely impact the enrollee, the State must request
information from the enrollee to verify or dispute the information
received, consistent with Sec. 457.380(f). If the State determines
that the reported change results in an adverse action, take appropriate
action in accordance with paragraph (b)(4) of this section.
(iii) If the State determines that the third-party information is
reliable and results in eligibility for additional child health
assistance or pregnancy-related assistance or lower premium or cost
sharing charges, the State must notify the enrollee of such
determination. Prior to providing such notice or additional child
health assistance or pregnancy-related assistance or lowering premium
or cost sharing charges, the State may verify third-party information
with the enrollee; the State may not terminate the enrollee's coverage
if the enrollee does not respond to the State's request for additional
or pregnancy-related assistance under this paragraph.
(iv) Except as provided paragraphs (f) and (g) of this section, if
the State determines that the third-party information is not reliable
or does not impact the enrollee's eligibility, no action is required.
(3) Anticipated changes. If the State has information about
anticipated changes in an enrollee's circumstances that may affect his
or her eligibility, it must initiate a determination of eligibility at
the appropriate time based on such changes consistent with the
requirements at Sec. 435.912(c)(6) of this chapter as referenced in
Sec. 457.340(d)(1).
(4) Determination of ineligibility and transmission of data
pertaining to individuals no longer eligible for CHIP. (i) The State
must comply with the requirements at Sec. 435.916(d)(2) of this
chapter as referenced in Sec. 457.343 (relating to determining
potential eligibility for other insurance affordability programs),
prior to terminating an enrollee's eligibility in accordance with this
section.
(ii) The State must provide notice of adverse action and State
review rights, in accordance with the requirements of Sec. 457.340(e),
Sec. 457.1260 (if enrolled in managed care), and subpart K of this
part, prior to taking any adverse action resulting from a change in an
enrollee's circumstances.
(c) Enrollee response times--(1) State requirements. The State
must--
(i) Provide enrollees with at least 30 days from the date the State
sends the notice requesting the enrollee to provide the State with any
additional information needed for the State to redetermine eligibility.
(ii) Allow enrollees to provide any requested information through
any of the modes of submission specified in Sec. 435.907(a) of this
chapter as referenced in Sec. 457.330 of this subpart.
(2) Time standards for redetermining eligibility. The State must
redetermine eligibility within the time standards described in Sec.
435.912(c)(5) and (6) of this chapter, except in unusual circumstances,
such as those as described in Sec. 435.912(e) of this chapter, as
referenced in Sec. 457.340(d); States must document the reason for
delay in the individual's case record.
(d) Ninety (90)-day reconsideration period. If an individual
terminated for not returning requested information in accordance with
this section subsequently submits the information within 90 days after
the date of termination, or a longer period elected by the State, the
State must--
(1) Reconsider the individual's eligibility without requiring a new
application in accordance with the timeliness standards described at
Sec. 435.912(c)(3) of this chapter as referenced in Sec. 457.340(d).
(2) Request additional information needed to determine eligibility
and obtain a signature under penalty of perjury consistent with Sec.
435.907(e) and (f) of this chapter respectively as referenced in Sec.
457.330 if such information or signature is not available to the State
or included in the information described in this paragraph (d).
(e) Scope of redeterminations following a change in circumstances.
For redeterminations of eligibility for CHIP enrollees completed in
accordance with this section--
(1) The State must limit any requests for additional information
under this section to information relating to change in circumstances
which may impact the enrollee's eligibility.
(2) If the State has enough information available to it to renew
eligibility with respect to all eligibility criteria, the State may
begin a new eligibility period under Sec. 457.343.
(f) State action on returned mail. Whenever beneficiary mail is
returned to the State by the United States Postal Service (USPS), the
State--
(1) Must check the following sources for updated mailing address
and other contact information--
(i) The State's Medicaid Enterprise System;
(ii) The State's contracted managed care plans, if applicable; and
(iii) One or more of the following: the State agency that
administers Supplemental Nutrition Assistance Program; the State agency
that administers Temporary Assistance for Needy Families; the State
Department of Motor Vehicles; the USPS National Change of Address
(NCOA) database; or other sources specified in the State's verification
plan described in Sec. 457.380(j).
(2) Must send the enrollee a notice by mail to the address
currently on file in the enrollee's case record, the forwarding address
(if provided on the returned mail), and any address identified by the
State per paragraph (f)(1) of this section;
(i) Consistent with paragraph (c)(1) of this section, the State
must provide beneficiaries with at least 30 days from the date the
State sends the notice to verify the accuracy of the new contact
information.
(ii) [Reserved]
(3) Must send the enrollee at least two notices, by one or more
modalities other than mail, such as by phone, electronic notice, email
or text messaging.
(i) For an enrollee who elected to receive electronic notices and
communications in Sec. 457.110, at least one communication attempt
must use the enrollee contact information on file via the preferred
electronic format and such notice must provide at least 30 days from
the date the agency sends the notice to verify the accuracy of the new
contact information. If there is a failed electronic communication
attempt then the State cannot use that same electronic modality as the
alternative modality to satisfy this proposed requirement and may use
telephonic or electronic contact information obtained in paragraph
(f)(1) of this section, as feasible.
(ii) The notices required under this paragraph must be sent to the
contact information in the enrollee's case record, if available, and
may be sent to other contact information obtained by the State per
paragraph (f)(1) of this section.
(iii) The State may elect to utilize any combination or order of
other modalities.
(iv) The first and last such notice must be separated by no less
than 3 business days.
(v) If the State does not have contact information for any
alternative modality, the State must make a note of that fact in the
enrollee's case record.
(4) In the case of enrollee mail returned with an in-state
forwarding address, whose current address the State is unable to
confirm pursuant to
[[Page 54852]]
paragraphs (f)(1) through (3) of this section, a State--
(i) May not terminate an enrollee's coverage for failure to respond
to a request to confirm their address or State residency.
(ii) Must accept and update the enrollee's case record with--
(A) The in-state forwarding address provided on the returned
enrollee mail;
(B) An in-state address obtained from the managed care organization
pursuant to paragraph (f)(1)(i) or (ii) of this section, provided that
such address was received by the plan directly from, or was verified
with, the enrollee; or
(C) The in-state address obtained from the USPS NCOA database
pursuant to paragraph (f)(1)(iii) of this section.
(5) In the case of an enrollee whose mail is returned with an out-
of-state address (or an address outside of the geographic area for
separate CHIPs that are not Statewide) and whose current address the
State is unable to confirm pursuant to paragraphs (f)(1) through (3) of
this section, the State must provide sufficient notice of termination
including information describing an individual's right to a CHIP review
process, consistent with Sec. 457.340(e)(1).
(6) If an enrollee's whereabouts are unknown, as indicated by the
return of enrollee mail with no forwarding address and the enrollee's
failure to respond to the notices described in paragraphs (f)(2) and
(3) of this section, and the State has not updated the enrollee's
address based on a reliable third-party source pursuant to paragraph
(f)(1) of this section, the State must take appropriate steps to
terminate coverage, suspend coverage, or move the individual to the
fee-for-service delivery system, if available.
(i) If the State elects to terminate or suspend coverage in
accordance with this paragraph, the State must send notice to the
enrollee's last known address or via electronic notification, in
accordance with the enrollee's election under Sec. 457.110, no later
than the date of termination or suspension and provide notice of an
individual's rights to a CHIP review in accordance with Sec.
457.340(e).
(ii) If whereabouts of a beneficiary whose coverage was terminated
or suspended in accordance with this paragraph become known within the
beneficiary's eligibility period, as defined in Sec. 435.916(b) of
this chapter as referenced in Sec. 457.343, the State--
(A) Must reinstate coverage back to the date of termination without
requiring the individual to provide additional information to verify
their eligibility, unless the agency has other information available to
it that indicates the enrollee may not meet all eligibility
requirements.
(B) May begin a new eligibility period, consistent paragraph (e)(2)
of this section, if the State has sufficient information available to
it to renew eligibility with respect to all eligibility criteria
without requiring additional information from the enrollee.
(g) State action on updated address information from other sources.
(1) Whenever the State obtains updated in-state mailing address
information from the United States Postal Service National Change of
Address (NCOA) or the State's contracted managed care plans, if
applicable, the State--
(i) In the case of updated mailing address information from a
contracted managed care plan, must ensure that an address was received
by the plan directly from, or was verified with, the enrollee;
(ii) Must send the enrollee a notice by mail to both the address
currently on file in the enrollee's case record and the new in-state
address and provide the individual with a reasonable period of time to
verify the accuracy of the new contact information;
(iii) Must send the enrollee at least two notices, by one or more
modalities other than mail, such as by phone, electronic notice, email
or text messaging consistent with paragraph (f)(3) of this section;
(iv) May not terminate an enrollee's coverage for failure to
respond to a request to confirm an in-state change of address;
(v) May accept the in-state address as the enrollee's new address
and update the enrollee's case record accordingly, if the enrollee does
not respond to a request to confirm their address or State residency,
provided the beneficiary is given at least 30 days from the date the
agency sent the notice; and
(vi) Must accept the in-state address as the enrollee's new address
and update the beneficiary's case record accordingly, if the enrollee
confirms their address or State residency.
(vii) For separate CHIPs that are not Statewide, if the address
obtained from NCOA or the State's managed care plans are outside of the
State's specific geographic area for its separate CHIP, the
requirements of paragraphs (f)(1) through (3) of this section to verify
out-of-state addresses are applicable.
(2) Upon approval from the Secretary, the State may treat updated
in-state address information from other trusted data sources in
accordance with paragraph (g)(1) of this section.
(3) Whenever the State obtains updated mailing address information
from any source not listed in paragraph (g)(1) or (2) of this section,
including out-of-state mailing address information, the State must
follow the steps outlined in paragraphs (f)(2) through (6) of this
section.
0
30. Section 457.348 is amended--
0
a. In paragraph (a)(4), by removing the phrase ``Provide for
coordination of notices with other insurance'' and adding in its place
the phrase ``Provide for a combined eligibility notice and coordination
of notices with other insurance'';
0
b. By adding paragraph (a)(6);
0
c. By revising paragraph (b);
0
d. In paragraph (c)(3), by removing the reference to ``Sec.
457.350(i)'' and adding in its place the reference ``Sec.
457.350(g)''; and
0
e. By adding paragraph (e).
The additions and revision read as follows:
Sec. 457.348 Determinations of Children's Health Insurance Program
eligibility by other insurance affordability programs.
(a) * * *
(6) Seamlessly transition the enrollment of beneficiaries between
CHIP and Medicaid when a beneficiary is determined eligible for one
program by the agency administering the other.
(b) Provision of CHIP for individuals found eligible for CHIP by
another insurance affordability program. (1) For each individual
determined CHIP eligible in accordance with paragraph (b)(2) of this
section, the State must--
(i) Establish procedures to receive, via secure electronic
interface, the electronic account containing the determination of CHIP
eligibility and notify such program of the receipt of the electronic
account;
(ii) Comply with the provisions of Sec. 457.340 to the same extent
as if the application had been submitted to the State; and
(iii) Maintain proper oversight of the eligibility determinations
made by the other program.
(2) For purposes of paragraph (b)(1) of this section, individuals
determined eligible for CHIP in this paragraph include:
(i) Individuals determined eligible for CHIP by another insurance
affordability program, including the Exchange, pursuant to an agreement
between the State and the other insurance affordability program
(including as a result of a decision made by the program or the
program's appeal entity in accordance with paragraph (a) of this
section)); and
(ii) Individuals determined eligible for CHIP by the State Medicaid
agency (including as the result of a decision made by the Medicaid
appeals entity) in
[[Page 54853]]
accordance with paragraph (e) of this section.
* * * * *
(e) CHIP determinations made by other insurance affordability
programs. The State must accept a determination of eligibility for CHIP
from the Medicaid agency in the State. In order to comply with this
requirement, the agency may:
(1) Apply the same MAGI-based methodologies in accordance withSec.
457.315, and verification policies and procedures in accordance with
Sec. 457.380 as those used by the Medicaid agency in accordance with
Sec. Sec. 435.940 through 435.956 of subchapter C, such that the
agency will accept any finding relating to a criterion of eligibility
made by a Medicaid agency without further verification;
(2) Enter into an agreement under which the State delegates
authority to the Medicaid agency to make final determinations of CHIP
eligibility; or
(3) Adopt other procedures approved by the Secretary.
0
31. Section 457.350 is revised to read as follows:
Sec. 457.350 Eligibility screening and enrollment in other insurance
affordability programs.
(a) State plan requirement. The State plan shall include a
description of the coordinated eligibility and enrollment procedures
used, at an initial and any follow-up eligibility determination,
including any periodic redetermination, to ensure that:
(1) Only targeted low-income children are furnished CHIP coverage
under the plan; and
(2) Enrollment is facilitated for applicants and enrollees found to
be eligible or potentially eligible for other insurance affordability
programs in accordance with this section.
(b) Evaluation of eligibility for other insurance affordability
programs. (1) For individuals described in paragraph (b)(2) of this
section, promptly and without undue delay, consistent with the
timeliness standards established under Sec. 457.340(d), the State
must:
(i) Determine eligibility for Medicaid on the basis of having
household income at or below the applicable modified adjusted gross
income standard, as defined in Sec. 435.911(b) of this chapter
(``MAGI-based Medicaid''); and
(ii) If unable to make a determination of eligibility for MAGI-
based Medicaid, identify potential eligibility for other insurance
affordability programs, including Medicaid on a basis other than MAGI,
eligibility for the Basic Health Program (BHP) in accordance with 42
CFR 600.305(a), or insurance affordability programs available through
the Exchange as indicated by information provided on the application or
renewal form provided by or on behalf of the beneficiary.
(2) Individuals to whom paragraph (b)(1) of this section applies
include:
(i) Any applicant who submits an application to the State which
includes sufficient information to determine CHIP eligibility;
(ii) Any enrollee whose eligibility is being redetermined at
renewal or due to a change in circumstance per Sec. 457.343; and
(iii) Any enrollee whom the State determines is not eligible for
CHIP, or who is determined not eligible for CHIP as a result of a
review conducted in accordance with subpart K of this part.
(3) In determining eligibility for Medicaid as described in
paragraph (b)(1) of this section, the State must utilize the option the
Medicaid agency has elected at Sec. 435.1200(b)(4) of this chapter to
accept determinations of MAGI-based Medicaid eligibility made by a
separate CHIP, and which must be detailed in the agreement described at
Sec. 457.348(a).
(c) Income eligibility test. To determine eligibility as described
in paragraph (b)(1)(i) of this section and to identify the individuals
described in paragraph (b)(1)(ii) of this section who are potentially
eligible for BHP or insurance affordability programs available through
an Exchange, a State must apply the MAGI-based methodologies used to
determine household income described in Sec. 457.315 or such
methodologies as are applied by such other programs.
(d) Individuals found eligible for Medicaid based on MAGI. For
individuals identified in paragraph (b)(1) of this section, the State
must--
(1) Promptly and without undue delay, consistent with the
timeliness standards established under Sec. 457.340(d), transfer the
individual's electronic account to the Medicaid agency via a secure
electronic interface; and
(2) Except as provided in Sec. 457.355, find the applicant
ineligible for CHIP.
(e) Individuals potentially eligible for Medicaid on a basis other
than MAGI. For individuals identified as potentially eligible for
Medicaid on a non-MAGI basis, as described in paragraph (b)(1)(ii) of
this section, the State must--
(1) Promptly and without undue delay, consistent with the
timeliness standards established under Sec. 457.340(d), transfer the
electronic account to the Medicaid agency via a secure electronic
interface.
(2) Complete the determination of eligibility for CHIP in
accordance with Sec. 457.340 or evaluation for potential eligibility
for other insurance affordability programs in accordance with paragraph
(b) of this section.
(3) Include in the notice of CHIP eligibility or ineligibility
provided under Sec. 457.340(e), as appropriate, coordinated content
relating to--
(i) The transfer of the individual's electronic account to the
Medicaid agency per paragraph (e)(1) of this section;
(ii) The transfer of the individual's account to another insurance
affordability program in accordance with paragraph (g) of this section,
if applicable; and
(iii) The impact that an approval of Medicaid eligibility will have
on the individual's eligibility for CHIP or another insurance
affordability program, as appropriate.
(4) Dis-enroll the enrollee from CHIP if the State is notified in
accordance with Sec. 435.1200(d)(5) of this chapter that the applicant
has been determined eligible for Medicaid.
(f) Children found ineligible for Medicaid based on MAGI, and
potentially ineligible for Medicaid on a basis other than MAGI. If a
State uses a screening procedure other than a full determination of
Medicaid eligibility under all possible eligibility groups, and the
screening process reveals that the child does not appear to be eligible
for Medicaid, the State must provide the child's family with the
following in writing:
(1) A statement that based on a limited review, the child does not
appear eligible for Medicaid, but Medicaid eligibility can only be
determined based on a full review of a Medicaid application under all
Medicaid eligibility groups;
(2) Information about Medicaid eligibility rules, covered benefits,
and restrictions on cost sharing; and
(3) Information about how and where to apply for Medicaid under all
eligibility groups.
(4) The State will determine the written format and timing of the
information regarding Medicaid eligibility, benefits, and the
application process required under this paragraph (f).
(g) Individuals found potentially eligible for other insurance
affordability programs. For individuals identified in paragraph
(b)(1)(ii) of this section who have been identified as potentially
eligible for BHP or insurance affordability programs available through
the Exchange, the State must promptly and without undue delay,
consistent
[[Page 54854]]
with the timeliness standards established under Sec. 457.340(d),
transfer the electronic account to the other insurance affordability
program via a secure electronic interface.
(h) Evaluation of eligibility for Exchange coverage. A State may
enter into an arrangement with the Exchange for the entity that
determines eligibility for CHIP to make determinations of eligibility
for advance payments of the premium tax credit and cost sharing
reductions, consistent with 45 CFR 155.110(a)(2).
(i) Waiting lists, enrollment caps and closed enrollment. The State
must establish procedures to ensure that--
(1) The procedures developed in accordance with this section have
been followed for each child applying for a separate child health
program before placing the child on a waiting list or otherwise
deferring action on the child's application for the separate child
health program;
(2) Children placed on a waiting list or for whom action on their
application is otherwise deferred are transferred to other insurance
affordability programs in accordance with paragraph (h) of this
section; and
(3) Families are informed that a child may be eligible for other
insurance affordability programs, while the child is on a waiting list
for a separate child health program or if circumstances change, for
Medicaid.
0
32. Section 457.480 is amended by--
0
a. Revising the section heading;
0
b. Redesignating paragraphs (a) and (b) as paragraphs (b) and (c),
respectively; and
0
c. Adding a new paragraph (a).
The revision and addition read as follows:
Sec. 457.480 Prohibited coverage limitations, preexisting condition
exclusions, and relation to other laws.
(a) Prohibited coverage limitations. The State may not impose any
annual, lifetime or other aggregate dollar limitations on any medical
or dental services which are covered under the State plan.
* * * * *
0
33. Section 457.570 is amended by--
0
a. Revising paragraph (c)(1);
0
b. Removing paragraph (c)(2);
0
c. Redesignating paragraph (c)(3) as paragraph (c)(2); and
0
d. Revising newly redesignated paragraph (c)(2).
The revisions read as follows:
Sec. 457.570 Disenrollment protections.
* * * * *
(c) * * *
(1) Impose a specified period of time that a CHIP eligible targeted
low-income child or targeted low-income pregnant woman who has an
unpaid premium or enrollment fee will not be permitted to reenroll for
coverage in CHIP.
(2) Require the collection of past due premiums or enrollment fees
as a condition of eligibility for reenrollment if an individual was
terminated for failure to pay premiums.
* * * * *
0
34. Section 457.805 is amended by revising paragraph (b) to read as
follows:
Sec. 457.805 State plan requirement: Procedures to address
substitution under group health plans.
* * * * *
(b) Limitations. A State may not, under this section, impose a
waiting period before enrolling an eligible individual in CHIP that has
been disenrolled from group health plan coverage. States should conduct
monitoring activities to prevent substitution of coverage.
0
35. Section 457.810 is amended by revising paragraph (a) to read as
follows:
Sec. 457.810 Premium assistance programs: Required protections
against substitution.
* * * * *
(a) Prohibition of imposing a waiting period. A State may not,
under this section, impose a waiting period before enrolling an
eligible individual who has, but is not enrolled in, group health plan
coverage into CHIP premium assistance coverage.
* * * * *
Sec. 457.960 [Removed]
0
36. Section 457.960 is removed.
0
37. Section 457.965 is revised to read as follows:
Sec. 457.965 Documentation.
(a) Basis and purpose. This section, based on section 2101 of the
Act, prescribes the kinds of records a State must maintain, the minimum
retention period for such records, and the conditions under which those
records must be provided or made available.
(b) Content of records. A State plan must provide that the State
will maintain or supervise the maintenance of the records necessary for
the proper and efficient operation of the plan. The records must
include all of the following--
(1) Individual records on each applicant and enrollee that
contain--
(i) All information provided on the initial application submitted
through any modality described in Sec. 435.907(a) of this chapter as
referenced in Sec. 457.330, by, or on behalf of, the applicant or
enrollee, including the signature on and date of application;
(ii) The electronic account and any information or other
documentation received from another insurance affordability program in
accordance with Sec. 457.348(c) and (d);
(iii) The date of, basis for, and all documents or other evidence
to support any determination, denial, or other adverse action taken
with respect to the applicant or enrollee, including all information
provided by the applicant or enrollee, and all information obtained
electronically or otherwise by the State from third-party sources;
(iv) The provision of, and payment for, services, items and other
child health assistance or pregnancy-related assistance, including the
service or item provided, relevant diagnoses, the date that the item or
service was provided, the practitioner or provider rendering, providing
or prescribing the service or item, including their National Provider
Identifier, and the full amount paid or reimbursed for the service or
item, and any third-party liabilities;
(v) Any changes in circumstances reported by the individual and any
actions taken by the State in response to such reports;
(vi) All renewal forms returned by, or on behalf of, a beneficiary,
to the State in accordance with Sec. 457.343, regardless of the
modality through which such forms are submitted, including the
signature on the form and date received.
(vii) All notices provided to the applicant or enrollee in
accordance with Sec. Sec. 457.340(e) and 457.1180; and
(viii) All records pertaining to any State reviews requested by, or
on behalf of, the applicant or enrollee, including each request
submitted and the date of such request, the complete record of the
review decision, as described in subpart K of this part, and the final
administrative action taken by the agency following the review decision
and date of such action; and
(ix) The disposition of income and eligibility verification
information received under Sec. 457.380, including evidence that no
information was returned from an electronic data source.
(2) Statistical, fiscal, and other records necessary for reporting
and accountability as required by the Secretary.
(c) Retention of records. The State plan must provide that the
records required under paragraph (b) of this section will be retained
for the period when the applicant or enrollee's case is active, plus a
minimum of 3 years thereafter.
(d) Accessibility and availability of records. The agency must--
[[Page 54855]]
(1) Maintain the records described in paragraph (b) of this section
in paper in an electronic format; and
(2) Make the records available to the Secretary, Federal and State
auditors and other parties who request, and are authorized to review,
such records within 30 calendar days of the request if not otherwise
specified, and to the extent permissible by Federal law.
0
38. Section 457.1140 is amended by revising paragraph (d)(4) to read as
follows:
Sec. 457.1140 Program specific review process: Core elements of
review.
* * * * *
(d) * * *
(4) Receive continued enrollment and benefits in accordance with
Sec. 457.1170.
0
39. Section 457.1170 is revised to read as follows:
Sec. 457.1170 Program specific review process: Continuation of
enrollment.
(a) A State must ensure the opportunity for continuation of
enrollment and benefits pending the completion of review of the
following:
(1) A suspension or termination of enrollment, including a decision
to disenroll for failure to pay cost sharing and;
(2) A failure to make a timely determination of eligibility at
application and renewal.
(b) [Reserved]
0
40. Section 457.1180 is revised to read as follows:
Sec. 457.1180 Program specific review process: Notice.
A State must provide enrollees and applicants timely written notice
of any determinations required to be subject to review under Sec.
457.1130 that includes the reasons for the determination, an
explanation of applicable rights to review of that determination, the
standard and expedited time frames for review, the manner in which a
review can be requested, and the circumstances under which enrollment
and benefits may continue pending review.
PART 600--ADMINISTRATION, ELIGIBILITY, ESSENTIAL HEALTH BENEFITS,
PERFORMANCE STANDARDS, SERVICE DELIVERY REQUIREMENTS, PREMIUM AND
COST SHARING, ALLOTMENTS, AND RECONCILATION
0
41. The authority citation for part 600 continues to read as follows:
Authority: Section 1331 of the Patient Protection and Affordable
Care Act of 2010 (Pub. L. 111-148, 124 Stat. 119), as amended by the
Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-
152, 124 Stat 1029).
0
42. Section 600.330 is amended by revising paragraph (a) to read as
follows:
Sec. 600.330 Coordination with other insurance affordability
programs.
(a) Coordination. The State must establish eligibility and
enrollment mechanisms and procedures to maximize coordination with the
Exchange, Medicaid, and CHIP. The terms of 45 CFR 155.345(a) regarding
the agreements between insurance affordability programs apply to a BHP.
The State BHP agency must fulfill the requirements of 42 CFR
435.1200(d), (e)(1)(ii), and (e)(3) and, if applicable, paragraph (c)
of this section for BHP eligible individuals.
* * * * *
0
43. Section 600.525 is amended by revising paragraph (b)(2) to read as
follows:
Sec. 600.525 Disenrollment procedures and consequences for
nonpayment of premiums.
* * * * *
(b) * * *
(2) A State electing to enroll eligible individuals throughout the
year must comply with the reenrollment standards set forth in Sec.
457.570(c) of this chapter.
Dated: August 29, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-18875 Filed 8-31-22; 4:15 pm]
BILLING CODE 4120-01-P