Medicaid Program; Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes
| Published date | 02 April 2024 |
| Record Number | 2024-06566 |
| Citation | 89 FR 22780 |
| Court | Centers For Medicare & Medicaid Services |
| Section | Rules and Regulations |
Federal Register, Volume 89 Issue 64 (Tuesday, April 2, 2024)
[Federal Register Volume 89, Number 64 (Tuesday, April 2, 2024)]
[Rules and Regulations]
[Pages 22780-22878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06566]
[[Page 22779]]
Vol. 89
Tuesday,
No. 64
April 2, 2024
Part IIDepartment of Health and Human Services-----------------------------------------------------------------------Centers for Medicare & Medicaid Services-----------------------------------------------------------------------42 CFR Parts 431, 435, 436, et al.Medicaid Program; Streamlining the Medicaid, Children's Health
Insurance Program, and Basic Health Program Application, Eligibility
Determination, Enrollment, and Renewal Processes; Final Rule
Federal Register / Vol. 89 , No. 64 / Tuesday, April 2, 2024 / Rules
and Regulations
[[Page 22780]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 431, 435, 436, 447, 457, and 600
[CMS-2421-F2]
RIN 0938-AU00
Medicaid Program; 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), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This is the second part of a two-part final rule that
simplifies the eligibility and enrollment processes for Medicaid, the
Children's Health Insurance Program (CHIP), and the Basic Health
Program (BHP). This rule aligns enrollment and renewal requirements for
most individuals in Medicaid; establishes beneficiary protections
related to returned mail; creates timeliness requirements for
redeterminations of eligibility; makes transitions between programs
easier; eliminates access barriers for children enrolled in CHIP by
prohibiting premium lock-out periods, benefit limitations, and waiting
periods; and modernizes recordkeeping requirements to ensure proper
documentation of eligibility determinations.
DATES: These regulations are effective on June 3, 2024.
FOR FURTHER INFORMATION CONTACT: Stephanie Bell, (410) 786-0617,
[email protected].
SUPPLEMENTARY INFORMATION:
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 meet the diverse health
care needs of children, pregnant individuals, parents, older adults,
and people with disabilities. For over 25 years, the Children's Health
Insurance Program (CHIP) has stood on the shoulders of Medicaid with
the goal of ensuring that all children have health insurance. Together
these programs play a major role in making health care available and
affordable to millions of Americans.
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 can provide affordable
health coverage to individuals whose household income is greater than
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.
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. We issued
implementing regulations on March 23, 2012, 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 July 15, 2013, titled ``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 (78 FR 42160) (referred to hereafter 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 issuance of these regulations. The
dynamic online applications developed by States and the Federally
Facilitated Marketplace, which ask only those questions needed to
determine eligibility, have reduced burden on applicants. Of the 48
States that reported application processing time data for the April
2023-June 2023 period, over half (57 percent) of all MAGI-based
eligibility determinations at application were processed in under 24
hours.\1\ By comparison, for the February 2018-April 2018 period, of
the 42 States reporting application processing time data, only 31
percent of all MAGI-based eligibility determinations at application
were processed in under 24 hours. 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 \2\
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.
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\1\ MAGI Application Processing Time Snapshot Report: April
2023-June 2023; accessed on 11/17/2023 at https://www.medicaid.gov/sites/default/files/2023-10/magi-app-process-time-snapshot-rpt-apr-jun-2023.pdf.
\2\ MAGI Application Processing Time Snapshot Report: April
2023-June 2023; accessed on 1/18/2024 at https://www.medicaid.gov/sites/default/files/2020-04/magi-application-time-report.pdf.
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The critical role of Medicaid and CHIP in providing timely health
care access was highlighted as the coronavirus disease 2019 (``COVID-
19'') spread across our country beginning in early 2020. Medicaid and
CHIP ensured people who may have lost their jobs or been exposed to
COVID-19, or both, had access to coverage, playing a critical role in
the national response. States were
[[Page 22781]]
eligible for a temporary increase in the Federal Medical Assistance
Percentage (FMAP) throughout the COVID-19 public health emergency
(PHE), if they met certain conditions specified in section 6008 of the
Families First Coronavirus Response Act (FFCRA) (Pub. L. 116-127, March
18, 2020), amended by section 5131 of Division FF of the Consolidated
Appropriations Act, 2023 (CAA, 2023) (Pub. L. 117-328, December 29,
2022). One such condition was the continuous enrollment condition
described at section 6008(b)(3) of the FFCRA. This condition required
States to maintain enrollment, through March 31, 2023, for all Medicaid
beneficiaries who enrolled on or after March 18, 2020, with limited
exceptions.
Under the CAA, 2023, the FFCRA's temporary FMAP increase was
extended through December 31, 2023, at a gradually reducing rate, for
States that continued to meet the conditions specified in subsections
6008(b)(1), (2), and (4) of the FFCRA, along with new conditions at
subsection 6008(f) of the FFCRA.\3\ Among the new conditions for
enhanced FMAP were requirements to (a) complete eligibility
redeterminations in accordance with all applicable Federal requirements
(or alternative processes and procedures approved by CMS), (b) update
beneficiary contact information, and (c) make a good faith effort to
contact beneficiaries whose mail was returned to the State. Since early
2023, States have been engaged in an effort to unwind their continuous
enrollment policies and return to normal eligibility and enrollment
operations (this process has commonly been referred to as
``unwinding''). CMS worked actively with States during this period to
review their redetermination processes, approve alternatives when
needed, and ensure that the enrollment protections established by the
ACA were available to all applicants and beneficiaries during the
unwinding period. This final rule builds upon these protections to
promote enrollment and reduce churn.
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\3\ See the January 2023 State Health Official (SHO) #23-002,
``RE: Medicaid Continuous Enrollment Condition Changes, Conditions
for Receiving the FFCRA Temporary FMAP Increase, Reporting
Requirements, and Enforcement Provisions in the Consolidated
Appropriations Act, 2023, for additional information on the
``unwinding period.'' Available online at https://www.medicaid.gov/sites/default/files/2023-08/sho23002.pdf.
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The Biden-Harris Administration is committed to protecting and
strengthening Medicaid and CHIP and has demonstrated this commitment
through multiple executive actions. For example, on January 20, 2021,
President Biden issued Executive Order 13985 on advancing racial equity
and support for underserved communities.\4\ It charged Federal agencies
with identifying potential barriers that underserved communities may
face to enrollment in programs like Medicaid and CHIP. 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 for coverage but remain uninsured.\5\ In April 2022, President
Biden issued another Executive order, building on progress and
reflecting new Medicaid and CHIP flexibilities established by the
American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2). 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.\6\ It
calls upon Federal agencies to examine policies and practices that make
it easier for individuals to enroll in and retain coverage. Building on
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
pandemic, and looked for gaps in our regulatory framework that continue
to impede access to coverage.
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\4\ 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/.
\5\ 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/.
\6\ 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 interested parties that certain policies continue to result in
unnecessary administrative burden and create barriers to enrollment and
retention of coverage for eligible individuals. For example:
Individuals whose eligibility is not based on MAGI (non-
MAGI individuals)--such as, 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). This left such individuals at greater risk of being
denied or losing coverage due to procedural reasons, including, for
example, failure to return paperwork,\7\ than their MAGI-based
counterparts, even though we believe many are likely to continue to
meet the substantive Medicaid eligibility criteria due to low
likelihood of changes in their income or other circumstances.\8\
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\7\ Procedural reasons include instances where a beneficiary
fails to provide the information necessary to complete a Medicaid or
CHIP renewal. This many include a renewal form with information
about the individual's continued eligibility or documentation to
verify continued eligibility.
\8\ Assistant Secretary for Planning and Evaluation (ASPE)
(2019). Loss of Medicare-Medicaid dual eligible status: Frequency,
contributing factors and implications. Accessed on August 4, 2023,
at https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//189201/DualLoss.pdf.
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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
delays in processing applications and renewals and some individuals
being denied increased assistance for which they have become eligible.
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 improper
Medicaid 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.
Through the proposed rule that appeared in the Federal Register on
September 7, 2022, entitled ``Streamlining the Medicaid, Children's
Health Insurance Program, and Basic Health Program Application,
Eligibility Determination, Enrollment, and Renewal Processes'' (87 FR
54760) (referred to hereafter as the ``September 2022 proposed rule''),
we proposed policies designed to address these and other gaps, thereby
streamlining Medicaid and CHIP eligibility and enrollment processes,
reducing
[[Page 22782]]
administrative burden on States and enrollees, and increasing
enrollment and retention of eligible individuals. We also sought to
improve the integrity of Medicaid and CHIP. Through the Payment Error
Rate Measurement (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 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 finalized in this rule will further these 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 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 of eligibility determinations, and
effective communications with providers, beneficiaries, and the public.
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.
On September 21, 2023, the ``Streamlining Medicaid; Medicare
Savings Program Eligibility Determination and Enrollment'' final rule
(88 FR 65230) (referred to hereafter as the ``2023 Streamlining MSP
Enrollment final rule'') appeared in the Federal Register, which
finalized provisions of our September 2022 proposed rule that were
specific to individuals dually eligible for both Medicaid and Medicare.
This rule addresses the remaining provisions of the September 2022
proposed rule. It is focused on aligning enrollment and renewal
requirements for most individuals in Medicaid; improving access for
medically needy individuals; establishing expectations for timely
renewals and redeterminations of eligibility for individuals
experiencing a change in circumstances; streamlining transitions
between Medicaid and CHIP; eliminating access barriers for children
enrolled in CHIP; removing unnecessary administrative barriers; and
modernizing recordkeeping requirements to ensure proper documentation
of eligibility determinations.
If any provision of this final rule is held to be invalid or
unenforceable by its terms, or as applied to any person or
circumstance, it shall be severable from this final rule and not affect
the remainder thereof or the application of the provision to other
persons not similarly situated or to other, dissimilar circumstances.
II. Summary of the Proposed Provisions and Analysis of and Responses to
Public Comments
We received a total of 7,055 timely comments from State Medicaid
and CHIP agencies, advocacy groups, health care providers and
associations, health insurers and plans, and the general public.
Comment: We received many comments supporting the September 2022
proposed rule. Commenters supported the changes proposed to reduce
barriers to coverage, make the eligibility and enrollment process
easier and faster, and help eligible individuals to retain coverage.
The commenters highlighted the benefits our proposed policies would
have on individuals, families, providers, States, and communities. On
the individual level, commenters stated that the proposed rule would
reduce individual burdens and worries, save money, and even make people
happier. The commenters noted that it would help families by removing
some of the barriers to accessing health care services during periods
of great stress and economic insecurity, and that it would ensure their
children have access to the health care services they need. Commenters
noted that a reduction in churning will not only improve the health of
beneficiaries, but it will also protect individual beneficiaries, and
their families, from medical debt and associated stressors. Maximizing
coverage for individuals, these commenters stated, will not only ensure
better outcomes for the people enrolled in Medicaid and CHIP but may
even save lives. Several commenters described the proposed changes as a
long-term complement to our current efforts to minimize inappropriate
coverage losses during the unwinding period following the end of the
continuous enrollment condition.
Commenters also stated that these regulations would reduce burdens
on States, save taxpayer dollars, and serve as a practical step toward
ensuring the long-term sustainability of Medicaid and CHIP. Some
commenters noted their belief that the current rules place an outsized
emphasis on preventing the enrollment of ineligible individuals and
that this rule will balance that interest with the ultimate goal of
ensuring coverage for those who are eligible.
From the provider perspective, commenters explained that the
reduction in enrollment churn resulting from the proposed streamlining
of Medicaid and CHIP eligibility and enrollment processes would reduce
administrative burdens on physicians and their practices. One commenter
stated that it would help providers to maintain continuity of care and
trust in their relationships with their patients. Another commenter
stated that the September 2022 proposed rule would diminish the harmful
consequences of churning, including disruptions in physician care and
medication adherence; increased administrative costs for providers,
Medicaid managed care plans, and States; and higher health costs when
delayed care forces more expensive interventions. One commenter noted
that eliminating barriers to enrollment in Medicaid and CHIP could lead
to an increase in the number of Medicaid and CHIP beneficiaries and a
reduction in uncompensated care costs, thereby protecting the viability
of the medical safety net. Hospitals also commented that reduced churn
from the policies proposed in the September 2022 proposed rule would
lessen the workload for hospital staff who assist patients with program
and financial assistance applications.
At the broader community level, commenters supported the proposed
steps to promote health equity by eliminating barriers to initial and
continuing enrollment in Medicaid (that is, form submission
requirements rather than reliance on electronic data and verification).
The commenters explained that because people of color are
disproportionately likely to be enrolled in Medicaid and CHIP for
health
[[Page 22783]]
coverage, lowering administrative burdens to make it easier to enroll
in coverage and to reduce coverage disruptions could be critical to
advancing health and racial equity. One commenter noted that by
enabling low-income households to access the benefits to which they are
entitled under law, the September 2022 proposed rule would effectively
result in a transfer of funding (spending described in the regulatory
impact analysis) from the Federal Government to Medicaid and CHIP
beneficiaries through additional health care spending by those
programs. The commenter explained that this transfer will not only
enhance the health of the United States' low-income population but will
also likely improve their financial well-being. Commenters also
supported the proposal to address institutional bias by allowing for
the projection of predictable costs in the community for home and
community-based services.
Response: We appreciate commenters' support for the September 2022
proposed rule. As discussed in the background section of this final
rule, Medicaid and CHIP play a key role in the United States health
care system. While Medicaid and CHIP coverage can have a huge impact on
the individuals served by these programs, we agree that the full value
of the programs goes well beyond the individual beneficiaries.
We agree with commenters that the streamlined eligibility and
enrollment processes established by this rule will help to reduce the
churning of eligible individuals on and off Medicaid and CHIP. We agree
with commenters that reduced churn has the potential to reduce
administrative burdens for beneficiaries and their health care
providers, improve the ability of beneficiaries and their providers to
form lasting relationships, reduce the need for high-cost interventions
that can result from delayed care, and protect beneficiaries from
medical debt and providers from non-payment. We also agree with
comments on the broader community impact of this rule. After completing
the upfront investment in systems and training needed to implement the
changes in this final rule, States should begin to see savings from the
reduced administrative burden. In addition, we believe that healthier
beneficiaries can be more productive in their homes, their work, and
their communities.
Recognizing the benefits of this rule, we are finalizing (with some
modifications) the changes included in the September 2022 proposed rule
that were not included in the 2023 Streamlining MSP Enrollment final
rule. Some of the proposed changes are modified in response to
comments, and all modifications are discussed in the comment responses
that follow.
Comment: We also received many comments that generally opposed the
September 2022 proposed rule and urged CMS to withdraw the rule in its
entirety. Commenters opposing the rule cited concerns about increased
enrollment of ineligible individuals, increased program costs, reduced
program integrity, and reduced flexibility for States. Other concerns
raised were that the proposed rule would increase doctors' and
hospitals' profits, take away individuals' choices, and decrease the
quality of health care.
Some commenters stated that this rule would prohibit critical
program integrity protections. These commenters expressed concern that
changes proposed to streamline the enrollment process would permit
ineligible individuals to enroll in Medicaid and CHIP, and they
recommended tighter controls to protect the integrity of these
programs. The commenters stated that loopholes in existing eligibility
and enrollment processes, particularly with respect to the verification
of eligibility, would be expanded by this rule, making it difficult for
States to effectively verify Medicaid and CHIP eligibility.
Commenters opposing the proposals noted the increase in State costs
described in the regulatory impact analysis and expressed concern that
Medicaid and CHIP costs would increase. One commenter expressed concern
that these changes were coming at the expense of State flexibility,
taxpayers, and the truly needy who rely on the sustainability of
Medicaid.
A few commenters stated that the proposed rule gives more control
to the Federal Government at the expense of States. They believe the
proposed rule weakens State flexibility to administer enrollment
determinations. One commenter stated that they opposed the proposed
changes noting that States are best positioned to set eligibility,
renewal, and retention requirements for Medicaid and CHIP. Another
commenter explained that because issues of health care vary from State
to State, they believe it is wrong for CMS to establish a ``one size
fits all'' approach.
Response: We appreciate commenters' concerns about protecting the
integrity of the Medicaid and CHIP programs. As stewards of Federal
funding for Medicaid and CHIP, we take program integrity very
seriously. We maintained a focus on reducing the rate of improper
payments as we developed the proposals finalized in this rule. For
example, we expect the new requirements finalized in this rule for
electronic recordkeeping will help ensure that State and Federal
auditors can more easily verify the accuracy of eligibility
determinations and payments made to providers. We also expect that
establishing clear timeliness standards for acting on changes in
circumstances and completing renewals will ensure that States do not
continue to provide coverage to ineligible individuals for an extended
period. These provisions will also ensure that States do not improperly
deny coverage for a beneficiary who is eligible for Medicaid or CHIP.
Accurate eligibility determinations in both situations are an important
part of program integrity.
We disagree with comments suggesting that streamlining eligibility
and enrollment processes and eliminating unnecessary administrative
requirements will increase the enrollment of ineligible individuals. To
the contrary, the focus of many of the proposed provisions is to reduce
enrollment errors caused when eligible individuals are unable to
overcome administrative barriers to enrollment. For example, by
removing the requirement to apply for other benefits that do not impact
an individual's eligibility for Medicaid or CHIP, this rule eliminates
a burdensome step in the eligibility process that increases potential
for caseworker- or system error. Additionally, this final rule
increases State reliance on electronic data sources, such as States'
asset verification programs, to verify eligibility, thereby reducing
the burden for States, as well as applicants and beneficiaries, of
submitting copies of paper documents that must be reviewed by a
caseworker.
Regarding commenters' concerns about the increased costs associated
with this rule, this final rule does not expand Medicaid or CHIP
eligibility criteria to include new populations (for example,
individuals with higher incomes or in categories not currently eligible
for coverage under these programs). It simply removes barriers that
prevent individuals who satisfy existing financial and other
eligibility criteria from enrolling and remaining enrolled in these
programs. We recognize that many of the provisions will require States
to change their eligibility systems and their enrollment processes, and
that these changes will generate upfront costs. However, as discussed
in the regulatory impact analysis and collection of information
sections, we believe these changes will create administrative savings
that will continue to accrue in the future, and
[[Page 22784]]
that these savings will far outweigh the initial administrative costs.
In addition, we note that enhanced Federal funding for design,
implementation, and operation of State eligibility and enrollment
systems is available in accordance with Sec. 433.112(b)(14) for
changes to support accurate and timely processing of eligibility
determinations.
Finally, we understand commenters' concerns that some of the
changes finalized in this rule will reduce the flexibility currently
available to States. As we considered the comments submitted regarding
each specific provision in this final rule, we looked for opportunities
to provide States with more flexibility in achieving the policy goals
of the September 2022 proposed rule. Revisions finalized in this
rulemaking, which improve State flexibility, are discussed in detail in
the responses to comments that follow.
A. Facilitating Medicaid Enrollment
1. Facilitate Enrollment by Allowing Medically Needy Individuals To
Deduct Prospective Medical Expenses (42 CFR 435.831 and 436.831)
We proposed to amend Sec. 435.831(g)(2) to permit States
additional flexibility to project the incurred medical expenses of
noninstitutionalized individuals who seek to establish eligibility for
Medicaid as medically needy. Generally, 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 and who
attain income eligibility by reducing their countable income to their
State's medically needy income level (MNIL) by deducting the uncovered
medical and remedial care expenses they, their family members, and
financially responsible relatives have incurred (a process referred to
as a ``spenddown''). When an individual qualifies as medically needy,
the individual's eligibility lasts only as long as the State's
medically needy budget period, which, under Sec. 435.831(a), can be no
longer than 6 months (and can be as short as 1 month), at which point
the individual will need to meet their spenddown amount again with
different incurred medical or remedial expenses to reestablish
eligibility. This process causes frequent disruptions in medically
needy-based Medicaid coverage and can pose administrative challenges to
States.
In 1994, we amended Sec. 435.831 to add a new paragraph (g)(1),
under which we permitted States to project the costs of medical
institutional expenses, at the Medicaid reimbursement rate, that
individuals seeking eligibility as medically needy will incur in a
budget period (59 FR 1659, 1673 (January 12, 1994)). As we explained in
section II.A.5. of the preamble of the September 2022 proposed rule,
``projecting'' expenses means that a State deducts from the
individual's countable income the medical expenses that it anticipates
an individual will incur during a budget period. This can expedite
eligibility because the individual does not have to first incur the
anticipated expenses. As we explained, our rationale for permitting the
projection of institutional expenses has been that such expenses are by
their nature constant and predictable, and allowing their projection at
the Medicaid rate offers States a simplified approach to determining
the eligibility of institutionalized individuals as medically needy
with a high degree of certainty of the accuracy of the determinations.
We believe that allowing projection of only institutional expenses,
while not also allowing projection of predictable and constant services
incurred by community-based individuals, fosters an institutional bias,
and we therefore proposed to amend Sec. 435.831(g)(2) to allow States
to project the expenses of other services that are also reasonably
constant and predictable. Our proposed regulation identified examples
of services that we believe meet this criterion, including home and
community-based services (HCBS) reflected in a person-centered service
plan in accordance with Sec. 441.301(b)(1)(i), Sec. 441.468(a)(1),
Sec. 441.540(b)(5), or Sec. 441.725 (relating to the HCBS authorized
under section 1915(c), (i), (j) and (k) of the Act), and prescription
drugs. We explained that features of these services create a high
degree of likelihood of their continued receipt from month to month. We
also proposed that States use the Medicaid reimbursement rate for the
costs of the services they would project under proposed Sec.
435.831(g)(2). We invited comment on other types of services that may
meet the reasonably constant-and-predictable criteria, which we would
consider including in the regulatory text.
In drafting the September 2022 proposed rule, we inadvertently
failed to include a revision to Sec. 436.831(g)(2) that mirrors the
change proposed at Sec. 435.831(g)(2) to permit Guam, Puerto Rico, and
the Virgin Islands (collectively, the ``436 territories'') to make the
same elections with respect to medically needy eligibility. This
omission was unintentional, as most of the provisions of the proposed
rule that are adopted in this final rule are applicable to the 436
territories as a result of incorporation by reference in existing
regulations (as noted elsewhere throughout this final rule). The same
reasons for adopting this option in Sec. 435.831 also apply in the 436
territories, and we note that reference to the effects of such changes
on all five U.S. territories was included in the discussion of
information collection requirements in the proposed rule (87 FR 54820).
We are including Sec. 436.831(g)(2) in this final rule and note that
all references to Sec. 435.831(g) also apply to Sec. 436.831(g).
We received the following comments on this provision in the
proposed rule, and below are our responses.
Comment: Most commenters strongly supported the proposed
regulation, with nearly all such commenters stating that the proposal
would do one or more of the following: help reduce Medicaid's
institutional bias; further the integration mandates of the Americans
with Disabilities Act (ADA) and section 504 of the Rehabilitation Act;
reduce eligibility churn and ensure greater continuity of coverage; and
reduce administrative burden and complexity. A couple of commenters
specifically noted that the proposed regulation will improve health
equity.
Response: We appreciate the commenters' support. As explained in
the following comment and response, we are finalizing the regulation as
proposed.
Comment: We received many comments in response to our invitation
for the identification of other types of services that are reasonably
constant and predictable, and which could be considered for inclusion
in the regulatory text. Commenters suggested a very broad variety of
services, and many commenters recommended that we include the services
they identified in the regulation text. Examples of the additional
expenses which were suggested to us by commenters include personal care
services, Program of All-Inclusive Care for the Elderly (PACE)
services, additional drug-related costs, behavioral health services,
durable medical equipment (DME), health insurance premiums, and
laboratory tests.
Response: We appreciate the very thorough and thoughtful responses
to our request. We agree that many of the expenses suggested by
commenters, including health insurance premiums (such as, but not
limited to, Medicare or PACE premiums paid by the individual), could
meet the reasonably constant-and-predictable standard. However, we have
decided to finalize the rule as proposed, in which the
[[Page 22785]]
examples of projectable services that will appear in the final
regulation text will be those that were included in the proposed rule--
that is, the services in plans of care for the section 1915-related
HCBS benefits and prescription drugs. We note that the list of specific
services included in the regulation text is illustrative, not
exhaustive, and have concluded that, given the variety and volume of
expenses which could meet the reasonably constant-and-predictable
standard, the addition of all or most of such services to the
regulation text would be too cumbersome. Additionally, we are concerned
that a longer list may actually heighten the potential that someone
would incorrectly conclude that the specifically identified services
are the only permissible ones that States may project as reasonably
constant and predicable.
Although we are not including additional examples in the final
regulation, we confirm that the services in the regulation text are not
exclusive, and that States are authorized to project services not
specifically identified in the regulation which they determine to be
reasonably constant and predicable. The language in the final rule (as
in the proposed rule) provides that States may project expenses that
they have determined to be reasonably constant and predictable
``including, but not limited to,'' the services in a person-centered
service plan for section 1915-related HCBS and prescription drugs.
(Emphasis added.)
We agree that many of the services identified by commenters could
be reasonably constant and predictable. However, we decline to
individually evaluate each service identified against that standard
here. Under the final rule, discretion is left to each State to
evaluate whether, and under what circumstances, a given service is
considered reasonably constant and predictable. We believe that the
services we have included in the regulation reflect practical examples
of the reasonably-constant-and-predictable principle that will guide
the type of services States may choose to project.
Comment: One commenter suggested removing all examples from the
regulation text, expressing concern that the inclusion of examples may
be inadvertently interpreted to limit the projection of expenses to
those contained within a Medicaid-approved plan of care, which would
make the option available only to individuals who have already
established Medicaid eligibility and have an approved plan of care. The
commenter suggested that CMS explicitly provide States with the option
to expand prospective HCBS-related deductions to individuals with
private-pay receipts or who have received support from a qualified
entity (such as an Aging and Disability Resource Center) to develop a
service plan.
Response: As explained previously in this final rule, we believe
that adding other services to the regulation could increase the
possibility that the list may be read as an exclusive one, in contrast
to our intent. We disagree, however, that it is necessary to omit all
examples from the regulatory text, because we believe, as also noted
previously in this final rule, that the examples we include offer a
useful gauge of our expectation on what may be considered reasonably
constant and predictable. We also believe it is clear that the list of
examples is illustrative but not exhaustive.
Comment: A commenter suggested that we replace specific HCBS
references with a blanket reference to HCBS authorized under all
authorities.
Response: As noted previously in this final rule, we believe that
the specific services identified in the regulation offer a useful gauge
of our expectations of what may be considered reasonably constant and
predictable. The proposed regulation identified examples of services
that we believe meet these criteria, including HCBS reflected in a
person-centered service plan pursuant to Sec. 441.301(b)(1)(i), Sec.
441.468(a)(1), Sec. 441.540(b)(5), or Sec. 441.725 (relating to the
HCBS authorized under section 1915(c), (i), (j) and (k) of the Act).
While we agree that HCBS that are not reflected in a person-centered
service plan pursuant to one of the authorities listed in proposed
Sec. 435.831(g)(2) could potentially include services that help an
individual remain in the community (such as transportation), our goal
is to provide clear examples of reasonably constant and predictable
expenses in the regulation text. We believe that the proposed
regulation text accomplishes that goal, since HCBS provided pursuant to
a person-centered service plan necessarily meet that standard, whereas
HCBS not reflected in such a plan may not, depending on the service and
circumstances. We reiterate, however, that States are authorized to
project services not specifically identified in the regulation which
they determine to be reasonably constant and predictable, including
HCBS that are not included in a person-centered service plan.
Comment: We received several comments that either requested
clarification on whether this proposal would be optional for States or
that implied the commenters believed it not to be optional. One
commenter stated that the subsection heading for this proposal in the
preamble is presented as an individual option instead of a State
option, and the commenter recommended that we confirm that States do
not have to elect this option. Another commenter indicated that this
proposal would reduce State discretion. A few other commenters shared
that the proposal would impose a burden on States (that is, additional
staff training and system changes), and that, given the complexity of
the proposal, the timeline for State implementation should be relaxed.
One commenter stated that the proposal might possibly increase
medically needy caseloads.
Response: We confirm that the authority to project noninstitutional
expenses that we proposed and are finalizing at Sec. 435.831(g)(2) in
this final rule is a State option, not a mandate. We agree that the
language of the heading in the preamble to the September 2022 proposed
rule suggests an individual option instead of a State option, and we
have revised it in this final rule preamble. We note, however, that we
did not propose, nor did we make, a change to the paragraph heading of
Sec. 435.831(g) in which this new State authority is inserted
(``Determination of deductible incurred medical expenses: Optional
deductions.'') (Emphasis added). Given the optional nature of this
provision, we disagree that it will impose a burden on States or that
the timeline for State implementation should be longer (as there is not
an implementation timeline for the election of this option). Although
we believe that adopting the option will ease administrative burden, a
State that believes negative outcomes that may possibly stem from
permitting the projection of noninstitutional expenses would outweigh
the benefits would not have to elect this option.
Comment: Many commenters took the position that, for HCBS
participants, CMS should require States to project noninstitutional
medical and remedial expenses, rather than making it optional. The
commenters indicated that making it mandatory would streamline the
process and reduce unnecessary burden on how people with extensive
health care needs receiving HCBS must demonstrate their eligibility.
Response: As we explained in section II.A.5. of the preamble of the
September 2022 proposed rule, our proposal to allow States to project
noninstitutional expenses builds on the preexisting State regulatory
option to project institutional expenses, a primary rationale of which
[[Page 22786]]
was to increase State flexibility. While we agree that expanding
States' authority to project additional types of expenses will help
streamline eligibility processes and offer important advantages to
applicants and beneficiaries, we did not propose to eliminate State
discretion in applying this policy. Doing so would be a substantial
departure from the flexibility principles on which the proposed rule
was based. Therefore, we are finalizing Sec. 435.831(g)(2) as
proposed. The projection of reasonably constant and predictable medical
expenses in determining whether a medically needy individual has met
their spenddown will be a State option under this final rule.
Comment: Several commenters requested that the regulation be
extended to a broader range of people beyond those receiving services
under the specific HCBS authorities included in the regulation text.
One commenter noted that because use of services in an HCBS plan of
care may vary greatly over the course of multiple budget periods,
States may not be able to reasonably predict the individual's services
costs in a forthcoming budget period.
Response: States are permitted under this regulation to project the
cost of noninstitutional services for all medically needy individuals,
regardless of whether such individuals are eligible for HCBS authorized
under section 1915 of the Act, so long as the projected services are
reasonably constant and predictable. States are also not limited to
projecting the specific services identified in the regulation.
Comment: One commenter stated that proposed Sec. 435.831(g)(2)
would not eliminate Medicaid's institutional bias. The commenter
indicated that individuals who become hospitalized and then apply for
Medicaid are typically discharged by hospitals to nursing facilities
instead of the community due to the higher degree of likelihood that
they will establish Medicaid eligibility in the former. The commenter
further stated that individuals who are thus discharged to a nursing
facility and become Medicaid-eligible will likely choose to remain
there, as a return to the community, with different financial
eligibility rules, may pose a threat to their retaining Medicaid.
Response: We appreciate the concerns raised by the commenter. We
have acknowledged in the past the challenges faced by Medicaid-eligible
institutionalized individuals seeking to return to the community, and
the proposed rule did not purport to eliminate all barriers individuals
receiving institutional care may face in returning to the community. We
previously issued a State Medicaid Director Letter on strategies that
States may utilize to facilitate transitions from institutions to the
community and connecting such individuals to HCBS. (Olmstead Update No.
3, July 25, 2000). We believe that the option provided under Sec.
435.831(g)(2) of this final rule complements these strategies to
further assist States in their rebalancing \9\ efforts.
---------------------------------------------------------------------------
\9\ ``Rebalancing'' is defined in this context as achieving a
more equitable balance between the share of spending and use of
services and supports delivered in home and community-based settings
relative to institutional care.
---------------------------------------------------------------------------
Comment: Two commenters stated that a plan of care may only be
developed for an individual who has established Medicaid eligibility,
with one of the commenters indicating that, as a result, projection of
the plan-of-care costs would not assist a prospective medically needy
individual in need of the HCBS.
Response: We disagree with the commenters. The eligibility group
described in Sec. 435.217, which covers individuals who are eligible
for and will receive section 1915(c) services and who would be eligible
if institutionalized, requires that section 1915(c) services be
authorized before the individual may be enrolled in the group. This
requires the completion of the plan of care as a condition precedent;
for example, for individuals seeking coverage under this group, a State
must complete a plan of care for section 1915(c) services prior to
determining them eligible for Medicaid. Similarly, States are
specifically authorized under sections 1915(c)(3) and 1915(i)(3) of the
Act to apply special financial eligibility deeming rules for medically
needy individuals seeking coverage for section 1915(c) or (i) services.
This means that States electing to cover section 1915(c) or (i)
services must confirm the need for such services as part of the
underlying Medicaid eligibility determination. A State could develop a
plan of care for the individual as part of this process; indeed, it
often will make sense for the State to do so.
Comment: We received many comments relating to retroactive coverage
for HCBS, with nearly all such commenters suggesting that retroactive
HCBS coverage should be available to the same extent it is for
institutional services. Some of the commenters claimed that the
misalignment is biased toward institutional services or discriminatory.
Response: While not specifically stated by the commenters, we
assume the comments on this point refer to the ``medical assistance''
definition in section 1915(c)(1) of the Act, which defines HCBS
services as services that are provided ``pursuant to a written plan of
care to individuals with respect to whom there has been a determination
that but for the provision of such [HCBS waiver] services, the
individuals would require the level of care provided in a hospital or a
nursing facility or intermediate care facility for the mentally
retarded the cost of which could be reimbursed under the State plan.''
We further believe that the commenters are proposing that if an
individual is otherwise eligible for Medicaid coverage of other
services, that the services that are in a section 1915(c) waiver
participant's plan of care, but which are received by the individual
before the plan of care is actually developed and the level-of-care
determination has been made, also be eligible for Medicaid coverage. We
appreciate the commenters' interest in this issue; however, it is
beyond the scope of this rule. We note, however, that individuals who
are eligible for HCBS are not categorically excepted from retroactive
medical assistance coverage authorized under section 1902(a)(34) of the
Act, and Medicaid beneficiaries may receive retroactive coverage for
HCBS-related State plan services such as personal care services and
home health care services.
Comment: A couple of commenters stated that requiring use of the
Medicaid rate for noninstitutional expense projection is too
prescriptive and requested that CMS provide flexibility for States to
determine the appropriate rate.
Response: We do not agree that the requirement to use the Medicaid
rate is overly prescriptive. Use of the Medicaid rate is appropriate to
achieve the highest level of certainty that an individual will incur
the liability that the regulation permits States to anticipate prior to
the actual receipt of services. Use of a different rate increases the
possibility that, upon reconciliation at the end of the budget period,
an individual will be found not to have met their spenddown obligation
(and thus to have been erroneously granted eligibility). Limiting the
expenses projected to the Medicaid rate strikes an appropriate balance
between preventing medically needy individuals from having to establish
or reestablish eligibility based on a spenddown prior to receiving
services and ensuring that individuals who are not reasonably certain
to meet
[[Page 22787]]
their spenddown obligation are not erroneously granted eligibility.
Comment: Some commenters recommended including community expenses
that are not currently available to meet a spenddown, such as housing
expenses (that is: rent, mortgage, and property taxes), utilities, and
food.
Response: Expenses that are used to meet an individual's spenddown,
whether they are projected or not, must meet the requirements of Sec.
435.831(e) (``Determination of deductible incurred expenses: Required
deductions based on kinds of services''). Changes to Sec. 435.831(e)
are beyond the scope of this regulation.
Comment: One commenter urged CMS to include in the regulation as
projectable expenses those that are significant in cost but not
necessarily predictable month-to-month.
Response: We are not permitting in the regulation the projection of
expenses that are not reasonably constant and predicable. As explained
in the preamble, the rationale for the projection of expenses is that
the individual has expenses that the State can be reasonably certain
the individual will actually incur the cost of during a budget period.
We do not believe that intermittent or sporadic expenses, regardless of
whether their cost is expected to be high, meet the standard needed to
predict with reasonable certainty that the individual will incur them
within a budget period. While we are not authorizing the projection of
expenses that do not meet a reasonably-constant-and-predictable
standard, we note that an individual's actually incurred medical and
remedial expenses that meet the requirements of Sec. 435.831(e) must
be deducted during a budget period.
Comment: A couple of commenters requested that CMS specifically
include section 1115 waivers in the HCBS authorities that are included
in the regulation.
Response: As noted previously in this final rule, we are not adding
additional services to the regulation beyond those that we originally
proposed, and we reiterate that the services listed in the regulation
text are not exhaustive. We confirm that a State that has received
authority under section 1115(a)(2) of the Act to provide to State-plan
eligible individuals coverage for services for which the State is not
otherwise eligible for Federal Financial Participation (FFP) could
project the cost of such services for individuals seeking to qualify as
medically needy, provided that such services are reasonably constant
and predictable.
Comment: One commenter inquired about whether a State would be
required to define which non-institutional expenses it has determined
meet the criteria and will be projected.
Response: States that elect to project institutional expenses are
currently required to confirm their election in their Medicaid State
plan. States that elect to project non-institutional expenses in
accordance with Sec. 435.831(g) of this final rule similarly will be
required to confirm this election in their Medicaid State plan. States
also should document each of the non-institutional expenses the State
has determined will be projected in accordance with the State's
election under Sec. 435.831(g)(2) of this final rule, and the
circumstances in which such expenses will be projected, in their
policies and procedures.
Comment: Several commenters requested that CMS require States to
revisit and modernize their MNILs to ensure that individuals have
enough income available to meet their needs in the community.
Response: Changes to State MNILs are beyond the scope of this rule.
Comment: One commenter requested that the regulation include a
requirement that if a determination is made that an individual no
longer has reasonably constant and predictable medical expenses that
meet his or her spenddown obligations, the individual should receive
timely and advance notice after the renewal, with appeal and aid-paid-
pending rights.
Response: The circumstances in which Medicaid's notice and fair
hearing rights apply are set forth in 42 CFR part 431, subpart E. If a
State's determination that an individual's medical or remedial care
expenses are no longer constant and predictable implicates one of the
circumstances described in part 431, subpart E (that is, as a result
the individual is no longer eligible for the medically needy group),
the individual will be entitled to advance notice and an opportunity
for a fair hearing. The requirement for States to provide advance
notice and fair hearing rights for individuals losing medically needy
eligibility is not impacted by this final rule.
Comment: A couple of commenters urged CMS to include a longer
period for projection of noninstitutional medical expenses, up to 12
months.
Response: The projection of expenses is made for the duration of
the medically needy budget period elected by the State, which, under
Sec. 435.831(a)(1), cannot be longer than 6 months.
Comment: A few commenters objected to the expectation described in
the preamble that States conduct reconciliations at the end of each
budget period; for example, that they confirm that medically needy
individuals actually incurred the amounts projected at the beginning of
the budget periods. One commenter indicated that reconciliation is
burdensome and could pose a barrier to enrollment. Another commenter
stated that the reconciliations should occur at renewal instead of the
end of budget periods.
Response: We believe reconciliation is necessary to ensure the
projection process does not result in erroneous grants of eligibility.
Reconciliation is also required for States that project institutional
services. We disagree that conducting reconciliation at the point of an
eligibility renewal is appropriate. It will be important for States to
identify as quickly as possible medically needy beneficiaries whose
projected expenses are not actually being incurred to (1) minimize the
financial burden on the individual at the point of reconciliation, and
(2) prevent further payment of medical assistance exceeding the amount
for which the individual is eligible.
Comment: One commenter requested that CMS include language in the
regulatory text that prohibits the termination of coverage
retroactively when individuals are found not to have met spenddown
obligations after reconciliation.
Response: Under Sec. 431.211, States generally are not permitted
to terminate an individual's Medicaid eligibility sooner than 10 days
after providing notice that the individual is no longer eligible for
Medicaid. While there are exceptions to this limitation, described in
Sec. 431.213, none of those exceptions relate to a circumstance in
which an individual may have received an erroneous grant of Medicaid
eligibility based on the projection of their medical or remedial care
expenses. Section 431.211 applies equally to individuals eligible for
medically needy coverage, and we do not consider it necessary or
appropriate to repeat this requirement in Sec. 431.831.
Comment: One commenter recommended that the regulation require only
documentation of the predictability of prospective bills without
requiring proof of payment during the budget period in which expenses
are projected, as there is often a lag in billing times.
Response: Such an addition to the regulation would not be
consistent with Federal policy. Expenses for incurred medical or
remedial care services are
[[Page 22788]]
counted in meeting an individual's spend down amount under Sec.
435.831, regardless of whether or not the individual actually pays the
provider for the services. The regulation at Sec. 435.831(f)(5)
identifies the particular circumstance in which an actual payment must
also be deducted (specifically, payments made during a current budget
period for services incurred previous to the budget period and which
were not deducted as expenses in a previous budget period). In these
circumstances, States may verify that the payment was made. However, we
note that the past consistency of payments made by an individual
seeking to qualify as medically needy by projecting the cost of an
expense that is reasonably constant and predictable may not be a factor
in determining the amount to be projected.
Comment: One commenter inquired about how the new authority to
project noninstitutional expenses will work in conjunction with the
``hypothetical spenddown'' process used by States that determine
eligibility for HCBS through the medically needy eligibility pathway.
Response: As mentioned previously in this final rule, the
eligibility group described in Sec. 435.217 (generally referred to as
``217 group'' beneficiaries) serves individuals who are eligible for
and will receive section 1915(c) services and who would be eligible if
institutionalized. While individuals in this group are, as required
under Sec. Sec. 435.726 and 435.735, subject to post-eligibility
treatment-of-income (PETI) rules, many States allow 217 group
beneficiaries to keep all of their income to meet their community
needs. This is effectuated by a State setting the maintenance allowance
used in the PETI calculation for 217 group beneficiaries at the income
eligibility standard for the State's 217 group. For example, if 300
percent of the supplemental security income (SSI) benefit rate is the
income eligibility standard for the State's 217 group, the State would
elect 300 percent of the SSI benefit rate as the maintenance allowance.
However, individuals who need section 1915(c) services but who have
incomes in excess of the 217 group income standard commonly must
qualify as medically needy to access such services, which requires them
to reduce their income to the State's MNIL, which is typically an
amount well below the State's maintenance allowance for the 217 group.
The hypothetical spenddown policy enables States, at their option,
to project the costs of institutional expenses that would be incurred
by an otherwise medically needy individual if that individual were
institutionalized. If the individual would meet their spenddown if they
were actually in an institution, a State electing this policy could
deem the individual to be one who would be eligible if
institutionalized, thereby enabling the individual to be eligible under
the 217 group. This allows the individual to keep the amount of their
income equal to the State's section 1915(c) maintenance allowance for
the 217 group, instead of having to spend down all of their income in
order to establish eligibility while remaining in the community.
This option is not impacted by the policy finalized in this
rulemaking at Sec. 435.831(g), which enables States to project
reasonably predictable and constant non-institutional medical expenses
an individual expects to incur. However, we note that there is now a
more versatile option available to States. As described in ``State
Flexibilities to Determine Financial Eligibility for Individuals in
Need of Home and Community-Based Services'' (SMD #21-004, December 7,
2021), States can adopt income and resource disregards targeted at
individuals who need HCBS, which includes the authority to target
disregards at the 217 group, which also enables States to provide HCBS
through the 217 group to individuals at higher income levels. We are
available to provide technical assistance to any State interested in
either of these options.
After considering the comments received, we are finalizing the
regulation text at Sec. 435.831(g)(2) as proposed without
modification. We note that because the effect of this change is
specific to the computation of medical expenses of noninstitutionalized
individuals who seek to establish eligibility for Medicaid as medically
needy, it operates independently from the other provisions of this
final rule.
2. Application of Primacy of Electronic Verification and Reasonable
Compatibility Standard for Resource Information (Sec. Sec. 435.952 and
435.940)
We proposed revisions to clarify that the regulations at Sec.
435.952, regarding the use of information to verify an individual's
eligibility, apply not only to verification of income and non-financial
information, but also to the verification of resources. The language of
Sec. 435.952 is written broadly to encompass all factors of
eligibility, including income and resource criteria, when applicable.
However, because Sec. 435.952(b) applies specifically to information
needed by the State to verify an individual's eligibility in accordance
with Sec. 435.948 (relating to income), Sec. 435.949 (relating to
information received through the Federal Data Services Hub), or Sec.
435.956 (relating to non-financial eligibility requirements), some have
interpreted this requirement not to apply to verification of resources.
Therefore, we proposed revisions to paragraphs (b) and (c) of Sec.
435.952 to clarify that this provision applies to any information
obtained by the State, including resource information. Since Sec.
435.952 applies to resource information obtained from electronic data
sources, such as an asset verification system (AVS) described under
section 1940 of the Act, we also proposed a corresponding technical
change to add section 1940 of the Act to Sec. 435.940 (regarding the
basis and scope of the verification regulations). As a reminder, when
implementing a reasonable compatibility standard for resources, States
should continue to evaluate resources on an individual basis (subject
to existing regulations under Sec. 435.602) and not on a household
basis.
We received the following comments on these proposed provisions:
Comment: Commenters overwhelmingly supported the proposed changes
clarifying that States should, to the extent possible and when
reasonably compatible, rely on electronic data for verifying resources
to streamline eligibility processes and alleviate the administrative
burden for States and individuals. Further, commenters expressed that
clarifying that the reasonable compatibility standards also apply to
the verification of resources would increase the efficiency of the
eligibility determination process for individuals who are age 65 or
over, are blind, or have a disability (referred to herein as ABD
individuals), as these individuals generally are required to have
resources under a certain threshold in order to be eligible for
Medicaid. Multiple commenters also supported the proposed changes
because they would reduce churn, where eligible individuals lose
eligibility (generally for a procedural reason such as not returning
requested documentation) and then reapply and are determined eligible
again.
Response: We appreciate the overwhelming support for the proposed
revisions at Sec. 435.952. We agree with commenters that applying a
reasonable compatibility standard will increase the efficiency and
reduce administrative burden for States when determining eligibility
for individuals for whom a resource standard is required. States are
already required to apply a reasonable compatibility standard for
income for all
[[Page 22789]]
populations under existing regulations at Sec. 435.952. As commenters
noted and we agree, our proposed policy will also streamline the
eligibility process for consumers, because individuals will not be
required to provide additional paper documentation of resources when
electronic data sources provide information that is reasonably
compatible with the individual's attestation. This streamlining will
facilitate enrollment of eligible individuals. For example, if the
resource threshold for non-MAGI eligibility is $2,000, the individual
attests to $1,700 in financial assets from two sources and the AVS
returns a resource amount of $1,850, the attested resource information
and the resource information returned from the AVS both would be below
the relevant threshold of $2,000, and therefore considered reasonably
compatible, and no additional information from the individual would be
needed. This is true regardless of the other data elements returned by
the AVS such as the type or name of an asset which differs from the two
sources listed in the attestation, or if the $1,850 includes a third
source that was not included in the attestation.
Comment: A few commenters raised concerns that the proposal would
increase fraud in the Medicaid program and divert health care dollars
and services from the neediest Americans. One commenter suggested that
the rule should require individuals to provide verification of their
resources rather than comparing self-attested information to data from
electronic sources. The commenter stated that the proposed changes
would increase Medicaid enrollment of ineligible individuals. This
commenter suggested that the rule require individuals to verify their
financial information, because such a policy would combat intentional
fraud and remove middle and upper-income individuals from the Medicaid
program.
Response: We disagree that the proposed changes will increase fraud
in the Medicaid program. The proposal would not limit States' statutory
obligation to verify factors of an individual's eligibility. States
currently must verify resources using an AVS described in section 1940
of the Act for individuals whose eligibility is subject to a resource
test, and nothing in this rulemaking changes that requirement. As
clarified in this final rule, Sec. 435.952(c)(2) requires States to
seek additional information, which may include documentation, if
attested information is not reasonably compatible with information
obtained through the AVS or other electronic data match. This means
that if the resource information to which the individual attests is not
reasonably compatible with information obtained through an electronic
data match, and thus could affect whether the individual would be
eligible for Medicaid, the State must seek additional information from
the individual. If electronic data verifies an individual's
attestation, there is no need for a State to require additional proof.
Doing so would only add burden for both the State and the individual
and diminish program integrity by potentially preventing the enrollment
of an individual who is eligible for the program. In the final rule, we
have made minor modifications to Sec. 435.952(c)(1) to make sure it is
clear that the policy described above is the same for income and
resources (meaning that resource information must be considered
reasonably compatible if the resource information obtained
electronically and the information provided by or on behalf of the
individual is either at or below the applicable standard or other
relevant threshold). Thus, we are finalizing the revisions at Sec.
435.952(b) and (c)(1) as proposed with minor clarifying modifications
to paragraph (c)(1).
Comment: One commenter suggested that CMS make our proposed
modifications to Sec. 435.952(b) and (c)(1) optional for States until
more extensive work has been done to ensure that electronic data
sources have sufficient information to verify resources. The commenter
noted that verification of many types of resources may not be available
through electronic data sources such as an AVS, for example, non-
homestead real property, automobiles and other vehicles, equipment,
investments, annuities, and retirement assets.
Response: We disagree that application of the regulations at Sec.
435.952 to verification of resources should be at State option. The
State must attempt to verify and determine eligibility in accordance
with its verification plan, which may include requesting additional
information and documentation from the individual in appropriate
circumstances. Documentation from the individual may be sought to
verify an individual's assets when electronic data is inconsistent with
attested asset information as well as when electronic data are not
available (that is for non-financial assets) and establishing a data
match would not be effective in accordance with Sec. 435.952(c). The
verification rules at Sec. 435.952, including the reasonable
compatibility requirements, reduce burden on both individuals and
States and thus further the effective and efficient administration of
the State plan and best interests of beneficiaries. Further, the
current regulation at Sec. 435.952 is written broadly to encompass all
factors of eligibility, including resource criteria when applicable.
The current regulations apply to verification of resources; this final
rule clarifies the regulations to explicitly reflect as much. Finally,
all 50 States, the District of Columbia, and Puerto Rico are required
to implement an AVS to verify financial assets under section 1940 of
the Act. States would be required to access other electronic data
sources for asset verification only to the extent that such sources are
available and would be effective in accordance with Sec.
435.952(c)(2)(ii).
Comment: A few commenters expressed concerns about operational and
technological challenges in implementing this provision within the
timeframe described in the September 2022 proposed rule, including some
States that operate an AVS as a separate portal that is not integrated
into the State's Medicaid eligibility system. Some commenters shared
that applying a reasonable compatibility standard to resources would
require a manual process until the State is able to make systems
changes. Some commenters stated that system enhancements to make a
reasonable compatibility determination for evaluation of resources
would require the development of a new interface and new system rules,
which would be difficult to complete within the 12-month implementation
timeframe proposed.
Response: We appreciate the operational concerns expressed by
commenters and understand that this provision may lead States to
implement operational changes and system enhancements. It is our
understanding that if a State is using an AVS through a separate
portal, there is already a manual process in place. Modification of the
manual process requires re-training, but not a new interface. If a
State is using an AVS through an automated interface, it may undertake
modification of comparison logic and rules, but no new interface and/or
rules need to be implemented. Because this is an existing requirement,
and because this final rule does not add any new or additional burden,
we are not providing additional time for State compliance with this
provision. We recognize that some States are in the midst of other
significant system changes and we will continue to work with them to
ensure compliance with this requirement as soon as possible.
[[Page 22790]]
Comment: A few commenters expressed concerns about the data quality
and timeliness of responses from an AVS, which can delay eligibility
determinations and prevent States from meeting application and renewal
processing deadlines. Some of these commenters also raised concerns
that not all financial institutions participate in AVS. A number of
commenters requested additional technical assistance from CMS on
details about how AVS programs should be operationalized. For example,
due to the frequency of the AVS returning missing information or
delayed information from smaller banks, one commenter requested
clarification on the timeframe in which the AVS verification is
considered complete and when to apply the reasonable compatibility
standard.
Response: We appreciate the comments regarding data quality and the
timeliness of the information returned from the AVS. We understand that
not all asset information available from financial institutions
participating in the AVS is returned in real time. States may establish
a reasonable timeframe to review information that is returned from an
AVS. We understand that most financial institutions respond to AVS
requests within 5 days, which a State could consider a reasonable
amount of time to wait for information to be returned before the State
applies the reasonable compatibility standard. If the State determines
that the information returned from the AVS is incomplete, or if the AVS
does not return information within the reasonable timeframe established
by the State, the State must attempt to determine eligibility in
accordance with its verification plan, which may include requesting
additional information and documentation from the individual. We
continue to be available to provide additional technical assistance to
States regarding operationalizing of AVS and the application of
verification rules at Sec. 435.952 to electronic information obtained
from an AVS.
Comment: One commenter requested clarification on how reasonable
compatibility would interact with resource assessments and 90-day asset
transfers to community spouses.
Response: We interpret this comment as requesting feedback on how
resource-related reasonable compatibility would operate in the context
of the spousal impoverishment rules described in section 1924 of the
Act (``Treatment of Income and Resources for Certain Institutionalized
Spouses''), both at the underlying eligibility and redetermination
phases. Reasonable compatibility, as explained immediately below, is
sometimes, but not always, relevant under the spousal impoverishment
rules.
Section 1924(c)(2) of the Act requires that a State determine the
amount of countable resources an institutionalized spouse and community
spouse own, jointly or separately, at the time of the institutionalized
spouse's Medicaid application. This amount, minus the community spouse
resource allowance (CSRA) determined under section 1924(f)(2) of the
Act, is the amount deemed available to the institutionalized spouse and
compared to the resource standard of the eligibility group for which
the institutionalized spouse is being evaluated. Effectively, the
resource standard for the institutionalized spouse is the CSRA plus the
resource standard for the relevant eligibility group.
Consider, for example, an institutionalized spouse who is being
evaluated for the eligibility group described in section
1902(a)(10)(A)(ii)(V) of the Act (relating to individuals who have been
in medical institutions for at least 30 consecutive days) in a State in
which the CSRA is $70,000. The resource standard for the eligibility
group is $2,000, which effectively means the institutionalized spouse
will be resource-eligible if the resources owned by the couple are
equal to or less than $72,000. Reasonable compatibility could be
applied in making this determination. If the institutionalized spouse
self-attests that the spouses have $60,000 in a savings account and no
other countable resources, and the data returned on the couple's
resources by the State's AVS is $65,000, the State would consider the
amounts reasonably compatible and determine the institutionalized
spouse resource-eligible without requiring additional documentation.
Section 1924(f)(1) of the Act permits the institutionalized spouse
to transfer their interest in any resources to the community spouse as
soon as practicable after being determined eligible, as any resources
still in the institutionalized spouse's name at their first renewal
will be deemed available to the institutionalized spouse, including
resources that were considered to be part of the CSRA at application.
In other words, while each spouse's ownership of resources is not
relevant at the determination of the institutionalized spouse's
eligibility, it is relevant at the institutionalized spouse's
redetermination. Reasonable compatibility would not serve a role in the
verification of whether the institutionalized spouse maintains
ownership of resources that were included in the initial calculation of
resource eligibility.
We note that section 1924(c)(1) of the Act also requires that a
State determine the resources owned by the institutionalized spouse and
community spouse at the former's first continuous period of
institutionalization. However, while this amount may be relevant in
determining the CSRA under section 1924(f)(2) of the Act, it is not
compared to a resource-eligibility standard, which means that
reasonable compatibility would not apply to a State's verification of
this figure.
Comment: One commenter suggested this September 2022 proposed rule
may be a good opportunity to modernize the MAGI and non-MAGI
verification plan submission and review process and move towards a web-
based submission process instead of submitting verification plans via
email.
Response: We appreciate the comment to improve the verification
plan submission and review process. The comment is outside the scope of
this rule. However, we will consider the comments for future
enhancements of the verification plan review process.
After considering the comments, we are finalizing the revisions at
Sec. Sec. 435.940 and 435.952(b) and (c)(1) as proposed. We note that
because the effect of this change is specific to clarifying current
regulations regarding States' use of electronic data for verification
of assets, it operates independently from the other provisions of this
final rule.
3. Verification of Citizenship and Identity (42 CFR 435.407 and
457.380)
A State must verify an applicant's U.S. Citizenship under section
1902(a)(46)(B) of the Act, implemented at Sec. Sec. 435.406 and
435.956(a). When a State has not been able to verify an applicant's
U.S. citizenship through an electronic data match with the Social
Security Administration (SSA), it must verify the applicant's U.S.
citizenship using alternative methods described under Sec. Sec.
435.407 and 435.956(a)(1). Under current regulations, individuals whose
citizenship is verified based on any of the sources identified in Sec.
435.407(b)--which include 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. Verification with a State's vital
statistics records or DHS SAVE system, like the data match with SSA,
provides both proof of U.S. citizenship or nationality and reliable
documentation of personal identity. Once U.S.
[[Page 22791]]
citizenship is verified via a State's vital statistic records or DHS
SAVE, a State may not require an individual to provide additional proof
of identity as a condition of eligibility. As such, in the September
2022 proposed rule, we proposed to move verification of birth with a
State's vital statistics records and U.S. citizenship with DHS SAVE
system to the list of primary verifications of U.S. citizenship that do
not require additional proof of identity, at Sec. 435.407(a)(7) and
(8) respectively. These changes are incorporated into CHIP through an
existing cross-reference at Sec. 457.380(b)(1)(i). We also proposed to
remove the phrase ``at State option'' from Sec. 435.407(b)(2), as use
of such data match with a vital statistics agency is not voluntary if
it is available and effective in accordance with Sec.
435.952(c)(2)(ii).
We received the following comments on these proposed provisions:
Comment: The majority of commenters were in support of the proposed
changes to allow verification of birth with a State vital statistics
agency and verification of citizenship with DHS SAVE system, or any
other process established by DHS, as stand-alone evidence of
citizenship. Commenters agreed the changes would provide additional
efficiencies in the eligibility determination process and limit the
burden on applicants to provide documentation of citizenship without
increasing the risk of erroneous eligibility determinations.
Response: We appreciate the support for the proposed changes at
Sec. 435.407(a)(7) and (8). We agree that allowing States to
electronically verify birth with a State vital statistics agency or to
verify citizenship with DHS SAVE system will create administrative
efficiencies for States and eliminate the need for applicants to
provide unnecessary additional information without an increased risk of
erroneous eligibility determinations. In section II.A.7. of the
September 2022 proposed rule, we provided details on the efficacy of
these data sources, both of which serve as primary information sources,
one for evidence of U.S. birth (State vital statistics) and the other
for naturalized U.S. citizenship (DHS SAVE system).
Comment: A few commenters noted that some States do not have
systems alignment with vital statistics, so these system changes could
be costly and time consuming for States to implement.
Response: We considered these comments and acknowledge that not
every State may have an existing electronic system that matches an
applicant's or beneficiary's data with the State vital statistics
agency. It is optional for Medicaid and CHIP agencies to have a data
match established with their State vital statistics agency. We note
that the proposed changes to allow birth verification through an
electronic match to a State's vital statistics agency, if use of such
match is available and effective (considering such factors as
associated costs to the data match, cost of reliance on paper
documentation, and impact on program integrity) in accordance with
Sec. 435.952(c)(2)(ii), is not a new requirement for States in this
final rule. Establishing such a data match with State vital statistics
agencies also promotes data integrity in the Medicaid and CHIP
programs. Once such a data match is established, the State must utilize
it to verify U.S. citizenship when the information from the applicant
is not able to be verified with SSA or DHS, rather than requesting
paper documentation from the individual.
If a State does need to make changes to its eligibility system, FFP
is available at the 90 percent rate (enhanced FFP or enhanced match),
in accordance with Sec. 433.112(b)(14), for changes to support
accurate and timely processing of eligibility determinations, like data
matching with a State's vital statistics agency, other States' vital
statistics agencies, or DHS SAVE system. Approval for enhanced FFP or
enhanced match requires the submission of an Advanced Planning Document
(APD). A State may submit an APD requesting approval for a 90/10
enhanced match for the design, development, and implementation of their
Medicaid Enterprise Systems (MES) initiatives that contribute to the
economic and efficient operation of the program, including the
electronic data exchanges discussed here. Interested States should
refer to 45 CFR part 95, subpart F (Automatic Data Processing Equipment
and Services--Conditions for Federal Financial Participation (FFP)),
for the specifics related to APD submission. States may also request a
75/25 enhanced match for ongoing operations of CMS approved systems.
Interested States should refer to 42 CFR part 433, subpart C
(Mechanized Claims Processing and Information Retrieval Systems), for
the specifics related to systems approval.
For some States, this rulemaking may require some eligibility and
enrollment systems changes, changes to operational eligibility
processes, and/or potential verification plan revisions, at the same
time when States are facing a significant workload following the
unwinding of the continuous enrollment condition. Therefore, we are
providing States with 24 months following the effective date of this
final rule to demonstrate compliance with the changes. We urge all
States to comply as soon as possible.
Comment: One commenter recommended CMS require States to accept
birth certificates (paper or electronic) issued by the State's vital
statistics agency as stand-alone evidence of U.S citizenship.
Response: We thank the commenter for this comment to consider
allowing a paper copy or electronic version (that is, a PDF obtained
via email) of a birth certificate from a State's vital statistics
agency as stand-alone evidence of U.S. citizenship. However, with such
documentation, it may be difficult for the State to know what, if any,
set of identifiable information was used to obtain such birth
certificate or if a data match of such information was required to
obtain the paper or electronic version of the birth certificate. A
paper or electronic copy of a birth certificate could be altered,
causing potential concern for program integrity. By contrast, data
matching for identity occurs when the State agency uses a set of
personally identifiable information from the applicant to check against
the State vital statistics agency for a match, enabling electronic
verification of birth or U.S. citizenship. As such, we believe this
provision will enhance program integrity. Evidence of identity as
specified in Sec. 435.407 would still need to be verified if a paper
copy or electronic version of a U.S. birth certificate is provided,
without evidence that verification with a State vital statistics agency
was completed.
Comment: One commenter requested that REAL IDs be included in the
list of documents providing stand-alone evidence of citizenship, since
they are verified with the State's vital statistics agency.
Response: This comment is outside the scope of the proposed rule.
However, it should be noted that if a State requires proof of U.S.
citizenship for issuing a valid State-issued driver's license, this
document can serve as stand-alone evidence of citizenship under
existing regulations at Sec. 435.407(a)(4).
Comment: Some commenters were concerned that the proposed
regulation would prohibit States from verifying eligibility, could lead
to increased fraud and waste in Medicaid and CHIP, and could result in
ineligible individuals being enrolled in coverage.
Response: We do not believe this proposal would cause ineligible
individuals to be enrolled in coverage. In fact, we believe it may
reduce potential fraud and waste in the
[[Page 22792]]
Medicaid and CHIP programs, thereby improving program integrity. First,
verifying U.S. citizenship directly through an electronic interface
with a State vital statistics agency or through DHS SAVE system
decreases reliance on paper documentation which may be more difficult
for the individual to obtain, take longer to verify, or have a higher
chance of being altered. Second, verification of U.S. citizenship with
a State vital statistics agency or DHS SAVE system requires a robust
data matching process. The 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) before a response is provided. Similarly, DHS SAVE system
reviews a set of identifiable information to verify identity before
providing a response that verifies U.S. citizenship, and in some cases,
the DHS SAVE system requires additional information or paper
documentation from the individual to complete the verification. Third,
State vital statistics agencies record and maintain evidence of birth
in the State, making them the primary source of evidence of U.S.
citizenship for many individuals. Likewise, DHS is the agency that
makes decisions to grant U.S. citizenship for individuals who are
naturalized U.S. citizens. Thus, the DHS SAVE system is the primary
Federal data source that is able to verify an individual's attestation
that they are a naturalized U.S. citizen.
Comment: A few commenters indicated that only U.S. citizens, not
noncitizens, should receive government benefits.
Response: This comment is outside the scope of this proposed rule.
Changes proposed at Sec. 435.407 apply only to individuals who have
declared to be U.S. citizens; they do not apply to noncitizens. We note
that Federal law, such as the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (PRWORA), governs eligibility of
noncitizens for Federal means-tested public benefits, including
Medicaid and CHIP.
After consideration of the public comments we received, we are
finalizing without modification our proposal to move verification
through a match with a State's vital statistics records or with the DHS
SAVE program from paragraph (b) to paragraph (a) of Sec. 435.407 as
proposed. We are also finalizing without modification our proposal to
remove the phrase ``at State option'' from Sec. 435.407(b)(2), as use
of such data match with a vital statistics agency is not voluntary if
it is available and effective in accordance with Sec.
435.952(c)(2)(ii). We note that because the effect of this change is
specific to simplifying verification procedures to allow verification
of citizenship with a state vital statistics agency or SAVE without
separate identity verification, it operates independently from the
other provisions of this final rule.
B. Promoting Enrollment and Retention of Eligible Individuals
1. Aligning Non-MAGI Enrollment and Renewal Requirements With MAGI
Policies (Sec. Sec. 435.907(c)(4) and (d) and 435.916)
Since the passage of the ACA, States have been required to apply
streamlined application and renewal processes to applicants and
beneficiaries whose financial eligibility is based on MAGI. Despite
their potential benefit, these procedures have been optional for
individuals excepted from use of the MAGI-based methodologies at Sec.
435.603(j) (``non-MAGI'' individuals). As discussed in section II.B.1.
of the September 2022 proposed rule, we proposed to revise requirements
at Sec. Sec. 435.907 and 435.916 to require that States adopt many of
the streamlined application and renewal procedures currently required
for MAGI applicants and beneficiaries for non-MAGI individuals as well.
We believe these changes promote equity across all populations served
by Medicaid.
As noted in the proposed rule, States are currently 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), although this is not expressly stated in the
regulations. Therefore, we proposed to codify in regulation at new
Sec. 435.907(c)(4) the requirement that any MAGI-exempt applications
and supplemental forms must be accepted through all modalities
currently allowed for MAGI beneficiaries. We also proposed at Sec.
435.916(a)(1) to require that States conduct regularly-scheduled
eligibility renewals once, and only once, every 12 months for all non-
MAGI Medicaid beneficiaries with one narrow exception (discussed
below). Next, we proposed to require that States provide MAGI-excepted
beneficiaries whose eligibility cannot be renewed based on information
available to the State with: Sec. 435.916(b)(2)(i), (1) a pre-
populated renewal form that contains information available to the
agency; and (2) a minimum of 30 calendar days from the date the agency
sends the renewal form to return the signed renewal form along with any
required information; and at Sec. 435.916(b)(2)(iii), (3) a 90-day
reconsideration period for individuals who return their renewal form
after the end of their eligibility period and following termination for
failure to return the form. We also proposed at Sec. 435.916(b)(2)(iv)
to eliminate the State option to require an in-person interview as part
of the application and renewal processes for non-MAGI beneficiaries.
States currently are required to comply with each of these policies for
MAGI-based individuals.
Lastly, in the September 2022 proposed rule, we proposed several
technical changes, on which we did not receive any comments, including:
(1) at proposed Sec. 435.916(b)(2)(i)(B) to clarify that the 30
calendar days that States must provide beneficiaries to return their
pre-populated renewal form begins on the date the State sends the form;
(2) at proposed Sec. 435.916(b)(2)(iii) to specify explicitly 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; (3) at proposed Sec. 435.916(d)(2) 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); and (4) at proposed Sec.
435.912(c)(4), with a cross reference in proposed Sec. 435.916(c), to
establish time standards for States to complete renewals of
eligibility.
This final rule redesignates several provisions from Sec. 435.916
to the new Sec. 435.919 rule, as discussed in section II.B.2. of this
preamble. As a result, several paragraphs of Sec. 435.916 are
renumbered in this final rule. For example, Sec. 435.916(g) (relating
to accessibility of renewal forms and notices) is redesignated to Sec.
435.916(e) of this final rule. We did not receive any comments on this
change. However, as a reminder, this provision requires State Medicaid
programs to ensure that any renewal form or notice be accessible to
persons who have limited English proficiency and persons with
disabilities, consistent with Sec. 435.905(b). Further, State Medicaid
[[Page 22793]]
programs are separately required under Federal civil rights laws to
conduct their programs and activities in an accessible manner. State
agencies that receive Federal financial assistance must take reasonable
steps to ensure meaningful access to individuals with limited English
proficiency, which may include provision of language assistance
services (section 1557 of the ACA, 42 U.S.C. 18116; Title VI of the
Civil Rights Act of 1964, 42 U.S.C. 2000d et seq.). States are also
required to take appropriate steps to ensure effective communication
with individuals with disabilities, including provision of appropriate
auxiliary aids and services (section 1557; section 504 of the
Rehabilitation Act of 1973, 29 U.S.C. 794; and Title II of the
Americans with Disabilities Act, 42 U.S.C. 12131 et seq.).\10\ Nothing
in this final rule changes these requirements.
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\10\ For more information, see U.S. Dept of Health & Human
Servs., Re: Ensuring Language Access for Limited English Proficient
(LEP) Individuals and Effective Communication for Individuals with
Disabilities During the States' Unwinding of the Medicaid Continuous
Enrollment Condition (Apr. 4, 2023), https://www.hhs.gov/sites/default/files/medicaid-unwinding-letter.pdf.
---------------------------------------------------------------------------
We note that the requirements in part 435, subpart J, apply
specifically to the 50 States, the District of Columbia, the Northern
Mariana Islands, and American Samoa and through a cross reference at
Sec. 436.901 they also apply to Guam, Puerto Rico, and the Virgin
Islands (with the exception of Sec. 435.909). The revisions to
Sec. Sec. 435.907 and 435.916, and all other revisions to part 435,
subpart J, included in this rule, apply equally to the 50 States, the
District of Columbia, and all territories.
We received the following comments on these proposed provisions:
Comment: Commenters generally supported the alignment of the non-
MAGI with MAGI processes proposed under Sec. Sec. 435.907 and 435.916,
including allowing non-MAGI individuals to apply and renew through all
modalities, renewing eligibility no more frequently than every 12
months, providing a pre-populated renewal form, giving enrollees 30
days to respond, and allowing a 90-day reconsideration period.
Commenters noted that these proposed requirements, which originated in
the ACA for the MAGI-based populations, have all proven possible to
implement and effective at reducing churn of beneficiaries on and off
Medicaid. Furthermore, non-MAGI populations tend to have fixed, routine
sources of income, and so tend to stay consistently eligible, and yet,
commenters asserted, States have not been allowed to extend to them the
simplified enrollment and renewal processes available to MAGI
populations that would help prevent churn. Therefore, commenters
support now extending these policies to the non-MAGI groups as proposed
in the September 2022 proposed rule.
Other commenters pointed out that the proposed changes to align
renewal requirements for MAGI and non-MAGI individuals would reduce
administrative burdens on State Medicaid agencies, by creating one
simplified set of renewal rules for State eligibility and enrollment
call center workers, enrollees, assisters, and other interested parties
to understand and implement. One commenter also highlighted that the
September 2022 proposed rule would extend some of the requirements for
applications to renewals, such as at proposed Sec. 435.916(b)(2)(iii),
which, via cross reference to Sec. 435.912(c)(3) of the current
regulation, would require that States determine eligibility at renewal
within the same timeliness standards applicable to processing
applications; this would allow States to consolidate eligibility and
enrollment information for each applicant or beneficiary in one case
record.
Response: We agree with these commenters that aligning these
application and renewal procedures will promote continuity of coverage,
decrease churn, 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. We note
that this alignment will be particularly beneficial to individuals in
households in which some individuals are eligible based on MAGI and
others are eligible on a non-MAGI basis, as non-MAGI household members
may otherwise be subject to more burdensome administrative
requirements. We also believe alignment will reduce administrative
burden for States. We want to clarify that, under the current
regulations, States are permitted, at their option, to apply to their
non-MAGI populations the application and renewal procedures we proposed
to require in this rulemaking. The proposed revisions at Sec. Sec.
435.907(c)(4) and 435.916(a)(1) and (b)(2)(i), (iii), and (iv), which
we are finalizing as proposed in this final rule, will make it
mandatory for States to do so.
Comment: One commenter noted that the proposal at Sec.
435.907(c)(4), requiring that States accept all MAGI-exempt
applications and supplemental forms provided by applicants seeking
coverage on a non-MAGI basis through all the modalities allowed for
MAGI individuals, would require substantial systems changes to
implement, as currently non-MAGI renewals are processed in a separate
system from MAGI renewals, and such updates would take longer than 12-
18 months given States' unwinding priorities.
Response: We understand that State system updates needed to accept
applications and supplemental as well as renewal forms via additional
modalities will take time and resources. However, as this is a
longstanding policy being codified through rulemaking, we find this to
be a reasonable investment given the reduction in beneficiary burden
that will result from being able to submit required information in
whatever modality best fits the needs of the applicant or beneficiary.
CMS has been working with States to enforce this requirement, and those
not already in compliance now have a mitigation plan approved by CMS to
come into compliance.
Additionally, while encouraged, there is no requirement for States
to integrate non-MAGI with MAGI systems but rather to make non-MAGI
applications and renewals possible through the same modalities--for
example, paper, phone, web-based--as MAGI applications and renewals. We
do recognize the operational challenges States face and are finalizing
these requirements so that they are effective upon the effective date
of this rule, except as otherwise required (such as by the CAA, 2023).
However, States will have 36 months after the effective date of this
rule to complete all system and operational changes necessary for
compliance. This implementation timeframe will permit States to
complete most unwinding and mitigation-related activities and then have
adequate time to complete any additional system changes needed for full
compliance with the requirements to align non-MAGI application and
renewal requirements with those applicable to MAGI beneficiaries.
We remind States that enhanced FFP is available, in accordance with
Sec. 433.112(b)(14), at a 90 percent matching rate for the design,
development, or installation of improvements to Medicaid eligibility
determination systems, in accordance with applicable Federal
requirements. Enhanced 75 percent FFP is also available for operations
of such systems, in accordance with applicable Federal requirements.
Comment: Some commenters specifically supported the proposed
limitation on renewals to no more than once every 12 months at Sec.
435.916(a)(1),
[[Page 22794]]
stating this would help improve health equity by ensuring that
vulnerable populations maintain their Medicaid coverage. Commenters
stated that more frequent renewals increase the number of eligible
individuals who lose coverage, while conducting eligibility
determinations only once every 12 months will reduce churn and provide
non-MAGI beneficiaries with greater stability of coverage. While
generally supporting the proposal requiring States to conduct regularly
scheduled renewals once, and only once, every 12 months, some
commenters requested that the Medically Needy population be excluded
from this requirement, because the determination of medical expenses
that individuals must incur to establish eligibility must be completed
more frequently than once every 12 months.
Response: We appreciate the support for this proposed provision.
With respect to the request to exempt medically needy beneficiaries
from the limitation on renewals to once every 12 months, we note that a
State's medically needy budget period and its renewal schedule do not
need to be identical. Under Sec. 435.831(a)(1) of the current
regulations, States can adopt a budget period between 1 and 6 months.
While States need to verify that individuals have met their spenddown
every budget period, they do not need to recalculate their spenddown
amount every budget period. The spenddown amount will remain constant
until the next renewal unless the individual experiences a change in
circumstances that might impact their eligibility. For example, a
number of States currently limit renewals for their medically needy
populations to once every 12 months, regardless of the length of their
budget periods. Likewise, we do not know of any States with a 1-month
budget period that conduct a full renewal of eligibility for medically
needy beneficiaries every month on the same timeline. Therefore, we do
not agree that alignment of regular renewals with the budget period is
needed, and we are finalizing the requirement at Sec. 435.916(a)(1) as
proposed to permit renewals no more frequently than once every 12
months, with the limited exception discussed later in this final rule.
Comment: A number of commenters supported our proposal at
Sec. Sec. 435.907(d)(2) and 435.916(b)(2)(iv) to eliminate in-person
interviews for non-MAGI eligible enrollees. They noted that the
proposed change would reduce burden on enrollees, especially those with
difficulties with activities of daily living, disabilities, behavioral
health issues, and any individuals who are hampered by work schedules,
inability to obtain childcare, or lack of transportation.
Response: We agree and appreciate the support for this proposed
provision. We believe in-person interview requirements create a barrier
for eligible individuals to obtain and maintain coverage without
yielding any additional information that cannot be obtained through
other modalities, particularly for individuals without access to
reliable transportation or a consistent schedule.
Comment: A few commenters requested that CMS extend the proposed
prohibition on mandatory in-person interviews at Sec. Sec. 435.907(d)
and 435.916(b) to include all interviews, including phone and video
interviews, for both non-MAGI and MAGI beneficiaries, because they
create significant barriers. These commenters explain that a phone or
video interview is no more necessary than an in-person interview. One
commenter explained that, in States that currently require interviews
as a condition of eligibility, individuals are allowed to complete the
interview by phone, so unless the interview requirement is eliminated
completely, this proposed change is unlikely to reduce procedural
denials based on failure to complete the interview.
Response: We appreciate and share the commenters' desire to remove
unnecessary barriers to retaining enrollment for non-MAGI
beneficiaries. We are finalizing our proposal to prohibit in-person
interviews for non-MAGI beneficiaries as proposed. If any States use
phone or video interviews to fulfill the requirement of an in-person
interview, these interview types are also prohibited.
Comment: One commenter stated their support for requiring that
States provide non-MAGI beneficiaries with prepopulated renewal forms
at Sec. 435.916(b)(2)(i)(A), which should assist many individuals who
have difficulties with eyesight, cognition, and language barriers that
interfere with understanding complex instructions. One commenter
supported CMS requiring a prepopulated form because it will reduce the
burden on people with disabilities, their families, and service
providers and will also reduce burden on legal services and other
assisters who assist individuals seeking coverage across the different
Medicaid eligibility pathways. Another commenter supported CMS
requiring States to give beneficiaries a prepopulated renewal form,
which would make it much easier for beneficiaries to complete the forms
and reduce risk of errors. Another commenter proposed that CMS should
make the proposal to require a prepopulated renewal form for non-MAGI
beneficiaries a State option. This commenter stated that if CMS were to
finalize the requirement as proposed, States would need funding to
support system changes as well as significant technical assistance with
implementation.
Response: We appreciate the support and agree that using a
prepopulated form will reduce burden and the risk of errors both when a
beneficiary completes the form and when the State enters information
into its system. We understand that system updates needed to implement
the form will take time and resources. However, we find this to be a
reasonable investment given the reduction in both beneficiary and State
burden that will result, as beneficiaries will no longer be required to
gather and resubmit, and State workers will not need to re-enter,
information already available to the State or already in the system.
Again, we remind States that enhanced FFP is available, in accordance
with Sec. 433.112(b)(14), at a 90 percent matching rate for the
design, development, or installation of improvements to Medicaid
eligibility determination systems, in accordance with applicable
Federal requirements. Enhanced FFP is also available at a 75 percent
matching rate, in accordance with Sec. 433.116, for operations of such
systems, in accordance with applicable Federal requirements. Receipt of
these enhanced funds is conditioned upon States meeting a series of
standards and conditions to ensure investments are efficient and
effective.
For the reasons noted, we are finalizing Sec. 435.916(b)(2)(i)(A),
which requires States to send a prepopulated renewal form when the
State needs additional information to renew a beneficiary's
eligibility, as proposed.
Comment: One commenter indicated their support for the
determination of Medicaid eligibility to be done through various State
applications, including the use of the Supplemental Nutrition
Assistance Program (SNAP) benefits assessment, to automatically
supplant the renewal process and use that data to determine eligibility
renewals.
Response: Although we support the development of integrated
applications that enable individuals to apply for multiple programs
using a single application, we did not propose to permit States to use
the applications used by SNAP or any other program in lieu of a
Medicaid application or renewal form. Accordingly, this comment is
outside the scope of this rulemaking. For more information about
[[Page 22795]]
States' ability to integrate SNAP and Medicaid applications, see the
August 31, 2015, SHO letter (SHO #15-001) ``RE: Policy Options for
Using SNAP to Determine Medicaid Eligibility and an Update on Targeted
Enrollment Strategies.'' \11\
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\11\ https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/downloads/SHO-15-001.pdf.
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Comment: Some commenters expressed concern that States with
integrated eligibility systems would be challenged to implement the
policies proposed at Sec. 435.916(b)(2)(i)(B) and (C), to require that
States provide non-MAGI beneficiaries with at least 30 calendar days to
return the prepopulated renewal form and other requested information,
as well as a 90 calendar day reconsideration period following
termination due to failure to return the renewal form or requested
information, because these timelines do not align with the time frames
for SNAP and Temporary Assistance for Needy Families (TANF). Commenters
believe that lack of alignment with these programs could lead to
beneficiary confusion and increase the risk of a higher rate of
procedural denials. Other commenters encouraged CMS to find a solution
to the different timeframes between Medicaid and SNAP for beneficiaries
to return required additional information and offer a waiver or other
option to States that jointly administer their Medicaid and SNAP
programs to adjust this requirement. Lastly, some commenters opposed
the proposal to apply the renewal processes at current Sec.
435.916(a)(3) to non-MAGI beneficiaries due to concerns that States
with integrated eligibility systems would have trouble implementing a
prepopulated renewal form for Medicaid when the same form is used for
other programs like SNAP and TANF that use different income counting
methodologies.
Response: We acknowledge the important work that many States have
undertaken to establish integrated eligibility systems and simplified
notices across their health and human service programs, like Medicaid,
CHIP, SNAP, and TANF. However, we believe it is equally important to
provide the same streamlined renewal processes for all Medicaid
beneficiaries, regardless of the financial methodologies used to
determine their eligibility. This is particularly important for
households with both MAGI and non-MAGI Medicaid beneficiaries, for whom
unaligned processes could increase confusion and result in increased
procedural terminations.
Further, we have worked with other human service programs,
including SNAP, to better understand their requirements and to identify
areas for potential alignment. While we recognize the challenges that
States face in developing integrated eligibility and enrollment systems
serving multiple programs, we do not believe that the processes
proposed in Sec. 435.907(c)(4) or Sec. 435.916 of the September 2022
proposed rule increase the challenges States face in aligning their
Medicaid and CHIP renewal processes with other human service programs
like SNAP. CMS is available to provide technical assistance to States
attempting to develop such an integrated system.
Comment: A few commenters urged CMS to consider extending the time
period for all beneficiaries to provide requested information at
renewal from a minimum of 30 calendar days to 45 or 60 calendar days.
Others also supported potentially increasing the timeframe available to
non-MAGI beneficiaries to 75 calendar days. These commenters were
concerned that 30 calendar days may not be enough time for current
beneficiaries to gather requested information. Commenters were
concerned that while individuals who may not respond within the 30 days
will have a reconsideration period after termination, they may still
experience gaps in coverage that could potentially be avoided if they
had more time initially to provide requested information.
Response: We appreciate commenters' concerns to ensure that current
beneficiaries have sufficient time to respond and prevent interruptions
to coverage. We note that States continue to retain the ability to
allow additional time beyond the required minimum of 30 calendar days
for both MAGI and non-MAGI beneficiaries. However, our goal is to align
requirements for non-MAGI beneficiaries with those currently applicable
for MAGI beneficiaries. We believe the benefits of aligning the renewal
requirements for all beneficiaries will operationally simplify the
process for States and reduce confusion for beneficiaries. We did not
propose any changes to the amount of time required for MAGI
beneficiaries to return requested information at renewal at Sec.
435.916(a)(3)(i)(B) but may consider extending the minimum timeframe
beyond 30 calendar days for both MAGI and non-MAGI beneficiaries in
future rulemaking. We are finalizing 30 calendar days for non-MAGI
beneficiaries as proposed.
Comment: While most commenters supported requiring a
reconsideration period after the date of termination, a few believed
that 90 calendar days for the reconsideration period proposed at Sec.
435.916(b)(2)(i)(C) is too long and could lead to increased recoupments
from providers. Instead, they suggested 60 calendar days to ensure
beneficiaries have adequate time to receive notices and reply as well
as to align with the Marketplaces' special enrollment period (SEP)
timeframes.
Response: In proposing 90 calendar days for the reconsideration
period, our goal was to provide an equitable experience for all
Medicaid beneficiaries, regardless of the financial methodologies used
to determine their eligibility, and to eliminate the confusion that may
result from different renewal timeframes for different household
members who are subject to different methodologies. The 90 calendar
days for the reconsideration period proposed for non-MAGI beneficiaries
would achieve alignment with the current requirement that provides a
90-day reconsideration period for MAGI beneficiaries.
We do not believe that requiring States to provide non-MAGI
beneficiaries who have been terminated for procedural reasons with 90
calendar days for the reconsideration period to return their renewal
form and any additional documentation needed will have any impact on
recoupment from providers. Indeed, because a reconsideration period
increases the number of terminated individuals who successfully
reenroll in the program relatively quickly, provider reimbursement is
likely to benefit.
The reconsideration period after termination should not be confused
with the amount of time individuals have to return a renewal form and
other needed documentation before their eligibility period expires,
which we proposed to be 30 days at Sec. 435.916(b)(2)(i)(B). We
appreciate the suggestion to align with the Marketplace, but in this
case, we believe the Medicaid standard is preferable. We do not believe
that lack of alignment between Medicaid's reconsideration period and
the 60-day Special Enrollment Period (SEP) poses a significant problem
for coordination between these programs and are not aware of any
challenges that the current 90 calendar days for the reconsideration
period for MAGI beneficiaries poses for coordination between the
Marketplace and Medicaid.
After considering these comments, we are finalizing Sec. Sec.
435.907(c)(4) and (d) and 435.916 as proposed. We note that
[[Page 22796]]
these changes to eligibility determination processes for non-MAGI
populations require States to: conduct renewals no more than once every
12 months; use prepopulated renewal forms; provide a minimum 90-day
reconsideration period after termination for failure to return
information needed to redetermine eligibility; eliminate mandatory in-
person interviews at application and renewal; and limit requests for
information on a change in circumstances to information on the change,
operate independently from the other provisions of this final rule.
Because each of these changes individually serves to reduce the burden
on applicants and beneficiaries associated with eligibility
determinations, we believe they also operate independently from one
another.
2. Acting on Changes in Circumstances Timeframes and Protections
(Sec. Sec. 435.916, 435.919, and 457.344)
In the September 2022 proposed rule, we proposed to add a new Sec.
435.919 to clearly define States' responsibility to act on changes in
circumstances. We proposed to revise and redesignate Sec. 435.916(c)
(related to procedures for reporting changes) and (d) (related to
promptly acting on changes in circumstances and scope of
redeterminations based on changes in circumstances) of the current
regulations to new Sec. 435.919. In addition to modifying these
existing requirements, we proposed to describe the steps that States
must take when reevaluating eligibility based on changes in
circumstances reported by beneficiaries and when reevaluating
eligibility based on changes in circumstances received from a third-
party data source. We also proposed that States must provide
beneficiaries with at least 30 calendar days to respond to requests for
additional information and 90 calendar days for the reconsideration
period during which beneficiaries who failed to provide requested
information related to a change in circumstances can still do so and
have their eligibility reinstated if eligible. Finally, we modified
existing language at Sec. 435.916(d)(2), redesignated to proposed
Sec. 435.919(b)(3), to clarify that States must act on anticipated
changes at an appropriate time (instead of the appropriate time).
Generally, these proposed provisions were incorporated into the CHIP
regulations at new Sec. 457.344.
We received the following comments on these proposals:
Comment: One commenter requested clarification regarding proposed
Sec. 435.919(a) for States ``to ensure that beneficiaries understand
the importance of making timely and accurate reports of changes in
circumstances that may affect their eligibility'' and CMS' expectations
for States to meet these requirements. The commenter expressed concern
that States that currently provide information regarding reporting
requirements via the rights and responsibilities to which individuals
agree when submitting their initial application, and which are repeated
in the notice informing individuals of their eligibility, may not
provide sufficient notice.
Response: As discussed in section II.B.2. of the September 2022
proposed rule, we proposed redesignating current requirements at Sec.
435.916(c) related to procedures for reporting changes to proposed
Sec. Sec. 435.919(a) and 457.344(a). It was not our intent to apply
new requirements about the procedures States must have in place to
communicate with Medicaid and CHIP beneficiaries on accurate and timely
reporting for changes in circumstances that may affect their
eligibility. Providing clear information about this responsibility in
the description of the rights and responsibilities provided to
applicants and individuals determined eligible for coverage can satisfy
this requirement. States continue to have flexibility to communicate
this information through other avenues as well.
Comment: We received many comments regarding the proposed processes
for acting on changes in circumstances at Sec. Sec. 435.919(b) and
457.344(b). Although commenters supported the alignment between
Medicaid and CHIP when States act on changes in circumstances,
commenters generally opposed the proposed approach as being overly
prescriptive and complex for State eligibility workers to implement.
Some commenters raised concerns that the number of decision points,
such as when a request for additional information may be needed and
what actions States must take in the different scenarios, would
increase the likelihood of errors. Others expressed concerns that the
proposed process would increase administrative burden by requiring
States to evaluate each reported change to determine whether it might
impact eligibility prior to processing the information. Commenters
recommended applying a single process to all changes in circumstances
rather than differentiating based on the source that reports the
change.
Response: We appreciate the feedback from commenters about the
potential administrative challenges of implementing Sec. Sec.
435.919(b) and 457.344(b) as proposed. As discussed in section II.B.2.
of the September 2022 proposed rule, our intent in establishing a new
section in part 435 (Sec. 435.919) (and a corresponding new section in
part 457 (Sec. 457.344)) was not to create a set of new requirements
that States must follow when they receive information about a change in
circumstances. Our intent was to clarify existing requirements to
ensure that States act on changes timely and in a manner that protects
the coverage of beneficiaries who remain eligible (thereby, reducing
unnecessary procedural terminations). Rather than increasing
administrative burden by requiring States to establish a host of new
actions and decision points within their process for redetermining
eligibility based on changes in circumstances, the clear set of
required actions described in this final rule is intended to help
States to streamline their processes and reduce errors.
We agree with commenters that the structure of proposed Sec.
435.919(b), differentiating between changes reported by a beneficiary
and changes reported by a third-party data source, with additional
requirements for anticipated changes known to the agency, appears to
create varied and potentially conflicting requirements for different
types of changes and may cause confusion. Therefore, in this final
rule, we revise Sec. 435.919(b) to streamline these requirements and
establish a single set of actions that are required when a State
receives reliable information about a change in circumstances that may
impact a beneficiary's eligibility.
In this final rule, we combined proposed Sec. 435.919(b)(1)(i),
requiring the State to evaluate whether a beneficiary-reported change
may impact that beneficiary's eligibility, with the requirement
proposed at Sec. 435.919(b)(2)(i) that the State evaluate whether the
information received from a third-party data source was accurate and if
accurate, whether it may impact a beneficiary's eligibility. As such,
we are finalizing Sec. 435.919(b) to require States to promptly
redetermine eligibility between regularly scheduled renewals, whenever
they have obtained or received reliable information about a change in a
beneficiary's circumstances that may impact the beneficiary's
eligibility for Medicaid, the amount of medical assistance for which
the beneficiary is eligible, or the beneficiary's premiums or cost
sharing charges. Reliable information includes changes reported by
beneficiaries or
[[Page 22797]]
their authorized representatives, as well as information obtained from
third-party data sources identified in States' verification plans that
the State has determined to be accurate.
At Sec. 435.919(b)(1) we are finalizing the requirement (proposed
in the same paragraph) that in redetermining eligibility based on a
change in circumstances, the agency must complete the redetermination
based on available information, whenever possible. If the State does
not have all information needed to complete a redetermination, it must
request needed information from the beneficiary in accordance with
Sec. 435.952(b) and (c).
At Sec. 435.919(b)(2) and (3) of this final rule, we combine the
requirements proposed at Sec. 435.919(b)(1)(iii) and (b)(2)(iii), to
describe the requirements when a reported change may result in
additional medical assistance (including lower premiums and/or cost
sharing charges). If the change was reported by the beneficiary, as
described at Sec. 435.919(b)(2)(i) of this final rule, prior to
furnishing additional medical assistance, the State must verify the
change in accordance with its verification plan. However, if the change
was obtained from a third-party data source, as described at Sec.
435.919(b)(2)(ii) of this final rule, the State may verify the
information with the beneficiary prior to completing the determination.
States are not required to verify such changes with the beneficiary.
Proposed Sec. 435.919(b)(1)(iii) and (b)(2)(iii) also included a
prohibition against terminating the coverage of a beneficiary who fails
to respond to a request for information to verify their eligibility for
increased medical assistance. This requirement is finalized at Sec.
435.919(b)(3).
We are finalizing, at Sec. 435.919(b)(4), the requirement proposed
at Sec. 435.919(b)(2)(ii) when third-party data indicates a change
that would adversely impact a beneficiary's eligibility. Prior to
taking adverse action based on information from a third-party data
source, the State must provide the beneficiary with an opportunity to
furnish additional information to verify or dispute the information
received. An adverse action, as defined at Sec. 431.201, includes a
termination, suspension, or reduction in covered benefits, services, or
eligibility, or an increase in premiums or cost sharing charges. At
Sec. 435.919(b)(5), we are finalizing the required actions proposed at
Sec. 435.919(b)(4), when a State determines that a reported change in
circumstances results in an adverse action. These include compliance
with the requirements to consider eligibility on other bases, determine
potential eligibility for other insurance affordability programs, and
provide advance notice and fair hearing rights.
We complete the revisions to Sec. 435.919(b) with a requirement at
paragraph (b)(6) regarding anticipated changes. This requirement is
finalized as proposed at Sec. 435.919(b)(3), except we added a cross-
reference to paragraphs (b)(1) through (5) to clarify that the same
steps apply when States are reevaluating a beneficiary's eligibility
based on an anticipated changes in circumstances. Lastly, in this final
rule, we revise the CHIP regulations at Sec. 457.344 to correspond
with the modifications at Sec. 435.919, as discussed previously in
this final rule, and ensure continued alignment between Medicaid and
CHIP. However, we note that there are some minor differences at Sec.
457.344 to account for Medicaid requirements that do not apply to CHIP,
such as considering eligibility on all other bases.
Comment: One commenter sought clarification on what would be
considered ``additional medical assistance'' for purposes of acting on
changes in circumstances under proposed Sec. 435.919(b). Some
commenters also had questions about whether moving individuals between
eligibility groups, when the move results in no change to the benefits
to which the individual is entitled, should be considered ``additional
medical assistance'' when acting on changes in circumstances.
Response: The term ``additional medical assistance'' at Sec.
435.919(b)(2), as well as the term ``additional child or pregnancy-
related assistance'' at Sec. 457.344(b)(2), mean any practical change
to an individual's coverage that is beneficial to the individual. For
example, an individual moving from an eligibility group provided with
limited benefits (for example, the eligibility group limited to family
planning and related services at Sec. 435.214) to another eligibility
group that receives a comprehensive benefit package (for example, the
eligibility group for parents and other caretaker relatives at Sec.
435.110) would be considered to be receiving ``additional medical
assistance'' because the individual is now entitled to more benefits.
Another example would be a reduction or elimination of cost sharing or
premiums, applied to a beneficiary who experienced a reduction in
income. We also consider movement between eligibility groups that does
not result in a practical change in benefits to be included within the
term ``additional medical assistance'' for the purposes of meeting the
requirements under proposed Sec. Sec. 435.919(b)(2) and 457.344(b)(2).
Comment: Some commenters had questions about what States should do
under proposed Sec. 435.919 when a reported change could result in an
individual moving to a different eligibility group, particularly when
the movement between eligibility groups may not impact benefits.
Commenters sought clarification on whether States should reach out to
beneficiaries regarding changes in circumstances that would result in a
beneficiary changing eligibility groups and what to do if the
beneficiary fails to respond to requests for additional information.
One commenter recommended that States be allowed to move the individual
between eligibility groups even if the individual does not respond to
requests for information.
Response: States are required, as described at Sec. Sec.
435.919(b) and 457.344(b) of this final rule, to redetermine
eligibility whenever they receive information about a change in
circumstances that may impact a beneficiary's eligibility. We recognize
that some changes in circumstances result in an adverse action, making
the beneficiary ineligible or eligible for less medical assistance
(that is, fewer benefits or higher cost sharing), some changes in
circumstances result in eligibility for additional medical assistance,
and other changes in circumstances necessitate a change from one
eligibility group to another without impacting the medical assistance
available to the beneficiary. In cases where a change in circumstances
has no practical impact on a beneficiary's coverage, for example,
eligibility for a different group with no change in coverage, the
requirements described at Sec. Sec. 435.919(b)(2) and 457.344(b)(2) of
this final rule apply. The State must attempt to act on the change, if
reported by the beneficiary, consistent with applicable verification
requirements (Sec. Sec. 435.940 through 435.960 for Medicaid and Sec.
457.380 for CHIP) and the State's verification plan. If the State is
able to verify the information, then the beneficiary would be moved to
the new group. If the change was provided by a third-party data source,
the State may verify the change with the beneficiary. If the State
elects to verify information with the beneficiary and the beneficiary
confirms that the change is correct, then the beneficiary would also be
moved to the new group. However, if the State is unable to verify the
information with the beneficiary, the individual must remain in their
current eligibility group; consistent with
[[Page 22798]]
Sec. Sec. 435.919(b)(3) and 457.344(b)(3), the individual's
eligibility may not be terminated for failure to respond to a request
for additional information.
Comment: Some commenters noted a lack of clarity in the proposed
rule about when information from a third-party data source would be
considered ``reliable'' consistent with proposed Sec. 435.919(b)(2)(i)
and encouraged CMS to provide additional guidance on the data sources
or types of information that could be considered reliable.
Response: We expect States to make eligibility determinations for
Medicaid and CHIP based on the most current and reliable information
available to them. Information available in a beneficiary's case record
or other more recent information available to the State, including
information from electronic data sources or other agencies such as
SNAP, would be considered reliable for this purpose. For example, if a
State receives information from a third-party data source, such as
Equifax, indicating a change in a beneficiary's income, but that
information is older than other income information the State received
from another agency, such as TANF, the State should not act on the
older information from the third-party data source. See the December
2020 Center for Medicaid and CHIP Services (CMCS) Informational
Bulletin ``Medicaid and CHIP Renewal Requirements'' for additional
information.\12\
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\12\ See December 2020 CMCS Informational Bulletin ``Medicaid
and Children's Health Insurance Program (CHIP) Renewal
Requirements.'' Available at https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf.
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Comment: One commenter expressed concern about how the proposed
changes in circumstances requirements would interact with the
reasonable opportunity period for individuals otherwise eligible for
full Medicaid or CHIP benefits who do not respond to requests for
additional information to resolve discrepancies about their declared
satisfactory U.S. citizenship or satisfactory immigration status. The
commenter provided an example when an individual is receiving limited
Medicaid benefits for the treatment of an emergency medical condition
who later declares to have a change in immigration status which makes
them eligible for full Medicaid benefits.
Response: Sections 1137(d)(3), 1902(a)(46)(B), 1902(ee) and
2105(c)(9) of the Act require that States verify that an individual is
a U.S. citizen or has a satisfactory immigration status when
determining eligibility for Medicaid and CHIP. If States are unable to
verify a beneficiary's U.S citizenship or satisfactory immigration
status or a reported change in such status, existing regulations at
Sec. Sec. 435.956(b) and 457.380(b)(1) require States to provide
individuals with a reasonable opportunity period to verify such
information. During this reasonable opportunity period, States must
provide the individual with benefits that they would otherwise be
eligible for consistent with Sec. Sec. 435.956(a)(5)(ii) and
457.380(b)(1)(ii).
In this scenario, in which an individual is eligible only for the
treatment of an emergency medical condition in Medicaid due to not
having U.S. citizenship or satisfactory immigration status, but the
individual reports a change by declaring to be a U.S. citizen, U.S.
national, or having satisfactory immigration status, we would expect
the State to attempt to verify the information consistent with Sec.
435.919(b)(1), which cites to existing citizenship/immigration
verification requirements at Sec. 435.956. If the State is unable to
verify the declared U.S. citizenship or satisfactory immigration status
promptly, the State must provide the individual with a reasonable
opportunity period and must continue efforts to complete the
verification of the individual's citizenship or satisfactory
immigration status, or request documentation if necessary. Once the
reasonable opportunity period is provided, the State may begin to
furnish full Medicaid benefits provided the individual is otherwise
eligible (that is, the individual satisfies all other eligibility
criteria). At that time, such State would be expected to follow the
reasonable opportunity requirements at Sec. 435.956(b), including
providing proper notice to the individual about when the reasonable
opportunity period begins and ends. If, by the end of the reasonable
opportunity period, the individual's U.S. citizenship or satisfactory
immigration status has not been verified, States would be expected to
terminate the individual's full Medicaid benefits within 30 days. At
that point coverage would revert back to limited coverage for the
treatment of an emergency medical condition as described in section
1903(v)(2)(A) of the Act.
Comment: Many commenters did not support proposed Sec.
435.919(b)(2)(iii), which would allow States to verify information
received from a third-party data source with the beneficiary before
providing additional medical assistance or lowering cost sharing.
Commenters indicated that currently at renewal States are required to
act on reliable information from a third-party data source that results
in eligibility for additional medical assistance or lower cost sharing
without verifying the information with the individual. The commenters
believe that States similarly should be required to act on reliable
information received from a third-party data source that indicates a
change in circumstances resulting in eligibility for additional medical
assistance or lower cost sharing without verifying the change with the
beneficiary.
Response: We appreciate commenters' concerns. The intent of our
proposal was to codify existing policy. States currently have the
option to act on information obtained from a third-party data source
without verifying the information with the individual prior to
providing the additional benefits. Because we did not propose to change
this policy, we are finalizing this policy as proposed but will take
the comments into consideration in the future. At Sec. Sec.
435.919(b)(2)(ii) and 457.344(b)(2)(ii), we are finalizing the option
for States to confirm third-party information with a beneficiary, prior
to providing additional medical assistance or reducing premiums and/or
cost sharing. However, we retain the requirement at Sec. Sec.
435.919(b)(3) and 457.344(b)(3) that States may not terminate a
beneficiary's eligibility if they do not respond to a request for
additional information to verify such third-party information.
Comment: Some commenters supported the requirement at Sec.
435.919(b)(1)(iv) to require States to send a notice to a beneficiary
who reports a change that does not ultimately impact their eligibility.
However, many other commenters believe that requiring a notice in this
situation would be administratively burdensome for States and could
create confusion for beneficiaries. Commenters were particularly
concerned about the potential for confusion following the end of the
continuous enrollment condition.
Response: While we believe that communication with beneficiaries is
critical, we appreciate commenters' concerns that this requirement both
imposes additional burden on States and could cause unnecessary
confusion for beneficiaries. Therefore, we are not finalizing the
requirement at proposed Sec. Sec. 435.919(b)(1)(iv) and
457.344(b)(1)(iv) that States must send a notice to beneficiaries that
the information they reported was received but did not impact their
eligibility. However, we encourage States to develop clear notices, at
their option, to acknowledge such reported changes and assure
beneficiaries that there is no impact on their eligibility or coverage.
Comment: Many commenters supported the proposed requirement at
[[Page 22799]]
Sec. Sec. 435.919(b)(1)(iii) and (b)(2)(iii) that would prohibit a
State from disenrolling a beneficiary who does not respond to requests
for additional information to verify a change in circumstance that
would result in a beneficial change, such as more medical assistance or
lower cost sharing.
Response: We appreciate commenters' support of our proposal to keep
individuals enrolled in Medicaid and CHIP when they do not respond to
requests that would potentially result in more beneficial coverage,
such as additional benefits or lower cost sharing. We are finalizing
Sec. 435.919(b)(1)(iii) and (b)(2)(iii), redesignated at Sec.
435.919(b)(3) for Medicaid, as proposed. In addition, we are finalizing
the corresponding CHIP provisions, proposed at Sec. Sec.
457.344(b)(1)(iii) and (b)(2)(iii), and redesignated here as Sec.
457.344(b)(3) of this final rule, as proposed.
Comment: Many commenters were supportive of proposed Sec.
435.919(c)(1) to require that States provide beneficiaries with at
least 30 calendar days to respond to requests for additional
information related to a change in circumstances, which would align
with the current policy to provide MAGI-based beneficiaries with at
least 30 days to return a renewal form. Commenters noted that
beneficiaries often have significant difficulty in responding to
requests for additional information, particularly when documentation is
needed. However, some commenters expressed concern that this
requirement would have a significant fiscal impact on States. These
commenters noted that the policy would require States to maintain
coverage for at least two additional months for individuals who may
ultimately be determined ineligible for Medicaid. They stated that this
additional time could have a considerable fiscal impact on States,
especially in the case of beneficiaries enrolled in a managed care
delivery system. Commenters also sought clarification from CMS on how
proposed Sec. 435.919(c)(1) interacts with the minimum 10-day advance
notice currently required prior to taking an adverse action (Sec.
431.211).
Response: We appreciate commenters' support for alignment of
beneficiary response timeframes at renewal and following a change in
circumstances for Medicaid and CHIP. We also appreciate commenters'
concerns about maintaining coverage for individuals who may be
determined ineligible, and we recognize the fiscal constraints that may
incentivize speedy disenrollment of potentially ineligible
beneficiaries. However, the benefits of providing individuals with
adequate time to collect needed information and respond to a request
from their State Medicaid or CHIP agency are clear. As discussed
earlier, maintaining enrollment and reducing enrollment churn has the
potential to improve beneficiary health; reduce the need for high-cost
interventions that can result from delayed care; reduce administrative
burdens for individuals, health care providers, and State agencies;
improve the ability of beneficiaries and their providers to form
lasting relationships; and protect beneficiaries from medical debt and
providers from non-payment.
Current Sec. 435.930(b) requires States to continue to furnish
Medicaid to beneficiaries until they are found to be ineligible, and
States cannot complete a finding of ineligibility without giving the
beneficiary an adequate opportunity to explain, disprove, or verify
information received from a third party. We believe a minimum 30-day
response period provides adequate time for beneficiaries to respond and
does not create undue burden on States. In addition, we agree with
comments that support aligning policies between renewals and changes in
circumstances to make administration simpler for States and reduce
beneficiary confusion in terms of the expectations regarding their
response to requests for additional information. As such, we are
finalizing the 30-day response period at Sec. 435.919(c)(1) for
Medicaid and Sec. 457.344(c)(1) for CHIP as proposed.
We appreciate the question about how the requirement at Sec.
431.211, to provide a minimum of 10 days advance notice prior to taking
an adverse action, fits together with the 30-day response period
finalized in this rule, when a beneficiary's eligibility must be
terminated for failure to provide the requested information and will
provide additional guidance on this question in the future.
Comment: While many commenters viewed requiring a minimum timeframe
for beneficiaries to respond to requests for additional information as
a helpful way to combat churn, one commenter suggested that approach
was not effective. Instead, this commenter highlighted the importance
of providing States with additional flexibility to be able to gradually
end Medicaid benefits for individuals who may appear to be no longer
eligible rather than applying additional rules to States.
Response: This comment is beyond the scope of this rulemaking. We
note that medical assistance can only be provided to individuals who
meet all eligibility requirements under a State plan or demonstration
project authorized under section 1115 of the Act. While States are
required to continue to furnish benefits until an individual has been
found ineligible, consistent with Sec. 435.930 of the current
regulations, Federal financial participation is not available for
individuals determined to no longer meet eligibility criteria.
Comment: Commenters were also generally supportive of the
requirement at proposed Sec. 435.919(c)(1)(ii) that would require
States to allow beneficiaries to respond to requests for information
through any modality specified in Sec. 435.907(a), but a few
commenters expressed concerns at being able to ensure that all methods
were available given that changes in circumstances happen frequently
and that it would be challenging for States to track all modalities of
submission.
Response: We appreciate commenters' raising their concerns about
challenges States may face when developing procedures for beneficiaries
to report changes or provide additional information regarding changes
in circumstances consistent with Sec. Sec. 435.919 and 457.344.
However, we note that these are not policy changes. They simply codify
existing policies. States are currently required to allow beneficiaries
to report information about changes through all modalities that are
also available to individuals submitting a new application under
existing Sec. 435.916(c), which is redesignated at Sec. 435.919(a)
for Medicaid and Sec. 457.344(a) for CHIP in this final rule.
Therefore, we are finalizing Sec. Sec. 435.919(c)(1)(ii) and
457.344(c)(1)(ii) as proposed.
Comment: The majority of commenters supported the redesignation of
existing requirements at Sec. 435.916(d), which limit the scope of
requests for additional information to only those related to the
reported change in circumstance, to new Sec. 435.919(e).
Response: We appreciate commenters' support of our proposal. We are
finalizing Sec. 435.919(e) and the corresponding CHIP regulation at
Sec. 457.344(e) as proposed.
Comment: Similar to the existing 90-day reconsideration period at
application, many commenters expressed support for providing a
reconsideration period for individuals who return requested information
relating to a change in circumstances after their coverage has been
terminated. Many commenters noted that this policy would reduce the
burden of processing new applications and simplify implementation by
applying a
[[Page 22800]]
consistent policy for renewals and changes in circumstances. However,
some commenters urged CMS to consider removing the language in proposed
Sec. 435.919(d) that limited the requirement to provide a 90-day
reconsideration period to only individuals who are terminated for
procedural reasons (that is, because they did not respond to the
State's request for additional information). Commenters stated that
providing a reconsideration period for individuals whose coverage is
terminated for cause, such as individuals with fluctuating income whose
coverage is terminated when their income increases only to become
eligible again shortly thereafter, could be very beneficial and prevent
unnecessary churn.
Response: We appreciate commenters' general support of our
proposal. We agree that aligning policies between renewals and changes
in circumstances simplifies requirements for States. We appreciate
commenters' suggestions to remove the language in proposed Sec.
435.919(d) that limits the proposed 90-day reconsideration period to
only terminations as a result of not providing requested information.
Since we did not propose expanding the scope of the reconsideration
period in this way, we are not including this as a requirement in this
final rule. We may consider the suggestion in future rulemaking and
encourage States to consider existing flexibilities available to
protect individuals whose coverage may be terminated as they experience
frequent changes in circumstances. In the specific scenario raised by
the commenter, we note that States have the flexibility under
Sec. Sec. 435.603(h)(3) and 457.315(a) to take into account reasonably
predictable changes in income when determining current monthly income,
and that this can help reduce churn for individuals whose income
fluctuates over the course of the year.
Comment: One commenter appeared to raise concerns about the current
requirement that States must obtain a signature for any additional
information received at renewal. The commenter noted that it may not
always be possible to obtain a signature depending on how information
is submitted and that it is very common for beneficiaries to forget to
sign when they return additional information at renewal. Second, the
commenter stated that if a similar policy is applied to reconsideration
periods as a result of a change in circumstance, States will likely
face the same challenges as they currently do in obtaining signatures
at renewal. Because of those challenges, they recommended removing the
requirement at Sec. 435.919(d)(2) that States be required to obtain a
signature from the beneficiary to confirm the accuracy of any
information provided to redetermine eligibility during a
reconsideration period following a change in circumstances. They
believe allowing this flexibility will reduce administrative burden.
Response: We appreciate the commenter's concerns about some of the
challenges States may face when attempting to obtain the necessary
signatures during renewal. As a best practice, we encourage States to
continue to reach out to beneficiaries that are missing information on
a returned renewal form. We believe this additional outreach is
particularly important when individuals have provided all of the
information necessary to complete an eligibility determination but have
forgotten to include their signature.
The intent of proposed Sec. Sec. 435.919(d)(2) and 457.344(d)(2)
was to align the policies for the reconsideration period specific to a
change in circumstance with the existing policies for a reconsideration
period provided at renewal. Currently, if a beneficiary provides
additional information during the 90-day reconsideration period at
renewal, States must treat the information as a new application as
described at Sec. Sec. 435.916(b)(2)(iii) and 457.343. As such under
Sec. 435.907(f), the individual must provide a signature to be able to
consent to enrollment (or reenrollment) in Medicaid and CHIP and verify
the accuracy of the additional information or provide correct
information, consistent with section 1137(d)(1)(A) of the Act. In order
to continue to meet these requirements, we are finalizing Sec. Sec.
435.916(d)(2) and 457.344(d)(2) with references to Sec. 435.907(f) as
proposed. Additionally, we note that treating additional information
received during the 90-day reconsideration period as a new application
entitles eligible individuals to up to 3 months of retroactive coverage
under Medicaid consistent with Sec. 435.915.
Comment: Some commenters expressed concern that it would not be
possible for States with an integrated eligibility system that also
determines eligibility for other programs, such as SNAP and TANF, to
comply with protections for Medicaid beneficiaries proposed at Sec.
435.919(c)(1), requiring at least 30 calendar days for beneficiaries to
respond to requests for information related to a change in
circumstances, because these protections are not required under the
other programs.
Response: We acknowledge the important work that many States have
undertaken to establish integrated eligibility systems and simplified
notices across their health and human service programs, like Medicaid,
CHIP, SNAP, and TANF. However, the eligibility requirements and
processes between those programs continue to differ, so we believe that
providing a minimum beneficiary response period to Medicaid and CHIP
beneficiaries is appropriate to ensure that individuals who are
actually eligible have time to provide the necessary information and
reduce the likelihood of churn within Medicaid and CHIP.
We have worked with other human service programs, including SNAP,
to identify areas for potential alignment. While we recognize the
challenges that States face in developing integrated eligibility and
enrollment systems serving multiple programs, we do not believe that
the processes proposed in Sec. Sec. 435.919(c)(1) and 457.344(c)(1) of
the September 2022 proposed rule increase the challenge States face in
aligning their Medicaid and CHIP beneficiary response timeframes with
other human service programs like SNAP. We are available to provide
technical assistance to States attempting to develop such an integrated
system.
Comment: Some commenters sought clarification on when States could
or could not act on information if individuals did not respond to
requests for additional information.
Response: Generally, the intent of proposed Sec. Sec. 435.919 and
457.344 was to outline in more detail the existing requirements States
must follow under Sec. 435.952 when considering information received
by the State and when additional information may be requested from the
beneficiary. For example, proposed Sec. Sec. 435.919(b)(2)(ii) and
457.344(b)(2)(ii), redesignated at Sec. Sec. 435.919(b)(4) and
457.344(b)(4) of this final rule respectively, require States to
provide individuals with the opportunity to dispute third-party
information prior to taking an adverse action, such as terminating a
beneficiary's coverage or their benefits; this is a current requirement
at Sec. 435.952(d) for Medicaid and also applies to CHIP as referenced
at Sec. 457.380.
However, in addition to the existing requirements under Sec. Sec.
435.952 and 457.380, we proposed to clarify at Sec. 435.919(b)(1)(iii)
and (b)(2)(iii), redesignated at Sec. 435.919(b)(3) of this final
rule, that States would not be permitted to terminate a beneficiary's
existing coverage if they do not respond to the State's request for
additional
[[Page 22801]]
information about a change in circumstances (either from the
beneficiary or a third party data source) that may make the individual
eligible for additional medical assistance or lower premiums or cost
sharing charges. We proposed the same requirement for CHIP at Sec.
457.344(b)(1)(iii) and (b)(2)(iii), which we redesignate at Sec.
457.344(b)(3) in this final rule. We believe it is important to affirm
this protection in the regulations to ensure that individuals who
otherwise remain eligible for Medicaid or CHIP retain their current
level of benefits, even if they may have been eligible for additional
coverage if they had responded to the State's request.
After considering the comments regarding requirements for acting on
changes in circumstances, we are finalizing Sec. Sec. 435.919 and
457.344, as well as the changes proposed to Sec. 435.916 with the
modifications discussed. We note that because the effect of these
changes is specific to the steps States are required to take to process
changes in circumstances, including processing timeframes, the a
minimum number of days States must provide for beneficiaries to return
information to verify eligibility, and the reconsideration period
(without requiring a new application) for beneficiaries who return
needed information after being terminated for failure to respond, they
operate independently from the other provisions of this final rule.
Because each of these changes individually serves to protect
beneficiaries during eligibility determinations based on changes in
circumstances, we believe they also operate independently from one
another.
3. Timely Determination and Redetermination of Eligibility (Sec. Sec.
435.907, 435.912, 457.340(d), and 457.1170)
Current requirements at Sec. 435.912 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, only reference applications,
although certain provisions also apply at renewal and when a
beneficiary experiences a change in circumstances. We proposed changes
to Sec. 435.912 to ensure that States complete initial determinations
and redeterminations of eligibility within a reasonable timeframe at
application, at regular renewals, and following changes in
circumstances. We also proposed to add a new paragraph at Sec.
435.907(d)(1), requiring that if a State is unable to determine an
applicant's eligibility based on information provided on the
application and verified through electronic data sources and it must
obtain additional information from the applicant, the State must
provide the applicant with a reasonable period of time to furnish the
information.
At Sec. 435.912(b), we proposed to require that States include
renewals and changes in circumstances within the performance and
timeliness standards described in their State plans. Additionally, we
proposed at Sec. 435.912(c)(1) to clarify the actions that begin and
end the period of time that is considered under a State's timeliness
standards at application, and to specify the actions that begin and end
the period of time that is considered under a State's timeliness
standards at renewal and changes in circumstances. Proposed Sec.
435.912(c)(2) expands the criteria that States need to consider when
developing their performance and timeliness standards. We also proposed
a new requirement at Sec. 435.912(g)(3) that prohibits States from
using the timeliness standards to delay terminating a beneficiary's
coverage or taking other adverse actions. Finally, we proposed
standards to specify the maximum amount of time States may take to
complete renewals and redeterminations based on changes in
circumstances (proposed Sec. 435.912(c)(4) through (6)).
The changes to Sec. Sec. 435.907(d) and 435.912 apply equally to
CHIP through existing cross-references at Sec. Sec. 457.330 and
457.340(d)(1), respectively. We proposed minor changes to Sec.
457.340(d) to clarify when certain Medicaid requirements were not
applicable to CHIP when States consider eligibility on other bases. We
also modified the title of Sec. 457.340(d) to include a reference to
timely redeterminations of CHIP eligibility. We are finalizing all
changes proposed at Sec. Sec. 435.907(d), 435.912, and 457.340(d),
except as described in the following discussions. Additionally, we note
that we revised the references to Medicaid requirements at Sec.
457.340(d)(1)(i), which were redesignated as Sec. 435.912(c)(4)(ii),
(c)(5)(iii), and (c)(6)(ii) in this final rule.
For reference, Table 1 provides an overview of the timeframes for
(1) applicants or beneficiaries to provide additional information, (2)
States to complete a timely determination, and (3) individuals to
submit information for reconsideration at application, when a change in
circumstances occurs, and at renewal. The information provided in Table
1 is offered for ease of reference but does not contain in full detail
the information needed to understand the application of the regulations
summarized within. Additional information on the specific changes
illustrated in Table 1 can either be found in the discussion that
follows or in sections II.B.1. and II.B.2. of this final rule. Readers
should refer to the regulation text and to the text discussion in this
preamble to understand the requirements summarized in Table 1.
BILLING CODE 4120-01-P
[[Page 22802]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.000
BILLING CODE 4120-01-C
a. At Application
Current Sec. 435.912(c)(3) requires States to determine
eligibility within 90 calendar days for new applicants whose
eligibility is being determined on the basis of disability and within
45 calendar days for all other applicants. We did not propose any
changes to this requirement. However, we did propose to establish a
minimum timeframe for applicants to provide additional information when
needed to determine eligibility. Specifically, we proposed new language
at Sec. 435.907(d)(1)(i) that would require the State to provide the
applicant with no less than 30 calendar days to respond to a request
for additional information when eligibility is being considered on the
basis of a disability, and no less than 15 calendar days to respond
when eligibility is being considered on all other bases. We proposed at
Sec. 435.907(d)(1)(ii) to require that States accept additional
information through any of the modes by which an application may be
submitted. We also proposed that when a notice of ineligibility is sent
for failure to respond, States must provide a reconsideration period of
at least 30 calendar days, during which the State
[[Page 22803]]
would be required to accept requested information and reconsider the
individual's eligibility without requiring a new application (proposed
Sec. 435.907(d)(1)(iii)(A)), similar to the minimum 90-day
reconsideration currently required at Sec. 435.916(a)(3) for
individuals terminated at a periodic renewal for failure to return a
renewal form or other information needed to renew their eligibility.
When a reconsideration period is applied, we proposed at Sec.
435.907(d)(1)(iii)(B) that the 45 calendar-day clock for completing an
eligibility determination timely as described at Sec. 435.912(c)(3)
(or 90 calendar days for a determination based on disability) would
restart on the date the requested information is submitted. In
addition, at proposed Sec. 435.907(d)(1)(iii)(C), the effective date
of coverage for individuals determined eligible would be based upon the
original application date (that is, the date the application was
submitted or the first day of the month of submission, in accordance
with the State's election).
We received the following comments related to timely determinations
at application:
Comment: While many commenters agreed that it was important to
provide additional time to individuals who may need to provide
documentation for their disability, they were concerned that applying
different timeframes--30 calendar days for those whose eligibility is
being determined on the basis of disability (proposed Sec.
435.912(d)(1)(i)(A)) and 15 calendar days for those being determined
eligible on all other bases (proposed Sec. 435.912(d)(1)(i)(B))--would
create confusion about what response deadline was applicable to a
specific applicant. Commenters sought clarification about whether the
additional time under proposed Sec. 435.912(d)(1)(i)(B) was available
only to individuals being considered for categorical eligibility based
on disability or available to any applicant with a disability.
Commenters also raised concerns regarding the operational and
administrative burden of applying two separate timeframes for
applicants. They explained that different timeframes may be
particularly challenging when multiple household members are included
on a single application and only one is applying on the basis of
disability, or when an individual applicant is being considered for
eligibility in both a disability-related and non-disability-related
eligibility group. In addition, several commenters expressed concerns
that States with integrated eligibility systems, which may include
SNAP, TANF, and other State-specific programs, would not be able to
provide the same timeframes for applicants to provide additional
information needed across programs. For example, if additional income
information was needed to verify financial eligibility for both
Medicaid and SNAP, SNAP requires States to give households at least 10
days for the individual to return the information, while the Medicaid
agency would be required to provide more time. Commenters expressed
concern that different deadlines would add complexity and confuse
applicants who may be receiving requests for the same information from
each program with different timeframes to respond, and both requests
may be included within the same notice or separate notices sent from
each program.
Some commenters recommended providing additional response time to
other groups of applicants, such as individuals who are subject to an
asset test or who are required to provide a level of care
determination. Other commenters also suggested that for individuals who
need language assistance or are experiencing homelessness, 15 calendar
days was not sufficient.
Many commenters agreed that 15 calendar days would be sufficient
for the majority of applicants, with some commenters citing CMS'
September 2022 Application Processing Time Snapshot report that
indicates the vast majority of MAGI applications are completed within
either the first 24 hours or within days of receipt. However, other
commenters did not agree with that timeframe and provided a range of
suggestions for minimum response times between 15 to 60 calendar days.
Some commenters did not support the establishment of specific
timeframes for any applicants and instead recommended that we continue
to provide flexibility for States to set their own timeframes that best
meet the needs of specific types of applicants and/or are appropriate
for the type of information being requested. Other commenters opposed a
30-calendar day minimum timeframe for applicants to respond to requests
for additional information because it would be challenging for States
to determine eligibility timely for non-disability applications (within
45 calendar days) while others asked for clarity regarding the
interaction between the minimum beneficiary response period and the
maximum timeframe for a timely eligibility determination.
In section II.B.3. of the preamble to the September 2022 proposed
rule, we requested comment on an alternative option providing a 30-
calendar day response period with a new exception to the timeliness
standard. The exception would provide States with up to 15 additional
calendar days if needed to process information provided by an applicant
at or near the end of the applicant's 30-day response period. Some
commenters supported a new exception to the timeliness standard to
ensure that both applicants and States had sufficient time in the
application process; other commenters were concerned that adding a new
exception provided States with too much time that would result in
additional delays for otherwise eligible applicants to be determined
eligible for coverage and obtain access to needed care, because many
States already struggle to meet the current timeliness standards. Some
commenters also were concerned that restarting the clock for completing
a timely determination of eligibility during the reconsideration
period, as proposed at Sec. 435.907(d)(1)(iii)(B), provided too much
time for States.
Response: We appreciate commenters' support for maximizing response
timeframes to ensure that applicants have sufficient time to respond to
requests for additional information, especially when information about
disability, assets, or level of care may be needed. However, we also
understand commenters' concerns about States' ability to meet
application timeliness standards and the need for continued flexibility
to address different types of situations. We agree with commenters that
requiring two separate timeframes for disability-related and non-
disability-related application types may be administratively burdensome
and could create confusion for both applicants and eligibility workers,
depending on how they are implemented. In States with integrated
eligibility systems, a third timeframe could also be needed if the
Medicaid timeframes cannot align with other programs like SNAP. At the
same time, we remain concerned that requiring a single, minimum of 30
calendar days for all applicants would make it challenging for States
to process non-disability-related applications timely (within 45 days).
In order to balance these opposing concerns, we are eliminating the
different standards at proposed Sec. 435.907(d)(1)(i)(A) and (B) and
finalizing a single minimum standard for all applicants. As described
at Sec. 435.907(d)(1)(i) of this final rule, States will be required
to provide all applicants with a reasonable amount of time that is no
less than 15 calendar days to respond to any request for
[[Page 22804]]
additional information needed to determine their eligibility at
application. This flexibility will permit States to elect to create a
single minimum timeframe for all requests for information at
application, including a 15 or 30 calendar day timeframe, that provides
the best balance for a State's specific circumstances. Alternatively, a
State may tailor the timeframes at application to reasonable periods
(no less than 15 calendar days) depending on the circumstances and may
vary the timeframes depending on the circumstances of the request.
Further, to support applicants in States with integrated
operations, we consulted with the U.S. Department of Agriculture (USDA)
to explore options for aligning response periods across Medicaid and
SNAP. As a result of this consultation, USDA anticipates releasing
guidance outlining available flexibilities for States to align their
SNAP processes with Medicaid. Through these flexibilities, a minimum 15
calendar day response period will permit States with integrated
eligibility systems to establish a single response period for SNAP and
Medicaid. This will also support individuals applying for both programs
simultaneously and help to minimize confusion when information is
requested to determine eligibility. CMS and USDA's Food and Nutritional
Service (FNS) are working in close collaboration to permit alignment of
these allied programs wherever possible and will develop coordinated
technical assistance to support state implementation.
We believe modifying Sec. 435.907(d)(1)(i) to require a reasonable
period of time (at least 15 calendar days) strikes an appropriate
balance between applicants' need for sufficient time to gather
necessary information and States' need for sufficient time to complete
the determination, while also considering administrative burden. We
believe that the reasonable response period (minimum of 15 calendar
days) coupled with the reconsideration period proposed and finalized at
Sec. 435.907(d)(1)(iii) for applicants who are denied eligibility for
failure to provide requested information timely alleviates any adverse
impact on individuals who may need more time.
The minimum amount of time that a State may consider reasonable for
an applicant to respond with additional information is 15 calendar
days. Consistent with the revisions at 435.907(d)(1)(i) of this final
rule, a State could consider that it is reasonable to provide only 15
calendar days for an applicant to obtain and submit a recent pay stub
demonstrating income eligibility. However, for an applicant acquiring
documentation of certain assets in order to verify resource eligibility
for a non-MAGI group, the same State may also determine that more time
may be reasonable. There is a limited exception to the 15-day minimum
for certain MSP determinations based on Low Income Subsidy (LIS)
application data (LIS leads data). If the LIS leads data does not
support a determination of Medicare Savings Program (MSP) eligibility
and the State requires additional information for the MSP
determination, Sec. 435.911(e)(8) requires States to provide
individuals with a minimum of 30 days to furnish such information.
Finally, although we are not making changes to the existing 45 and
90 calendar day application timeliness standards at Sec.
435.912(c)(3), we clarify that these standards represent the maximum
amount of time a State may take to complete an eligibility
determination. Recognizing that operational flexibilities and
limitations differ in each State, we believe States are in the best
position to establish reasonable timeframes for beneficiary responses
that will permit the State to complete application processing timely,
subject to the timeframes required under this final rule. Consistent
with existing requirements at Sec. 435.912(g)(1), we expect States to
complete their initial eligibility determinations as quickly as
possible and not use the timeliness standards to delay coverage for
individuals who would otherwise be eligible.
Comment: Almost all commenters were supportive of the
reconsideration period proposed at Sec. 435.907(d)(1)(iii) for
applicants who are denied eligibility for failure to provide requested
information and who subsequently submit the information within the
period allowed by the State.
Some of these commenters supported a 30-day reconsideration period,
while others recommended providing a 90-day period at application to be
consistent with the reconsideration periods at renewal and when an
individual experiences a change in circumstances.
Many commenters did not support our proposal at Sec.
435.907(d)(1)(iii)(B) and (C) to require States to provide a
retroactive effective date of coverage back to the original date of
application if an individual provided information during their
reconsideration period. Some expressed concern that this policy would
incentivize applicants to not respond timely and would be unfair to
individuals who do provide the necessary information by the requested
deadline. Other commenters noted that providing the retroactive
effective date for coverage was an important beneficiary protection
from harmful outcomes, like debt from unpaid medical bills. Some
commenters suggested applying the same effective date rules for
reconsideration periods at application, renewal, and changes in
circumstances, such that the provision of additional information would
be treated like a new application and the effective date of eligibility
would be based on the new application date.
We received only one comment expressing concern about the burden of
implementing a new reconsideration period for applicants. The commenter
explained that they did not believe this would create any improvement
since most application errors are resolved during the application
review process.
Response: We agree with commenters that applying the same policies
across all reconsideration periods, whether at application, renewal, or
changes in circumstances, would promote consistency and reduce
complexity for States and individuals who need to provide additional
information at application, at renewal, or following a change in
circumstances. Therefore, we are modifying proposed Sec.
435.907(d)(1)(iii) in this final rule to increase the reconsideration
period at application from 30 to a minimum of 90 calendar days, and
requiring the effective date of coverage to be based on the date the
requested information is received to align with the policies for
reconsideration periods at renewal and following a change in
circumstances. We do not believe it is reasonable to require States to
provide retroactive coverage based on the original application date
because applicants now have a longer period of time to respond without
having to provide a new application. Additionally, States are required
to provide eligible Medicaid applicants with retroactive coverage
consistent with Sec. 435.915(a).\13\ We believe that this retroactive
coverage will help address the impact of potential gaps in coverage for
applicants who provide requested information during the reconsideration
period. We note that States also have the option to provide retroactive
coverage to individuals applying for CHIP under Sec. 457.340(g).
---------------------------------------------------------------------------
\13\ Unlike other Medicaid eligibility groups, qualified
Medicare beneficiary (QMB) benefits are not retroactive. Coverage
begins the first day of the month following the month in which the
individual is determined to qualify for this eligibility group.
---------------------------------------------------------------------------
Therefore, we are removing the provisions proposed at Sec.
435.907(d)(1)(iii)(B) and (C) regarding the timeliness standard and
effective date of eligibility. We are finalizing a
[[Page 22805]]
single paragraph at Sec. 435.907(d)(1)(iii) that (1) requires States
to accept information submitted by an applicant within 90 calendar days
of the date of denial and (2) specifies that States must treat the
additional information like a new application and reconsider
eligibility consistent with the current timeliness standards at Sec.
435.912(c)(3). Because this information will be treated like a new
application, the effective date of eligibility will be based on the
date the information is returned consistent with current Sec. 435.915.
Comment: A few commenters urged CMS to revise Sec. 435.912(e) to
limit the scope of the exceptions to the timeliness standards in Sec.
435.912. Current Sec. 435.912(e) provides that States must determine
or redetermine eligibility within established timeliness standards
except in unusual circumstances. One commenter was concerned that the
example described at Sec. 435.912(e)(2) for an administrative or other
emergency beyond the agency's control is too broad and recommended
removing the reference to ``administrative.'' Another commenter
recommended that States be required to notify applicants and
beneficiaries when they are taking advantage of the exceptions provided
at Sec. 435.912(e).
Response: We appreciate the commenters' concerns about protecting
access to timely eligibility determinations. We believe the timeliness
standards are critically important for ensuring that applicants and
beneficiaries have timely access to the coverage and services to which
they are entitled. At the same time, we believe it is important that
the language in the example described at Sec. 435.912(e)(2) remain
sufficiently broad to account for a variety of unusual circumstances.
As the introductory language at Sec. 435.912(e) states, the situations
described in paragraphs (e)(1) and (2) are simply examples of the types
of circumstances that may require an exception to the timely
determination of eligibility. We have, and will continue to, work with
States when they experience unusual circumstances like natural
disasters and other emergencies to determine whether a timeliness
exception is warranted and to implement workarounds to ensure that
individuals continue to have access to the benefits they need during
this time. We also note that States are required to document the reason
for the delay in the individual's case record in accordance with Sec.
435.912(f).
Comment: We sought comment about whether States should be afforded
additional time to determine CHIP eligibility for applicants seeking
coverage under a separate CHIP for children with special health care
needs (CSHCN), similar to the additional time provided at Sec.
435.912(c)(3)(i) for States to make a final determination of
eligibility for Medicaid coverage based on disability. Commenters
indicated that it was not appropriate to provide States with extra time
to make an eligibility determination for the separate CHIP for CSHCN
because these children still have to meet the financial eligibility
criteria for CHIP. Also, commenters were concerned that delaying a
child's enrollment into CHIP for the sake of enrolling the child into
CHIP for CSHCN, which offers an enhanced benefit package, could
potentially be harmful. Instead, commenters believed it would be
reasonable for States to continue to work with these children post-
enrollment into CHIP if additional information is necessary to
determine their eligibility for the State's CSHCN program, and to
transition them to such program at a later time if appropriate.
Response: We agree with commenters that providing additional time
for a determination of eligibility for a CSHCN program within CHIP is
not necessary and could potentially delay the receipt of necessary
care. Therefore, we are finalizing Sec. 457.340(d)(1) as proposed.
b. At Renewal
At Sec. 435.912(c)(4) of the proposed rule, we proposed
requirements for timeliness standards for States to complete renewals
conducted under Sec. 435.916. We proposed three timeframes for
completing timely renewals depending on the circumstances of the case.
First, if a beneficiary's eligibility can be renewed based on available
information or the beneficiary returns a renewal form with at least 25
days remaining in the eligibility period, we proposed that a State
would be required to complete the renewal prior to the end of the
individual's eligibility period. Second, if the State is redetermining
eligibility on the basis for which a beneficiary has been enrolled and
the beneficiary returns a renewal form less than 25 calendar days
before the end of the eligibility period, we proposed that the State
must complete the renewal by the end of the following month. Finally,
if the State must redetermine eligibility on another basis other than
disability, we proposed that the State would have an additional 25
calendar days to complete the eligibility determination. However, if
the State is redetermining eligibility on the basis of disability, the
State would have up to 90 additional calendar days from the date the
individual is determined ineligible on their current basis.
Comment: Many commenters supported the clarity of the timeliness
standards for renewals proposed at Sec. 435.912(c)(4), including our
proposal to provide States with additional time to complete a renewal
when renewal forms are received near the end of a beneficiary's
eligibility period. However, other commenters stated that the proposed
timeliness standards were too prescriptive, and that additional
flexibility is necessary for States to be able to effectively manage
their processes.
Response: We appreciate commenter support for our proposal to
ensure that States have sufficient time to complete a timely
eligibility determination, particularly when beneficiaries provide all
necessary information close to the end of their eligibility period. We
also agree with commenters that flexibility is important for States to
effectively administer their Medicaid and CHIP programs, although we
believe our proposal at Sec. 435.912(c)(4) provides more flexibility
than currently is available to States. As discussed in section II.B.3.
of the September 2022 proposed rule, Sec. 435.930(b) currently
requires States to continue furnishing Medicaid benefits to eligible
individuals until they are found to be ineligible. This means a State
must maintain the eligibility of a beneficiary who submits all needed
information at the end of their eligibility period, until the State can
complete a redetermination, and if the beneficiary is no longer
eligible, provide advance notice and fair hearing rights. However,
current regulations do not provide for an extension of the renewal
process beyond the end of a beneficiary's eligibility period, even if
additional information is not provided to the State in a timely manner
and even when the State is required to evaluate eligibility on other
bases. Proposed paragraphs (c)(4)(ii) and (iii) of Sec. 435.912
address this tension in the current regulations, by accounting for
those situations in which States will need additional time to complete
an eligibility determination in order to comply with Sec. 435.930(b)
without running afoul of the requirement in Sec. 435.916 to renew
eligibility once every 12 months. Therefore, we are finalizing the
proposed policy to permit States to extend the redetermination process
beyond the end of a beneficiary's eligibility period when information
is received late in the process or eligibility needs to be determined
on another basis, but we are making some modifications to the standards
[[Page 22806]]
themselves as described in the comment responses that follow.
We note that the timeliness standards described at Sec.
435.912(c)(4) represent the maximum amount of time that States may take
to complete renewals. States maintain significant flexibility when
establishing their timelines to process renewals and are not required
to take the maximum amount of time described in the regulation to
complete a renewal. In establishing standards for timely renewals,
Sec. 435.912(c)(2) which we are finalizing as proposed, requires
States to demonstrate that their timeliness standards address certain
criteria, including prior State experience, availability of
information, the needs of beneficiaries, and advance notice
requirements.
Comment: Many commenters expressed concern about the variety of
timeliness standards proposed for different circumstances at renewal,
which could require completion of the renewal at the end of the
beneficiary's eligibility period (Sec. 435.912(c)(4)(i)), the end of
the month following the end of the beneficiary's eligibility period
(proposed Sec. 435.912(c)(4)(ii)), and 90 or 25 calendar days
following a determination of ineligibility on the current basis when
eligibility on another basis must be determined (proposed Sec.
435.912(c)(4)(iii)). Some commenters also expressed confusion about the
maximum timeliness standard applicable under proposed Sec.
435.912(c)(4)(iii) when eligibility is being determined on a different
basis. There also was concern that requiring several different
timeframes for completion of renewals depending on when information is
returned to the agency would be challenging to implement. Several
commenters indicated that these changes, and the variety of timeframes
associated with them, would require complex systems changes and
extensive training for eligibility workers.
Response: We appreciate commenters' concern that the variety of
different timeframes proposed for timely renewals, which differ from
the current timeframes for application and the proposed timeframes for
changes in circumstances, would add unnecessary complexity and
confusion and would require complex systems changes and significant
training for eligibility workers. In this final rule, we simplify the
maximum timeframes for timely renewals at Sec. 435.912(c)(4) to align
more closely with the existing timeframes for timely eligibility
determinations at application and the timeframes for processing changes
in circumstances.
The September 2022 proposed rule included three maximum timeliness
standards for renewals: (1) the end of the eligibility period for
renewals that can be completed using available information and those
for which all necessary information is returned to the State at least
25 or more calendar days prior to the end of the eligibility period
(proposed Sec. 435.912(c)(4)(i)); (2) the end of the month following
the end of the eligibility period for renewals for which needed
information is returned with no less than 25 calendar days prior to the
end of the eligibility period (proposed Sec. 435.912(c)(4)(ii)); and
(3) following a determination of ineligibility, 90 calendar days for
eligibility determined based on disability or 25 calendar days when
eligibility must be determined on a different basis (proposed Sec.
435.912(c)(4)(iii)). At Sec. 435.912(c)(4) of this final rule, we are
finalizing the requirement to complete all renewals by the end of the
eligibility period with two exceptions.
The first exception, at Sec. 435.912(c)(4)(i), occurs when
additional information needed to determine eligibility is not returned
timely. We proposed a threshold of 25 calendar days, meaning if the
beneficiary returned the renewal form at least 25 calendar days before
the end of the eligibility period, the State must process the renewal
before the end of the eligibility period. If the beneficiary returns
the renewal form with less than 25 calendar days before the end of the
eligibility period, the proposed rule would have required that the
State process the renewal by the end of the month following the end of
the eligibility period. In this final rule, we are increasing this
threshold to 30 calendar days before the end of the eligibility period,
such that if a beneficiary returns their renewal form at least 30
calendar days before the end of their eligibility period, the State
must process the renewal before the end of the eligibility period. If
less than 30 calendar days remain before the end of the eligibility
period, the State must process the renewal by no later than the end of
the following month.
The second exception, finalized at Sec. 435.912(c)(4)(ii), permits
States to establish a separate timeliness standard when eligibility
must be determined on another basis. We proposed at Sec.
435.912(c)(4)(iii) to provide States with an additional 90 calendar
days to complete a renewal when the other basis requires a disability
determination and 25 calendar days when the other basis does not
require a disability determination. In this final rule, we are
maintaining the 90 calendar day threshold for disability-related
determinations and increasing the timeframe for all other
determinations to 45 calendar days to be consistent with the existing
timeliness standards at application.
Again, we clarify that the standards described at Sec.
435.912(c)(4) are the maximum standards that a State may establish for
timely eligibility renewals. States retain flexibility to complete
renewals requiring a determination on other bases more quickly,
provided that the State provides beneficiaries with at least 30
calendar days consistent with Sec. 435.916(b)(2)(i)(B) as well as the
minimum 10 days advance notice and fair hearing rights required under
42 CFR part 431, subpart E.
Comment: Many commenters raised concerns that the proposed
thresholds for renewals, as well as changes in circumstances, would
need to be tracked and reported to CMS, which would require extensive
modifications to their systems.
Response: We are not establishing new reporting requirements for
States to report on the timeliness thresholds established in this final
rule. Section 435.912(b) requires States to establish timeliness and
performance standards in their State plan. However, we recognize that
States may find tracking this information important for purposes of
their own internal audits or external reviews, such as PERM and MEQC
reviews and other CMS eligibility audits.
Comment: Many commenters were concerned that the changes proposed
at Sec. 435.912(c)(4)(ii) and (iii), which permit States to establish
renewal timeliness standards that extend beyond the end of an
individual's eligibility period, would result in many renewals being
completed after a beneficiary's eligibility period ends. Commenters
were concerned about the fiscal impact of that policy if States are
required to keep beneficiaries enrolled in coverage while they complete
their renewal and then the beneficiary is ultimately found to be
ineligible. Some commenters also sought clarification on whether States
could continue to receive enhanced funding based on a beneficiary's
current eligibility group during the additional time available to
States to redetermine eligibility based on information provided less
than 25 calendar days prior to the end of the beneficiary's eligibility
period consistent with proposed Sec. 435.912(c)(4)(ii).
Response: Current regulations at Sec. 435.930(b) require States to
continue furnishing Medicaid benefits to all eligible individuals until
the State completes a redetermination and finds
[[Page 22807]]
an individual to be ineligible. The timeliness standards proposed at
Sec. 435.912(c)(4) do not modify those requirements. States are still
expected to complete redeterminations prior to the end of a
beneficiary's eligibility period whenever possible. What the renewal
timeliness standards finalized at Sec. 435.912(c)(4) recognize is that
sometimes it is not possible for a State to complete a renewal by the
end of a beneficiary's eligibility period because the State received
requested information from that beneficiary too close to the end their
eligibility period or the State needs to evaluate eligibility on other
bases. If a State concludes that an individual is ineligible with less
than 10 days remaining in the eligibility period, the State will be
unable to provide the required advance notice and terminate eligibility
before the eligibility period ends. In such cases, the State must
continue eligibility beyond the end of the eligibility period, and if
the State has elected to extend coverage through the end of the month,
that beneficiary would remain enrolled until the end of the month
following the month in which the eligibility period ends. Under Sec.
435.912(c)(4)(i) of this final rule, this would be considered a timely
renewal.
Section 435.912(c)(4) of this final rule recognizes that a
beneficiary remains eligible until determined ineligible, and States
must continue providing benefits until the determination is complete.
As such, as long as the eligibility determination is conducted in
accordance with the timeliness standards for renewals outlined in Sec.
435.912(c)(4), States may continue to claim the same match rate for
such beneficiaries, until they are determined ineligible, without the
potential risk of eligibility-related improper payments or other
negative audit findings due to this requirement. For increased clarity
of existing policy, we modify Sec. 435.912(g)(2) in this final rule by
adding a cross-reference to Sec. 435.930(b) to ensure that States may
not use the timeliness standards as a reason to stop furnishing
benefits if they are unable to complete eligibility determinations in a
timely manner.
c. At Changes in Circumstances
We proposed two different timeliness standards at Sec.
435.912(c)(5) and (6) for redeterminations based on changes in
circumstances that may impact eligibility. First, we proposed at Sec.
435.912(c)(5)(i) that States must complete redeterminations based on a
reported change by the end of the month in which 30 calendar days from
the date the agency becomes aware of the change falls, unless the State
needs to request additional information from the beneficiary. In that
case, we proposed that the State must complete the redetermination by
the end of the month in which 60 calendar days from the date that the
agency received the reported change in circumstances falls, as
described at proposed Sec. 435.912(c)(5)(ii).
Second, for anticipated changes of circumstances, we proposed at
Sec. 435.912(c)(6) to use the same general standard proposed for
renewals based on whether all necessary information is available at
least 25 calendar days before the change occurs. Anticipated changes
are those that the State knows will occur in the future, like a
beneficiary turning 65 and becoming eligible for Medicare or aging out
of the eligibility group for children under age 19. As described at
proposed Sec. 435.912(c)(6)(i), if all information needed to
redetermine eligibility is available with 25 or more calendar days
before the date of the change, a State would be required to redetermine
eligibility by the date (or at State option, the end of the month) the
anticipated change will occur. Per proposed Sec. 435.912(c)(6)(ii), if
the State receives needed information with less than 25 calendar days
remaining before the anticipated change occurs, the State must complete
the redetermination by the end of the month following the anticipated
change. Finally, we proposed at Sec. 435.912(c)(6)(iii) that if a
State must redetermine eligibility on another basis following an
anticipated change in circumstances, they must complete the
redetermination within either 25 calendar days (or, if on the basis of
disability, 90 calendar days) from the date it determines the
individual is ineligible based on their current basis.
Comment: While some commenters were supportive of the proposed
timeliness standards for reported changes in circumstances at Sec.
435.912(c)(5), others suggested that CMS adopt a simplified approach.
One commenter recommended including language to specify that the
timeliness standard begins once all necessary information is received.
Response: We appreciate commenters' support of proposed Sec.
435.912(c)(5). We believe the proposal clearly outlines the applicable
standards based on whether States seek additional information or not,
so we will not modify those requirements in this final rule. However,
in order to provide alignment across all changes in circumstance
timeliness standards, we have added a new Sec. 435.912(c)(5)(iii) in
this final rule to clarify that as a result of a change in
circumstances, States must redetermine eligibility on another basis
within 90 calendar days for determinations based on disability or 45
calendar days for all other determinations. The additional 90 or 45
calendar days begins on the day the State determines the individual is
no longer eligible on their current basis of eligibility.
Comment: Many commenters did not support the proposed timeliness
standards for anticipated changes at Sec. 435.912(c)(6). Similar to
renewals, commenters raised concerns regarding the complexity of
implementing and tracking a 25-calendar day cutoff to know when
additional time would be available to complete a redetermination due to
an anticipated change in circumstances. Another commenter did not agree
with proposed Sec. 435.912(c)(6)(iii)(B), stating that 25 calendar
days was not enough time to redetermine eligibility on other bases for
an individual who was found ineligible on their current basis due to
the anticipated change in circumstances and instead recommended
applying the same timeliness standard proposed for reported changes in
Sec. 435.912(c)(5).
Response: We understand the commenters' concerns about the
complexity of the maximum timeliness standards proposed for anticipated
changes in circumstances. Similar to the changes made to streamline the
maximum timeliness standards at renewal at Sec. 435.912(c)(4), we are
streamlining the requirements for the timeliness of redeterminations
related to anticipated changes in eligibility. Specifically, we are
establishing a single standard for timely redeterminations regarding
anticipated changes in circumstances and creating two exceptions. As
described at Sec. 435.912(c)(6) of this final rule, a redetermination
of eligibility based on an anticipated change may not exceed the end of
the month in which the change occurs, except in cases where the
beneficiary returns needed information late in the process or the State
needs to complete a determination of eligibility on another basis. In
section Sec. 435.912(c)(6)(i) of this final rule, we increase the 25-
calendar day threshold to 30 calendar days, such that if a beneficiary
returns requested information less than 30 days prior to the end of the
month in which the anticipated change occurs, the State must complete
the redetermination by the end of the following month. At Sec.
435.912(c)(6)(ii) of this final rule, we apply the existing timeliness
standards for new applications when a State must consider eligibility
for a beneficiary on another basis following a change in
[[Page 22808]]
circumstances. This provides States with a maximum of 45 additional
calendar days that begins when States make the determination of
ineligibility on the original basis, to complete an eligibility
determination on a new basis for beneficiaries whose eligibility is not
being redetermined based on a disability. If a disability determination
is required, the State may take up to an additional 90 calendar days to
complete the eligibility determination.
d. Overarching Comments and CHIP-Specific Considerations
In addition to the comments discussed previously in this final
rule, we received several general comments that relate to the proposed
beneficiary response requirements or timeliness standards, including
CHIP-specific changes, as follows.
Comment: In the September 2022 proposed rule, we sought comment on
whether the 30-day beneficiary response timeframes proposed at
Sec. Sec. 435.907(d)(1)(i), 435.916(b)(2)(i)(B), and 435.919(c)(1)(i)
should be calculated using calendar days or business days.
Additionally, we sought comment on whether the timeliness standards for
States to complete a redetermination of eligibility at a regularly-
scheduled renewal or based on a change in circumstances at proposed
Sec. 435.912(c)(4) through (6) should be based on calendar or business
days. The majority of commenters supported a timeframe based on
calendar days to maintain consistency with existing standards and
minimize differences across States based on recognizing different
holidays. However, a few commenters supported using business days or
giving States flexibility to use the most appropriate approach, because
in some cases using business days would provide applicants with more
time in which to submit requested information.
Response: We appreciate commenters' feedback in this area and agree
that continuing to adhere to current practices, which define the
response period based on calendar days, would maintain consistency and
minimize confusion among both eligibility workers and beneficiaries.
Therefore, we are finalizing Sec. Sec. 435.907(d)(1)(i) and
435.916(b)(2)(i)(B) as proposed and modifying Sec. Sec.
435.919(c)(1)(i) and 457.344(c)(1)(i) to specify ``calendar days'' to
describe applicant and beneficiary response periods consistently
throughout this final rule. Finally for increased clarity of current
policy at application, we are making a technical change to specify
``calendar days'' at Sec. 435.912(c)(3) and modifying proposed Sec.
435.912(c)(4) through (6) to also specify that States must redetermine
an individual's Medicaid eligibility on another basis using timeliness
standards based on ``calendar days.''
Comment: Many commenters supported CMS clarifying in this final
rule that the 30-day response period begins on the date a request for
additional information is sent, which we defined in the September 2022
proposed rule as the date the request was postmarked. Commenters
believed that this would help to reduce the impact of delays on the
amount of time available to an applicant or beneficiary if the State or
the mail system is delayed in sending requests for additional
information in a timely manner. However, commenters were concerned that
it would not be practical to base the response period on the day the
request was postmarked due to operational challenges. For example, one
commenter explained that in many cases it would not be possible for
States to know the exact date the request was postmarked, and they
would have to rely on beneficiaries keeping the original envelopes to
determine the 30-calendar day response timeframe at renewal. Commenters
were concerned that this approach would also not allow States to
include a specific deadline for response within the request for
additional information, and that they would have to rely on
beneficiaries to determine their own deadline based on the postmarked
date. Another commenter indicated that requiring States to postmark all
requests could increase mailing costs if their current process does not
include postmarked envelopes.
Response: At Sec. Sec. 435.916(b)(2)(i)(B), and 435.919(c)(i), we
proposed to require States to begin an applicant or beneficiary's 30-
day response timeframe on the date the agency sends the notice or form.
As discussed in the September 2022 proposed rule, our expectation is
that States will base the beginning of the beneficiary response window
on the date the request is postmarked, when applicable. If the required
notice or form is not sent through U.S. mail with a postmark, then the
30 calendar days would be calculated based on the date the required
notice or form is sent electronically or submitted to the post office
for mailing.
While we appreciate commenters' concerns that it may be difficult
to always know the specific date that a notice is postmarked or sent,
we believe the benefit of a consistent policy across States outweighs
the challenges. In a State that uses a contractor for mailing, we would
expect the agreement between the State and the contractor to include
details about the timeliness of mailings, and the 30-calendar day
response period would be based on that agreement. For example, if the
contract specifies that all mailings are completed within 2 days of
receipt from the State, the return date specified in the notice would
be 32 days after the notice is sent out for mailing. We agree that it
would be inappropriate to notify a beneficiary that they must return
needed information within 30 days of the postmark date and then expect
the beneficiary to calculate the due date. This would also make it
difficult for the State to include a deadline in the eligibility system
for receipt of the needed information. We believe that proposed
Sec. Sec. 435.907(d)(1)(i), 435.916(b)(2)(i)(B), and 435.919(c)(i)
will ensure that all Medicaid beneficiaries are provided with
sufficient time to respond to requests for additional information at
application, renewal, or a change in circumstances. Therefore, we are
finalizing these provisions as proposed.
Comment: Many commenters supported the technical changes throughout
Sec. 435.912 to clarify that timeliness standards are applicable at
application, renewal, and changes in circumstances, including the
proposed changes at Sec. 435.912(c)(1) to further clarify the period
covered when calculating a State's timeliness standards. Commenters
also supported expanding the criteria at Sec. 435.912(c)(2), that
States need to consider when developing their performance and
timeliness standards, such as accounting for time needed to evaluate
information obtained from electronic data sources and to provide
required advance notice when the agency makes a determination that
results in an adverse action. Finally, commenters supported the
requirement at proposed Sec. 435.912(g)(3), which specifies that
States may not use the timeliness standard to delay an adverse action,
including termination of an individual's coverage.
Response: We appreciate commenters' support of these specific
changes as well as the technical changes throughout Sec. 435.912 to
clarify that timeliness standards are now applicable at application,
renewal, and changes in circumstances. We are finalizing as proposed
Sec. 435.912(c)(1) (period covered by the timeliness and performance
standards), (c)(2) (criteria for establishing timeliness and
performance standards), and (g)(3) (prohibition on using the timeliness
standards to delay adverse action), as well as the technical changes
extending
[[Page 22809]]
existing requirements at Sec. 435.912 to renewals and redeterminations
based on changes in circumstances. We note that references to
requirements for changes in circumstances within Sec. 435.912(b)(4)
and (c)(1)(iii) and (iv) were revised consistent with the redesignation
of those requirements in this final rule as discussed in section
II.B.2. of this final rule.
Comment: Some commenters recommended that CMS engage in stronger
oversight and enforcement of timeliness requirements. While commenters
agreed that new timeliness standards at renewal and changes in
circumstances were important, they remained concerned that States will
struggle to meet these new timeliness standards, because they continue
to struggle to meet the existing timeliness standards at application.
For example, one comment suggested including State reporting
requirements at Sec. 435.912 for the timeliness standards as a
condition to receive FFP, because it would not be difficult to expand
the current Performance Indicator data set, where States currently
report application timeliness data, to incorporate reporting elements
specific to timeliness for renewals and changes in circumstances.
Others urged CMS to consider imposing sanctions on States that have a
high percentage of determinations that are not completed within the
required timeliness standards.
Response: We appreciate commenters' concerns regarding State
compliance with timeliness standards, and we agree that it is critical
for States to complete all eligibility determinations as quickly as
possible. We believe oversight and enforcement are important components
of our role with respect to Medicaid, CHIP, and the BHP. As such, this
final rule includes important regulatory requirements for States and
protections to ensure that eligible applicants and beneficiaries can
enroll and stay enrolled as long as they continue to meet the
requirements of their program. In this final rule, we are not including
reporting requirements for the timeliness standards at Sec. 435.912.
Processes are already in place at both the State and Federal levels to
ensure that applications, renewals, and redeterminations are processed
timely. We note that States that do not comply with these requirements
may be cited for improper payments identified during PERM reviews, MEQC
reviews, other CMS eligibility audits, or State-level audits.
Consistent with existing program requirements, improper payments
identified by PERM and MEQC may be subject to recoveries.
Comment: The comments we received with respect to modifying
Sec. Sec. 457.1140, 457.1170(a), and 457.1180 supported these changes,
which (1) require States to provide an opportunity for review if States
fail to make a timely CHIP eligibility determination at application or
renewal and (2) emphasize that continuation of enrollment under Sec.
457.1170 includes continued provision of benefits pending a review.
Response: We are finalizing Sec. Sec. 457.1140, 457.1170, and
457.1180 as proposed.
After considering all comments received, we are finalizing the
proposals described above in this section with the modifications
discussed. We note that these changes revising timeliness standards to
expressly apply at application, renewal, and when a change in
circumstance occurs, requiring States to provide a minimum number of
days for individuals to return information needed to verify
eligibility, providing specific timeframes for conducting Medicaid and
CHIP renewals, including when beneficiaries return information late and
when the State needs to consider eligibility on other bases, and
establishing a 30-day reconsideration period for applicants who return
needed information after being determined ineligible for failure to
respond, operate independently from the other provisions of this final
rule.
4. Agency Action on Updated Address Information (Sec. Sec. 435.919 and
457.344)
As we discussed in section II.B.2. of this final rule, in order to
ensure that Medicaid and CHIP beneficiaries continue to meet applicable
eligibility requirements, States must have a process to obtain
information about changes in circumstances that may impact eligibility
and to redetermine eligibility when appropriate. A change in address
represents such a change. Beneficiaries who have moved out of State
will no longer meet eligibility requirements for coverage in the
original State (unless the State has suspended its State-residency
requirement or has extended Medicaid and/or CHIP eligibility to
individuals who are not residents of the State). Beneficiaries who have
moved to a new in-State address are at risk of procedural termination
at a regularly-scheduled renewal, if they rely on mailed paper notices
and the State does not have their updated address. Indeed, our
experience in working with States and beneficiary advocacy
organizations indicates that returned mail historically has resulted in
a significant number of beneficiaries losing their coverage, because
their continued eligibility cannot be confirmed by the State. As such,
it is critical for States to take reasonable steps to locate and update
the contact information of beneficiaries who may have moved, prior to
terminating their coverage or taking any other adverse action.
In the September 2022 proposed rule, we included new paragraphs (f)
and (g) at proposed Sec. 435.919 for Medicaid and Sec. 457.344 for
CHIP to specify the steps States must take when beneficiary mail is
returned to the agency by the United States Postal Service (USPS)
(paragraph (f)) or when the agency obtains updated mailing information
from third-party data sources (paragraph (g)). For brevity, in the
following discussion we provide only the Medicaid references at Sec.
435.919(f) and (g). When reading these references please note that the
policy includes both the Medicaid requirements at Sec. 435.919(f) and
(g) and the CHIP requirements at Sec. 457.344(f) and (g) unless
otherwise stated.
We proposed the following three-step process when the State
receives returned beneficiary mail:
Step 1 would require the State to check available data
sources for updated beneficiary contact information (proposed Sec.
435.919(f)(1));
Step 2 would require the State to (1) conduct outreach via
mail to the original address on file, the forwarding address (if
provided on the returned mail), and all addresses obtained in Step 1;
and (2) make at least two additional attempts through one or more
modalities other than mail, such as phone, text or email, to locate the
beneficiary and verify their address (proposed Sec. 435.919(f)(2) and
(3));
Step 3 describes the actions a State would be required to
or would have the option to take when a beneficiary's new address could
not be verified, and mail was returned with an in-State forwarding
address (proposed Sec. 435.919(f)(4)), an out-of-State forwarding
address (proposed Sec. 435.919(f)(5)), or no forwarding address at all
(proposed Sec. 435.919(f)(6)). We also proposed conforming changes to
Sec. Sec. 431.213(d) and 431.231(d) regarding returned mail with no
forwarding address.
At proposed Sec. 435.919(g), we described the steps a State would
have to take to verify the accuracy of information obtained from a
third-party data source other than the USPS. Specifically, at Sec.
435.919(g)(1), we proposed that States that obtain updated in-State
mailing information from USPS National Change of Address (NCOA)
[[Page 22810]]
database or managed care plans \14\ may treat such information as
reliable, provided that the State completes the same basic actions
described in Step 2 for returned mail (for example, attempt to contact
the beneficiary at the original address on file and the new address
provided by the third-party data source, and complete at least 2
additional attempts to contact the individual to verify their new
address through one or more modalities other than mail). At Sec.
435.919(g)(2), we proposed that, with Secretary approval, States may
treat updated in-State information from other trusted data sources in
accordance with proposed paragraph (g)(1), and at Sec. 435.919(g)(3),
we proposed that for all other third-party updates, the State must
follow the actions described in steps 2 and 3 for returned mail. For
additional information on the requirements and State options in
proposed Sec. 435.919(f) and (g), see section II.B.4. of the September
2022 proposed rule.
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\14\ Throughout this document, the use of the term ``managed
care plan'' includes managed care organizations (MCOs), prepaid
inpatient health plans (PIHPs), prepaid ambulatory health plans
(PAHPs), primary care case managers (PCCMs) and primary care case
management entities (PCCM entities).
---------------------------------------------------------------------------
We received the following comments on these provisions:
Comment: Many commenters supported the three-step process proposed
for responding to returned mail. They noted that Medicaid beneficiaries
may move frequently; parents and other caregivers, especially those
experiencing housing instability, are often under extreme amounts of
stress, and updating their address may not be a high-enough priority to
take care of immediately; and some beneficiaries maintain non-
traditional residences that cannot receive mail. These commenters noted
that returned mail can be a particular problem for people who are
housing insecure.
Many commenters stated that the proposed processes represent a
reasonable approach that would promote retention of eligible
individuals, reduce procedural disenrollments, avoid churn, and
accelerate the pace at which States adopt non-traditional modes of
beneficiary communication, which can be more efficient, cost-effective,
and timely. The commenters asserted that clear guidance and commonsense
tactics to better locate beneficiaries in the event of returned mail
would help to mitigate unnecessary coverage losses and will be
particularly important as millions of notices requiring a response are
physically mailed to program enrollees during the unwinding period.
While most commenters supported increasing requirements for States
to confirm the accuracy of beneficiary contact information and obtain
updated address information when mail is returned, some of these same
commenters also opposed the specific requirements included in the
September 2022 proposed rule. These commenters described the proposed
requirements for returned mail and other address updates as overly
complicated and burdensome, particularly for States that already
exercise reasonable diligence in handling returned mail and attempting
to locate enrollees who have moved. They raised concerns about
potential negative, unintended consequences for beneficiaries;
requirements not reflecting on-the-ground realities; and increased risk
of negative audit findings.
A number of commenters expressed concern that the proposed returned
mail requirements are unduly prescriptive, weaken or remove State
flexibility, include an unprecedented level of detail that is likely to
become outdated over time, and lack the flexibility for simple
solutions, like calling a beneficiary to get an updated address.
Specific operational challenges raised by commenters include: the need
to implement significant system updates across multiple enrollment
systems; challenges in reconfiguring timeframes for timed processes;
increased workload for outreach and imaging staff; increased mailing
costs, including the cost of paper, postage, and mail vendors; and the
need for new legislative and budget authority. Some of these commenters
urged CMS not to finalize the proposed changes, but instead to work
directly with States to better understand the operational realities,
and to support the development of State-specific strategies that meet
local needs.
Response: We appreciate the support for requirements that protect
coverage for eligible individuals, particularly those who may be
housing insecure, by establishing reasonable solutions to the problems
posed by returned mail. At the same time, we also appreciate the
concerns and challenges raised by commenters about States' ability to
implement the specific steps set forth in the September 2022 proposed
rule, and we recognize that the same approach may not be best for all
States. As such, we are finalizing a simplified set of requirements for
returned mail and address updates.
The September 2022 proposed rule included separate requirements for
agency action when mail is returned by the USPS (paragraph (f)) and
when updated address information is obtained from sources other than
returned mail (paragraph (g)). We are combining paragraphs (f) and (g)
of proposed Sec. 435.919 into one paragraph at Sec. 435.919(f)
(Agency action on updated address information) in this final rule that
establishes a single set of requirements for all types of address
changes. Then we are streamlining the requirements at Sec. 435.919(f),
such that paragraph (f)(1) describes the requirements for obtaining
updated address information from third-party data sources, paragraphs
(f)(2) through (4) describe the actions required by the State depending
on the type of address information received, and paragraph (f)(5)
describes the good-faith effort requirements for contacting
beneficiaries as needed to confirm updated information.
Within Sec. 435.919(f), we are also making changes to provide
greater State flexibility, such as by removing some of the details for
operationalizing the regulatory requirements. This will permit
continued use of existing strategies for addressing returned mail, such
as those established during the COVID-19 PHE under the waiver authority
of section 1902(e)(14)(A) of the Act, which have proven very effective
with updating beneficiary contact information without any notable
adverse impact on beneficiaries. These changes are detailed in the
succeeding discussion.
Comment: We received many comments about the use of third-party
data sources for updating beneficiaries' mailing addresses. Many
commenters supported the requirement proposed at Sec. 435.919(f)(1)
that States check data sources, including the agency's Medicaid
Enterprise System and the agency's contracted managed care plans, if
applicable, when mail is returned to the State. They noted that
obtaining updated, accurate information from reliable outside sources
will help to reduce disenrollment of otherwise eligible beneficiaries
and ensure that they continue to receive important information about
their coverage. Other commenters supported the use of electronic data
sources but were opposed to the specific requirements proposed. A few
commenters noted the cost implications for building new interfaces and
establishing data sharing agreements with multiple managed care plans,
and with other entities like SNAP, TANF, or the State's department of
motor vehicles (DMV).
Many commenters specifically supported the proposed requirement at
Sec. 435.919(f)(1)(ii) and option at Sec. 435.919(g)(1) for States to
obtain updated beneficiary contact information from their contracted
managed care
[[Page 22811]]
plans. A number of commenters flagged managed care plans as one of the
best sources for updated address information. The commenters stated
that plans are more likely than States to have recently updated contact
information, since beneficiaries typically engage with their managed
care plans more frequently than they engage with the State Medicaid
agency. Managed care plans often have multiple points of contact with
their members, including hospital admissions, provider relationships,
care management programs, disease management programs, and other health
plan activities.
A number of commenters also highlighted the nationwide reliability
of the NCOA database and recommended that all States be required to use
it. Commenters stated that forwarding addresses and updated contact
information from the NCOA database are almost always accurate. One
State reported that it had never received a member report of an
incorrect address update based on the NCOA database. Another commenter
explained that the NCOA database includes safeguards to ensure accuracy
of change requests, making it a readily accessible and reliable source
of information.
Several commenters stated that CMS should give States the option to
accept updated addresses from managed care plans and the NCOA database
without first having to contact beneficiaries to reverify the
information. The commenters recognized that this strategy is proving
effective under waiver authority granted under section 1902(e)(14)(A)
of the Act to assist States in returning to normal operations during
the unwinding period. As such, they indicated that the strategy should
be made permanent.
Some commenters recommended going beyond a State option and
requiring States to obtain updated contact information from their
contracted managed care plans and the NCOA database. They noted that
despite the availability of waiver authority under section
1902(e)(14)(A) of the Act and CMS' guidance highlighting its use as a
best practice, some States have not established the necessary data
exchange protocols to obtain updated contact information from their
contracted managed care plans. Many commenters supported a requirement
that States use both the NCOA database and information obtained from
contracted managed care plans. One commenter suggested that without a
requirement across all States, CMS would effectively be authorizing
States to reject reliable sources of information and to increase
procedural terminations; and such policies would disproportionately
affect eligible people of color.
Many commenters supported the use of automatic, electronic data
matches to the greatest extent possible because they not only mitigate
churn, but also reduce administrative burden on beneficiaries and
States. Other commenters recommended caution when using updated contact
information and addresses obtained from sources other than the
beneficiary, when they have not been directly confirmed by the State
agency with the beneficiary. Finally, one commenter recommended that
States be required to give notice to beneficiaries and provide them
with an opportunity to verify the information obtained from these data
sources.
Response: We appreciate commenters' support for State use of
available, reliable data sources to identify updated beneficiary
addresses and other contact information. We agree that the use of
outside data sources will improve States' ability to maintain contact
with beneficiaries and will reduce unnecessary procedural terminations.
We also appreciate the feedback regarding the cost and burden required
to establish new connections with outside data sources.
As described in section II.B.4. of the September 2022 proposed
rule, we proposed to require, at Sec. 435.919(f)(1), that States check
their Medicaid Enterprise System, their contracted managed care plans
(if applicable), and at least one other data source such as the NCOA
database, for updated mailing address information whenever beneficiary
mail is returned by the USPS. At Sec. 435.919(g)(1), we proposed that
independent of the returned mail processes, States that obtain updated
in-State mailing information from the NCOA database or contracted
managed care plans may, at their option, treat that information as
reliable, provided they contact beneficiaries and provide them with an
opportunity to review the information as specified at proposed Sec.
435.919(g)(1)(i). We also requested comment on whether States should be
required, or permitted, to update beneficiary contact information based
on information obtained from a managed care plan, the NCOA database, or
other reliable sources, without first attempting to contact the
beneficiary to verify the information.
We received significant support from commenters for a requirement
that States obtain and act on updated address information provided by
contracted managed care plans (when such information has been verified
by the beneficiary) and the NCOA database, without requiring the State
Medicaid or CHIP agency to complete additional verification. Commenters
also supported the use of forwarding information provided by USPS
without additional beneficiary verification. Based on this feedback, at
Sec. 435.919(f)(1)(i), we are revising and redesignating proposed
Sec. 435.919(f)(1) and (g)(1) to require that States establish a
process to regularly obtain updated address information from reliable
third-party data sources for use in updating beneficiaries' addresses
in their case records. At Sec. 435.919(f)(1)(iii), we define four
types of data sources as always reliable for this purpose: (1) mail
that is returned to the State agency by USPS with a forwarding address:
(2) the NCOA database; (3) managed care plans under contract with the
State, provided that the managed care plan received the information
directly from the beneficiary or verified it with the beneficiary; and
(4) other data sources identified by the State agency and approved by
the Secretary. Hereafter in this preamble, we will refer to the sources
described in Sec. 435.919(f)(1)(iii) as ``reliable data sources.'' We
also clarify at Sec. 435.919(f)(1)(iii)(C) that for the purpose of
this rule, managed care plans include MCOs, PIHPs, PAHPs, PCCMs, and
PCCM entities as defined in Sec. 438.2 of the subchapter.
In returning to normal operations during the unwinding period, the
vast majority of States requested (and were granted) waiver authority
under section 1902(e)(14)(A) of the Act to accept updated contact
information from contracted managed care plans and/or the NCOA
database, without separately verifying the information with
beneficiaries. We did not receive any feedback from commenters
suggesting that this practice was, or would, harm beneficiaries or
their access to coverage. We agree with commenters that implementing
this process nationwide would result in more equitable treatment of
beneficiaries across States and improved access for all Medicaid and
CHIP beneficiaries nationwide. Therefore, we are finalizing a
requirement at Sec. 435.919(f)(2)(i) that when a State receives
information regarding an in-State change of address from a reliable
data source, the State must accept the information as reliable, update
the beneficiary's case record with the new information, and notify the
beneficiary of the update.
We recognize that some States will incur new costs as they
establish data sharing agreements, create new electronic exchanges with
the NCOA database and/or contracted managed care plans, and train staff
in the use of
[[Page 22812]]
reliable, third-party information. However, we believe States will also
see a reduction in the volume of returned mail as a result of this new
policy. The benefits of maintaining up-to-date contact information for
all beneficiaries should outweigh these upfront costs.
Comment: We received many comments supporting the use of data
sources other than the NCOA database and contracted managed care plans,
such as the examples described in proposed Sec. 435.919(f)(1)(iii):
SNAP, TANF, DMV, and other sources identified in the State's
verification plan. Many commenters supported allowing States to accept
updated address and contact information from a more expansive list of
third-party sources. Suggested data sources include: medical providers
and health clinics; Indian health care providers; essential community
providers such as Federally Qualified Health Centers (FQHCs); community
service providers such as a homeless shelters, homeless services
providers or reentry programs; organizations that support managed care
delivery systems, such as enrollment brokers; pharmacies and
prescription drug plans; commercial third-party data providers; State
and health plan contractors such as non-emergency medical
transportation providers; schools; legally authorized representatives
and/or emergency contacts; and other partners. One commenter supported
crosschecking beneficiaries' addresses across State programs. Another
commenter recommended that CMS more flexibly define reliable data
sources and allow States to utilize additional sources that have proven
to be credible (such as credit reporting agencies and utility
companies).
Many commenters recommended State flexibility with respect to the
data sources to be used, and two commenters specifically opposed
requirements to create new electronic data exchanges with sources a
State has determined not to be helpful. One commenter stated that
requiring States to check data sources with which they do not already
have electronic connections will require eligibility workers to
manually review a long list of data sources before acting on
information, even when third-party information may not be reliable.
Another commenter expressed support for an explicit requirement that
the State Medicaid Agency select the third-party source that is
believed to be the most comprehensive.
Finally, many commenters expressed support for the provision at
proposed Sec. 435.919(g)(2) authorizing States to use updated in-State
address information from other trusted data sources with approval from
the Secretary and further supported permitting such sources to be
deemed ``reliable'' such that the information does not need to be
reverified by the State. Some recommended permitting other reliable
data sources, at State option, since the quality of data and the
feasibility of accepting updated addresses varies between States and
data sources.
Response: We believe updated address information available from the
NCOA database and updated address information verified by contracted
managed care plans should always be considered reliable. As discussed,
we are requiring at Sec. 435.919(f)(1)(i) of this final rule that
States must establish processes to regularly obtain and act on
information from these reliable data sources. We appreciate that other
outside sources of information may also be efficient and effective for
this purpose; however, we do not have enough information to conclude
that any other such sources are sufficiently reliable to permit States
to accept updated beneficiary contact information from them without
separately verifying the information with the beneficiary or to require
their use by all States.
In this final rule, proposed Sec. 435.919(g)(2) is redesignated at
Sec. 435.919(f)(1)(iii)(D), permitting States to request authority to
utilize other data sources as reliable data sources, provided they can
demonstrate that the data source provides reliable, up-to-date address
information that has been verified with the beneficiary or an
individual described at Sec. 435.907(a) who is permitted to submit
information on behalf of the beneficiary. At Sec. 435.919(f)(1)(ii) of
this final rule, we also revise and redesignate proposed Sec.
435.919(g)(3), permitting States to establish a process to obtain
information from other third-party data sources as well and to act on
such information following additional verification by either a reliable
data source or the beneficiary.
Additional verification is required for two types of address
changes: in-State address changes obtained from a third-party data
source other than those considered reliable for this purpose and out-
of-State address changes received from any source. Section
435.919(f)(2)(ii) of this final rule provides that when an in-State
address change is provided by a data source not described in Sec.
435.919(f)(1)(iii), the State must check their Medicaid Enterprise
System, along with the most recent information obtained from reliable
data sources, before taking any further action. In the September 2022
proposed rule, we did not include a check of other data sources at
proposed Sec. 435.919(g)(3) for verification of these types of address
updates, but we sought comment on whether we should require States to
check available data sources. We did not receive any comments opposing
this action, and we are including this requirement in this final rule
because we believe it is in the best interests of beneficiaries for all
States to check reliable data sources that would permit the immediate
update of beneficiary contact information. Section Sec.
435.919(f)(2)(ii)(A) of this final rule requires that if the in-State
change of address is consistent with information from the State's
Medicaid Enterprise System or a reliable data source, the State must
update the beneficiary's case record and notify the beneficiary of the
change. In such cases no further action is required. However, if the
State is unable to confirm the new address information through the
State's Medicaid Enterprise System or other reliable data source, under
Sec. 435.919(f)(2)(ii)(B) of this final rule, the State must make a
good-faith effort to contact the beneficiary to verify the new address
information. The requirements for making a good-faith effort are
discussed later in this section.
In the September 2022 proposed rule, we proposed that when a State
is unable to confirm an in-State change of address with a beneficiary,
the State may not terminate the beneficiary's eligibility for failure
to respond to a request to confirm the change (proposed Sec.
435.919(f)(4)(i)); additionally, if the in-State change of address was
provided by a reliable data source, the State must accept it and update
the beneficiary's case record (proposed Sec. 435.919(f)(4)(ii)). In
this final rule, we revise and redesignate proposed Sec.
435.919(f)(4)(i) and (ii) at Sec. 435.919(f)(2)(ii)(C), which
prohibits a State from terminating the coverage of an individual for
failure to respond to a request from the State to confirm the
information. Section 435.919(f)(2)(ii)(C) of this final rule also
prohibits the State from using the information to update the
beneficiary's case record, because the information subject to this
provision was not obtained from a reliable data source, and it was not
verified by the beneficiary.
The other type of address change requiring additional verification
is an out-of-State address change. In the September 2022 proposed rule,
at Sec. 435.919(f)(2) and (3), we proposed to require States to
contact a beneficiary by mail and using at least one alternative
modality to verify an out-of-State forwarding address provided by USPS
[[Page 22813]]
when mail is returned to the State. Then at Sec. 435.919(g)(3), we
proposed to apply these same beneficiary contact requirements (proposed
Sec. 435.919(f)(2) and (3)) to out-of-State address changes provided
by third-party data sources other than the NCOA database and contracted
managed care plans. We did not receive any comments specific to
beneficiary contacts required to confirm out-of-State address changes.
In this final rule, at Sec. 435.919(f)(3)(i) we revise and redesignate
the requirements proposed at Sec. 435.919(f)(2) and (3) and (g)(3)
that States contact a beneficiary by mail and through at least one
alternative modality to verify an out-of-State address update. As
finalized, Sec. 435.919(f)(3)(i) requires the State to make a good-
faith effort to contact the beneficiary to confirm an out-of-State
address change received from any third-party data source. The good-
faith effort requirement is discussed in detail later in this section.
When a State is unable to reach a beneficiary to confirm the
accuracy of updated out-of-State address information or to obtain
additional information demonstrating that the beneficiary continues to
meet State residency requirements, we proposed at Sec. 435.919(f)(5)
that the State must provide advance notice of termination and fair
hearing rights consistent with 42 CFR part 431, subpart E. We are
finalizing this policy as proposed; to do so, we revise and redesignate
the language proposed at Sec. 435.919(f)(5) at Sec. 435.919(f)(3)(ii)
of this final rule.
While the use of data sources other than USPS and contracted
managed care plans does require a State to complete additional
verification, we encourage States to continue existing data exchanges
to obtain updated beneficiary address information and to test the
reliability of existing data sources and other data sources identified
by commenters. As CMS and States' experience with other sources of
beneficiary contact information increases, we may learn of other
sources that are also extremely reliable. If a State demonstrates that
another such source of updated beneficiary contact information is
reliable, Sec. 435.919(f)(1)(iii)(D) of this final rule provides
flexibility for the State, subject to approval by the Secretary, to
treat updated contact information from such source in the same manner
as other reliable data sources (Sec. 435.919(f)(1)(iii)(A) through
(C)) are treated.
Comment: Several commenters encouraged CMS to either require or to
encourage States to use all available data sources to verify addresses
and contact information prior to terminating eligibility when a
beneficiary's whereabouts cannot be confirmed. These commenters
explained that requesting States to select only one data source, as
proposed at Sec. 435.919(f)(1)(iii), may be insufficient, as not all
beneficiaries will, for example, receive benefits from a specified
State agency or have a driver's license. Utilizing all available data
sources would minimize unnecessary Medicaid coverage loss.
Response: We understand commenters' concerns about ensuring that
States take sufficient action to attempt to locate a beneficiary whose
whereabouts are unknown. In the September 2022 proposed rule at Sec.
435.919(f)(1), we proposed to require that when a State receives
returned mail with no forwarding address, the State must check its
Medicaid Enterprise System, contracted managed care plans (if
applicable), and at least one third-party data source for an updated
address. We recognize that a single data source may not be sufficient,
depending on the source, to locate a beneficiary whose whereabouts are
unknown. However, as discussed previously, in this final rule we are
requiring all States to utilize the reliable data sources described in
Sec. 435.919(f)(1)(iii). We believe these data sources will provide
not only the greatest reliability but also include information on the
largest number of Medicaid and CHIP beneficiaries of any available
third-party data sources. While we are not requiring the use of
additional data sources, we encourage States to use all available
resources to locate a beneficiary whose whereabouts are unknown.
At Sec. 435.919(f)(4)(i) and (ii) of this final rule, we are
revising and redesignating the requirements proposed at Sec.
435.919(f)(1), along with the requirements proposed at Sec.
435.919(f)(2) and (3), for mail that is returned without a forwarding
address. We require at Sec. 435.919(f)(4)(i) of the final rule that
when a State receives returned mail with no forwarding address, the
State must check its Medicaid Enterprise System and the most recently
available information from reliable data sources for additional contact
information. If updated address information cannot be obtained and
confirmed as reliable, then Sec. 435.919(f)(4)(ii) requires the State
to make a good-faith effort (as discussed later) to contact the
beneficiary to obtain updated information. If a State is unable to
identify and confirm a beneficiary's current address, the State must
either move the beneficiary to a fee-for-service delivery system or
take the necessary steps to terminate or suspend the beneficiary's
coverage. At Sec. 435.919(f)(4)(iii) of this final rule, we
redesignate and finalize the requirements proposed at Sec.
435.919(f)(6).
Comment: One commenter requested clarity on what would constitute a
check of a third-party data source such as a contracted managed care
plan. The commenter questioned whether a process, for example, in which
the State obtains updated beneficiary contact information from its
managed care plans on a recurring basis, would satisfy the requirement
at proposed Sec. 435.919(f)(1)(ii) to check managed care plans for
updated address information whenever beneficiary mail is returned.
Similarly, commenters recommended that requests for beneficiary contact
information be sent to managed care plans in batch files, rather than
individually, since responding to individual requests would require a
significant amount of time and resources from the plans. One commenter
recommended that States establish new processes to ensure that they do
not accidentally override updated enrollee information received from
managed care plans.
Response: We recognize that submitting an individual request to a
managed care plan each time the State receives updated beneficiary
address information may be unnecessarily burdensome, particularly if
the process is not automated. We also understand that many States have
established processes with contracted managed care plans to obtain
updated beneficiary contact information on a regular basis, such as a
daily, weekly, or monthly data exchange. We believe any of these
options satisfies the requirement to check data sources for updated
address information, which was proposed at Sec. 435.919(f)(1) and is
finalized at Sec. 435.919(f)(1)(i) (establishing a process to obtain
updated address information from reliable sources) and at Sec.
435.919(f)(2)(ii) (checking reliable data sources to verify in-State
address updates) and (f)(4)(i) (checking reliable data sources to
obtain updated address information when whereabouts are unknown). A
State may satisfy the requirement to verify in-State address updates
(Sec. 435.919(f)(2)(ii)) and the requirement to obtain new address
information when whereabouts are unknown (Sec. 435.919(f)(4)(i)), by
making individual data requests to reliable data sources or by sending
a batch of individual requests to a reliable data source on a regular
basis, such as at the end of each day or week. Alternatively, States
may satisfy this requirement by
[[Page 22814]]
establishing a process to receive regular updates (that is, daily,
weekly, or monthly) from reliable data sources. We believe that
establishing a process to receive regular updates strikes the best
balance between minimizing the burden on States (as well as their
contracted managed care plans) and ensuring that States have up-to-date
beneficiary contact information when needed to contact a beneficiary,
such as the beneficiary's next renewal or redetermination of
eligibility following a change in circumstances.
Comment: We received many comments on the requirements proposed for
contacting beneficiaries to confirm a change of address. At Sec.
435.919(f)(2) and (g)(1)(ii), we proposed to require States to send the
beneficiary a notice by mail at: the current address in the
beneficiary's case record; the forwarding address, if provided for
returned mail, or the new address obtained from a third-party data
source; and any address identified by checking other data sources
(required for returned mail only). Some commenters supported these
proposed requirements, describing the requirement to send notices to
both (or multiple) addresses as a critical step to protect the
beneficiary's right to ensure that the information is correct before it
becomes permanent.
While some commenters were supportive, many other commenters
expressed concerns about the requirements for mailing notices to
beneficiaries. Commenters were particularly concerned about the
proposed requirement to send a notice to the address on file after mail
sent to that address has been returned. They stated that such an
approach would not be effective or efficient, and that it would add
unnecessary time, and administrative and financial burden. A couple of
commenters were concerned that the proposed approach would do the
opposite of streamlining eligibility and enrollment, and one suggested
that it contradicts the intent of the Paperwork Reduction Act of 1995,
because it will generate twice as much mail to be processed when it is
returned again to the agency undelivered.
Commenters reported concerns that ongoing paper and envelope
shortages would be exacerbated by a requirement to send multiple paper
notices, that it would increase the backlog of returned mail
processing, that it would have a negative environmental impact, and
that it would compound confusion and burden on beneficiaries who
already receive a large volume of notices. In addition, several States
reported that their systems do not have the functionality to hold (or
send mail to) more than one beneficiary address; that manual
intervention by workers would be necessary to add a second address; and
that this process would significantly increase the risk of data input
errors and lead to more misdirected notices. One State commenter
explained that due to system limitations, they have developed a
different process that is not consistent with CMS' proposed change, but
they believe to be comparably effective.
At Sec. 435.919(f)(3) and (g)(1)(iii), we proposed to require
States to send at least two additional notices using one or more
modalities besides mail, such as text message or email. Many commenters
supported the proposed requirement for States to contact beneficiaries
through other modalities, such as phone, email, or text message, when
mail is returned, since this may increase their ability to reach
eligible individuals. Several commenters noted that use of additional
modalities puts greater protections in place to ensure that States are
doing their due diligence to follow up when mail is returned. One
commenter noted that traditional mail has proven to be vastly
ineffective due to changes in address and delays in mail delivery, and
one State commenter stated that they already attempt outreach to
beneficiaries by telephone, in addition to sending a notice by mail,
when mail is returned.
Other commenters expressed concerns about the financial,
administrative, and time burden of contacting beneficiaries through
multiple modalities. Several commenters stated that their States would
require significant personnel resources for compliance, since possible
automation of notices provided through other modalities would be
limited and would likely require complex modifications to multiple
systems. Some States reported that they would need to procure a
Customer Relationship Management system, which would require years and
significant State funds to implement. Other commenters were concerned
that it may be impossible to send a beneficiary at least two additional
notices by one or more modalities other than mail. The commenters
stated that States may not have enough available contact information
for a phone call, electronic notice, email, and/or text message,
particularly if they only maintain email addresses for individuals who
have elected to receive their notices electronically, which may result
in a low contact success rate with a high cost.
A number of commenters recommended more State flexibility for
contacting beneficiaries about returned mail and updated mailing
addresses. Others suggested specific alternative approaches. Some
supported a requirement for States to investigate other available
addresses and send notice to those addresses. Others recommended
limiting the total number of required attempts to two, for example, by
sending one notice to the updated address and another notice through an
additional modality other than mail. We also received comments
recommending that the second notice be a State option or best practice,
particularly in light of the reliability of forwarding addresses.
Finally, some commenters recommended that CMS not mandate any specific
outreach, but instead encourage States to make additional attempts to
contact beneficiaries through additional modalities.
Response: We agree that when new address information is obtained
from outside sources, which may not have verified the information in
advance, it is important for States to take adequate steps to contact
the beneficiary and ensure that the information is correct. We also
understand the barriers and challenges raised by commenters regarding
the proposed approaches for contacting beneficiaries by mail and
through other modalities, and we recognize that some approaches will be
easier to implement in some States than others. In this final rule, we
seek to balance the likelihood of reaching a beneficiary with the
significant increase in burden that multiple mailings and the use of
multiple modalities would place on State Medicaid and CHIP agencies.
As discussed previously in this final rule, we believe updated
addresses provided by the NCOA database and States' contracted managed
care plans (when verified by the beneficiary) are extremely reliable.
Therefore, we are finalizing a requirement at Sec. 435.919(f)(2)(i)
that States must accept in-State address updates from these sources as
reliable, use the information to update the contact information in a
beneficiary's case record without attempting to contact the beneficiary
for additional verification, and notify the beneficiary of the update.
We believe this change will reduce the number of additional beneficiary
communications that are needed. However, we believe there are still a
number of situations in which it is important for States to attempt to
contact a beneficiary to confirm a change of address before updating
the beneficiary's case record.
[[Page 22815]]
This includes situations in which the reliable third-party data
indicates a potential change of State residency (that is, an out-of-
State forwarding address), the change of address was provided by a
third-party data source other than those considered reliable under
Sec. 435.919(f)(1)(iii) of this final rule, or mail is returned to the
State without a forwarding address. Therefore at Sec.
435.919(f)(2)(ii)(B), (f)(3)(i), (f)(4)(ii), and (f)(5) of this final
rule, we revise and redesignate the beneficiary contact requirements
proposed at Sec. 435.919(f)(2) and (3) and (g)(1)(ii) and (iii). For
the purpose of this final rule, we refer to these beneficiary contact
requirements as a good-faith effort to contact beneficiaries to confirm
address changes, and we define a good-faith effort at Sec.
435.919(f)(5). The discussion that follows describes Sec.
435.919(f)(5) in detail, including the redesignation and revisions to
proposed Sec. 435.919(f)(2) and (3) and (g)(1)(ii) and (iii).
In the September 2022 proposed rule, at Sec. 435.919(f)(2), we
proposed to require that whenever beneficiary mail is returned to the
State by USPS, the State must attempt to contact the beneficiary by
mail to either confirm the forwarding address or to obtain a new
address. This included requirements to send a notice to the address
currently on file in the beneficiary's case record, the forwarding
address (if provided) and any other addresses identified by the agency.
We proposed the same requirement at Sec. 435.919(g)(1)(ii) for updated
in-State address information obtained from the NCOA database or from a
contracted managed care plan (provided the information was verified by
the beneficiary), except the requirement to send a notice to other
addresses identified by the agency. Finally, we proposed to apply the
requirements at Sec. 435.919(f)(2) to in-State address changes
received from data sources other than USPS and contracted managed care
plans and to out-of-State address changes received from any outside
data source through a cross reference at proposed Sec. 435.919(g)(3).
At Sec. 435.919(f)(3) and (g)(1)(iii) we proposed to require that
States send the beneficiary at least two notices, by one or more
modalities other than mail, such as phone, electronic notice, email, or
text message, to either confirm the forwarding address or to obtain a
new address. Consistent with the requirements for mailing notices, we
proposed to apply these requirements when beneficiary mail is returned,
when the State obtains an updated in-State address from the NCOA
database, and to other address updates through a cross-reference at
Sec. 435.919(g)(3).
In this final rule, we combine these requirements into a good-faith
effort requirement to contact the beneficiary, which must include, at a
minimum, at least two attempts to contact the beneficiary, using at
least two different modalities, with a reasonable period of time
between contact attempts. To permit a swift and seamless transition, we
modelled the good-faith effort required by this final rule on the
requirements established under section 6008(f)(2)(C) of the FFCRA, as
amended by the CAA, 2023. As a condition for receiving the FFCRA's
temporary FMAP increase, States were required to undertake a good-faith
effort to contact beneficiaries using more than one modality before
terminating eligibility on the basis of returned mail. In a State
Health Official letter issued on January 27, 2023 (SHO# 23-002), we
defined a good-faith effort to mean that the State (1) has a process in
place to obtain up-to-date mailing addresses and additional contact
information for all beneficiaries, and (2) attempts to reach a
beneficiary whose mail is returned through at least two modalities
using the most up-to-date contact information the State has for the
individual.\15\
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\15\ https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf.
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The September 2022 proposed rule would have required States to mail
notices to all available beneficiary addresses, including the address
currently on file, the forwarding address, and any other addresses
obtained from other data sources. We agree with commenters that this
proposed requirement was unnecessarily burdensome. In this final rule,
we have eliminated the specific requirements for mailing notices to the
old address, new address, and any other available to the agency.
Instead, Sec. 435.919(f)(5)(i)(A) requires the State to make at least
two attempts to contact the beneficiary, and Sec. 435.919(f)(5)(i)(B)
requires the State to use at least two different modalities (such as
mail, phone, email). For many beneficiaries, a mailed paper notice
continues to be the best method of communication, and when the State
receives an out-of-State forwarding address or obtains an updated in-
State address, we would generally expect the State to mail a notice to
that address as part of their good-faith effort, in accordance with
this final rule. This approach provides States with flexibility, for
example, to tailor their approach to specific types of beneficiaries
and to utilize modalities that have proven most effective in reaching
their beneficiaries.
We recognize that every individual's situation is different, and
some beneficiaries may respond best to text messaging, internet-based
messaging, or other electronic communication, while others may be more
likely to respond to a phone call or a letter. We proposed to require,
at Sec. 435.919(f)(3)(i) that for a beneficiary who elected to receive
electronic notices and communications in accordance with Sec. 435.918,
at least one communication attempt must be electronic, and any
additional attempts must occur through a different modality. We are not
finalizing this requirement; removing this proposed requirement from
the final rule increases State flexibility, and current Sec.
435.918(b) already requires States to communicate electronically, by
posting notices to an individual's electronic account, when an
individual elects to receive their notices electronically. We expect
States to utilize the modalities that match individual beneficiary
preferences as much as possible. For those beneficiaries who have
requested electronic communications, we would generally expect at least
one of the attempts to contact the beneficiary, as required at Sec.
435.919(f)(5)(i), to be made using this modality unless the electronic
communication is undeliverable. If the electronic communication is
undeliverable, the State must utilize other modalities, if available,
to fulfill this requirement.
Further, we proposed at Sec. 435.919(f)(3)(ii) and (iii) that
notices must be sent first to contact information in the beneficiary's
case record, if available, and then using other contact information,
but that the State may utilize any combination or order of modalities.
To increase flexibility and permit States to establish the most
effective processes given their unique circumstances, we are not
finalizing these requirements. However, in making a good-faith effort
to contact a beneficiary, we expect States to utilize the most up-to-
date information available. For example, if a State receives a piece of
returned mail with no forwarding address, and the contact information
in the beneficiary's case record includes a mailing address and cell
phone number provided 10 months ago, plus an email address that was
updated one month ago, the State would be expected to attempt to
contact the beneficiary by email and by phone or text.
We believe this requirement to make a good-faith effort to contact
the beneficiary, with at least two attempts through two or more
modalities, strikes
[[Page 22816]]
the best balance of protecting coverage for eligible individuals
without overburdening State agencies. We also recognize that States
will not always have sufficient information to make two or more
attempts through different modalities. At Sec. 435.919(f)(5)(ii), we
revised and redesignated the requirement proposed at Sec.
435.919(f)(3)(v) that if the State does not have the necessary contact
information to full the requirements of Sec. 435.919(f)(5)(i) for a
good-faith effort, the State must make a note of that fact in the
beneficiary's case record.
Comment: One commenter supported the proposed requirement that when
a State sends notice to a beneficiary to update their address, or
confirm an updated address, the individual be provided with a
reasonable period of time of 30 calendar days from the date the notice
is sent to the beneficiary to verify the accuracy of the new contact
information. Another commenter disagreed with the requirement to wait
30 calendar days to hear back from a beneficiary before acting on a
change. One commenter reported that States often receive address
changes that at are least six months old, creating very little risk
that the individual incorrectly updated their address and did not
realize the error in the intervening six months; in these cases, giving
the beneficiary 30 days to respond would significantly delay the
State's ability to update the address and not meaningfully increase the
accuracy of the agency's contact information.
Response: We believe it is important to provide beneficiaries with
adequate time to receive and respond to a request from the State. In
this final rule, we revise and redesignate the requirement to provide
beneficiaries with at least 30 days to verify the accuracy of new
contact information, proposed at Sec. 435.919(f)(3)(i) and (g)(1)(v),
at Sec. 435.919(f)(5)(i)(D) of this final rule. Section
435.919(f)(5)(i)(D) provides that when a State makes a good-faith
effort to contact a beneficiary to confirm their updated address, the
State must provide the beneficiary with at least 30 calendar days to
respond to the request and either provide updated contact information
or confirm the updated contact information obtained by the State. We
note that when beneficiaries themselves provide updated contact
information to the State, or when the State receives updated, in-State
contact information from a reliable data source described in Sec.
435.919(f)(1)(iii), the State is not required to separately verify the
change with the beneficiary.
Comment: We received several comments regarding the use of data in
States with combined eligibility systems, which may include Medicaid,
SNAP, TANF, and other public benefit programs. One commenter questioned
whether use of a combined eligibility system would automatically
satisfy the requirement at proposed Sec. 435.919(f)(1)(iii) to check
at least one outside data source. Two commenters expressed concern
about the use of other data sources in States with combined eligibility
systems. One commenter noted that while the NCOA database, for example,
may be an acceptable source for address verification for Medicaid, it
may conflict with other programs' requirements and could have a
significant impact on eligibility for other benefit programs.
Response: We recognize that utilizing a combined eligibility system
requires navigating among different programs' eligibility requirements.
Prior to this final rule, policy differences already existed between
CMS programs and other State-administered health and human services
programs, and States have reconciled differences over time to
administer multiple programs together through a single system. States
have a number of options for reconciling different program requirements
for this purpose. They may, for example, adopt options or flexibilities
that permit alignment of program rules, establish separate processes to
allow separate rules to be applied to each program, or determine that
information collected, or decisions made, by one program can be applied
to the other program. The options available will differ by program, by
State and Federal requirements, and by the specific nature and design
of State processes.
In this rule, we are finalizing a requirement that States must
obtain data from sources defined as reliable for updating beneficiary
contact information. At Sec. 435.919(f)(1)(iii), we define the
following four data sources as reliable: mail returned to the State
agency by the USPS, the NCOA database, managed care plans, and other
entities under contract with the State, and other data sources
identified by the State and approved by the Secretary. States may seek
approval from the Secretary to deem data provided by SNAP, TANF, or
another public benefit program or agency as reliable for updating
beneficiary contact information. In such cases, the State must
demonstrate that the information was received directly from, or
verified by, the beneficiary whose contact information will be updated
or by an individual with authority to provide information to the State
on the beneficiary's behalf. Such individuals would include an adult
who is in the applicant's household, as defined in Sec. 435.603(f),
family, as defined at 26 U.S.C. 36B(d)(1), or an authorized
representative. Additional information on obtaining Secretarial
approval for this purpose will be made available through subregulatory
guidance.
We are not finalizing the requirement at proposed Sec.
435.919(f)(1)(iii) to check at least one outside data source, so the
commenter's question about whether use of a combined eligibility system
would automatically satisfy the requirement to check an outside data
source is no longer relevant for this rule. However, States are
permitted, as described at Sec. 435.919(f)(1)(ii) to establish
processes to obtain updated address information from data sources other
than those identified as reliable and described in Sec.
435.919(f)(1)(iii), including data provided by SNAP, TANF, or other
public benefit programs. States must act on information obtained from
these data sources in accordance with Sec. 435.919(f)(2) and (3).
Comment: Several commenters opposed the proposed requirement that
when sending notices through one or more modalities, the notices be
issued a minimum of 3 days apart. The commenters stated that this would
be operationally difficult for States to monitor and track and would
create significant additional work without a clear added benefit. The
commenters recommended State flexibility with respect to the timing of
the communications. Other commenters supported the requirement to
schedule at least 3 business days between the first and the last
attempt to contact a beneficiary, explaining that such additional time
may permit some beneficiaries to overcome challenges they experienced
in responding to the first attempt.
Response: We appreciate the input. We agree that it is important to
provide a reasonable period of time for a beneficiary to respond
between the first and the last contact attempts. However, we also
understand commenters' concerns that 3 days may not be the best
timeframe for all situations and that such a specific timeframe may be
difficult to implement. While we believe 3 days is a reasonable period
of time, we believe other timeframes may also be considered reasonable.
As such, we are revising and redesignating proposed Sec.
435.919(f)(3)(iv) at Sec. 435.919(f)(5)(i)(C), which requires that a
good-faith effort to contact a beneficiary includes a reasonable period
of time between contact attempts.
Comment: One commenter recommended that before updating a
[[Page 22817]]
mailing address based on secondary information, States use the new
address as an alternative address or consider communicating only non-
sensitive information at the new address until the beneficiary has been
successfully contacted and has confirmed the update. The commenter
explained that such an approach would mitigate privacy concerns if
personal health information was inadvertently sent to the individual at
an incorrect address.
Response: We agree that protecting the privacy of Medicaid and CHIP
beneficiaries is critical. That is why we proposed at Sec.
435.919(f)(2) and (3) and (g)(1) to require that States contact
beneficiaries prior to making updates to their contact information
based on information provided by an outside data source that has not
been determined to be extremely reliable. We note that the reliable
data sources identified in Sec. 435.919(f)(1)(iii) of this final rule
all provide information that was either obtained from or confirmed by
the beneficiary. Except in the case of updated in-State address
information received from a reliable data source, we are finalizing the
requirement that the State attempt to contact a beneficiary to confirm
an in-State change of address (Sec. 435.919(f)(2)(ii)(B)) and an out-
of-State change of address (Sec. 435.919(f)(3)(i)) provided by a
third-party data source.
Comment: One commenter expressed concern that States would not be
permitted to send electronic notices to individuals who do not
expressly consent to receive their notices electronically.
Response: States are required to provide timely and adequate
written notice to beneficiaries of any decisions affecting their
eligibility, as described at current Sec. 435.917. If an individual
elects to receive such notices electronically, the use of electronic
notices must comply with Sec. 435.918(b). This regulatory requirement
does not prohibit a State from attempting to reach a beneficiary
through a secure electronic communication when the State is unable to
deliver the notice by mail because a beneficiary's mailing address is
no longer correct.
Comment: One commenter expressed concerns surrounding managed care
plans' ability to utilize two different effective contact modalities
given current restrictions under the Telephone Consumer Protection Act
(TCPA). The commenter requested clear guidance on the role of managed
care plans in these outreach efforts.
Response: We believe managed care plans are a particularly
effective source of reliable contact information for beneficiaries.
That is why we are finalizing the requirement proposed at Sec.
435.919(f)(1)(ii), revised and redesignated at Sec. 435.919(f)(1)(i)
that States establish a process to obtain and act on updated
information available through contracted managed care plans. While
managed care plans are important partners to State Medicaid and CHIP
agencies, the regulatory requirement finalized at Sec. 435.919(f) does
not require action by contracted managed care plans. State agencies
must make a good-faith effort to contact their beneficiaries to verify
a change of address. While Sec. 435.919(f)(1)(i) requires States to
work with contracted managed care plans to obtain updated beneficiary
contact information, the managed care plans themselves are not
obligated to conduct any outreach under these requirements. Because the
requirements established by the TCPA fall outside our purview, we are
not able to provide guidance on this statute or compliance with its
terms. For additional information on the TCPA and its implications for
Medicaid and CHIP agencies, we refer readers to guidance issued by the
Federal Communications Commission at https://www.fcc.gov/document/fcc-provides-guidance-enable-critical-health-care-coverage-calls.
Comment: Many commenters noted the importance of using multiple
modalities to reach beneficiaries in different types of situations.
Several commenters expressed concerns about States' ability to contact
beneficiaries who may be housing insecure and do not maintain a
consistent address, because reliance on mailed notices will have a
disproportionately negative impact on such individuals, particularly
individuals experiencing homelessness. One commenter explained that
text messages and email are likely preferred methods of contact for
Medicaid beneficiaries due to the high prevalence of smartphone use
among this population. Other commenters noted that beneficiaries have
varied access to different modes of communication, and they are likely
to have different levels of ability and levels of comfort utilizing
various communication modalities. Examples provided by commenters
include beneficiaries in rural areas who may have limited broadband
access and cellphone coverage, older adults and people with
disabilities who may temporarily lose access to mail while they are
hospitalized or receiving skilled nursing care in a facility, and
individuals with disabilities who may have unique accessibility issues
across different modes of communication.
One commenter recommended that beneficiary preferences be
considered when determining the best contact method for a given
beneficiary, as some may prefer electronic notices, some may opt for
paper, and others may prefer to speak to a caseworker, especially if
they have questions. Another commenter recommended that applications
and renewal forms include options to indicate when an individual is
experiencing unstable housing and must be contacted through methods
other than mail. A third commenter suggested that we provide States
with resources and technical assistance to ensure they are equipped to
communicate with beneficiaries experiencing homelessness, including via
text messaging.
Response: We agree that different modes of communication are likely
to be more effective for some beneficiaries than others and that access
to alternative forms of communication is particularly important for
individuals who may not receive mail regularly, such as those who are
housing insecure. The model, single streamlined application described
at Sec. 435.907(b)(1) permits applicants to leave the home address
field blank if they are experiencing unstable housing, and applicants
and beneficiaries are always permitted to provide an alternative
mailing address, such as the address of a relative, friend, community-
based organization, or post office, among others. In addition, every
applicant and beneficiary currently have the right under existing
regulations (see Sec. 435.918) to elect to receive communications
electronically. We will continue to consider additional opportunities,
including potential changes to the single, streamlined application, to
assist States in communicating with different types of individuals who
may have different communication needs. We remind States that
communications with individuals with limited English proficiency and
individuals with disabilities must be accessible, as discussed
previously.
Comment: One commenter requested clarification about whether States
are required to act on address changes reported by third-party entities
that are not considered by the State to be reliable.
Response: Other than the data sources identified as reliable in
Sec. 435.919(f)(1)(iii) of this final rule--the agency's contracted
managed care plans, the NCOA database, USPS returned mail, and any
other source identified by the State and approved by the Secretary--
States are not required to establish processes for obtaining updated
address information from any
[[Page 22818]]
other specific data sources. Each State agency has flexibility to
determine which data sources will be most effective for use in their
own State. Address information obtained from any data source other than
those identified as reliable in Sec. 435.919(f)(1)(iii) must be
verified by the beneficiary.
Comment: Most commenters supported the proposed requirement at
Sec. 435.919(f)(4)(i) that when beneficiary mail is returned to the
State and the State is unable to confirm a beneficiary's in-State
forwarding address, the State may not terminate the beneficiary's
eligibility for failure to respond.
Response: We agree that failure to respond to a request to confirm
a change of address is not a valid reason for terminating a
beneficiary's eligibility. We are finalizing this requirement as
proposed, except that we have moved the proposed provision to Sec.
435.919(f)(2)(ii)(C) of this final rule and applied it only to in-State
address updates from third-party sources other than those defined as
reliable at Sec. 435.919(f)(1)(iii). When the State receives an in-
State address change from the USPS, either via returned mail or from
the NCOA database, or from a contracted managed care plan that obtained
the information directly from the beneficiary or verified it with the
beneficiary, Sec. 435.919(f)(2)(i) requires the State to accept the
change, update the beneficiary's case record with the information and
then notify the beneficiary of the change. A beneficiary does not need
to respond to reconfirm the information provided by a reliable data
source.
Comment: One commenter requested clarification about the
prohibition on terminating Medicaid eligibility when a beneficiary
fails to respond to a request to confirm an in-State forwarding
address. The commenter was unclear about whether this requirement was
limited to only circumstances in which the change of address is the
only change or whether it also applies when a State attempts to contact
a beneficiary to request information about a change that does impact
the individual's eligibility, such as income.
Response: Section Sec. 435.919(f)(2)(ii)(C) of this final rule,
prohibits a State from terminating an individual's coverage for failure
to respond to a request from the State to confirm their address or
State residency. This requirement applies only to the request to
confirm the change of address. For example, a State receives
notification through a monthly data exchange with SNAP that a
beneficiary's address has changed to a new in-State address. In
accordance with Sec. 435.919(f)(2)(ii)(A) of this final rule, the
State checks reliable data sources but is unable to confirm the
beneficiary's updated address. The State therefore mails a notice to
the beneficiary and calls the beneficiary at the phone number in the
beneficiary's case record to request confirmation of the change of
address. If the beneficiary does not respond to either request, the
State may not terminate the beneficiary's eligibility in accordance
with Sec. 435.919(f)(2)(ii)(C) of this final rule. However, if the
State receives information from the SNAP agency both that the
beneficiary has moved and that their income has increased beyond the
income standard for Medicaid, the outcome may be different. In this
case, the State would need to contact the beneficiary in accordance
with Sec. 435.919(f)(2)(ii) to confirm the change of address, and in
accordance with Sec. 435.919(b)(4) to verify or dispute the income
information. After following these steps, if the beneficiary does not
respond the State's outreach, then the State may send advance notice of
termination and fair hearing rights, in accordance with Sec. 435.917
and 42 CFR part 431, subpart E, because it cannot confirm that the
beneficiary remains income eligible.
Comment: We received one comment urging CMS to require States to
provide advance notice, at a beneficiary's last known address or
through electronic means, before suspending or terminating eligibility
because a beneficiary's whereabouts are unknown.
Response: The circumstances in which Medicaid's notice and fair
hearing rights apply are set forth in 42 CFR part 431, subpart E.
Section 431.213 provides for a series of exceptions to the requirement
to provide advance notice; current Sec. 431.213(d) permits a State to
send notice of an adverse action not later than the date of the action
when a beneficiary's whereabouts are unknown and the post office
returns mail with no forwarding address. It also refers to current
Sec. 431.231(d) for the procedure for when beneficiaries whereabouts
become unknown. In the preamble to the September 2022 proposed rule, we
proposed to revise and redesignate Sec. 431.231(d) at proposed Sec.
435.919(f)(6) and to update the reference to Sec. 431.231(d) in
current Sec. 431.213(d). However, we did not carry these changes over
to the proposed regulatory text correctly, and the references to
Sec. Sec. 431.213(d) and 431.231(d) were switched. The requirement for
States to provide advance notice and fair hearing rights, and the
existing exception at Sec. 431.213(d) permitting the State to send
notice no later than the date of termination or suspension when a
beneficiary's whereabouts are unknown, are not impacted by this final
rule. However, we are finalizing the proposed change to revise and
redesignate Sec. 431.231(d). In this final rule, we remove and reserve
paragraph (d) of Sec. 431.231, which requires that any discontinued
services be reinstated if a beneficiary's whereabouts become known
during the time that beneficiary would have remained eligible for
services. Paragraph (f)(4)(iii) of this final rule describes the
procedures a State must follow when a beneficiary's whereabouts are
unknown, including the requirement to reinstate coverage if the
beneficiary's whereabouts become known.
We understand the commenter's concerns about ensuring that
beneficiaries receive advance notice of any adverse actions. We believe
the changes finalized in this rule will reduce the number of
beneficiaries whose whereabouts remain unknown and who cannot be
reached for notification. While we are not making any policy changes to
the exception at Sec. 431.213(d), we will continue to seek new
alternatives and will consider making a change in future rulemaking.
Comment: We received several comments on proposed Sec.
435.919(f)(5), which would require States to terminate the eligibility
of a beneficiary if they are unable to contact the beneficiary
following the return of mail with an out-of-State forwarding address.
Several commenters specifically supported this proposed requirement.
They noted that beneficiaries must first be given proper notice and the
opportunity to verify or dispute the out-of-State address, and the
State must provide advance notice of termination and fair hearing
rights. Two commenters recommended that no disenrollment action be
taken due to returned mail, since it does not necessarily indicate that
a beneficiary has moved. Another commenter recommended that in lieu of
disenrollment, States be given the option to retain eligibility for
such beneficiaries and transition them to fee-for-service care as
opposed to keeping them enrolled in a managed care plan and continuing
to make capitation payments.
Response: We believe it is appropriate for States to terminate the
eligibility of beneficiaries when the State has information indicating
that the beneficiary no longer meets all eligibility requirements, in
this case State residency, and the beneficiary does not respond to
requests from the State to verify continued eligibility. At
[[Page 22819]]
Sec. 435.919(f)(3)(ii) of this final rule, we are finalizing the
requirement proposed at Sec. 435.919(f)(5) to terminate eligibility in
such cases; States must provide advance notice and fair hearing rights
in accordance with Sec. 435.917 and 42 CFR part 431, subpart E.
We appreciate commenters' interest in keeping beneficiaries
enrolled. However, we do not believe it is appropriate to maintain the
eligibility of a beneficiary when the State has information indicating
that the individual no longer meets the State's residency requirement,
regardless of the delivery system in which the individual is enrolled.
An individual cannot have a different eligibility determination in a
managed care versus a fee-for-service delivery system. We believe the
commenter's recommendation to transition beneficiaries from managed
care to fee-for-service was intended to permit States to keep
beneficiaries enrolled, in case they respond later to confirm continued
State residency, while at the same time protecting the State from
paying for medical assistance while their eligibility status is
unclear. Changing the delivery system through which a beneficiary
receives medical assistance is not an appropriate way to resolve an
eligibility issue. However, we note that States may achieve a similar
result through use of a reconsideration period. As described at Sec.
435.919(d) of this final rule, when the State receives information
indicating that a beneficiary experienced a change in circumstances
that impacts eligibility, and the beneficiary fails to respond to the
State with information indicating continued eligibility, the State must
move forward to terminate eligibility and provide the individual with a
reconsideration period of at least 90 days. If the individual
subsequently submits information indicating continued eligibility
within 90 days after the date of termination, or a longer period
elected by the State, the State must reconsider the individual's
eligibility without requiring a new application.
Comment: We received a number of comments opposing proposed Sec.
457.344(f)(5). In States in which CHIP coverage is not provided
statewide, we proposed to apply the requirements for out-of-State
returned mail when mail is returned with an out-of-county forwarding
address and CHIP coverage is not available in the county to which the
enrollee's mail is being forwarded. Commenters were concerned that such
individuals' eligibility would be terminated without considering
whether the individual may be eligible for other Medicaid or CHIP
coverage or for assistance purchasing a qualified health plan through
the State's Marketplace. They recommended that the State proceed with
determining eligibility for other insurance affordability programs,
sending a combined notice, and transferring the individual's account in
accordance with Sec. Sec. 435.1200 and 457.350.
Response: We appreciate the points raised by commenters about
protecting access to coverage for CHIP enrollees who move but continue
to reside within the same State. We also recognize that while States
are permitted to limit their CHIP coverage to specific geographic areas
within the State, only a very small number of States have chosen to
limit the program's Statewide availability. As such, we do not believe
it is necessary to establish a special requirement for handling mail
returned with an in-State address in the limited cases in which CHIP is
not available Statewide. The requirement finalized at Sec.
457.344(f)(2) for handling an in-State change of address will apply to
all CHIPs. When a change of address is provided by a reliable data
source, Sec. 457.344(f)(2) of this final rule requires the State to
accept and update the address in the enrollee's case record. When
applying this requirement in a State that does not provide Statewide
coverage, if the change would impact an individual's CHIP eligibility,
we would expect the State to first attempt to contact the beneficiary
to confirm the change of address as they would with any other reported
change impacting eligibility. If the State is unable to reach the
enrollee to confirm the change, the State must act on the change. In
cases where a change of address would result in ineligibility for CHIP,
before terminating enrollment, the State must screen the individual for
eligibility for other Medicaid or CHIP coverage, and if the individual
is no longer eligible for CHIP and is not eligible for Medicaid, the
State must consider the individual's potential eligibility for
assistance through the State's Marketplace in accordance with Sec.
457.350. If the individual is potentially eligible for coverage through
the Marketplace, their account must be transferred to the Marketplace
in accordance with Sec. 457.350.
Comment: One commenter expressed concern that the changes proposed
with respect to returned mail will likely lead to prolonged delays in
assessing enrollees' eligibility. Another commenter stated that from a
member perspective, the increased outreach requirements that must be
performed by the agency, such as the requirement to perform outreach
using at least two modalities, may impact timely receipt of
notifications, increasing unnecessary churn.
Response: We do not agree that the proposed returned mail changes
will lead to delays in assessing enrollees' eligibility. In fact, we
believe these requirements will facilitate better communication with
beneficiaries and reduce delays in redetermining their eligibility at
regular renewals or when the State receives information regarding a
change in circumstances that may impact a beneficiary's eligibility. We
believe that returned mail results in a significant number of
beneficiaries being terminated from coverage, even though they continue
to meet all eligibility requirements, because many States historically
have not taken reasonable steps to locate them. Returned mail with an
in-State forwarding address does not indicate a potential change that
may result in ineligibility. While an out-of-State or no forwarding
address does indicate a potential change in circumstances with respect
to State residency, it is critical to maintaining continuity of
coverage for eligible individuals that States attempt to confirm the
accuracy of the information before acting on it, including efforts to
locate the individual to obtain or confirm their new address.
After considering the comments, we are finalizing the returned mail
requirements with modification as discussed. Because the effect of this
change is specific to updating beneficiaries' case files with updated
address information, primarily for the purpose of contacting
beneficiaries with information about their case, we note that this
provision operates independently from the other provisions of this
final rule.
5. Transitions Between Medicaid, CHIP and BHP Agencies (42 CFR 431.10,
435.1200, 457.340, 457.348, 457.350, and 600.330)
We proposed to revise Medicaid regulations at Sec. Sec. 431.10 and
435.1200 and CHIP regulations at Sec. Sec. 457.340, 457.348, and
457.350 to improve coverage transitions between Medicaid and separate
CHIPs. The proposed changes seek to reduce and prevent unnecessary gaps
in coverage for individuals transitioning between these programs, and
to make the transitions process more seamless for families. The
proposed changes would require Medicaid and separate CHIPs to make
determinations of eligibility on behalf of the other program; to accept
determinations of eligibility made by these programs; to transition
individuals to the insurance affordability program for which they are
determined eligible
[[Page 22820]]
or potentially eligible based on available data; and for Medicaid and
separate CHIP agencies to provide a single, combined notice to all
members of a household with information about each individual's
eligibility status for each applicable insurance affordability program.
We proposed technical changes to BHP regulations at Sec. 600.330, to
maintain the current policy for that program. We sought comment on
whether it is appropriate and feasible to apply the proposed changes
for seamless transitions between Medicaid and separate CHIPs to
coverage transitions between Medicaid, separate CHIPs, and BHPs, but we
did not receive any specific comments on the appropriateness or
feasibility of applying the specific transitions requirements to BHPs.
Therefore, we are not making changes to Sec. 600.330, and are
finalizing this section as proposed. BHPs must continue to fulfill the
requirements of Sec. 435.1200(d), (e)(1)(ii), and (e)(3) and, if
applicable, Sec. 600.330(c).
Comment: Many commenters provided overall support for the
provisions in the September 2022 proposed rule to improve transitions
in coverage between Medicaid and separate CHIPs. Commenters indicated
that the proposed changes would help to prevent unnecessary churn
between insurance affordability programs; reduce gaps in coverage as
beneficiaries move between programs; improve timeliness for State
agencies to transition beneficiaries' coverage; and reduce burden for
families throughout the renewal and transition processes.
Response: As noted by commenters, we believe these changes will
help to ensure a more streamlined process for transitioning
beneficiaries between insurance affordability programs, reduce gaps in
coverage during these transitions, and improve the renewal and
transitions experience for beneficiaries. As such, we are finalizing as
proposed the changes as set forth in proposed Sec. Sec. 435.1200,
457.340, 457.348, and 600.330 without revision. We are making one
change to proposed Sec. 457.350, in paragraph (b)(1)(ii) of that
section, to include new language that clarifies that information
provided on the application or renewal form by or on behalf of the
beneficiary includes information obtained through trusted electronic
data sources. Aside from this change to paragraph (b)(1)(ii) of the
section, we are finalizing Sec. 457.350 as proposed.
Comment: Numerous commenters expressed support for provisions in
Sec. 435.1200(e) of the September 2022 proposed rule to require
Medicaid agencies to make determinations of eligibility for their
State's separate CHIP and proposed Sec. 457.348 to require separate
CHIPs to accept determinations of eligibility made by their State's
Medicaid agency. Commenters noted that these changes will ensure
continuity of coverage for individuals transitioning from Medicaid to a
separate CHIP. Some commenters provided suggestions for CMS on how to
implement these changes in order to minimize barriers to accessing care
when individuals are transitioned from Medicaid to a separate CHIP.
Several commenters encouraged CMS to require States to effectuate
separate CHIP coverage immediately after an eligibility determination
is made by Medicaid, and permit plan-selection and collection of
premiums and enrollment fees (if imposed) for the separate CHIP post-
enrollment. Similarly, other commenters suggested that CMS require
States to apply a 30-day premium grace period for the first month of
enrollment after a transition in coverage from Medicaid to a separate
CHIP. Another commenter requested that CMS encourage States to develop
a gradual phase-out of benefits from Medicaid and graduated co-payments
in separate CHIPs when individuals are transitioned from Medicaid to a
separate CHIP.
Response: We appreciate commenters' support of our proposal to
require Medicaid agencies to make eligibility determinations on behalf
of separate CHIPs and agree that this change will help to ensure
beneficiaries retain coverage and access to care through transitions
from Medicaid to a separate CHIP. We are finalizing Sec. Sec.
435.1200(e) and 457.348 as proposed to effectuate this requirement. We
thank commenters for offering suggestions for implementation of this
requirement. We acknowledge that adopting the recommendations to
require a 30-day premium grace period; collect initial premiums and
enrollment fees post-enrollment; and initiate graduated copayments in
separate CHIPs would reduce barriers for individuals to access care as
they transition to a separate CHIP from Medicaid. We note that the
current regulation at Sec. 457.340(g), which is not revised in this
final rule, requires States to develop a method for determining the
effective date of separate CHIP eligibility. This provision provides
States with the flexibility to select any reasonable method that
supports coordinated transitions of children between a State's separate
CHIP and other insurance affordability programs without creating gaps
or overlaps in coverage. We believe States with premiums and enrollment
fees in their separate CHIPs could prevent potential gaps in coverage
and delays in effectuating separate CHIP coverage for individuals
transitioning from Medicaid by leveraging the flexibility afforded
under existing authority at Sec. 457.340(g). For example, to address
commenters' concerns about enrollment fees and premiums creating
potential gaps in coverage as individuals transition from Medicaid to a
separate CHIP, we encourage States to waive premiums for the first
month of separate CHIP coverage. We also acknowledge that post-
enrollment plan-selection for separate CHIPs would help to reduce
delays for individuals to access care as they are transitioned to a
separate CHIP from Medicaid. Several States with managed care delivery
systems in their separate CHIP provide services to newly enrolled
individuals through fee-for-service arrangements temporarily before
their managed care plan selection/assignment is finalized. This
strategy helps to ensure that newly enrolled individuals can receive
needed care before they have been assigned to a specific managed care
plan. We encourage States with managed care delivery systems in their
separate CHIP to consider this or a similar approach to ensure newly
enrolled beneficiaries are able to access needed separate CHIP services
prior to plan-assignment.
Comment: Numerous commenters expressed support for the requirements
for separate CHIP agencies to make eligibility determinations on behalf
of Medicaid as outlined in Sec. 457.350(b) of the September 2022
proposed rule, and for Medicaid to accept determinations of eligibility
made by the separate CHIP agency as proposed at Sec. 435.1200.
Commenters noted that these changes would improve coordination between
Medicaid and separate CHIPs in conducting eligibility determinations
and transitioning individuals between programs. A few commenters
expressed concern that inaccurate or incomplete eligibility
determinations could be made by separate CHIPs that use different
methodologies to assess eligibility than Medicaid. A commenter also
recommended that CMS require Medicaid programs to supervise separate
CHIPs and other insurance affordability programs in determining
Medicaid eligibility in States that do not use a shared eligibility
service for Medicaid, their separate CHIP, and other insurance
affordability programs.
Response: We thank commenters for their support of the proposed
requirements to permit separate CHIPs to make determinations of
eligibility on
[[Page 22821]]
behalf of Medicaid and agree that these changes will support alignment
in separate CHIPs and Medicaid to conduct eligibility determinations
and transitions between insurance affordability programs as seamlessly
as possible. We appreciate commenters' recommendations to ensure that
accurate Medicaid eligibility determinations are made by separate
CHIPs. We note that State Medicaid agencies are not required to accept
eligibility determinations that are not made on the basis of MAGI and
that proposed Sec. 435.1200(b)(4) provides Medicaid agencies with
several options for accepting determinations of eligibility based on
MAGI that are made by separate CHIPs, which we are finalizing without
revision. We believe this approach provides the State Medicaid agency
with the ability to exercise appropriate oversight over MAGI-based
eligibility determinations for Medicaid. For instances when separate
CHIPs do not have sufficient information to make determinations of
eligibility for Medicaid, such as Medicaid eligibility on a non-MAGI
basis, proposed Sec. 457.350(e) directs separate CHIPs to make a
determination of potential Medicaid eligibility and transfer the
account to the State Medicaid agency to make a final determination.
Comment: Another commenter indicated that potential increases in
Medicaid enrollment as a result of permitting separate CHIPs to
determine eligibility on behalf of Medicaid could strain dental
provider capacity to care for additional children in Medicaid and urged
CMS to expand dental provider participation in Medicaid to meet the
oral health care needs of a larger eligible Medicaid population.
Response: We acknowledge commenters' request for us to expand
dental provider participation in Medicaid to ensure adequate provider
capacity to administer oral health care services to a potentially
larger Medicaid population as a result of these changes. However,
changes related to Medicaid provider participation requirements are
outside the scope of this final rule. Therefore, we are finalizing
requirements at Sec. 435.1200 for Medicaid and Sec. 457.350(b) for
separate CHIPs as proposed.
Comment: Many commenters offered support for the proposed
requirements in Sec. Sec. 435.1200(h)(1) and 457.340(f) that State
Medicaid and separate CHIP agencies provide households with a single
combined notice to indicate changes in beneficiaries' eligibility and
coverage under Medicaid, separate CHIPs, BHPs, and an Exchange.
Commenters noted that the use of a combined notice for all insurance
affordability programs will ensure a more seamless and less burdensome
process for renewals and transitions between programs for States and
beneficiaries.
Response: We thank the commenters for their support to require
Medicaid and separate CHIP agencies to provide a single combined notice
with information about Medicaid, separate CHIP, BHP, and Exchange
coverage. We agree that issuing one notice to families about
eligibility and ineligibility information for all insurance
affordability programs would simplify the process to inform families
about changes in coverage.
Comment: A few commenters recommended that CMS explicitly require
the content of combined notices to include information about additional
steps for individuals to effectuate coverage, such as plan selection
and premium requirements.
Response: We appreciate commenters' concerns about combined notices
including detailed information for families about what they need to do
to effectuate their Medicaid or separate CHIP coverage. We are
maintaining current requirements for content of eligibility notices to
applicants and beneficiaries outlined in existing Sec. 435.917(b) for
Medicaid and Sec. 457.340(e) for separate CHIP, which include
information about obtaining benefits and cost sharing requirements.
Comment: One commenter encouraged CMS to make conforming changes to
the definition of combined notices for Medicaid in Sec. 435.4, and to
Sec. 457.340(f) for separate CHIPs to align these sections with the
changes for combined notices included in proposed Sec. 435.1200(h)(1).
Response: We agree with commenters' recommendation that the
definition of combined notices in Sec. 435.4 be consistent with
proposed changes for combined notices in Sec. 435.1200(h)(1). We note
that the proposed Sec. 435.1200(h)(1) cross-references the definition
of combined eligibility notices in Sec. 435.4 for Medicaid.
Additionally, corresponding changes for separate CHIPs in Sec.
457.340(f) cross-reference the definition of combined eligibility
notices in Sec. 457.10. We believe the existing definitions of
combined eligibility notices in current Sec. Sec. 435.4 and 457.10
adequately account for changes in proposed Sec. Sec. 435.1200(h)(1)
and 457.340(f), and these current definitions will be maintained
without revision. In response to comments about making conforming
changes to Sec. 457.340(f) to align with proposed changes for combined
notices in Sec. 435.1200(h)(1), we note that conforming changes were
proposed in Sec. 457.340(f) for separate CHIPs to align with changes
proposed in Sec. 435.1200(h)(1) for Medicaid. As such, we are
finalizing Sec. Sec. 435.1200(h)(1) and 457.340(f) as proposed to
require State Medicaid and separate CHIP agencies to use a single,
combined notice to provide information about Medicaid, separate CHIP,
BHP, and Exchange eligibility and ineligibility determinations.
Comment: Some commenters requested that CMS specify scenarios when
a combined notice for a full family would not be required.
Response: In response to commenter questions about situations when
a single combined notice for a full family will not be required, we
clarify that current Sec. 435.1200(h)(1), redesignated as Sec.
435.1200(h)(1)(ii) in this final rule, requires States to issue a
single combined notice to the maximum extent feasible for all members
of a household that are included on the same application or renewal
form, regardless of individual member differences in program
eligibility. A situation that could result in multiple notices for a
single household is when multiple members of a household are included
on an application for coverage, and one or more individuals are
determined to be potentially eligible for different programs for which
a final eligibility determination is needed. In this scenario,
individuals that are assessed as potentially eligible may receive an
additional, separate notice once the program they are potentially
eligible for makes a final eligibility determination. For example, a
parent and their child who are members of the same household submit one
application for health coverage. A notice is provided to the household,
indicating that the child is eligible for Medicaid, while the parent is
potentially eligible for Exchange coverage. The parent's information is
sent to the Exchange to make a final eligibility determination. The
household would then receive a second, separate notice with information
about the parent's final eligibility determination made by the
Exchange.
Comment: Several commenters responded to CMS' request for comment
in section II.B.5. of the September 2022 proposed rule about the
appropriateness of requiring BHP agencies and Exchanges to issue single
combined notices. These commenters encouraged CMS to require that
combined notices be provided by all insurance affordability programs
and that the combined notices include information
[[Page 22822]]
pertaining to eligibility and ineligibility for Medicaid, separate
CHIP, BHP, and Exchange coverage. CMS also sought comment about the
feasibility for BHP agencies and Exchanges to implement the combined
notice requirements proposed for Medicaid and separate CHIPs. However,
comments did not address CMS' question about the feasibility for BHPs
and Exchanges to implement the combined notice requirements.
Response: While we acknowledge the recommendation of some
commenters to require BHP agencies and the Exchanges to issue combined
eligibility notices, we are concerned about the feasibility of State
implementation, a point on which we did not receive any comments.
Additionally, requirements for Exchange notices are outside of the
scope of this rulemaking. Therefore, while we encourage State BHP
agencies with the capability to issue combined notices to do so, we
decline commenters' suggestion to require this of BHPs and Exchanges in
the final rule.
Comment: Another commenter requested that CMS permit individuals
transitioning from Medicaid to an Exchange to seamlessly transition to
an Exchange plan that is affiliated with the individual's existing
Medicaid plan, to promote continuity of care.
Response: We agree with commenters that maintaining continuity of
care is an important element to ensure seamless transitions between
insurance affordability programs. However, this rule does not address
plan selection through the Exchanges. We understand that some States
may have agreements with the same health plans across all insurance
affordability programs. However, this is not always the case. To the
extent that health plans do align across insurance affordability
programs in a State, we encourage States to assign individuals to
health plans in Medicaid or a separate CHIP that are affiliated with
the individual's existing health plan to ensure continuity of care, as
long as they follow the rules for plan enrollment in Sec. Sec. 438.54
and 457.1210(a).
After considering all comments, we are finalizing the proposed
changes to Medicaid regulations at Sec. Sec. 431.10 and 435.1200 and
CHIP regulations at Sec. Sec. 457.340, 457.348, and 457.350 with
modifications as discussed previously in this final rule. Because the
effect of this change is specific to the process to prevent termination
of eligible beneficiaries who should be transitioned between Medicaid
and CHIP, we note that this provision operates independently from the
other provisions of this final rule.
6. Optional Group for Reasonable Classification of Individuals Under 21
Who Meet Criteria for Another Optional Group (Sec. Sec. 435.223 and
435.601)
We proposed to add a new regulation at Sec. 435.223, ``Other
optional eligibility for reasonable classifications of children under
21,'' to codify in the regulations the option for States to provide
coverage to individuals under age 21, 20, 19, or 18, or to reasonable
classifications of such individuals, who meet the requirements of any
clause of section 1902(a)(10)(A)(ii) of the Act. We further confirmed
in the proposed rule (87 FR 54800) that States, in determining
eligibility under the proposed Sec. 435.223, could except from MAGI
financial eligibility methodologies those individuals who are described
in Sec. 435.603(j). We explained that the current section of our
regulations for optional categorically needy coverage of reasonable
classifications of children at Sec. 435.222 does not reflect the full
scope of authority States have under section 1902(a)(10)(A)(ii) of the
Act to cover different groups of individuals under age 21 or reasonable
classifications of such individuals, as the terms of Sec. 435.222
apply only to individuals who are eligible under section
1902(a)(10)(A)(ii)(I) (relating to individuals who meet the eligibility
requirements for, but are not receiving, cash assistance) or (IV) of
the Act (relating to individuals who meet the eligibility requirements
for cash assistance or would but for their institutionalization) and
whose financial eligibility is determined using MAGI-based
methodologies.
We also proposed changes to Sec. 435.601(f)(1) to provide that, in
the case of individuals for whom the cash assistance program most
closely categorically-related to the individual's status is Aid to
Families and Dependent Children (AFDC) (that is, individuals under age
21, pregnant individuals and parents and other caretaker relatives who
are exempt from MAGI-based methodologies and to whom, as we explained
in the proposed rule, AFDC methodologies generally still apply), the
agency may apply either (1) the financial methodologies of the AFDC
program, or (2) the MAGI-based methodologies defined in Sec. 435.603,
except to the extent that MAGI-based methods conflict with the terms of
Sec. 435.602 (relating to financial responsibility of relatives and
other individuals).
We also proposed to change the heading of Sec. 435.222, to reflect
that it would no longer be the exclusive regulation relating to
reasonable classifications of children and proposed certain additional
technical changes to Sec. 435.601(b)(2) and (d)(1) in accordance with
our proposed amendment to Sec. 435.601(f).
Comment: We received several comments on these proposals, all of
which expressed support. Commenters noted that the proposals would
increase State flexibility and add an eligibility pathway for non-MAGI
individuals under age 21.
Response: We appreciate the commenters' support, and we are
finalizing Sec. Sec. 435.223 and 435.601(b)(2), (d), and (f)(1)(i) and
(ii) as proposed.
We are making an additional change to the heading of Sec. 435.222.
We proposed to change the existing heading of Sec. 435.222 from
``Optional eligibility for reasonable classifications of individuals
under age 21'' to ``Optional eligibility for reasonable classifications
of individuals under age 21 with incomes below a MAGI-equivalent
standard.'' As we explained in section II.B.6 of the preamble of the
September 2022 proposed rule, part of the rationale for proposing a new
Sec. 435.223 was to confirm the authority of States to extend
eligibility to reasonable classifications of individuals under age 21
who are excepted from the mandatory use of MAGI-based methodologies. We
further explained that, while the proposed Sec. 435.223 would not be
exclusive to non-MAGI reasonable classifications of individuals under
age 21, we believed, as a practical matter, States would utilize the
proposed Sec. 435.223 only for non-MAGI reasonable classifications,
because Sec. 435.222 already permitted MAGI-based reasonable
classifications of individuals under age 21.
Upon further review, however, we recognize that the current terms
of Sec. 435.222 only permit the creation of MAGI-based reasonable
classifications of individuals under age 21 within two particular
eligibility categories: section 1902(a)(10)(A)(ii)(I) (relating to
individuals who are eligible for, but are not receiving, cash
assistance); and section 1902(a)(10)(A)(ii)(IV) (relating to
individuals who would be eligible for cash assistance but for their
institutionalization). Because Sec. 435.222 limits States' ability to
create MAGI-based reasonable classifications of individuals under age
21, we are further modifying our proposed heading of Sec. 435.222 to
read ``Optional eligibility for reasonable classifications of
individuals under age 21 with income below a MAGI-equivalent standard
in specified eligibility categories,'' to better reflect the limited
reach of Sec. 435.222.
Neither the heading to the proposed Sec. 435.223, nor the terms of
the
[[Page 22823]]
September 2022 proposed rule, limited eligibility to individuals
eligible on a non-MAGI basis. Therefore, our change to the heading to
Sec. 435.222 does not require a corresponding change to Sec. 435.223
(which, as noted above, we are finalizing as proposed). We also confirm
that States may offer eligibility under Sec. 435.223 to MAGI-based
reasonable classifications of individuals under age 21 who are eligible
under categories separate from section 1902(a)(10)(A)(ii)(I) and (IV).
We also note that the proposed regulation text to Sec. 435.601
noted paragraph (f)(2) as ``[Reserved.]'' This was inadvertent. Current
Sec. 435.601(f)(2) contains certain rules relating to a State's
election of less restrictive financial methodologies. No change was
intended to be proposed or is being made to this provision.
Comment: One commenter specifically encouraged CMS to evaluate any
cost-sharing requirements that a State might apply to this new pathway
which could in turn create a barrier to coverage.
Response: We thank the commenter for raising this concern about
cost-sharing requirements. We have considered possible financial
barriers to coverage under Sec. 435.223 in the context of cost-sharing
requirements. Specifically, we reviewed our premiums and cost-sharing
rules under 42 CFR 447.50 through 447.90, to identify any standard
limitations that apply to individuals under 21 or reasonable
classifications of such individuals. Currently, under Sec.
447.56(a)(1)(v), States may exempt from premiums and cost-sharing
``individuals under age 19, 20, or age 21, eligible under Sec.
435.222.''
As we explained in the September 2022 proposed rule, proposed Sec.
435.223 is derived from the same statutory provisions that supports
Sec. 435.222. With the addition of a new Sec. 435.223, there would be
no statutory directive or logical reason to limit the discretion in
Sec. 447.56(a)(1)(v) to individuals eligible under Sec. 435.222 and
not include those eligible under Sec. 435.223. In this final rule,
therefore, we are making a technical amendment to Sec. 447.56(a)(1)(v)
to add ``and Sec. 435.223'' after ``42 CFR 435.222.''
After consideration of the public comments we received, we are
finalizing Sec. Sec. 435.223 and 435.601(b)(2), (d), and (f)(1)(i) and
(ii) as proposed (with certain minor stylistic changes to cross-
references therein that do not affect the substance), and are making
modifications, as described previously in this final rule, to
Sec. Sec. 435.222 (the heading) and 447.56(a)(1)(v). Because the
effect of this change is specific to allowing states to establish an
optional eligibility group for all or a reasonable classification of
individuals under age 21 whose eligibility is excepted from use of the
MAGI-based methodology (that is, those living with a disability), or
whose MAGI-based eligibility is not otherwise described, and for which
such coverage is not already permitted in regulation, we note that this
provision operates independently from the other provisions of this
final rule.
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), 1903(x)(4), and
1137(d)(4)(A) of the Act, set forth the requirement for States to
provide a reasonable opportunity period (ROP) for individuals who have
declared U.S. citizenship or satisfactory immigration status, for whom
the State is unable to promptly verify citizenship or satisfactory
immigration status, and who meet all other eligibility requirements.
During the ROP, the State furnishes benefits to the individual while
continuing efforts to complete verification. Current Sec.
435.956(b)(4) provides 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. As we have no information
indicating the availability of multiple ROPs poses significant risks to
program integrity, in the September 2022 proposed rule, we proposed to
revise Sec. 435.956(b)(4) to remove the option for States to impose
limits on the number of ROPs that an individual may receive. This
Medicaid requirement is applicable to CHIP through an existing cross-
reference at Sec. 457.380(b)(1)(ii).
We received the following comments on this proposed change:
Comment: The overwhelming majority of commenters supported the
proposed change to remove the State option to place a limitation on the
number of reasonable opportunity periods an individual may receive.
Supportive comments included statements that allowing States to limit
the number of ROPs would make it harder for eligible individuals to
enroll, which could disproportionately impact certain vulnerable
groups, that there is no indication that the availability of multiple
ROPs poses significant risks to program integrity, and that limitations
on the number of ROPs are unnecessary and act as barriers to eligible
immigrants' enrollment. One commenter shared that removing the option
to limit ROPs is consistent with sections 1902(a)(46)(B),
1902(ee)(1)(B)(ii), 1903(x)(4), and 1137(d)(4)(A) of the Act, which do
not include any limitation on the number of ROPs.
Response: We agree with these comments. Under section 1902(a)(8) of
the Act and Sec. 435.906, State agencies must afford individuals the
opportunity to apply for Medicaid without delay. The ROP is an integral
piece of the Medicaid application and enrollment process when the State
is not able to promptly verify an individual's citizenship or
satisfactory immigration status. By removing the option for States to
limit the number of ROPs, we aim to reduce barriers to enrollment and
to ensure that U.S. citizens and immigrants and their families applying
for or renewing their coverage have prompt access to the benefits to
which they are entitled while they complete the process of verifying
their citizenship or satisfactory immigration status. We agree that the
statute does not expressly limit the number of ROPs an individual may
receive, nor does it expressly provide discretion for States to
establish such a limit. We note that only one State has elected the
option to limit the number of ROPs, as a pilot program, and that State
removed the requirement from its State Plan as data revealed there were
no program integrity issues.
Comment: One commenter shared that an applicant's immigration
status can change over time and that the removal of the ROP limitations
better accommodates circumstances in which such a change may occur.
Response: We understand that an individual's immigration status may
change as their life circumstances change, including when an individual
has applied for an adjustment of status to Lawful Permanent Resident
(LPR, or ``green card'' holder). By removing the State option to limit
the number of ROPs, we intend to allow for the possibility that an
individual's immigration status may have changed since the individual
was last determined eligible for Medicaid or CHIP, or that new
information or evidence regarding their satisfactory immigration status
may be available. We agree that individuals who submit a new
application after they are procedurally terminated or terminated for
another reason should be afforded another ROP if their citizenship or
immigration status cannot be promptly verified, including when their
citizenship or immigration status changed from the status on their
previous application.
[[Page 22824]]
Comment: Many commenters shared that some applicants such as
survivors of domestic abuse and individuals experiencing homelessness
are more likely to have difficulty with electronic data matches to
verify their U.S. citizenship or satisfactory immigration status. The
challenging circumstances some vulnerable individuals face can make it
harder for them to be determined eligible for Medicaid. These
commenters noted that noncitizens, such as Compact of Free Association
(COFA) migrants or those with visas under the Violence Against Women
Act (VAWA) or trafficking victims (T visa holders), may have particular
difficulty having their immigration status verified timely or providing
paper documentation. The commenters shared that allowing States to
limit the number of ROPs could disproportionately impact these
communities, widening health disparities. These individuals are more
likely to need an ROP to ensure the individual can immediately enroll
in Medicaid if they have attested to U.S. citizenship or satisfactory
immigration status and meet all other eligibility requirements, so that
they can receive benefits during delays in the verification process.
Response: We agree that individuals experiencing domestic abuse and
homelessness, or survivors of trafficking, may have greater difficulty
with verification of citizenship or immigration status, because without
stable and permanent housing, individuals often do not have access to
the documentation that includes the information needed by States to
begin verification of satisfactory immigration status with DHS SAVE
system. For example, an individual who is a Victim of Trafficking may
need to provide paper documentation, specifically a letter issued by
the HHS' Office of Refugee Resettlement, demonstrating evidence of
satisfactory immigration status, when such status is not verifiable
through the Federal Data Services Hub or DHS SAVE system. For many
other noncitizens, to initiate DHS SAVE system verification, an
individual must provide an ``Alien number'' or I-94 number. We note
that while most COFA migrants' immigration status can be verified
electronically through the Hub or DHS SAVE system, there are some COFA
migrants who may have to provide additional paper documentation to
verify COFA status. The ROP is intended to account for delays in the
verification process, such that individuals can receive coverage while
waiting for verification of their citizenship or satisfactory
immigration status. There may be operational challenges or delays with
the verification process, including for noncitizens with the DHS SAVE
system or if an individual's citizenship is not verified with the SSA.
We believe that ROPs should not be limited, given the possibility of
individuals, especially vulnerable individuals, needing additional time
for their citizenship or satisfactory immigration status to be
verified.
Comment: A few commenters encouraged CMS to engage in oversight of
States' implementation of this provision to ensure that individuals are
afforded a ROP and receive benefits during that time.
Response: We provide oversight of States' Medicaid and CHIP
eligibility determination and enrollment processes through multiple
avenues. We offer technical assistance to States on various eligibility
issues, including citizen and noncitizen eligibility requirements and
verification processes, through monthly Eligibility Technical
Assistance Group (E-TAG) meetings, Center for Medicaid and CHIP
Services (CMCS) all-State calls, and one-on-one calls with State agency
staff. We also conduct oversight of State's eligibility policies and
processes through the PERM and MEQC programs and other CMS eligibility
audits, through which eligibility cases are sampled and reviewed for
compliance with all eligibility criteria and enrollment processes,
including those related to citizenship and satisfactory immigration
status. Finally, we make extensive eligibility policy resources
available on Medicaid.gov to assist States in making accurate
eligibility determinations. When we learn that a State is out of
compliance with Federal statutes that CMS has been charged with
implementing or CMS regulations, we immediately begin working with the
State to address the issue--providing technical assistance, requesting
corrective action when needed, and then withholding Federal funding
when noncompliance cannot otherwise be resolved.
Comment: One commenter suggested clarification that in prohibiting
a limitation on ROPs, CMS is not requiring States to accept self-
attestation and thereby approve an application that has not been
electronically verified for citizenship status. Another commenter
expressed concern that without a limitation on ROPs, the State may be
forced to accept other information on the application that is no longer
accurate.
Response: A State must comply with the statutory requirements for
verification of U.S. citizenship and satisfactory immigration status
prior to completing an applicant's eligibility determination. Section
1902(a)(46)(B) of the Act requires Medicaid agencies to verify the U.S.
citizenship of applicants who have attested to being U.S. citizens;
verification may occur through a data match with the SSA under section
1902(ee) of the Act, or an alternative method of verification under
section 1903(x) of the Act. States must verify an applicant's
declaration of satisfactory immigration status through an electronic
system set up by DHS under section 1137(d) of the Act. If an individual
has declared to be a U.S. citizen or to have satisfactory immigration
status but the State has been unable to complete verification of such
status, and the individual meets all other Medicaid and CHIP
eligibility requirements, the agency must provide an ROP and make
benefits available during the ROP. Federal statute and regulations
specify that if verification of citizenship or satisfactory immigration
status is not completed by the end of the ROP, except in specific
cases, benefits must be terminated within 30 days.
We do not agree that, by removing the limit on the number of ROPs,
State Medicaid and CHIP agencies will have to accept application
information that is no longer accurate. For each application that is
submitted, the individual would be required to provide a declaration of
satisfactory citizenship or immigration status and updated information
regarding U.S. citizenship or satisfactory immigration status. Such
information would be verified by the State Medicaid or CHIP agency in
accordance with sections 1902(a)(46), 1902(ee)(2)(B), 1903(x) and
1137(d)(3) of the Act, Sec. Sec. 435.407, 435.945, and 435.956, and
the State's approved verification plan. Finally, under 42 CFR
435.907(f), all applications must be signed under penalty of perjury.
Comment: One commenter recommended that CMS amend the proposed rule
to require States to close a case, for which citizenship or immigration
status has not been electronically verified, that is more than 90 days
old. The commenter further noted that this would not prohibit an
individual from submitting a new application.
Response: This comment is outside the scope of this regulation.
However, we note that Sec. 435.956(b)(3), implementing sections
1902(ee)(1)(B)(ii)(III) and 1137(d)(5) of the Act, requires State
Medicaid and CHIP agencies to terminate benefits within 30 days of the
end of the 90-day ROP, while providing notice and fair hearing rights
under 42 CFR 431,
[[Page 22825]]
subpart E, if the individual's U.S. citizenship or satisfactory
immigration status has not been verified. States have an option
(described at Sec. 435.956(b)(2)(ii)(B)) to extend the ROP beyond 90
days for individuals declaring to be in a satisfactory immigration
status, if the agency determines that the individual is making a good-
faith effort to obtain any necessary documentation, or the agency needs
more time to verify the individual's status through other available
electronic data sources or to assist the individual in obtaining
documents needed to verify their status. This option, which must be
elected through a State plan amendment, is not impacted by this final
rule. Some States have also provided for a similar extension for
individuals who have declared to be U.S. citizens under section 1115
demonstration authority during the unwinding period.
After consideration of the public comments we received, we are
finalizing without modification our proposal at Sec. 435.956(b)(4) to
remove the optional limitation on the number of reasonable opportunity
periods. Because the effect of this change is specific to removing the
option to limit the number of ROPs during which otherwise eligible
applicants receive Medicaid while they complete verification of their
U.S. citizenship or satisfactory immigration status, we note that this
provision operates independently from the other provisions of this
final rule.
2. Remove Requirement To Apply for Other Benefits (Sec. Sec. 435.608
and 436.608)
In the September 2022 proposed rule, we proposed to remove the
requirement at Sec. 435.608 that State Medicaid agencies require
Medicaid applicants and beneficiaries, as a condition of their
eligibility, to take all necessary steps to obtain other benefits to
which they are entitled, such as annuities, pensions, retirement and
disability benefits, unless they can show good cause for not doing so.
This requirement presently applies to all Medicaid applicants and
beneficiaries, without regard to the basis of their eligibility or the
financial methodology used to determine their eligibility.
In section II.B.2. of the September 2022 proposed rule, we
explained that current Sec. 435.608 was established in 1978, under the
authority of section 1902(a)(17)(B) of the Act, which authorizes the
Secretary to prescribe the standards for evaluating which income and
resources are available to Medicaid applicants or beneficiaries.
Through this proposed change, we would redefine ``available'' in
section 1902(a)(17)(B) of the Act to mean only such income and
resources as are actually within a Medicaid applicant's or
beneficiary's immediate control. We indicated in the proposed rule,
however, that we were also considering maintaining the requirement with
modifications.
In drafting the September 2022 proposed rule, we inadvertently
failed to include the removal of Sec. 436.608 consistent with the
change proposed to remove Sec. 435.608. Similar to the proposed
revisions to Sec. 435.831(g), this omission was unintentional, as most
of the provisions of the proposed rule that are adopted in this final
rule are applicable to the 436 territories as a result of incorporation
by reference in existing regulations (as noted elsewhere throughout
this final rule). The same reasons for rescinding Sec. 435.608 also
apply in the 436 territories. We are including the recission of Sec.
436.608 in this final rule to make the same simplification available to
applicants in Guam, Puerto Rico, and the Virgin Islands and the
Medicaid agencies in these territories. All references to Sec. 435.608
in the September 2022 proposed rule and this final rule also apply to
Sec. 436.608.
We received the following comments on this proposal:
Comment: Most commenters supported the proposal to eliminate Sec.
435.608 in its entirety. Numerous commenters, including beneficiary
advocacy organizations and State Medicaid agencies, stated that the
current rule is outdated, burdensome, and impedes access to medical
care. Several commenters identified the administrative challenges posed
by the current rule and welcomed eliminating the work involved in
applying the rule in their eligibility determinations. Two commenters
specifically mentioned the communications with applicants and
beneficiaries made necessary by Sec. 435.608, with one reporting that
multiple contacts are commonly required and the other reporting that
they are time consuming. Multiple commenters stated that compliance
with Sec. 435.608 does not commonly result in applicants or
beneficiaries receiving income that affects eligibility, and several
commenters noted challenges related to specific benefits. One commenter
stated that this change would help veterans by eliminating the burden
of applying for veterans' benefits to which they may not be entitled.
Other commenters noted that this requirement can frequently result in
individuals being forced to elect early retirement benefits from Social
Security, which provides a lower monthly benefit. One commenter stated
this choice is particularly harmful for women because, the commenter
wrote, women are more likely than men to rely on Social Security but
receive lower average benefits than men, and, as women and particularly
women of color, as further shared by the commenter, are at greater risk
of poverty as they age, a reduction in their Social Security benefit
could represent a serious loss at a financially precarious time.
Additionally, one commenter stated that, as CHIP, BHP, and the
Marketplace do not impose a requirement to apply for other benefits,
the Medicaid requirement creates misalignment across programs, which is
a counter-objective of the September 2022 proposed rule itself.
Many commenters expressly opposed the alternatives we presented,
under which CMS would maintain the rule but with modifications. These
comments noted that only reducing the scope of the rule would have
little practical value, because a modified requirement to apply for
other benefits would still leave many individuals subject to the rule,
and a modified form of the rule would possibly be more complex for
States to administer.
Response: We appreciate this support and commenters' explanations
about specific impacts of our proposal. We are finalizing our proposal
to remove and reserve Sec. 435.608.
Comment: Some commenters suggested that CMS consider ways to
encourage States to educate beneficiaries about the other benefits to
which they may be entitled, including public benefit programs, by
engaging in partnerships with other entities, and that CMS should
consider using its resources to help facilitate the timely enrollment
of Medicaid beneficiaries in such programs. The commenters mentioned
the SNAP as an example of a program that could help meet the needs of
Medicaid beneficiaries. Another commenter stated that individuals
should pursue income and benefits for which they are potentially
eligible, as it is in their best interest to do so, even if receipt of
such benefits would not be counted for Medicaid eligibility.
Response: We agree generally that the receipt of other benefits to
which Medicaid applicants and beneficiaries are entitled could help
such individuals meet their needs. The purpose of this rulemaking to
eliminate Sec. 435.608 is focused on our role in establishing the
parameters for Medicaid eligibility rather than assessing whether
applying for other benefits serves the best interests of Medicaid
applicants and beneficiaries. We did not originally
[[Page 22826]]
promulgate Sec. 435.608 based on our judgment of what actions taken by
Medicaid applicants and beneficiaries, even if unrelated to their
Medicaid eligibility, might produce the best outcomes for them.
Instead, as noted above, we promulgated Sec. 435.608 in order to align
a procedural requirement of the AFDC and SSI programs with Medicaid, at
a time when eligibility for Medicaid was predominantly based on
eligibility for these cash assistance programs.
Removing the Medicaid requirement that applicants and beneficiaries
apply for other benefits does not prohibit, and is not intended to
discourage, States from educating Medicaid applicants and beneficiaries
about their potential eligibility for other such benefits or
facilitating their application for them. While we do not intend to
directly inform Medicaid applicants and beneficiaries of other benefits
for which they may be eligible, we have engaged in efforts to
facilitate their eligibility for other programs, such as working with
States to establish multi-benefit applications (that is, Medicaid,
SNAP, and TANF) and partnering with the Food and Nutrition Service
(FNS) to promote and expand demonstration projects aimed at qualifying
children for free and reduced-price school meals. We expect to continue
working on initiatives such as these and encourage States to continue
educating beneficiaries about other benefits for which they may be
eligible.
Comment: One commenter supported maintaining Sec. 435.608 and
applying the rule in circumstances in which applicants and
beneficiaries will receive income countable in their Medicaid
eligibility determinations. Another commenter indicated that States
should maintain the discretion to apply the rule for individuals who
apply for Medicaid on the basis of being 65 years old or older, or
having blindness or a disability.
Response: We decline to maintain the rule in circumstances
involving countable income or for discrete populations. As noted above,
most commenters supported the removal of the provision in its entirety,
and numerous commenters noted that only reducing the scope of the rule
would have little practical value, because a modified requirement to
apply for other benefits would still leave many individuals subject to
the rule, and a modified form of the rule would possibly be more
complex for States to administer. We did not receive comments
suggesting that certain categories of beneficiaries are not as acutely
affected by the rule as others, which means that maintaining the rule
in limited form will perpetuate the challenges to beneficiaries and
States that commenters noted in their input. We are persuaded that
maintaining the rule even in limited circumstances would not reduce the
delays in access to coverage experienced by applicants or the
administrative burden States experience in enforcing it.
Comment: We received several comments relating to the potential
costs of eliminating the requirement to apply for other benefits. One
commenter expressed concern that an increase in State costs could be an
unintended consequence of the elimination of the requirement, which,
the commenter indicated, States commonly address by reducing
eligibility, benefits, and employing other mechanisms that create
barriers to timely access to health care. The commenter suggested that
CMS take steps to minimize possible negative ramifications of the
proposal. Other commenters stated that removing Sec. 435.608 could
increase Long-Term Services and Supports (LTSS) costs, with one
commenter specifically noting that, if veterans do not pursue Veteran
Aid and Attendance benefits, which are includable in the PETI
calculation, State and Federal liability would be affected. The
commenter questioned if this had been taken into consideration.
Response: We appreciate the commenters' concern about unintended
consequences, in the form of possible increased State costs that might
stem from the elimination of the requirement. However, based on the
comments we received, we do not share the concern. States commented
that imposing the requirement does not commonly produce countable
income for Medicaid applicants and beneficiaries. Therefore, we do not
expect this change to result in increased State costs. Additionally, as
noted above, numerous States, in commenting in support of eliminating
Sec. 435.608, reported that the staff time necessary to contact
applicants and beneficiaries to confirm compliance with the existing
regulation has imposed an administrative burden on them, and that the
operational complexity of implementing the requirement outweighs any
benefit to them in terms of saved payments for medical assistance.
Accordingly, it is possible that this change will result in fewer costs
for States by making eligibility determinations more efficient without
an offsetting increase in benefit costs.
We interpret the generalized comment about the increase in LTSS
costs that might result from the removal of Sec. 435.608 as being
related to PETI, which is the subject of the specific comment relating
to Veteran Aid and Attendance benefits.
The PETI calculation described in Sec. Sec. 435.700 through
435.735 (relating to the categorically needy) and 435.832 (relating to
the medically needy) generally requires the inclusion of all income,
including income that is disregarded or excluded in the underlying
income eligibility determination. However, nearly all of the examples
of benefits specifically identified in Sec. 435.608 for which Medicaid
applicants and beneficiaries have historically been required to apply--
annuities, pensions, retirement and disability benefits, Old-Age,
Survivors, and Disability Insurance (OASDI) and railroad retirement
benefits, unemployment compensation--are generally sources of countable
income for individuals whose eligibility is determined using non-MAGI
income eligibility methodologies and who therefore could be subject to
PETI. While there may be some benefits within the scope of Sec.
435.608 that might produce income not countable in a non-MAGI income
eligibility determination, but which could be countable in a PETI
calculation (that is, a certain portion of Veterans Affairs
Administration (VA) Aid and Attendance benefits), the instances are
few. Therefore, we do not anticipate that the elimination of Sec.
435.608 would have a disproportionate impact on State LTSS costs
compared to non-LTSS expenditures, nor an impact that would persuade us
to make Sec. 435.608 a post-enrollment activity.
Comment: One commenter requested clarification about whether
removal of Sec. 435.608 means that Medicaid applicants and
beneficiaries will not be required to apply for Social Security
benefits or for retirement distributions, but that they may still be
required to apply for Medicare as a condition of Medicaid eligibility.
Response: We confirm that the removal of Sec. 435.608 means that
Medicaid applicants and beneficiaries will no longer be required, as a
condition of their Medicaid eligibility, to apply for Social Security
benefits or retirement distributions. However, States may still require
applicants and beneficiaries to apply for Medicare as a condition of
Medicaid eligibility.
We have historically permitted, as a State plan option, the
requirement that applicants and beneficiaries apply for Medicare as a
condition of Medicaid eligibility, subject to certain limitations
(described below). This authority is not derived from Sec. 435.608,
but instead from New York State Department of Social
[[Page 22827]]
Services v. Dublino, 413 U.S. 405 (1973), the holding of which
generally provides support for States to impose collateral conditions
of eligibility in Federal programs which further the objectives of the
particular program and are not otherwise prohibited by the authorizing
statute.
As we have historically noted, Medicaid is the payor of last resort
(see section 3900.1 of the State Medicaid Manual), and Medicaid
regulations prohibit FFP for coverage of any services that would have
been covered by Part B of the Medicare program had the individual been
enrolled in Part B (section 1903(b)(1) of the Act; Sec.
431.625(c)(3)). Given these precepts and in the absence of any
statutory prohibition, consistent with the Dublino holding, we have
permitted States to require Medicaid applicants and beneficiaries who
may be eligible for Medicare to apply for Medicare Parts A, B, and/or D
as a condition of Medicaid eligibility. When electing this authority, a
State must agree to pay any premiums and cost-sharing (except those
applicable under Part D) that such individuals would otherwise incur
based on their Medicare enrollment. States continue to have this
authority notwithstanding the removal of Sec. 435.608.
Comment: A few commenters noted that States rely on disability
determinations made by the SSA for Social Security Disability Insurance
(SSDI) benefits and expressed concern that eliminating applications for
SSDI as a Medicaid eligibility requirement could increase the workloads
of State disability units. The commenters further expressed concern
that those who forego applying for SSDI may ultimately forego their
Medicare entitlement, which SSDI beneficiaries attain after receiving
benefits for 24 months; this would result in Medicaid providing
coverage for services such individuals would otherwise receive from
Medicare.
Response: It is not clear to us how the removal of the requirement
in Sec. 435.608 would increase the workload of State disability units
or create circumstances in which they will become newly responsible for
making disability determinations. Section Sec. 435.541(c) requires
States to conduct a disability determination for individuals who apply
for Medicaid on the basis of disability in several different
circumstances. These include, but are not limited to, the circumstances
in which such a Medicaid applicant has not yet filed an application for
disability benefits with SSA, or has filed an application for
disability benefits with SSA but is not expected to receive a
determination from SSA within sufficient time for the State to comply
with the time limit in Sec. 435.912(c)(3)(i) for disability-based
Medicaid applications (that is, within 90 days of the filing of the
Medicaid application).
An individual who applies for Medicaid on the basis of disability
and has not filed a disability claim with SSA, but then does so
pursuant to the historical requirement in Sec. 435.608 to apply for
other benefits, would most typically still be an individual for whom a
State, per Sec. 435.541(c), would conduct a disability determination.
This is because the State, in order to comply with Sec.
435.912(c)(3)(i) to determine disability-related eligibility within 90
days of the date of Medicaid application, would most practically
proceed with its own determination, instead of first waiting during
this period for the outcome of the SSA's determination, as the latter
course would present a risk to the State of having insufficient time to
make its own determination consistent with Sec. 435.912(c)(3)(i) if it
were to become clear that SSA's determination would not be completed
before the 90th day of the Medicaid application. In most other
situations in which a State is required under Sec. 435.541(c) to
determine disability, the relevant individual has already applied for
disability-related benefits with SSA.
We appreciate the commenters' additional concern about the
possibility of individuals who forego SSDI applications not eventually
attaining entitlement to Medicare as a result. However, we generally
did not receive comments suggesting that individuals are likely to
forego applying for other benefits for which they may be eligible as a
result of the removal of Sec. 435.608. As such, it is not clear to us
that eliminating Sec. 435.608 will correlate into Medicaid applicants
and beneficiaries choosing not to apply for SSDI and, possibly as a
result, not attaining entitlement to Medicare. Further, as we explained
earlier, States may still advise individuals of their possible
eligibility for other benefits.
In addition, as discussed previously, we did receive a comment
noting that requiring individuals to apply for Social Security
retirement benefits before their full retirement age forces them to
accept a lower benefit. However, individuals who might now delay filing
for Social Security retirement benefits as a result of the removal of
Sec. 435.608 would not be Medicare-eligible if they applied for their
retirement benefits before the age of 65. At the age of 65, whether
they have applied for Social Security retirement benefits or not, they
will be Medicare-eligible. As we explained previously, States may still
require such individuals, independent of Sec. 435.608, to file an
application for Medicare as a condition of Medicaid eligibility. We are
therefore not persuaded that eliminating Sec. 435.608 will translate
into Medicaid applicants and beneficiaries choosing to forego applying
for SSDI or applying for retirement benefits and ultimately requiring
States to provide Medicaid coverage for services that could have been
covered by Medicare.
Comment: One commenter who supported removal of Sec. 435.608 also
recommended that CMS consider eliminating the requirement in Sec. Sec.
433.145(a)(2) and 435.610(a)(2)(i) that Medicaid applicants and
beneficiaries (subject to the ``good cause'' exception) cooperate in
establishing the identity of a child's parents and obtaining medical
support payments. The commenter believes the requirement is a barrier
to coverage.
Response: We appreciate the comment; however, the suggestion is
beyond the scope of this regulation.
Comment: One commenter supported the elimination of Sec. 435.608
and suggested that income and resource standards can have the effect of
discouraging Medicaid-eligible individuals who have disabilities from
working. The commenter noted that Medicaid's working disability
eligibility groups allow such individuals to work and maintain their
Medicaid coverage, given the higher income and resource standards that
generally apply to these groups. The commenter encouraged CMS to issue
Federal guidance supporting State adoption of the working disability
groups, and allowing States to smoothly transition individuals to other
eligibility groups when they experience a change in their health or
work status.
Response: We agree on the importance of Medicaid's working
disability eligibility groups. While the commenter's suggestions are
outside the scope of this regulation, we appreciate this feedback.
Comment: One State indicated that it requires individuals to pursue
assets as a condition of receiving certain State-funded cash payments
and questioned whether the elimination of Sec. 435.608 would affect
this requirement.
Response: Eliminating Sec. 435.608 will only prohibit States from
requiring that Medicaid applicants and beneficiaries, as a condition of
their Medicaid eligibility, apply for other benefits for which they may
be entitled. A similar requirement imposed by a State in the context of
its State-funded programs would not be affected.
[[Page 22828]]
After consideration of the public comments we received, we are
finalizing our proposal to eliminate Sec. 435.608 in its entirety.
Because the effect of this change is specific to eliminating the
requirement to apply for other benefits as a condition of Medicaid
eligibility, we note that this provision operates independently from
the other provisions of this final rule.
D. Recordkeeping (Sec. Sec. 431.17, 435.914, and 457.965)
As we explained in section II.D. of the September 2022 proposed
rule, State Medicaid agencies must maintain records needed to justify
and support all decisions made regarding applicants and beneficiaries.
These records must include sufficient information to substantiate an
eligibility determination made by the State. They must also be made
available for review purposes, such as review by applicants and
beneficiaries prior to a fair hearing and review by State and Federal
auditors conducting oversight. Because current recordkeeping
regulations are both outdated and lacking in needed specificity, we
proposed revisions at Sec. Sec. 431.17 and 435.914 for Medicaid and at
Sec. 457.965 for CHIP to require that State agencies maintain their
records in an electronic format and to clarify the specific information
to be retained, the minimum retention periods, and the requirements for
making records available outside the agency.
We note that Sec. 431.17 applies to States, the District of
Columbia, and all Territories, as does Sec. 435.914 through a cross-
reference at Sec. 436.901.
We received the following comments on these proposed provisions:
Comment: Many commenters noted their support for the proposed
changes, including standardized timeframes for record retention and
clarification of the specific records and documentary evidence that
must be maintained by States to support eligibility determinations.
They supported the alignment of requirements between Medicaid and CHIP
and agreed that proposed changes would advance the integrity of these
programs. Commenters explained that proper documentation would not only
reduce improper payments identified by PERM due to insufficient
documentation, but more importantly, actual eligibility and coverage
errors that could negatively impact Medicaid and CHIP beneficiaries.
Additionally, commenters reported that some States' systems and
processes are already in alignment with these proposals.
Response: We thank the commenters for their support. We are
finalizing proposed changes to Sec. 431.17 (regarding the format,
content, and availability of records, as well as the minimum retention
period in Medicaid), changes to Sec. 435.914 (regarding documentation
of agency decisions at application, redetermination, and renewal in
Medicaid), and corresponding changes at Sec. 457.965 for CHIP with
some modifications, which are explained in the following discussion.
Comment: Most commenters supported the proposal at Sec. Sec.
431.17(d)(1) and 457.965(d)(1) to require States to maintain records in
an electronic format. They noted both long-term operational
efficiencies and ease of sharing documents. Several commenters raised
concerns about the significant technology, time, and resource
investment that would be required to transition from paper to
electronic records, including the eligibility system interfaces,
scanning technology, and staff training that will be required. Some
States reported that they have already transitioned completely to
electronic records, while others reported that they are in the process
of moving to an electronic format. Commenters also noted that
implementation may be especially challenging for States with non-MAGI
legacy systems, integrated eligibility systems, eligibility offices in
smaller, more rural areas, and county-based eligibility systems.
Response: We appreciate these concerns and recognize that States
are currently facing competing demands on their time, resources, and
eligibility systems. At the same time, we believe it is critically
important for States to modernize their recordkeeping processes and
implement comprehensive electronic records to address HHS Office of
Inspector General (OIG) audits and PERM, MEQC, and other CMS
eligibility reviews that have historically identified documentation
inadequacies. Accordingly, we are finalizing as proposed the
requirements at Sec. Sec. 431.17(d)(1) and 457.965(d)(1) that Medicaid
and CHIP agencies must maintain all required records in an electronic
format.
Comment: We received a number of comments regarding
standardization. A couple of commenters recommended that CMS work with
States to adopt a standardized format across all Medicaid and CHIP
agencies. Another commenter expressed concern that implementation of
the proposed requirements would necessitate universal definitions for
all records both within States and across States. Several commenters
recommended that CMS partner with State agencies to ensure that any
system changes made to support electronic recordkeeping are completed
in a standardized and secure way, including proper testing and training
for agency staff. One commenter urged CMS to clarify that States must
retain sensitive claims information separately from eligibility and
enrollment information. Finally, one commenter requested clarification
on the funding available to support the changes needed to comply with
these new electronic recordkeeping requirements.
Response: While we recognize the benefits of standardization across
States, in this final rule, we do not require States to adopt a single
standardized format. We do, however, encourage States to implement a
standardized format for records across their systems as much as
possible. While each of the records and documentary evidence described
in Sec. Sec. 431.17(b)(1) and 457.965(b)(1) for Medicaid and CHIP
respectively are considered part of the case record, we did not propose
that these records must be stored in a single system, and this final
rule does not require that States maintain all required case records in
a single system.
Federal funding may be available for systems development, subject
to conditions for enhanced funding (CEF) outlined at Sec. 433.112 and
Medicaid program standards, laws, regulations, and industry best
practices, including certification under the Streamlined Modular
Certification process. As described at Sec. 95.621, State agencies are
responsible for the security of all automated data processing systems
involved in the administration of Department of Health and Human
Services' programs and must establish a security plan that outlines how
software and data security will be maintained. This section further
requires that State agencies conduct a review and evaluation of
physical and data security operating procedures and personnel practices
on a biennial basis. Additionally, as specified in part 11 of the State
Medicaid Manual, State agencies are required to be in compliance with
the security and privacy standards contained in Public Law 104-191, the
Health Insurance Portability and Accountability Act of 1996 (HIPAA),
and adopted in 45 CFR 164, subparts C and E, as follows: The security
standards require that measures be taken to secure protected heath
information that is transmitted or stored in electronic format. The
privacy standards apply to protected health information that may be in
electronic, oral, and paper form. Furthermore, State agencies are bound
by the requirements in section 1902(a)(7) of the Act, as further
implemented in our regulations
[[Page 22829]]
at Sec. Sec. 431.300 through 431.307. These provisions require that
use or disclosure of information concerning applicants and recipients
is permitted only when directly connected to administration of the
State plan and provide additional safeguards to protect applicant and
beneficiary data. Conducting a risk analysis, pursuant to HIPAA and
implementing regulations at 45 CFR 164.308(a)(1)(ii)(A), should be the
first step in identifying and implementing safeguards that comply with
and carry out the standards and implementation specifications of HIPAA.
Therefore, a risk analysis can be foundational and must be completed to
assist organizations in identifying and implementing the most effective
and appropriate administrative, physical, and technical safeguards of
PII/PHI.
Comment: One commenter suggested that we provide an option for
States to store records in non-electronic format in special
circumstances, such as when a beneficiary expresses safety concerns
that an individual may have unauthorized access to State systems.
Response: We appreciate this comment and agree that maintaining the
safety and privacy of Medicaid beneficiaries is of critical importance.
We acknowledge that storing records electronically may pose new
challenges to ensuring beneficiary records are secure from unauthorized
access. However, we note that any recordkeeping system will have
security vulnerabilities and that there are safeguards that States can
implement to minimize this risk. We believe that electronic storage of
records is necessary to align with industry standards and that the
advantages of modernizing Medicaid recordkeeping standards outweigh the
risks inherent with electronic systems. We are finalizing the
electronic format requirements at Sec. Sec. 431.17(d)(1) and
457.965(d)(1) as proposed. We expect States to implement privacy and
security measures in accordance with all Federal and State laws
regarding privacy, security, and confidentiality. Compliance with these
laws will help to ensure that records are not improperly accessed. To
comply with the privacy protections under section 1902(a)(7) of the Act
and 42 CFR part 431, subpart F, States must have policies in place that
specify for what purposes data will be used within the organization and
to whom and for what purposes the agency will disclose data. While
States are required to establish electronic recordkeeping as finalized
in this rule, States also have flexibility to develop additional
protection processes for applicants and beneficiaries who need or
request them. For example, a State could place a security freeze on the
beneficiary's records at the request of the beneficiary, which would
prevent the records from being accessed on the user-end, such as
through an applicant or beneficiary user portal, while still allowing
the State Medicaid agency to utilize the data as appropriate. Such a
process could also include restricting access to records to a limited
number of State employees. Additionally, States could implement a
policy of requiring identity proofing to validate that an individual
attempting to access records on the user-end is the applicant or
beneficiary.
Comment: Several commenters supported the specific types of
information and documentation that we proposed must be included in
beneficiary case records, as described at proposed Sec. Sec.
431.17(b)(1) and 457.965(b)(1). Another commenter expressed concern
about the specific content requirements included in the proposed rule,
describing them as rigid and administratively taxing. The commenter
expressed appreciation for the historic flexibility in this area and
concern that the specificity of the new requirements will lead to
increased audit citations.
Response: We appreciate commenters' support of the content
requirements proposed at Sec. Sec. 431.17(b)(1) and 457.965(b)(1) for
individual applicant and beneficiary records. We proposed to require
such records to include applications, renewal forms, and changes
submitted by the individual or household; information transferred from
another insurance affordability program; evidence returned regarding
the disposition of income and eligibility verification; documentation
supporting any decisions made regarding the individual's eligibility;
all notices provided to the individual; records pertaining to any
appeals or fair hearings; and information on all medical assistance
provided. We developed these requirements to assist State Medicaid and
CHIP agencies in maintaining records that can be used to justify and
support decisions made regarding the eligibility of applicants and
beneficiaries and the coverage available to them, defend these
decisions when challenged by an applicant or beneficiary, and enable
State and Federal auditors and reviewers to conduct appropriate
oversight. As discussed in section II.D. of the proposed rule,
insufficient documentation was the leading cause of eligibility-related
improper payments in the most recent cycles of review in the PERM
program, MEQC program, and other CMS eligibility audits. As such, we do
not agree with the comment that flexibility in this area has benefited
State agencies or that increased specificity related to recordkeeping
will increase audit citations. Based on the PERM, MEQC, and other CMS
eligibility audit findings and recent OIG findings citing insufficient
documentation to evaluate the accuracy of States' eligibility
determinations, we anticipate a reduction in audit citations once
States fully implement these requirements. We are finalizing the
content requirements at Sec. Sec. 431.17(b)(1) and 457.965(b)(1) as
proposed.
Comment: One commenter expressed support for our proposal to expand
the Medicaid case documentation requirements at Sec. 435.914 to
include agency decisions at renewal, in addition to agency decisions at
application. One commenter suggested further amendment to add
redeterminations in addition to renewals.
Response: We appreciate the support for the changes proposed at
Sec. 435.914, which would require State Medicaid agencies to include
in each applicant's case record, the facts and documentation necessary
to support a decision of eligibility or ineligibility at application
and at renewal. We did not intend to exclude redeterminations based on
changes in circumstance from these recordkeeping requirements.
Accordingly, we are adding ``redetermination'' to Sec. 435.914(b) in
this final rule to ensure that records related to redeterminations made
in response to changes in circumstances are maintained in the same way
and to the same extent as records related to applications and annual
renewals.
Comment: Commenters requested clarification of the level of detail
required to be maintained in each individual's case record,
particularly with respect to data received through electronic data
sources, when to document data that is not useful to the eligibility
determination, and whether to document a lack of data received through
data sources.
Response: State Medicaid and CHIP agencies are expected to maintain
an appropriate level of detail to permit the individual or other
authorized reviewer to understand how and why the agency made a
determination of eligibility or a coverage decision. Data received by
the State Medicaid or CHIP agency that is related to a condition of
eligibility and therefore relevant to the determination made by the
State must be maintained. For example, if a State pings an electronic
data source to verify income when income is relevant to the eligibility
determination, the State must
[[Page 22830]]
maintain the income data received, even if the agency subsequently
determines that the income data was not useful in making the
eligibility determination. In this case, the State Medicaid agency
should document that the State found the income information to not be
useful to determining or verifying eligibility. This income data as
well as documentation that the State reviewed it and determined it to
be irrelevant to their determination is necessary context 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.
Comment: One commenter recommended that we require collection of
demographic information on all program applicants. They explained that
collection of demographic information at application facilitates
interactions with individuals who may need language access services or
other communication services to enroll in coverage, and it removes the
need for entities further down the line to request duplicative
information. It also allows programs to track disparities not just in
access to services, but in the eligibility and redetermination
processes, in retention of eligible individuals and families, and in
utilization of services.
Response: We support efforts to collect demographic information for
purposes of States providing language access, streamlining
communications with applicants and beneficiaries, and supporting
retention efforts. However, we believe that requiring provision of
certain demographic information on the application would increase
applicant burden and act as a barrier to enrollment. The requirements
regarding certain demographic information collected on the application
are outside the scope of this rulemaking, and we decline to require
collection of specific demographic information from all program
applicants through the requirements for the content of records at Sec.
431.17(b). However, we urge States to continue to explore methods of
encouraging applicants to provide demographic information, which can be
used to improve access and retention, such as providing help text on
the application explaining how demographic information will be used or
requesting the information after the person has been enrolled.
Comment: Most commenters supported the proposed requirement at
Sec. Sec. 431.17(d)(2) and 457.965(d)(2) that States must make records
available to the Secretary and to Federal and State auditors within 30
days of the request. One commenter specifically supported beneficiary
access to case records within 30 calendar days. However, many
commenters were concerned by the inclusion of ``other parties, who
request, and are authorized to review, such records'' within the
requirement. Commenters expressed concerns about applicant and
beneficiary privacy, specifically regarding access to sensitive
information such as diagnoses and services used, as well as immigration
status, that may be used for purposes outside the provision of health
care through Medicaid and CHIP. Commenters recommended that we
strengthen this requirement by more narrowly defining the specific
parties that have a legitimate program integrity purpose or research
purpose for accessing beneficiary records. Others recommended that
records only be made available to parties authorized under Federal law
so that Federal privacy protections clearly apply. One commenter stated
that it is important to reassure immigrants that it is safe to apply
for health coverage because their information will only be used for
purposes of administering the program and not for immigration
enforcement purposes. Some commenters suggested that we use this
opportunity to clarify CMS policy on information sharing with the DHS
or other similar authorities.
Response: We appreciate this comment and agree that safeguarding
confidential information concerning Medicaid applicants and
beneficiaries is of critical importance. Section 1902(a)(7) of the Act
and implementing regulations at 42 CFR part 431, subpart F, require
State Medicaid agencies to provide safeguards that restrict the use or
disclosure of information concerning Medicaid applicants and
beneficiaries to uses or disclosures that are directly connected with
the administration of the Medicaid State plan. The same requirements
also apply to separate CHIPs under Sec. 457.1110(b), which provides
that separate CHIPs must comply with part 431, subpart F. Accordingly,
we are clarifying this existing requirement by adding a new paragraph
(e) to Sec. 431.17 of this final rule, which specifies that records
maintained pursuant to Sec. 431.17 must be safeguarded in accordance
with the requirements of part 431, subpart F.
Section 431.302 sets forth the ``purposes directly related to State
plan administration,'' which include: Establishing eligibility;
determining the amount of medical assistance; providing services for
beneficiaries; and conducting or assisting an investigation,
prosecution, or civil or criminal proceeding related to the
administration of the plan. Under longstanding policy, sharing
information with DHS about an applicant or beneficiary's Medicaid or
CHIP coverage for purposes of a public charge determination is
generally not directly related to administration of the State plan,\16\
and therefore the circumstances in which such information can be shared
with DHS are quite limited. Some examples of permissible disclosure of
applicant and beneficiary information include: providing the
information needed to verify eligibility under section 1137 of the Act
and Sec. Sec. 435.940 through 435.965, such as verifying immigration
status through the DHS SAVE Program; sharing information with a
beneficiary's enrolled Medicaid or CHIP providers as needed to provide
services; and sharing information with a beneficiary's Medicaid or CHIP
managed care plan as needed to provide services.
---------------------------------------------------------------------------
\16\ CMCS Informational Bulletin, ``Public Charge and
Safeguarding Beneficiary Information'' (issued July 22, 2021),
available at: https://www.medicaid.gov/federal-policy-guidance/downloads/cib072221.pdf.
---------------------------------------------------------------------------
Comment: Several commenters raised concerns about States' ability
to meet the 30-day timeframe for making records available upon request.
They noted challenges that may be outside the agency's control, such as
a high volume of requests during a specific timeframe or competing
demands from other programs in States with integrated or county-based
eligibility systems, which may make it difficult to provide all records
within the requirement timeframe. Commenters suggested we provide a
process for States to request an extension to this timeframe.
Response: At Sec. Sec. 431.17(d)(2) and 457.965(d)(2) we proposed
to require that States make records available within 30 calendar days
of the receipt of a request. We thank commenters for the suggestion to
permit a process through which States could request an extension of the
timeframe for making records available. We understand that there may be
limited circumstances in which a State is unable to make records
available within 30 days following a request, such as in the case of
natural disasters. However, we believe that a process for States to
request an extension in such cases is impractical, as States in such
circumstances may be unable to take necessary steps to request an
extension. In lieu of an extension process, we have revised Sec. Sec.
431.17(d)(2) and 457.965(d)(2) in this final rule to permit an
exception to the 30-day timeframe when there is an
[[Page 22831]]
administrative or other emergency beyond the agency's control. This
exception is modeled on the eligibility determination timeliness
exception found at Sec. 435.912(e)(2). States will not be required to
seek our approval that use of the exception is appropriate but may want
to seek our concurrence for audit or other oversight purposes.
Additionally, we are making a technical revision to Sec. Sec.
431.17(d)(2) and 457.965(d)(2) to clarify that parties may specify in
their request a longer period of time for States to provide the
requested records.
Comment: We received a number of comments in support of our
proposal that the Medicaid and CHIP State plans provide for retention
of records for the period during which an applicant or beneficiary's
case is active and a minimum of 3 additional years thereafter. One
commenter stated that this proposal strikes a good balance between the
preservation of necessary information and administrative efficiency. We
also received many comments recommending that States be required to
maintain applicant and beneficiary records for longer than 3 years. The
majority of these comments recommended retention of records during the
period in which a case is active and 10 years thereafter. They
explained that it is not unusual for an individual to reapply after a
break in coverage for 3 or more years, and a longer retention policy
would make it possible for the State to utilize verification of
citizenship or immigration status and other eligibility factors that do
not change when such an individual reapplies for coverage. Commenters
also noted that a 10-year retention period would align with the policy
for Medicaid MCOs under Sec. 438.3(u) and for drug manufacturers
participating in the Medicaid Drug Rebate Program under Sec.
447.510(f).
Response: We appreciate commenters' support for the proposed
policy, at Sec. Sec. 431.17(c) and 457.965(c), which would require
State Medicaid and CHIP agencies to retain records while an
individual's case is active plus a minimum 3 years thereafter. We also
understand commenters' concerns that 3 years will not be sufficient in
all cases. A longer retention period may be particularly beneficial for
certain citizens and certain qualified non-citizens whose eligible
immigration status is unlikely to change and cannot be verified
electronically. If such an individual disenrolls and then reapplies, we
agree that the enrollment process would be streamlined significantly if
the State still had the individual's case record with documentation of
their citizenship or satisfactory immigration status.
In proposing a 3-year retention timeframe, we considered the
administrative burden of maintaining documentation with a large file
size, like a recording of a telephonic signature, along with the
different actions for which beneficiary case records may be needed.
While we appreciate that retention for just 3 years will not be long
enough to help every applicant who reapplies for coverage after a
period of disenrollment, we also recognize that no standard will
protect everyone. We are also concerned that the burden of maintaining
all required documentation for all beneficiaries for at least 10 years
may cause some States to take actions to reduce case record size, which
could negatively impact applicants' and beneficiaries' user experiences
if data is lost or rendered unreadable.
While we appreciate the drawbacks to a 3-year retention period
raised by commenters, we still believe that requiring State Medicaid
and CHIP agencies to retain records for 3 years after an individual's
case is no longer active strikes the best balance between the
advantages of a longer retention period and administrative burden on
States. Therefore, we are finalizing a 3-year retention requirement at
Sec. Sec. 431.17(c)(1) and 457.965(c), as proposed, with one exception
at Sec. 431.17(c)(2) specific to Medicaid, which is described in a
subsequent comment response. We note that the requirement to retain
records during the period that an individual case is active, plus 3
years thereafter, is the minimum requirement for State retention of
records. Recognizing the benefits of retaining records for a longer
period of time, particularly records related to factors of eligibility
that will not change, we encourage all States to consider instituting a
longer record retention period. We also note that, as discussed in
section II.D. of the September 2022 proposed rule, a case remains
active for any applicant or beneficiary who has a fair hearing appeal
pending. In addition, in the event that an individual submits a new
application prior to expiration of the 3-year period, the records
retention clock would restart, and the State would need to retain the
case record until 3 years after eligibility is terminated or the
individual otherwise disenrolls from coverage.
Comment: One commenter pointed out that State and Federal statute
does not allow estate recovery until after a Medicaid recipient dies,
or if they are survived by a spouse, after their spouse dies.
Therefore, in cases when estate recovery is required, the commenter
noted that records may need to be maintained for longer than the
proposed 3-year period. This commenter suggested that we amend the
minimum record retention period to require records to be maintained for
at least 15 years.
Response: We thank the commenter for raising this issue and agree
that the proposed minimum retention period may be insufficient in cases
where estate recovery is required after the death of a surviving
spouse. We also note that in some situations, States may need to delay
estate recovery if the deceased beneficiary is survived by someone
other than their spouse, such as a minor or child with a disability. We
recognize States need to maintain records for use in the estate
recovery process, when such a process is required under section 1917(b)
of the Act. However, requiring a minimum record retention period of 15
years, even if narrowly tailored to cases where estate recovery is
required, may be longer than necessary in some cases and not long
enough in other cases. Therefore, we are including an exception to our
proposed language at Sec. 431.17(c) when estate recovery is required.
As described at Sec. 431.17(c)(2) of this final rule, States must
maintain records for individuals whose estates are subject to recovery
until they have satisfied their statutory obligations under section
1917(b) of the Act for the estate at issue (that is, the State
completed recovery from the estate through a legal proceeding or other
means, waived recovery against the estate on the basis of undue
hardship, or determined that the estate has insufficient property from
which to recover).
Comment: Several commenters requested that CMS amend the proposed
record retention period to align with other programs such as SNAP and
TANF.
Response: While we acknowledge there may be benefits to aligning
the record retention period with other programs, particularly in States
with an integrated eligibility system that includes other programs like
SNAP and TANF, we decline to make this a requirement. We do not believe
that all other programs have the same record retention requirements,
and our rule does not preclude a State from maintaining records for a
longer period of time if, for example, the State determines it would be
administratively convenient to align the period with longer periods
used by other programs. Similarly, we do not believe that States are
precluded from retaining records
[[Page 22832]]
from other programs for a longer period if needed to align with
Medicaid's retention period. We believe that our proposed retention
period of the time that the case is active plus an additional 3 years
for most records, as described at Sec. Sec. 431.17(c)(1) and
457.965(c), will ensure that applicant and beneficiary records will be
available for the majority of circumstances in which such records may
be needed. Some programs calculate the retention period only from the
date of initial determination, without taking into account the time
period a case is active. If we were to impose a minimum retention
period that did not take into account the length of time that a case is
active, States would not be required to maintain evergreen verification
data, for example, which continues to demonstrate a beneficiary's
current eligibility even if received more than 3 years prior.
Additionally, beneficiaries who enrolled more than 3 years prior may be
unable to access all of their records. Therefore, we are finalizing the
length of the retention period for most records at Sec. Sec.
431.917(c)(1) and 457.965(c) as the period when the applicant or
beneficiary's case is active, plus a minimum of 3 years thereafter.
Comment: One commenter recommended that the proposed retention
policy apply not only to an individual's record while that individual's
case is active plus 3 years thereafter, but also while that individual
is part of another case that is active, plus 3 years thereafter.
Another commenter recommended that the retention period relate to the
individual, rather than the active case. One commenter further
recommended clarification that States must maintain separate case
records for parents and their dependent children.
Response: We appreciate the comments flagging differences in how
States maintain applicant and beneficiary records. The regulatory
provisions related to recordkeeping in this final rule, at Sec. Sec.
431.17, 435.914, and 457.965 are specific to individual applicants and
beneficiaries. We recognize that applications often include multiple
household members, and these household members may remain together in a
State's beneficiary case records. However, applicants and beneficiaries
receive their own individual determination of eligibility at
application, at renewal and when they experience a change in
circumstances. Most services are provided at the individual beneficiary
level as well. As such, the Medicaid and CHIP regulations regarding
maintenance of records are applied at the individual applicant and
beneficiary level. This does not preclude a State from maintaining the
records of individual household members together for recordkeeping
purposes, but in such cases, the household record must be retained
while every individual member's case is active and for at least 3 years
after the last household member has disenrolled.
Comment: One commenter requested that CMS clarify its expectations
for disposition of records after the mandatory retention period ends.
Another commenter suggested adding a provision to hold States harmless
during audits for documentation omissions that would not have made a
difference in determining eligibility for an applicant or beneficiary
or in authorizing coverage of a specific service. And one commenter
recommended that CMS provide guidance on how States can help applicants
and beneficiaries understand how to gain access to their case records.
Response: We decline to prescribe specific regulatory standards in
these areas. State Medicaid and CHIP agencies have flexibility to adopt
record disposition procedures consistent with their State law, rules,
and policies. After the mandatory retention period under this final
rule ends, States may choose to maintain records for a longer period of
time, archive, or destroy records. With respect to the information that
must be made available to auditors, we agree that applicant and
beneficiary case records must include the information needed to support
the decisions made regarding eligibility and benefits, but the specific
details about what types of information may, or may not, be considered
in an audit are outside the scope of this rule. Finally, we agree that
every State must establish a clear process, that is not burdensome, for
individuals to request and access copies of their case records. We will
consider including more information on these topics in future
subregulatory guidance.
After considering all comments, we are finalizing the recordkeeping
requirements proposed at Sec. Sec. 431.17, 435.914, and 457.965 with
some modifications as discussed. Because the effect of this change is
specific to clearly defining the types of eligibility determination
documentation to be maintained, defining the time required to retain
Medicaid and CHIP records and case documentation, removing references
to outdated technology, and defining when records must be made
available upon request, we note that this provision operates
independently from the other provisions of this final rule.
E. Eliminating Access Barriers in CHIP and BHP
1. Prohibition on Premium Lock-Out Periods (Sec. Sec. 457.570 and
600.525(b)(2))
We proposed to revise CHIP regulations at Sec. 457.570 and BHP
regulations at Sec. 600.525(b)(2) to prohibit premium lock-out periods
in CHIP and BHP. Premium lock-out periods have permitted States to
specify a period of time that an individual must wait after non-payment
of premiums until being allowed to reenroll in the CHIP or BHP.
In order to improve continuity of care and align with Medicaid
rules in this area, we proposed that States with a separate CHIP or BHP
that terminate enrollees for non-payment of premiums or enrollment fees
may not condition re-enrollment in CHIP or BHP on the payment of past-
due premiums or enrollment fees. This is in accordance with our CHIP
statutory authority at section 2101(a) of the Act to ``expand the
provision of child health assistance to uninsured, low-income children
in an effective and efficient manner'' and BHP authority at section
1331(c)(4) of the Act to ``coordinate the administration of, and
provision of benefits with the State Medicaid program under title XIX
of the SSA, the State child health plan under title XXI of such Act,
and other State-administered health programs to maximize the efficiency
of such programs and to improve the continuity of care.'' We also
sought comment on an alternative proposal to provide States with an
option to implement a 30-day premium lock-out period.
Comment: We received numerous comments in support of our proposal
to prohibit premium lock-out periods in CHIP. Several commenters
indicated that eliminating premium lock-outs would improve access and
continuity of care for children and reduce barriers to care. One
commenter noted their support for this change in BHP, citing it will
simplify BHP premium rules. In addition, a few commenters indicated
that even short gaps in coverage can create a barrier to care and
stated that CMS should not permit a premium lock-out period of 30 days.
Response: We thank the commenters for supporting our proposal to
eliminate premium lock-out periods. We are finalizing this provision as
proposed at Sec. 457.570 for CHIP and Sec. 600.525(b)(2) for BHP. As
discussed in section II.F.1. of the September 2022 proposed rule, we
agree that removing lock-out periods will increase access to care,
reduce gaps in coverage, and limit financial barriers to care for low-
income families. This final rule will support continuity of care
[[Page 22833]]
to ensure enrollees in CHIP and BHP receive and maintain coverage.
Comment: A few commenters requested technical clarifications
related to eliminating premium lock-out periods. One commenter
requested clarification on whether the enrollee's services will be
expected to be covered in the month of termination. Another commenter
requested clarification on whether a State can require payment of past-
due premiums as a condition of re-enrollment. Another commenter
questioned whether States will be able to terminate for non-payment of
premiums.
Response: We appreciate the commenters request for clarity on these
issues. Under the final rule, once an individual's coverage is
terminated, States will not be required to cover services (unless the
individual re-enrolls in coverage). Further, as discussed in the
September 2022 proposed rule, under the final rule, States cannot
require families who were disenrolled to repay past-due premiums as a
condition of reenrollment. Because States will 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, and could re-enroll without paying
any past due premiums. However, the family could be required to pay a
new premium or enrollment fee associated with new enrollment prior to
re-enrollment. Finally, while the final rule prohibits lock-out periods
for individuals with unpaid premiums or enrollment fees, it does not
address whether States may still terminate coverage for nonpayment of
premiums, an issue that is beyond the scope of the final rule.
Comment: Two commenters opposed prohibiting premium lock-out
periods. One commenter expressed concerns that States could experience
administrative and budgetary challenges with removing the premium lock-
out period.
Response: We acknowledge the commenters' concerns related to
potential administrative and budgetary challenges associated with
States eliminating premium lock-out periods. To improve administrative
simplicity, we encourage States to consider other options for
facilitating timely premium payments, such as charging a single, but
affordable, annual enrollment fee. As discussed in the September 2022
proposed rule, requiring an affordable enrollment fee may improve
retention, reduce disenrollment rates, and simplify program
administration by reducing the cost of monthly bill collection. As with
premiums, States could consider varying enrollment fees based on family
income level to ensure that they are affordable. Some States have
reported that the costs associated with managing premium lock-out
periods and frequent churn have resulted in greater administrative
burden and higher costs compared to premium payment offsets.
Comment: A few commenters requested that CMS delay the effective
date of this provision to ensure States have adequate time to make
necessary changes in State laws or updates to information technology
systems.
Response: We recognize that certain changes proposed in this rule,
including the elimination of premium lock-out periods, may require
States to make changes to their statutes and/or regulations, as well as
systems changes prior to implementation, and that this process can take
time. States will no longer be permitted to adopt a new premium lock-
out period when this provision becomes effective. However, we are
providing States with existing premium lock-out periods with 12 months
from the effective date of this final rule to implement the necessary
changes to discontinue this policy. States with biennial legislatures
that require legislative action to implement these requirements can
request an extension of up to 24 months following the effective date of
this final rule.
After considering the comments, we are finalizing as proposed.
Because the effect of this change is specific to preventing States from
disenrolling or locking-out CHIP beneficiaries for failure to pay
premiums, we note that this provision operates independently from the
other provisions of this final rule.
2. Prohibition on Waiting Periods in CHIP (Sec. Sec. 457.65, 457.340,
457.350, 457.805, and 457.810)
CHIP regulations at Sec. 457.805(b) have permitted States to
institute a 90-day ``period of uninsurance,'' or ``waiting period,''
for individuals who have disenrolled from a group health plan, prior to
allowing them to enroll in a separate CHIP. We proposed to revise
Sec. Sec. 457.805(b) and 457.810(a) to eliminate the use of a waiting
period for any length of time as a substitution procedure under either
CHIP direct state plan coverage or premium assistance. We also proposed
conforming amendments to remove references to waiting periods by
revising Sec. 457.65(d), removing Sec. 457.340(d)(3), and revising
Sec. 457.350(i) (which is redesignated as Sec. 457.350(g) in this
final rule). Then we proposed to remove specified limitations in Sec.
457.805(b)(2) and (3) that are no longer relevant without waiting
periods.
We sought comment on an alternative proposal to provide States with
an option to implement a 30-day waiting period if a high rate of
substitution of group coverage could be demonstrated. We are finalizing
the change we proposed, to prohibit the use of waiting periods
altogether.
Comment: The majority of commenters supported the proposal to
prohibit waiting periods in separate CHIPs. Commenters expressed the
view that elimination of waiting periods would help reduce potential
gaps in children's coverage and simplify the enrollment process for
families. In addition, several commenters explicitly opposed permitting
a waiting period of any length, including a 30-day waiting period, in
favor of eliminating waiting periods altogether.
Response: We thank commenters for their support of the proposal to
eliminate CHIP waiting periods. We agree with commenters that
permitting a waiting period for any length of time would not
sufficiently address the access barriers that waiting periods pose for
children and families. In addition, a 30-day waiting period would
provide less time for children to obtain coverage in another insurance
affordability program during the waiting period. The purpose of these
changes is to mitigate gaps in coverage for children that may occur
during a waiting period and to align with other insurance coverage such
as Medicaid and private insurance plans that do not permit waiting
periods prior to individuals being enrolled. The proposal to eliminate
separate CHIP waiting periods is also consistent with Executive Order
14070 of April 5, 2022, titled ``Continuing to Strengthen Americans'
Access to Affordable, Quality Health Coverage,'' which instructs
agencies to identify policy changes to ensure that enrollment and
retention in coverage can be more easily navigated by consumers.
Comment: A commenter expressed concern that prohibiting States' use
of waiting periods in our regulations would be more restrictive on
State plans than the existing title XXI statutory requirements. A few
commenters expressed concern that the proposed changes removed some of
the State flexibility needed to design their separate CHIPs.
Response: We appreciate the commenters' request for further
clarification on these issues. No provision of the Act expressly
authorizes waiting periods. As we explained in the preamble to our
original CHIP final regulations (66 FR
[[Page 22834]]
2490), CMS had previously interpreted section 2102(b)(3)(C) of the Act,
which requires the State child health plan to ``include a description
of procedures to be used to ensure that the insurance provided under
the State child health plan does not substitute for coverage under
group health plans,'' to permit States to adopt a waiting period as one
possible method to prevent substitution.\17\ When CHIP began in 1997,
group health plans were the main alternative sources of coverage for
children who would otherwise have been eligible for CHIP. Because
waiting periods historically involved a period of uninsurance,
requiring a waiting period before a child could enroll in CHIP was
considered a possible deterrent to families who wanted to change
coverage from group health plans to CHIP. CMS therefore permitted
waiting periods as one potential route to ensure that CHIP ``does not
substitute for coverage under group health plans.''
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\17\ See section II.G.2 of (66 FR 2490), State Child Health;
Implementing Regulations for the State Children's Health Insurance
Program.
---------------------------------------------------------------------------
Since 1997, circumstances have changed significantly. As explained
in section II.F.2. of the September 2022 proposed rule preamble, after
the passage of the Affordable Care Act, families waiting to enroll in
CHIP can receive health coverage through an Exchange, greatly
diminishing any deterrent effect that may have resulted from a waiting
period. There is little to no evidence that waiting periods effectively
reduce substitution of coverage.\18\ By contrast, the evidence has
shown that waiting periods can impose significant costs on children.
There is an abundance of evidence showing that waiting periods reduce
program enrollment and utilization of health care services and increase
the number of children without insurance.2 19 20 Children
are particularly vulnerable to waiting periods because a period of
uninsurance can compromise child health and development and access to
preventive and primary health care during childhood and
adolescence.21 22 23
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\18\ Gruber, J. and Simon, K. (2008) Crowd-out 10 years later:
Have recent public insurance expansions crowded out private health
insurance? Journal of Health Economics, 27(2):201-217. https://doi.org/10.1016/j.jhealeco.2007.11.004.
\19\ Reinbold, G.W. (2021). State Medicaid and CHIP options and
child insurance outcomes: An investigation of 83 state options with
state-level panel data. World Medical & Health Policy, 1-15. https://doi-org.ezproxyhhs.nihlibrary.nih.gov/10.1002/wmh3.465.
\20\ Medicaid and CHIP Payment and Access Commission,
Transitions Between Medicaid, CHIP, and Exchange Coverage, July
2022. Accessed at: https://www.macpac.gov/wp-content/uploads/2022/07/Coverage-transitions-issue-brief.pdf.
\21\ DeVoe, J.E., Graham, A., Krois, L., Smith, J., &
Fairbrother, G.L. (2008). ``Mind The Gap'' in Children's Health
Insurance Coverage: Does the Length of a Child's Coverage Gap
Matter?. Ambulatory Pediatrics, 8(2), 129-134. https://doi.org/10.1016/j.ambp.2007.10.003.
\22\ Leininger, L.J. Partial-Year Insurance Coverage and the
Health Care Utilization of Children. Medical Care Research and
Review. 2009;66:49-67. https://doi.org/10.1177/1077558708324341.
\23\ Buchmueller, T., Orzol, S.M., & Shore-Sheppard, L. (2014).
Stability of children's insurance coverage and implications for
access to care: evidence from the Survey of Income and Program
Participation. International journal of Health Care Finance and
Economics, 14(2), 109-126. https://doi.org/10.1007/s10754-014-9141-1.
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Even though sections 2102(b)(1)(B)(iii), 2102(b)(1)(B)(iv), and
2112(b)(5) of the Act prescribe limitations on the use of waiting
periods, these restrictions on their usage do not automatically
authorize waiting periods. Rather, these provisions--which were
included in the statue when it was first enacted in 1997--reflect the
fact that waiting periods were, at the time, contemplated as one
potential strategy States could use to prevent substitution of
coverage, consistent with section 2102(b)(3)(C) of the Act. As
explained, because the health coverage landscape has changed since
1997, waiting periods are no longer a viable method to ensure that CHIP
does not substitute for coverage under group health plans.
Further, CMS regulations at Sec. 457.805(a) require that States
employ ``reasonable procedures'' to ensure that CHIP does not
substitute for coverage. For the reasons stated above, as well as those
reasons discussed in section II.F.2. of the preamble to the September
2022 proposed rule, waiting periods no longer constitute a ``reasonable
procedure'' for preventing or addressing substitution of coverage.
States will continue to be required to monitor for substitution of
coverage. In addition, States will also have the flexibility to propose
a procedure other than a waiting period to reduce substitution of
coverage if monitoring shows that substitution of coverage exceeds the
acceptable threshold determined by the State in its CHIP state plan.
For example, States may implement a CHIP premium assistance program for
children enrolled in group health plan coverage, and/or improve public
outreach about the range of health coverage options that are available
in that State.
We believe this approach appropriately meets the requirements
outlined in relevant statute and regulations, while minimizing adverse
impacts for children and families that are often a result of
implementing waiting periods.
After considering the comments, we are finalizing as proposed.
Because the effect of this change is specific to ensuring that CHIP
coverage does not substitute for coverage under group health plans, we
note that this provision operates independently from the other
provisions of this final rule.
3. Prohibit Annual and Lifetime Limits on Benefits (Sec. 457.480)
Annual and lifetime limits are not permitted on Essential Health
Benefits in any individual, group, or employer health plans, or on any
benefits in Medicaid. However, CHIP regulations have been silent on the
use of annual and lifetime limits except for banning annual and
aggregate dollar limits on mental health and substance use disorder
benefits. Recognizing that these limits may present barriers to CHIP
enrollees receiving necessary health care services and exacerbate unmet
treatment needs, we proposed to prohibit any annual, lifetime or other
aggregate dollar limitations on any medical or dental services that are
covered under the CHIP State plan. This prohibition was included in the
September 2022 proposed rule at Sec. 457.480.
We received the following comments on this provision:
Comment: The majority of commenters supported the proposal to
prohibit annual and lifetime limits on all covered CHIP benefits. In
particular, commenters expressed support for the provision as important
to eliminating barriers to care, preventing discrimination against
children with higher medical needs, and providing CHIP children
improved access to dental and orthodontia care. A few commenters
highlighted the positive benefit of aligning State Medicaid programs
and CHIP that this provision would achieve. One commenter also noted
that States still have the flexibility to design their benefit package,
which creates an appropriate balance between utilization management and
assuring access to critical services.
Response: We appreciate the support from commenters for our
proposal to remove annual and lifetime limits. We are finalizing
changes as proposed at Sec. 457.480. As discussed in section II.F.3.
of the September 2022 proposed rule, we agree that such limits create
barriers for families to access health coverage, particularly for
children with the greatest medical needs. States have frequently
reported that alignment across Medicaid and CHIP creates administrative
simplification, and we
[[Page 22835]]
agree that this is an important area for alignment. We also recognize,
as noted by commenters, that States continue to have flexibility in
designing their benefit package, as long as they adhere to the relevant
requirements in part 457, subpart D.
Comment: One commenter expressed support for the September 2022
proposed rule and recommended that removing limits should be factored
into rate setting to ensure actuarial soundness in States with managed
care plans.
Response: We agree with the point raised by the commenter. States
that remove lifetime and annual limits in a CHIP managed care delivery
system should ensure that such changes are accounted for in rate
development. States must adhere to the Federal standards for rate
development in CHIP managed care at Sec. 457.1203, including using
payment rates in CHIP managed care that are consistent with actuarially
sound principles. We recommend that States coordinate closely with
their actuaries to ensure the application of generally accepted
actuarial principles and practices in CHIP managed care rate setting.
Comment: Two commenters opposed removing annual and lifetime
limits. Specifically, one commenter expressed concern related to
prohibiting annual and lifetime limits due to the potential cost impact
to State CHIPs.
Response: We recognize that the potential cost associated with
eliminating annual and lifetime limitations in CHIP is an important
consideration for States and health plans. We note that one study found
that the cost of eliminating lifetime limits is minimal because only a
small number of people exceed them.\24\ In addition, improving overall
access to dental care services, for example, helps families avoid
emergency room visits that may increase financial burden for both
States and families. We also note that CHIP has been an outlier in
terms of permitting these types of limitations. Following
implementation of the ACA, neither Medicaid, Exchange, nor private
group health plans allow annual, lifetime or other aggregate dollar
limitations. Thus, higher income children in the Exchange have been
protected from these types of limitations whereas lower income children
in CHIP continued to be subject to dollar limitations. We also note
that States and health plans have extensive experience in using other
types of cost containment mechanisms.
---------------------------------------------------------------------------
\24\ PricewaterhouseCoopers. ``The Impact of Lifetime Limits.''
March 2009. Prepared for the National Hemophilia Foundation on
behalf of the Raise the Caps Coalition.
---------------------------------------------------------------------------
For the above reasons, we are finalizing these changes to Sec.
457.480 as proposed. Because the effect of this change is specific to
prohibiting annual and/or lifetime limits on benefits in CHIP, we note
that this provision operates independently from the other provisions of
this final rule.
F. Compliance Timelines
In the September 2022 proposed rule, we did not specify the date(s)
by which States would be required to demonstrate compliance with the
proposed requirements, but we requested comment on appropriate
compliance timeframes. We received the following comments on the amount
of time States will need to implement each provision as proposed:
Comment: Many comments regarding the timeline for implementing this
rule focused on the benefits of the streamlined eligibility and
enrollment processes included in the September 2022 proposed rule and
the likelihood that these changes would reduce erroneous disenrollments
when States begin to terminate the coverage of ineligible individuals
at the end of the continuous enrollment condition. Timeframes
recommended by these commenters ranged from promptly or as soon as
practicable to specific timeframes of 30 to 60 days, 90 days, and no
more than 6 or 12 months following publication of this final rule. Some
commenters supported our proposed approach to make all changes
effective 30-days after publication, with compliance required within 12
months. Others recommended prioritizing some provisions for earlier
implementation, or phasing them in, based on different factors,
including whether the provisions (1) would help to mitigate coverage
losses; (2) required fewer resources; (3) posed a smaller technological
burden or required fewer system changes; or (4) simply clarified
existing requirements. Many commenters recognized the need to balance
State resources and the amount of work required to implement a change
with the needs of beneficiaries and the potential positive impact on
coverage. They urged CMS to afford States sufficient time to implement,
but not more time than would be necessary.
At the other end of the spectrum, many commenters focused on the
vast resources States were currently directing toward unwinding from
the PHE and returning to regular operations at the end of the
continuous enrollment condition. They described how that work was
already stretching States' limited resources, and that States could not
simultaneously manage that work and implement this rule within the
proposed timeframe. Many commenters expressed concern that the
significant time and resources needed to implement this rule would take
time and funding away from unwinding work and that instead of
mitigating coverage losses, speedy implementation would put States at
risk for implementation errors. Commenters described many changes that
States will need to make as they implement this rule, including:
developing new State legislative and regulatory constructs; revising
budget requests to obtain needed funding; implementing system updates,
which will be much greater in States that still utilize legacy systems
for eligibility and enrollment that is not based on MAGI; designing new
procedures and implementing workflow changes; hiring and training staff
to implement the new processes and requirements; and obtaining CMS
approval of changes to their State plans. None of these commenters
believed our proposed timeframe for compliance was adequate. They
recommended timeframes for compliance ranging from at least 6 to 12
months following the end of unwinding to 2, 3, or 5 years following
publication of this final rule. One commenter suggested that CMS pause
this rulemaking and refile it after States have returned to regular
operations following the continuous enrollment condition. Several
commenters also recommended that we provide States with an option to
request an extension when specific barriers could not be overcome
during a required compliance timeframe.
Response: We agree that the provisions in the September 2022
proposed rule will help eligible individuals to enroll in Medicaid and
CHIP and to stay enrolled as long as they remain eligible. At the same
time, implementing many of the provisions in this final rule will
require complex systems changes that will take time for States to make.
We are sympathetic to States' assertions that they are currently
devoting all available resources toward protecting the enrollment of
eligible individuals as they unwind from the continuous enrollment
condition, and we believe that requiring States to divert resources
away from this work will likely do more harm than good. We also agree
that an early effective date, combined with phased-in compliance,
strikes the best balance between making the streamlined processes in
this final rule available as soon as possible and giving States the
time needed to implement these changes correctly. We
[[Page 22836]]
appreciated the many suggestions for criteria to assist us in
developing a phase-in plan for compliance.
After considering all of the factors suggested for phase-in and all
of the challenges that States may need to overcome as they implement
these changes, we are finalizing this rule with an effective date 60
days after publication and will phase-in compliance with each provision
as described in Table 2, with full compliance required no more than 36
months after this final rule becomes effective.
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In establishing a compliance date for each provision in this final
rule, we first considered whether the provision established a new State
option or a requirement, and whether the provision clarified the policy
for existing processes or would require new processes. For those
provisions that create new options, are expected to require little to
no change in State processes, or clarify existing requirements,
compliance is required
[[Page 22837]]
when the rule becomes effective. Next, we considered those provisions
that were expected to reduce State administrative burden and have the
least extensive statutory or system implications. Recognizing that some
of these provisions may require State legislative action or have budget
implications, States will have 12-18 months following the effective
date of this final rule to implement these provisions and demonstrate
compliance with the new requirements. States with biennial legislatures
that require legislative action to implement these requirements can
request an extension of up to 24 months following the effective date of
this final rule. The last set of provisions are expected to require the
greatest change to State systems and workflow processes. To ensure that
States have adequate time to adopt the system and policy changes needed
to implement these requirements, to ensure that eligibility workers are
properly trained in the new policies and procedures, and to ensure that
implementation does not interfere with the completion of State
unwinding work and mitigations, we are providing States with 24 to 36
months following the effective date of this final rule to demonstrate
compliance with these requirements. We encourage all States to work
within these timeframes to prioritize completion of these changes as
quickly as possible.
Comment: We received a number of comments recommending specific
implementation timeframes for specific provisions. Recommended
timeframes included:
Agency action on returned mail as soon as possible, 30
days, and 90 days after the effective date;
Align non-MAGI enrollment and renewal requirements with
MAGI policies 60 days, 90 days, and at least 3 years after the
effective date;
Apply primacy of electronic verification and reasonable
compatibility standard for resource information 60 days after effective
date;
Establish specific requirements for acting on changes in
circumstances--18-24 months and 3 years after the effective date;
Prohibiting access barriers in CHIP--as soon as possible;
Remove requirement to apply for other benefits 90 days
after effective date; and
Transitions between Medicaid and CHIP 90 days after the
effective date.
Response: We took each of these recommendations into account when
developing the compliance timeframes described in Table 2. In some
cases, the specific recommendation was consistent with our final
compliance timeframe. For example, commenters recommended between 18
and 36 months to implement the requirements for acting on changes in
circumstances. We believe this provision will require significant
system changes, particularly in States that are still using legacy
eligibility systems, and we are requiring compliance with the
requirements at Sec. Sec. 435.919, 457.344, and 457.960 no later than
36 months after this final rule becomes effective. In other cases, the
specific recommendation informed our compliance timeframe even though
it is not the same. For example, one commenter recommended making
removal of the requirement to apply for other benefits effective 90
days after the effective date. We agree that this is a low-complexity
system change that is likely to improve beneficiary access and reduce
State administrative burden, and as such, it should happen quickly.
However, we are providing States with up to 12 months following the
effective date of this final rule to comply with this requirement as we
believe some States may require additional time to get the necessary
system changes in the queue and to effectuate them.
III. Collection of Information Requirements
In the September 2022 proposed rule, we projected both new burden
and savings based on how the rule would change respondents' efforts
relative to the status quo. However, the proposed rule referenced
Office of Management and Budget (OMB) control numbers that we now
believe do not cover certain longstanding provisions of the Medicaid
and CHIP programs related to eligibility and enrollment. Specifically,
because the Medicaid program predates the enactment of the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.), and because we
viewed many longstanding basic Medicaid requirements as exempt from the
PRA, burden for the following requirements were not historically
subjected to the requirements of the PRA and therefore are not covered
by the OMB control numbers referenced in the September 2022 proposed
rule: application (burden on State in processing the application and
burden on individual in filling out application); requests for
additional information (burden on State in assessing application and
burden on individual in responding to State); making eligibility
determinations and providing appeal rights (burden on State in making
determinations and burden on individual if filing appeal); verifying
information in the application (burden on State in conducting
verifications and burden on individual in supplying supporting
documentation); and renewal process (burden on State in conducting
renewals and burden on individual in responding to State). We are
addressing that oversight by moving our burden and savings estimates to
the Regulatory Impact Analysis (RIA) section of this final rule. We
will be bringing the longstanding Medicaid requirements and what was
thought to be exempt into compliance with the PRA outside of this
rulemaking. That effort will include the publication of Federal
Register notices with 60- and 30-day comment periods to allow for
public comment on the estimates of this final rule's impact.
In addition to the above-mentioned restructuring of the burden
estimates from the proposed rule to final rule, the finalization of
certain proposed collection of information requirements were separately
addressed in the 2023 Streamlining MSP Enrollment final rule. The
provisions were specific to individuals dually eligible for both
Medicaid and Medicare and include: Information Collection Requests
(ICRs) Regarding Facilitating Enrollment Through Medicare Part D Low-
Income Subsidy ``Leads'' (Sec. Sec. 435.601, 435.911, and 435.952),
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), and
ICRs Regarding Automatically Enrolling Certain SSI Recipients Into the
Qualified Medicare Beneficiaries Group (Sec. 435.909).
IV. Regulatory Impact Analysis
We received one public comment on the RIA section of the September
2022 proposed rule, which we summarize and respond to here.
Comment: One commenter recommended that CMS include in its RIA more
qualitative estimates of the positive impacts of this final rule, in
addition to quantitative estimates of administrative spending and
spending due to increased enrollment as well as savings to States and
beneficiaries. Specifically, the commenter suggested that we highlight
the improved health and economic outcomes for beneficiaries of
increased enrollment and decreased churn. Likewise, the commenter urged
CMS to describe the distributive impacts of the rule as well as the
positive effects on health equity.
Response: We agree that we anticipate unquantified positive impacts
on beneficiaries as a result of States implementing the policies in
this final rule. As discussed in the background section of this final
rule and in response
[[Page 22838]]
to similar comments in section II. of this preamble, Medicaid and CHIP
play a key role in the United States health care system. These programs
make it possible for tens of millions of Americans to access the health
care services they need. While Medicaid and CHIP coverage can have a
huge impact on the individuals served by these programs, we agree that
the full value of the programs goes well beyond the individual
beneficiaries.
Again, we agree with commenters that the streamlined eligibility
and enrollment processes established by this rule will reduce the
enrollment churn of eligible individuals on and off Medicaid and CHIP.
Commenters noted that a reduction in enrollment churn will not only
improve the health of beneficiaries, but it will also protect
individual beneficiaries, and their families, from medical debt and
associated stressors. We agree with commenters that reduced enrollment
churn has the potential to reduce administrative burdens for
beneficiaries and their health care providers, improve the ability of
beneficiaries and their providers to form lasting relationships, and
reduce the need for high-cost interventions that can result from
delayed care. We also agree with comments on the broader community
impact of this rule. We believe that healthier beneficiaries can be
more productive in their homes, their work, and their communities.
We also received one comment specifically related to the rule's
collection of information requirements. The comment and our response
can be found below.
Comment: One commenter questioned whether the cost savings that CMS
claimed that States should achieve once automation is in place are
meaningful, since, in many States, most of the Medicaid operations are
automated other than the non-MAGI caseloads. According to the
commenter, the system, policy, and procedural updates required to
implement this rule will need to be prioritized and developed over
several years. For example, a small to medium build can take up to 12
months, while a significant build can take 24-36 months, depending on
the complexity of the systems and the number of competing priorities.
States' challenges include staff turnover and competing priorities, and
any administrative savings from this rule would take additional years
to realize.
Response: We understand that State system updates, such as those
needed to accept applications and supplemental forms via additional
modalities, will take time and resources. However, we find this to be a
reasonable investment given the reduction in beneficiary burden that
will result from being able to submit required information in whatever
modality best fits the needs of the applicant or beneficiary.
Additionally, while encouraged, there is no requirement for States to
integrate non-MAGI with MAGI systems but rather to make non-MAGI
renewals possible through the same modalities--for example, paper,
phone, web-based--as MAGI renewals. We do recognize the operational
challenges States face and are finalizing these requirements so that
they are effective using a phased approach (see section II.F for a list
of compliance dates for each provision in this final rule).
We remind States that enhanced FFP is available, in accordance with
Sec. 433.112(b)(14), at a 90 percent matching rate for the design,
development, or installation of improvements to Medicaid eligibility
determination systems, in accordance with applicable Federal
requirements. Enhanced FFP is also available at a 75 percent matching
rate for operations of such systems, in accordance with applicable
Federal requirements.
A. Statement of Need
We have learned through our experiences in working with States and
other interested parties 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 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 final rule will 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 Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), Executive Order 14094 on Modernizing Regulatory
Review (hereinafter, the Modernizing E.O.) (April 6, 2023), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 on Regulatory Planning and Review and 13563
on Improving Regulation and Regulatory Review 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). The
Modernizing E.O. amends section 3(f)(1) of Executive Order 12866. The
amended 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 $200 million or more in
any 1 year (adjusted every 3 years by the Administrator of the Office
of Information and Regulatory Affairs (OIRA) for changes in gross
domestic product), or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, territorial, or
tribal governments or communities; (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) raise legal or policy issues for which
centralized review would meaningfully further the President's
priorities or the principles set forth in this Executive order, as
specifically authorized in a timely manner by the Administrator of OIRA
in each case.
OIRA must be prepared for major rules with significant regulatory
action(s) or with economically significant effects ($200 million or
more in any 1 year). Based on our estimates,
[[Page 22839]]
the OIRA has determined this rulemaking is significant per section
3(f)(1) as measured by the $200 million or more in any 1-year
threshold, and hence is also a major rule under Subtitle E of the Small
Business Regulatory Enforcement Fairness Act of 1996 (also known as the
Congressional Review Act). 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 final rule is estimated to be
$45.15 billion (in real FY 2024 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 $37.39 billion paid
by the Federal Government and $23.20 billion paid by the States, and a
reduction of $15.44 billion in Federal Marketplace subsidies.
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 $9.0 million to $47.0 million in any one year. Individuals
and States are not included in the definition of a small entity. Since
this final rule would only impact States and individuals, we do not
believe that this final rule will have a significant economic impact on
a substantial number of small businesses.
In addition, section 1102(b) of the Act requires us 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 604 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 final 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 final rule would not have a significant impact on
the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act (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. In 2024,
that is approximately $183 million. We believe that this final rule
would have such an effect on spending by State, local, or tribal
governments but not by private sector entities.
C. 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 2024 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. We have assumed
that the effective date of the rule would be October 1, 2024, with
provisions being effective on the schedule described in this rule. In
addition, we have relied on the data sources and assumptions described
in the next section to develop estimates for specific provisions of
this final rule.
D. Anticipated Effects
To derive average administrative burdens for each provision in this
rule, we used data from the U.S. Bureau of Labor Statistics' (BLS) May
2022 National Occupational Employment and Wage Estimates (https://www.bls.gov/oes/2022/may/oes_nat.htm). Table 3 presents BLS' mean
hourly wage along with our estimated cost of fringe benefits and other
indirect costs (calculated at 100 percent of salary) and our adjusted
hourly wage.
[GRAPHIC] [TIFF OMITTED] TR02AP24.002
States: To estimate State costs, it was important to take into
account the Federal Government's contribution to the cost of
administering the Medicaid and CHIP programs. The Federal Government
provides funding based on a 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 in this final rule, 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
[[Page 22840]]
higher. As such, in taking into account the Federal contribution to the
costs of administering the Medicaid and CHIP 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.
Beneficiaries: We believe that the cost for beneficiaries
undertaking administrative and other tasks on their own time is a post-
tax wage of $21.98/hr. While we used BLS wage data to estimate the cost
of our proposed provisions, this final rule uses the Valuing Time in
U.S. Department of Health and Human Services Regulatory Impact
Analyses: Conceptual Framework and Best Practices,\25\ which identifies
the approach for valuing time when individuals undertake activities on
their own time. To derive the costs for beneficiaries, we used a
measurement of the usual weekly earnings of wage and salary workers of
$1,059 \26\ for 2022, divided by 40 hours to calculate an hourly pre-
tax wage rate of $26.48/hr. This rate is adjusted downwards by an
estimate of the effective tax rate for median income households of
about 17 percent or $4.50/hr ($26.48/hr x 0.17), resulting in the post-
tax hourly wage rate of $21.98/hr ($26.48/hr-$4.50/hr). Unlike our
State and private sector wage adjustments, we are not adjusting
beneficiary wages for fringe benefits and other indirect costs, since
the individuals' activities, if any, would occur outside the scope of
their employment.
---------------------------------------------------------------------------
\25\ https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//176806/VOT.pdf.
\26\ https://fred.stlouisfed.org/series/LEU0252881500A.
---------------------------------------------------------------------------
Total Administrative Burden and Savings: As outlined in Table 4, in
total, we expect this rule will result in a one-time administrative
burden of 53,409 labor hours for States and savings of minus 7,207,971
labor hours for beneficiaries, as well as $2,589,410 in one-time
spending for States and one-time savings of minus $158,431,203 for
beneficiaries. However, we also expect the rule to result in annual
reductions in administrative burden of minus 3,048,036 labor hours for
States and minus 21,859,547 labor hours for beneficiaries, as well as
an annual reduction of minus $66,014,177 in spending by States and
minus $480,472,849 by beneficiaries.
BILLING CODE 4120-01-P
[[Page 22841]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.003
[[Page 22842]]
BILLING CODE 4120-01-C
1. Facilitating Enrollment by Allowing Medically Needy Individuals To
Deduct Prospective Medical Expenses (Sec. 435.831(g))
The amendments under Sec. 435.831(g) will permit States to project
medical expenses of noninstitutionalized individuals that the State can
determine with reasonable certainty will be constant and predictable 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 individual or
State agency. Over time, this will reduce the burden on the State by
making the spenddown process much more predictable for many
noninstitutionalized individuals in the medically needy group. This
will also reduce the burden on the individual who will not need to wait
for coverage until they've reached their spenddown each budget period
but instead will remain continuously enrolled while their medical
expenses remain predictable. However, there will 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
reconsider financial eligibility each budget period once the spenddown
amount is reached.
This provision is only relevant to the 36 States that have opted to
cover the medically needy or are 209(b) States, and it is optional for
those States. Assuming all 36 States take up the option, we estimate
that 36 States will 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 reconsider financial eligibility
each month once the spenddown amount is reached. We estimate it will
take an average of 200 hours per State to develop and code the changes
to utilize projected noninstitutional expenses when determining
financial eligibility for medically needy individuals. Of those 200
hours, we estimate it will take a Database and Network Administrator
and Architect 50 hours at $106.16/hr and a Computer Programmer 150
hours at $98.84/hr. Therefore, we estimate a one-time burden of 7,200
hours (36 States x 200 hr) at a cost of $724,824 (36 States x [(50 hr x
$106.16/hr) + (150 hr x $98.84/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
will be $362,412 ($724,824 x 0.5).
We estimate that under new Sec. 435.831(g), each of all 36 States
will no longer need to collect information each budget period on the
incurred medical expenses for 25 beneficiaries in the medically needy
or mandatory 209(b) groups annually. We estimate it currently takes an
Eligibility Interviewer, Government Programs, 2 hours at $48.10/hr and
an Interpreter and Translator 1 hour at $59.36/hr to review the
incurred medical expenses submitted for 6 months per year per
beneficiary. Therefore, each State will save minus 450 hours (-3 hr x 6
months/year x 25 beneficiaries) and minus $23,334 (6 months/year x -25
beneficiaries x [(2 hr x $48.10/hr) + (1 hr x $59.36/hr)]) annually by
not processing such incurred expenses each budget period for each
individual in the medically needy or mandatory 209(b) groups. In
aggregate, we estimate this provision will save all 36 States minus
16,200 hours (-450 hr x 36 States) and minus $840,024 (-$23,334 x 36
States). When taking into account the 50 percent Federal contribution
to Medicaid and CHIP program administration, the estimated State
savings will be minus $420,012 (-$840,024 x 0.5).
Likewise, we estimate that under new Sec. 435.831(g), those same
25 beneficiaries will no longer need to submit evidence of the incurred
medical expenses that their States have designated as being reasonably
constant and predictable but instead will remain continuously enrolled
and reconcile actual expenses with projected expenses periodically,
thus reducing the burden on the individuals. We estimate that it
currently takes a beneficiary 2 hours at $21.98/hr to submit
information each budget period in an average of 6 months per year.
Therefore, beneficiaries in each State will save a total of minus 300
hours (-2 hr x 6 months/year x 25 beneficiaries/State) and minus $6,594
(-300 hr x $21.98/hr) annually. In aggregate, under this provision,
beneficiaries across all 36 States will save minus 10,800 hours (-300
hr x 36 States) and minus $237,384 (-$6,594 x 36 States) annually.
When taking into account the Federal contribution, we estimate a
one-time State savings of minus $57,600 ($362,412-$420,012).
[[Page 22843]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.004
2. Application of Primacy of Electronic Verification and Reasonable
Compatibility Standard for Resource Information (Sec. Sec. 435.952 and
435.940)
States have inquired about 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 under Sec. Sec. 435.952 and 435.940 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 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 changes to Sec. Sec. 435.952 and 435.940, we estimate
that the States will save an Eligibility Interviewer 1 hour per
beneficiary at $48.10/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 minus 510,000 hours
(51 States x 10,000 individuals/State x -1 hr) and minus $24,531,000 (-
510,000 hr x $48.10/hr). When taking into account the 50 percent
Federal contribution to Medicaid and CHIP program administration, the
estimated State savings will be minus $12,265,500 (-$24,531,000 x 0.5).
Under the changes to Sec. Sec. 435.952 and 435.940, we estimate
that 10,000 individuals per State will save on average 1 hour each at
$21.98/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 $11,209,800 (-510,000 hr x $21.98/hr).
[[Page 22844]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.005
3. Verification of Citizenship and Identity (Sec. 435.407)
The amendments under Sec. 435.407 will simplify eligibility
verification procedures by considering verification of birth with a
State vital statistics agency or verification of citizenship with DHS
SAVE as stand-alone evidence of citizenship. Likewise, under this
provision, separate verification of identity will not be required. This
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 will apply to the
roughly 100,000 applicants per year for whom States cannot verify U.S.
citizenship with SSA.
We estimate that the amendments under Sec. 435.407 will take a
Management Analyst 15 minutes (0.25 hr) per applicant at $100.64/hr to
check with the State's vital statistics agency for verification of U.S.
citizenship of an applicant. In aggregate for all 56 States, this
provision will add a burden of 25,000 hours (0.25 hr x 100,000
applicants) at a cost of $2,516,000 (25,000 hr x $100.64/hr). Taking
into account the 50 percent Federal contribution to Medicaid and CHIP
program administration, the estimated State share will be $1,258,000
($2,516,000 x 0.5).
In contrast, we estimate that the amendments under Sec. 435.407
will save an Eligibility Interviewer 45 minutes (0.75 hr) at $48.10/hr
by no longer needing to request and process paper documentation to
verify identity. In aggregate, all 56 States will save minus 75,000
hours (0.75 hr x -100,000 applicants) and minus $3,607,500 (-75,000 hr
x $48.10/hr). Taking into account the 50 percent Federal contribution
to Medicaid and CHIP program administration, the estimated State
savings will be minus $1,803,750 (-$3,607,500 x 0.5).
When taking into account the Federal contribution, we estimate a
total annual State savings of minus $545,750 ($1,258,000 - $1,803,750).
For individuals, we estimate that the amendments under Sec.
435.407 would save each applicant 1 hour at $21.98/hr plus an average
of approximately $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 to verify identity. In aggregate, all 100,000 applicants
would save 100,000 hours (1 hr x -100,000 applicants) and minus
$2,198,000 (-100,000 hr x $21.98/hr) in labor and minus $1,000,000
($10.00 x -100,000 applicants) in non-labor related costs.
[[Page 22845]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.006
4. Aligning Non-MAGI Enrollment and Renewal Requirements With MAGI
Policies (Sec. 435.916)
The amendments under Sec. 435.916(a) will 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. Section 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. Section
435.916(b)(2) will require States to provide all beneficiaries,
including non-MAGI beneficiaries, whose eligibility cannot be renewed
without contacting the individual in accordance with 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. Section 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) had 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 conducted 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 Sec. 435.916(a), we estimate it will 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 will take
a Database and Network Administrator and Architect 50 hours at $106.16/
hr and a Computer Programmer 150 hours at $98.84/hr. In aggregate, we
estimate a one-time burden of 1,200 hours (6 States x 200 hr) at a cost
of $120,804 (6 States x [(50 hr x $106.16/hr) + (150 hr x $98.84/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 will be $60,402 ($120,804 x
0.5).
We also estimate that 21 States do not pull available non-MAGI
beneficiary information to prepopulate a renewal form.\27\ Under Sec.
435.916(b)(2), we estimate it will 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 will take a Business
Operations Specialist 50 hours at $80.08/hr and a Management Analyst
150 hours at $100.64/hr. In aggregate, we estimate a one-time burden of
4,200 hours (21 States x 200 hr) at a cost of $401,100 (21 States x
[(50 hr x $80.08/hr) + (150 hr x $100.64/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 will be $200,550 ($401,100 x
0.5).
---------------------------------------------------------------------------
\27\ 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 or telephone 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 \28\ for whom States will no
[[Page 22846]]
longer need to conduct an in-person interview as part of the renewal
process. Under Sec. 435.916(b)(2), we estimate that an Eligibility
Interviewer will save on average 0.5 hours per beneficiary at $48.10/
hr. In aggregate, we estimate this will save States minus 1,344,193
hours (0.5 hr x -2,688,386 beneficiaries) and minus $64,655,683 (-
1,344,193 hr x $48.10/hr). Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State savings will be minus $32,327,842 (-$64,655,683 x 0.5).
---------------------------------------------------------------------------
\28\ 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 burdens related to Sec. 435.916, taking into
account the Federal contribution, we estimate an annual State savings
of minus $32,327,842 with a one-time cost of $260,952 ($200,550 +
$60,402).
We estimate that in the aforementioned six States 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
\29\ who would no longer need to submit a renewal under Sec.
435.916(a). Assuming impacted beneficiaries are evenly distributed
across these six States, and assuming it currently takes each
beneficiary 1 hour at $21.98/hr to submit a renewal form, in aggregate,
beneficiaries across these six States will save minus 2,688,386 hours
(-2,688,386 non-MAGI beneficiaries x 1 hr) and minus $59,090,724 (-
2,688,386 hr x $21.98/hr).
---------------------------------------------------------------------------
\29\ 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 \30\ who will no longer need to travel to a Medicaid
office to complete an in-person interview in order to maintain coverage
under 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 will save minus 2,688,386 hours (-
2,688,386 beneficiaries x 1 hr) and minus $59,090,724 (-2,688,386 hr x
$21.98/hr) in labor and minus $26,883,860 (-2,688,386 non-MAGI
beneficiaries x $10.00) in non-labor related costs for a total savings
of minus $85,974,584 (-$59,090,724-$26,883,860).
---------------------------------------------------------------------------
\30\ Ibid.
---------------------------------------------------------------------------
Under 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 \31\ 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.\32\ Therefore, we estimate
74,603 beneficiaries (2,688,386 beneficiaries/56 States x 0.042 x 37
States) will newly not need to complete a full application to reenroll
in coverage because they will be in a 90-day reconsideration period
under 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 $21.98/hr to submit a new full application, this
provision will save, in aggregate, beneficiaries across these 37 States
a total of minus 74,603 hours (-74,603 beneficiaries x 1 hr) and minus
$1,639,774 (-74,603 hr x $21.98/hr).
---------------------------------------------------------------------------
\31\ Ibid.
\32\ 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
5,451,375 hours (-2,688,386 hr -2,688,386 hr -74,603 hr) and minus
$146,705,082 (-$59,090,724-$85,974,584-$1,639,774).
BILLING CODE 4120-01-P
[[Page 22847]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.007
BILLING CODE 4120-01-C
5. Acting on Changes in Circumstances (Sec. Sec. 435.916, 435.919, and
457.344)
The amendments under Sec. 435.919 will, 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 will 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 requirements under Sec. Sec. 435.912, 435.919, and
457.344 will result in more time for beneficiaries to respond to the
State's request for additional information, it is likely that fewer
beneficiaries will lose eligibility as a result of this provision. As
well, because the amendments will, 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) \33\ to submit
additional information to maintain their eligibility, it is likely that
beneficiaries will not need to complete and States will 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.\34\
---------------------------------------------------------------------------
\33\ CMS, November 2021 Medicaid & CHIP Enrollment. Available at
https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
\34\ 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
will 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 at least 30 calendar days to respond. Therefore, we
estimate it will 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 will take a Business Operations
Specialist 4 hours (and 2 hr for CHIP) at $80.08/hr and a Management
Analyst 2 hours (and 1 hr for CHIP) at $100.64/hr. We estimate one-time
burden of 306 hours for Medicaid (51 Medicaid States \35\ x 6 hr) and
120 hours for CHIP (40 CHIP States x 3 hr) at a cost of $26,602 for
Medicaid (51 States x [(4 hr x $80.08/hr) + (2 hr x $100.64/hr)]) and
$10,432 for CHIP (40 States x [(2 hr x $80.08/hr) + (1 hr x $100.64/
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 shares will be $13,301 for
Medicaid ($26,602 x 0.5) and $5,216 for CHIP ($10,432 x 0.5).
---------------------------------------------------------------------------
\35\ 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 will 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
[[Page 22848]]
to include language allowing the beneficiary a 90-day reconsideration
period. Of those 6 hours, we estimate it will take a Business
Operations Specialist an average of 4 hours at $80.08/hr and a
Management Analyst 2 hours at $100.64/hr. In aggregate, we estimate a
one-time burden of 336 hours (56 States x 6 hr) at a cost of $29,210
(56 States x [(4 hr x $80.08/hr) + (2 hr x $100.64/hr)]) for revising
the termination notice. Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State share will be $14,605 ($29,210 x 0.5).
We also estimate that it will save each State 50 hours to process
full applications annually for beneficiaries who will no longer lose
coverage and later reenroll. Specifically, we estimate it will save an
Eligibility Interviewer 40 hours at $48.10/hr and an Interpreter and
Translator 10 hours at $59.36/hr. In aggregate, we estimate an annual
savings of minus 2,800 hours (56 States x -50 hr) and minus $140,986
([(40 hr x $48.10/hr) + (10 hr x $59.36/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 will be minus $70,493 (-$140,986 x 0.5).
When taking into account the Federal contribution, we estimate a
total State savings of minus $37,371 ($13,301 + $5,216 + $14,605-
$70,493).
We estimate that it will save each beneficiary who is disenrolled
after a change in circumstance 2 hours at $21.98/hr to no longer submit
a full application. As stated above under burden #4, approximately 4.2
percent of beneficiaries are disenrolled from coverage and reenroll
within 90 days.\36\ 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),\37\ we estimate approximately 3,603,986 beneficiaries
(85,809,179 beneficiaries x 0.042) will save this time not reapplying
after a change in circumstance. In aggregate, we estimate that this
provision will save beneficiaries minus 7,207,972 hours (-3,603,986
beneficiaries x 2 hr) and minus $158,431,225 (-7,207,972 hr x $21.98/
hr).
---------------------------------------------------------------------------
\36\ Kaiser Family Foundation (2021). ``Medicaid Enrollment
Churn and Implications for Continuous Coverage Policies.'' Available
at: https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-churn-and-implications-for-continuous-coverage-policies/.
\37\ CMS, ``November 2021 Medicaid & CHIP Enrollment.''
Available at https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
---------------------------------------------------------------------------
BILLING CODE 4120-01-P
[[Page 22849]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.008
6. Timely Determination and Redetermination of Eligibility in Medicaid
(Sec. 435.912) and CHIP (Sec. 457.340)
a. State Plan Changes
The amendments in this section will 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 amendments will apply the current
requirements that apply at application to redeterminations either at
renewal or based on changes in circumstances. 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
amendments will 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 amendments will require
States to establish performance and timeliness standards for
[[Page 22850]]
determining Medicaid eligibility, as well as determining eligibility
for CHIP and BHP when an individual is determined ineligible for
Medicaid.
Lastly, the amendments under Sec. 435.912 will for the first time
establish set timeframes for when States must complete existing
requirements related to acting on change in circumstances. The
amendments will require States to process a redetermination by the end
of month that occurs 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 by the end of month that occurs 60 calendar
days if the State needs to request additional information from the
individual.
We estimate that it will take each State 3 hours to update their
Medicaid State plans via a State plan amendment (SPA) to establish
timeliness standards for the State to process redeterminations. Of
those 3 hours per SPA, we estimate it will take a Business Operations
Specialist 2 hours at $80.08/hr and a General Operations Manager 1 hour
at $118.14/hr to update and submit each SPA to us for review. In
aggregate, we estimate a one-time burden of 168 hours (56 States x 3
hr) at a cost of $15,585 (56 responses x ([2 hr x $80.08/hr] + [1 hr x
$118.14/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 will be $7,792
($15,585 x 0.5).
b. Updating Notices and Systems
We estimate that it will 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 for the
State to process their redeterminations. Of those 6 hours, we estimate
it will take a Business Operations Specialist 4 hours at $80.08/hr and
a Computer Programmer 2 hours at $98.84/hr. In aggregate, we estimate a
one-time burden of 336 hours (56 States x 6 hr) at a cost of $29,008
(56 States x ([4 hr x $98.84/hr] + [2 hr x $80.08/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 will be $14,504 ($29,008 x 0.5).
We also estimate it will take an average of 200 hours per State to
develop and code the changes to each State's system to update the
timeframes for beneficiaries to return additional information and to
implement a reconsideration process for beneficiaries who are
disenrolled for failure to return information within the newly
established timeframes but who return the information within the
reconsideration period. Of those 200 hours, we estimate it will take a
Business Operations Specialist 50 hours at $80.08/hr and a Management
Analyst 150 hours at $100.64/hr. In aggregate, we estimate a one-time
State burden of 11,200 hours (56 States x 200 hr) at a cost of
$1,069,600 ([(50 hr x $80.08/hr) + (150 hr x $100.64/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 will be $534,800 ($1,069,600
x 0.5).
c. Total State Cost
When taking into account the Federal contribution, we estimate a
total one-time State cost of $557,096 ($7,792 + $14,504 + $534,800).
[GRAPHIC] [TIFF OMITTED] TR02AP24.009
7. Agency Action on Updated Address Information (Sec. Sec. 435.919 and
457.344)
This rule establishes the steps States must take when beneficiary
mail is returned to the agency. All States must establish a data
exchange to obtain updated beneficiary contact information from the
USPS and contracted managed care plans. When updated in-State contact
information is found, States must accept that information as reliable,
update the beneficiary's case record, and notify the beneficiary of the
change. If an in-State change of address is obtained from other data
sources and
[[Page 22851]]
cannot be confirmed as reliable by information available from USPS or
contracted managed care plans, then the State must make a good-faith
effort (at least two attempts to contact the beneficiary through at
least two different modalities) to confirm the change. When updated
out-of-State contact information is obtained from any source, the State
must always make a good-faith effort to contact the beneficiary. If the
State is unable to confirm that the beneficiary continues to meet State
residency requirements, the State must terminate the beneficiary's
eligibility, subject to notice and fair hearing rights. When mail is
returned with no forwarding address, and the State is unable to obtain
a new address (after making a good-faith effort), the State must
suspend or terminate the beneficiary's enrollment, or move the
beneficiary from a managed care program to fee-for-service Medicaid.
In the September 2022 proposed rule, we estimated that, to
implement this provision, States with managed care delivery systems in
their Medicaid and CHIP programs would need to update their contracts
to enter into regular data sharing arrangements with their managed care
plans to obtain up-to-date beneficiary contact information. However, we
know now that all States with managed care delivery systems have
already done this as a part of their activities to unwind from the
COVID-19 PHE, and so we are omitting this burden estimate from this
final rule.
In the same September 2022 proposed rule, we estimated, using our
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, the NCOA database, etc., we estimated
that it would take 28 States each 40 hours to establish these data-
sharing agreements. Through ongoing monitoring of States' activities to
unwind from the COVID-19 PHE, we now know that 37 States have waiver
authority under section 1902(e)(14)(A) of the Act to check the NCOA
database and update beneficiary contact information based on that
information without checking with the beneficiary first, and so we no
longer need to use a proxy here. We are updating our estimate that the
additional burden of implementing this provision will apply to only 19
States (56 States - 37 States with waiver authority) instead of 28,
thus reducing the burden. Of those 40 hours, we estimate it will take a
Procurement Clerk 10 hours at $44.76/hr and a Management Analyst 30
hours at $100.64/hr. In aggregate, we estimate a one-time burden of 760
hours (40 hr x 19 States) at a cost of $65,869 ([(10 hr x $44.76/hr) +
(30 hr x $100.64/hr)] x 19 States). Taking into account the 50 percent
Federal contribution to Medicaid and CHIP program administration, the
estimated State share will be $32,935 ($65,869 x 0.5).
In the September 2022 proposed rule, we also assumed that 15
percent \38\ of all Medicaid beneficiaries (12,871,377 beneficiaries =
85,809,179 beneficiaries x 0.15) \39\ generate returned mail each year,
and so we estimated that it will 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. However, in this final rule we
are amending our proposal, as described in detail in section II.B.4. of
this preamble, to only require that States send a single notice by mail
to the forwarding address. Therefore, we revise our estimate here to
omit the burden for mailing an additional notice to the original
address on file. We estimate that it will take a Management Analyst in
each State 0.0083 hr/notice at $100.64/hr to program the sending of one
extra notice for a total of 106,832 hours (0.0083 hr x 12,871,377
beneficiaries) at a cost of $10,751,616 (106,832 hr x $100.64/hr).
Taking into account the 50 percent Federal contribution to Medicaid and
CHIP program administration, the estimated State share will be
$5,375,808 ($10,751,616 x 0.5). We also estimate this amendment will
create additional burden in postage costs for all States totaling
$7,722,826 ($0.60/notice \40\ x 12,871,377 \41\). When taking into
account the 50 percent Federal contribution, the estimated State share
will be $3,861,413 ($7,722,826 x 0.5). In aggregate for the above
burdens, taking into account the 50 percent Federal contribution to
Medicaid and CHIP program administration, the estimated State share
will be $9,237,221 ($5,375,808 + $3,861,413).
---------------------------------------------------------------------------
\38\ 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/.
\39\ 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.
\40\ This amount is based on the current USPS postage rate for
standard letters.
\41\ 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 will take an Eligibility Interviewer an average
of 5 minutes (0.083 hr) per beneficiary at $48.10/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. Because this final rule permits States to automatically
update in-State changes of address when they can be verified by USPS or
a contracted managed care plan, we do not believe States will need to
conduct additional outreach to all 12.9 million beneficiaries. However,
until we have a better understanding of the volume of returned mail
that will require such follow-up outreach, we are maintaining our
proposed estimate here. In aggregate, we estimate this will add
1,068,324 hours (0.083 hr x 12,871,377 beneficiaries) at a cost of
$51,386,398 (1,068,324 hr x $48.10/hr). Taking into account the 50
percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share will be $25,693,199
($51,386,398 x 0.5).
In total, for the burden related to Sec. Sec. 435.919 and 457.344,
when taking into account the 50 percent Federal contribution, we
estimate a total State cost of $34,963,355 ($32,935 + $9,237,221 +
$25,693,199).
We estimate that current State policies on returned mail may have
contributed to a drop of approximately 2.125 percent in enrollment.\42\
Applying that change, we estimate that 273,517 beneficiaries in total
(12,871,377 beneficiaries x 0.02125), or 5,363 beneficiaries in each of
51 States, will no longer be disenrolled after non-response to a State
notice generated by returned mail and will no longer need to reapply to
Medicaid. Therefore, we estimate that these amendments will lead to a
reduction in burden for 273,517 beneficiaries who will otherwise be
disenrolled after generating returned mail. We estimate that these
beneficiaries will each save 2 hours of time not needed to reapply for
Medicaid at $21.98/hr. In aggregate, we estimate this amendment will
save beneficiaries in all States minus 547,034
[[Page 22852]]
hours (-273,517 beneficiaries x 2 hr) and minus $12,023,807 (-547,034
hr x $21.98/hr).
---------------------------------------------------------------------------
\42\ 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/.
[GRAPHIC] [TIFF OMITTED] TR02AP24.010
8. Improving Transitions Between Medicaid and CHIP (Sec. Sec.
435.1200, 457.340, 457.348, 457.350, and 600.330)
In States with separate Medicaid and CHIP programs, Sec. 435.1200
will require both the Medicaid and CHIP agencies to make system changes
to transition the eligibility of individuals more seamlessly 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 Sec. 435.1200 will 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 will take a Procurement
Clerk 10 hours at $44.76/hr and a Management Analyst 30 hours at
$100.64/hr. In aggregate, we estimate a one-time burden of 1,600 hours
(40 hr x 40 States) at a cost of $138,672 [(10 hr x $44.76/hr) + (30 hr
x $100.64/hr) x 40 States]. Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State share will be $69,336 ($138,672 x 0.5).
We estimate that it will 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. Of those 42 hours, we estimate
it will take a Business Operations Specialist 22 hours at $80.08/hr and
a Management Analyst 20 hours at $100.64/hr. In aggregate, we estimate
a one-time burden of 1,680 hours (40 States x 42 hr) at a cost of
$150,982 ([(22 hr x $80.08/hr) + (20 hr x $100.64/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 will be $75,491 ($150,982 x
0.5).
We estimate that it will 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 an 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 will take a Business
[[Page 22853]]
Operations Specialist 50 hours at $80.08/hr and a Management Analyst
150 hours at $100.64/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
$764,000 ([(50 hr x $80.08/hr) + (150 hr x $100.64/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 will be $382,000 ($764,000 x
0.5).
We estimate that 25 percent of States with a separate CHIP (40
States x 0.25 = 10) are already using combined notices and will 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 will 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 will
take a Business Operations Specialist 14 hours at $80.08/hr and a
Management Analyst 32 hours at $100.64/hr. In aggregate, we estimate a
one-time burden of 1,380 hours (30 States x 46 hr) at a cost of
$130,248 ([(14 hr x $80.08/hr) + (32 hr x $100.64/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 will be $65,124 ($130,248 x 0.5).
For the burden related to Sec. Sec. 435.1200, 457.340, 457.348,
457.350, and 600.330, when taking into account the Federal
contribution, we estimate a total cost of $591,951 ($69,336 + $75,491 +
$382,000 + $65,124).
We also estimate that this provision will 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 $56,582,586 (-2,574,276 hr x $21.98/
hr).
We estimate that it will save each beneficiary 4 hours previously
spent reapplying for coverage. Assuming 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
$18,860,862 (-858,092 hr x $21.98/hr).
For beneficiaries, we estimate a total savings of minus $75,443,448
(-$56,582,586-$18,860,862).
BILLING CODE 4120-01-P
[[Page 22854]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.011
[[Page 22855]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.012
BILLING CODE 4120-01-C
9. Eliminating Requirement To Apply for Other Benefits (Sec. 435.608)
This rule removes 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.\43\ 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 applied for a benefit
solely to obtain or keep Medicaid coverage.
---------------------------------------------------------------------------
\43\ CMS, November 2021 Medicaid & CHIP Enrollment. Available at
https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
---------------------------------------------------------------------------
If we estimate that, in a year, 5 percent of beneficiaries need to
apply for another benefit, that will be 2,300,000 people who are no
longer required to apply due to the removal of 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 we did not estimate the burden reduction
for Medicaid and CHIP.
We estimate it will 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 will take a
Database and Network Administrator and Architect 50 hours at $106.16/hr
and a Computer Programmer 150 hours at $98.84/hr. For States, we
estimate a total one-time burden of 11,200 hours (56 States x 200 hr)
at a cost of $1,127,504 ([(50 hr x $106.16/hr) + (150 hr x $98.84/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 will be $563,752
($1,127,504 x 0.5).
[[Page 22856]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.013
10. 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. We are
finalizing the proposal to revise Sec. 435.956(b)(4) to remove the
option for States to establish limits on the number of ROPs. Under
revised Sec. 435.956(b)(4), all 56 States will be prohibited from
imposing limitations on the number of ROPs that an individual may
receive.
Since the option was established, 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, we have not received any inquiries about establishing
such a limitation. Therefore, we estimate that the amendments to Sec.
435.956(b)(4) will not lead to any change in burden on States.
11. Eliminating Requirement To Apply for Other Benefits (Sec. Sec.
435.608 and 436.608)
We anticipate a reduction in administrative burden for States
resulting from the elimination of the requirement to apply for other
benefits outlined in the preamble of this final rule. Specifically, we
estimate that this provision would save State Eligibility Interviewers
on average 1 hour per enrollee at $48.10/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 $110,630,000
(2,300,000 hrs x $48.10/hr). Taking into account the 50 percent Federal
contribution to Medicaid and CHIP program administration, the estimated
State share will be $55,315,000.
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 $21.98/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 minus $101,108,000 (4,600,000 hrs x $21.98/hr)
annually.
BILLING CODE 4120-01-P
[[Page 22857]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.014
BILLING CODE 4120-01-C
12. Recordkeeping (Sec. Sec. 431.17 and 457.965)
The amendments under Sec. Sec. 431.17 (Medicaid) and 457.965
(CHIP) 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 final rule
clearly defines the records, such as the date and basis of any
determination and the notices provided to the applicant/beneficiary.
Sections 431.17(c) and 457.965(c) establish a minimum records retention
period of 3 years, and Sec. Sec. 431.17(d) and 457.965(d) 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
Sec. Sec. 431.17(c) and 457.965(c), we estimate it will take an
average of 20 hours per State for a Management Analyst at $100.64/hr to
update each State's policies and procedures to retain records
electronically for 3 years minimum as well as the other changes
finalized in this rule. In aggregate, we estimate a one-time burden of
1,120 hours (56 States x 20 hr) at a cost of $112,717 (1,120 hr x
$100.64/hr) for completing the necessary updates. Taking into account
the 50 percent Federal contribution to Medicaid and CHIP program
administration, the estimated State share will be $56,358 ($112,717 x
0.5).
[[Page 22858]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.015
13. Prohibiting Premium Lock-Out Periods and Disenrollment for Failure
To Pay Premiums (Sec. Sec. 457.570 and 600.525(b)(2))
a. CHIP State Plan Changes
The amendments to Sec. Sec. 457.570 and 600.525(b)(2) will
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 Sec. 457.570, we estimate it will take a Management Analyst
2 hours at $100.64/hr and a General and Operations Manager 1 hour at
$118.14/hr in all 14 States that currently impose lock-out periods to
amend their CHIP State plans to remove the lock-out period and submit
in the Medicaid Model Data Lab (MMDL) portal for review. We estimate an
aggregate one-time burden of 42 hours (14 States x 3 hr) at a cost of
$4,472 (([2 hr x $100.64/hr] + [1 hr x $118.14/hr]) x 14 States).
Taking into account the 50 percent Federal contribution to Medicaid and
CHIP program administration, the estimated State share will be $2,236
($4,472 x 0.5).
b. BHP Blueprint Changes
Our amendments will require BHP States to revise their BHP
Blueprints to remove the premium lock-out period. Under Sec.
600.525(b)(2), in the one BHP State that imposes a lock-out period, we
estimate it will take a Management Analyst 2 hours at $100.64/hr and a
General and Operations Manager 1 hour at $118.14/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 $319
(([2 hr x $100.64/hr] + [1 hr x $118.14/hr]) x 1 State).
c. Total State Cost
In total for the burden related to Sec. Sec. 457.570 and
600.525(b)(2), taking into account the Federal contribution for the
CHIP-related changes, we estimate a total one-time cost for the State
of $2,555 ($2,236 + $319).
[GRAPHIC] [TIFF OMITTED] TR02AP24.016
[[Page 22859]]
14. Prohibition on Waiting Periods in CHIP (Sec. Sec. 457.65, 457.340,
457.350, 457.805, and 457.810)
The amendments to Sec. Sec. 457.65, 457.340, 457.350, 457.805, and
457.810 in the September 2022 proposed rule will 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 amendments
will 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 will
need to update their applications to eliminate the question requesting
attestation of recently lost coverage and all related follow-up
questions evaluating 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 will need to update the application to remove the
trigger to query the data source.
We estimate it will 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 will take a Database and Network
Administrator and Architect 50 hours at $106.16/hr and a Computer
Programmer 150 hours at $98.84/hr. In aggregate, we estimate a one-time
burden of 2,200 hours (11 States x 200 hr) at a cost of $221,474 ([(50
hr x $106.16/hr) + (150 hr x $98.84/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 will be $110,737 ($221,474 x 0.5).
We estimate it will take an average of 3 hours in each of 11 unique
States to update each State's CHIP SPAs in MMDL to eliminate the
waiting period and to document the other strategies the States will use
to monitor substitution of coverage. We estimate it will take a General
and Operations Manager 1 hour at $118.14/hr and a Business Operations
Specialist 2 hours at $80.08/hr. In aggregate, we estimate a one-time
burden for all States of 33 hours (11 States x 3 hr) and $3,061 ([(1 hr
x $118.14/hr) + (2 hr x $80.08/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 will be $1,531 ($3,061 x 0.5).
In total for the burden related to Sec. Sec. 457.65, 457.340,
457.350, 457.805, and 457.810, and taking into account the 50 percent
Federal contribution to Medicaid and CHIP program administration, the
estimated State share will be $112,268 ($110,737 + $1,531).
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR02AP24.017
[[Page 22860]]
BILLING CODE 4120-01-C
15. Prohibiting Annual and Lifetime Limits on Benefits (Sec. 457.480)
a. Programming Changes to Annual and Lifetime Limits
The amendments to Sec. 457.480 will 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 six 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 amendments will require 13 States to update
their systems and their CHIP SPAs to eliminate annual or lifetime
benefit limits.
We estimate it will 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 will take a Database and
Network Administrator and Architect 5 hours at $106.16/hr and a
Computer Programmer 15 hours at $98.84/hr. In aggregate, we estimate a
one-time burden across all 13 States of 260 hours (20 hr x 13 States)
and $26,174 ([(5 hr x $106.16/hr) + (15 hr x $98.84/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 will be $13,087 ($26,174 x
0.5).
b. Updating CHIP SPAs
The amendments to Sec. 457.480 will require States to submit
updated CHIP SPAs. We estimate it will take an average of 3 hours in
each of 13 unique States to update each State's CHIP SPAs in MMDL to
remove each of 21 different limits on annual and/or lifetime benefits
(calculated as 21/13, or approximately 1.62, limits per State if
distributed evenly). Of those 3 hours, we estimate it will take a
General and Operations Manager 1 hour at $118.14/hr and a Business
Operations Specialist 2 hours at $80.08/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 3 hr x 1.62 limits/
State) and $5,844 ([(1 hr x $118.14/hr) + (2 hr x $80.08/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 will be $2,922 ($5,844 x
0.5).
c. Total State Cost
In total for the burden related to Sec. 457.480, taking into
account the 50 percent Federal contribution, we estimate a total one-
time State cost of $16,009 ($13,087 + $2,922).
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR02AP24.018
BILLING CODE 4120-01-C
[[Page 22861]]
16. Provisions To Facilitate Medicaid Enrollment
For provisions that would facilitate Medicaid enrollment (including
the electronic verification and reasonable compatibility standard;
facilitating enrollment by allowing medically needy individuals to
deduct prospective medical expenses; 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 2028.
[GRAPHIC] [TIFF OMITTED] TR02AP24.019
17. 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 final 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, we 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 890,000 person-year equivalents by 2028.
[GRAPHIC] [TIFF OMITTED] TR02AP24.020
18. Eliminating Barriers to Access in Medicaid
We assumed that removing or limiting 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
420,000 person-year equivalents by 2028.
We have assumed that removing optional limitations on the number of
reasonable opportunity periods would have a negligible impact on
Medicaid enrollment and expenditures.
[[Page 22862]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.021
19. CHIP Changes and Eliminating Access Barriers in CHIP
We estimated that 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 130,000 person-year equivalents by 2028.
[GRAPHIC] [TIFF OMITTED] TR02AP24.022
20. 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 final 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.
To estimate the impacts this final rule would have on Marketplace
expenditures, we started by calculating the cost of care and Federal
subsidy payments for different households shifting from Medicaid and
CHIP to Marketplace coverage. 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 programs was 10 percent--
this also considers that some beneficiaries receive all or part of
their care outside of managed care delivery systems. 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 Medicaid and CHIP to
Marketplace coverage 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 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 this final 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 this final rule. To project costs
for future years that would be affected by this final rule,
[[Page 22863]]
we assumed that per capita costs, 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
final rule.
[GRAPHIC] [TIFF OMITTED] TR02AP24.023
There is a wide range of possible savings due to this effect of
this final 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 less than estimated here. This
uncertainty is addressed in the high and low range estimates provided
in the accounting statement (see section IV.F. of this final rule).
21. Total
In total, we project that these provisions would increase Medicaid
enrollment by 1.33 million by 2028 and would increase total Medicaid
spending by $58,950 million from 2024 through 2028. Of that amount, we
estimate that $36,240 million would be paid by the Federal Government
and $22,710 million would be paid by the States. We also estimate that
CHIP enrollment would increase by 0.13 million by 2028, and that total
CHIP expenditures would increase by $1,640 million from 2024 to 2028
($1,150 Federal and $490 million State costs). Table 24 shows the net
impacts for Medicaid and for CHIP.
[GRAPHIC] [TIFF OMITTED] TR02AP24.024
In addition to the effects on Medicaid and CHIP, we have also
estimated impacts on the Federal subsidies for Marketplace coverage.
Table 25 shows the net impact on Federal spending for Medicaid, CHIP,
and Federal Marketplace subsidies.
[[Page 22864]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.025
E. Alternatives Considered
In developing this final rule, the following alternatives were
considered:
1. Not Proposing the Rule
We considered not finalizing this rule and maintaining the status
quo. However, we believe this final 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
final 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. 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 in section
IV.D. of this final rule, as a one-time cost of $56,358) and sought
comment on whether States should retain flexibility to maintain records
in paper or other formats that reflect evolving technology.
F. Limitations of the Analysis
There are several 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 (and to a lesser extent, CHIP) has 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 optional in this final 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
spending in the entire Medicaid program ($839 billion in FY 2022), this
is still a relatively narrow range.
G. 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 10 showing the classification of the transfer payments with the
provisions of this final 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 IV.D. of this final rule. To address the significant
uncertainty related to these estimates, we have assumed that the costs
could be 50 percent greater than or less 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 less 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 the Marketplace subsidies; we believe this range adequately
accounts for the potential variation in costs or savings to those
programs as well. Finally, given
[[Page 22865]]
the significant effects of the COVID-19 pandemic and legislation
intended to address this, the current outlooks 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 26.
[GRAPHIC] [TIFF OMITTED] TR02AP24.026
H. Waiver Fiscal Responsibility Act Requirements
The Director of OMB has waived the requirements of section 263 of
the Fiscal Responsibility Act of 2023 (Pub. L. 118- 5) pursuant to
section 265(a)(2) of that Act.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on February 27, 2024.
List of Subjects
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 436
Aid to families with dependent children, Grant programs-health,
Guam, Medicaid, Puerto Rico, Supplemental Security Income (SSI), Virgin
Islands.
42 CFR Part 447
Accounting, Administrative practice and procedure, Drugs, Grant
programs--health, Health facilities, Health professions, Medicaid,
Reporting and recordkeeping requirements, Rural areas.
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 amends 42 CFR chapter IV as set forth below:
PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION
0
1. The authority citation for part 431 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
2. Section 431.10 is amended by--
0
a. Redesignating paragraphs (c)(1)(i)(A)(2) and (3) as paragraphs
(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:
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
3. 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 chapter 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 chapter.
(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.
[[Page 22866]]
(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 chapter, 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 chapter.
(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
chapter, 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--
(1) Except as provided in paragraph (c)(2) of this section, 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.
(2) For beneficiaries described in section 1917(a)(1)(B), (b)(1)(B)
and (b)(1)(C) of the Act, provide that the records required under
paragraph (b) of this section will be retained until the State has
satisfied the requirements of section 1917(b) of the Act (relating to
estate recovery).
(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) Consistent with paragraph (e) of this section, and to the
extent permitted under Federal law, 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 (or longer period specified in the request), except when there
is an administrative or other emergency beyond the agency's control.
(e) Release and safeguarding information. The agency must provide
safeguards that restrict the use or disclosure of information contained
in the records described in paragraph (b) of this section in accordance
with the requirements set forth in subpart F of this part.
0
4. Section 431.213 is amended by revising paragraph (d) to read as
follows:
Sec. 431.213 Exceptions from advance notice.
* * * * *
(d) The beneficiary's whereabouts are unknown, and the post office
returns mail directed to him indicating no forwarding address (see
Sec. 435.919(f)(4) of this chapter for procedures if the beneficiary's
whereabouts become known);
* * * * *
Sec. 431.231 [Amended]
0
5. Section 431.231 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
6. The authority citation for part 435 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
7. 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
in specified eligibility categories.
* * * * *
0
8. Section 435.223 is added to read 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.
0
9. 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 (10) and (12) through (18)
as paragraphs (b)(2) through (16), respectively; and
0
d. In newly redesignated paragraph (b)(16), removing the reference
``(17)'' and adding in its place the reference ``(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 (DHS)
Systematic Alien Verification for Entitlements (SAVE) Program or any
other process established by DHS to verify that an individual is a
citizen.
* * * * *
0
10. Section 435.601 is amended by--
0
a. In paragraph (b)(2), 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 or as permitted under paragraph (f)(1)(ii)(B) of this
section, in determining'';
0
b. In paragraph (d)(1) introductory text, 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''; and
0
c. Revising paragraph (f)(1).
The revision reads as follows:
Sec. 435.601 Application of financial eligibility methodologies.
* * * * *
(f) * * *
(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
[[Page 22867]]
agency must comply with the terms of Sec. 435.602.
* * * * *
Sec. 435.608 [Removed and Reserved]
0
11. Section 435.608 is removed and reserved.
0
12. 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 of this chapter and expenses for
prescription drugs, projected to the end of the budget period at the
Medicaid reimbursement rate;
* * * * *
0
13. 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 paragraph (a) of this
section.
(d) Requesting information from applicants. (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 applicants with a reasonable period of time of no less
than 15 calendar days, measured from the date the agency sends the
request, to respond and provide any necessary information;
(ii) Allow applicants to provide requested information through any
of the modes of submission specified in paragraph (a) of this section;
and
(iii) If the applicant subsequently submits the additional
information within 90 calendar days after the date of denial, or a
longer period elected by the agency, treat the additional information
as a new application and reconsider eligibility in accordance with the
application time standards at Sec. 435.912(c)(3) without requiring a
new application; and
(2) The agency may not require an in-person interview as part of
the application process.
* * * * *
0
14. Section 435.911 is amended by removing the heading from paragraph
(a) and revising paragraph (c) introductory text 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--
* * * * *
0
15. 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, promptly and without undue delay, for:
(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 Sec. 435.1200(e);
(4) Redetermining eligibility for current beneficiaries based on a
change in circumstances in accordance with Sec. 435.919(b)(1) through
(5), including determining eligibility or potential eligibility for,
and transferring individuals' electronic accounts to, other insurance
affordability programs pursuant to Sec. 435.1200(e); and
(5) Redetermining eligibility for current beneficiaries based on
anticipated changes in circumstances in accordance with Sec.
435.919(b)(6), including determining eligibility or potential
eligibility for, and transferring individuals' electronic accounts to,
other insurance affordability programs pursuant to Sec. 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);
(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
[[Page 22868]]
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)(1) through (5), cover the period
from the date the agency receives information about the reported
change, 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)(6), 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
chapter when the agency makes a determination resulting in termination
or other action as defined in Sec. 431.201 of this chapter.
(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) 90 calendar days for applicants who apply for Medicaid on the
basis of disability; and
(ii) 45 calendar days for all other applicants.
(4) Standard for renewals. The redetermination of eligibility at a
beneficiary's regularly scheduled renewal may not exceed the end of the
beneficiary's eligibility period, except as provided in paragraphs (e)
and (c)(4)(i) and (ii) of this section.
(i) In the case of a beneficiary who returns a renewal form less
than 30 calendar days prior to the end of the beneficiary's eligibility
period, the redetermination of eligibility may not exceed the end of
the month following the end of the beneficiary's eligibility period.
(ii) In the case of a beneficiary who is determined ineligible on
the basis for which they are currently receiving Medicaid (the
applicable modified adjusted gross income standard described in Sec.
435.911(b)(1) and (2) or another basis) and for whom the agency is
considering eligibility on another basis, the eligibility determination
on the new basis may not exceed--
(A) 90 calendar days for beneficiaries whose eligibility is being
determined on the basis of disability; and
(B) 45 calendar days for all other beneficiaries.
(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) 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;
(ii) 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; or
(iii) In the case of a beneficiary who is determined ineligible on
the basis for which they are currently receiving Medicaid (the
applicable modified adjusted gross income standard described in Sec.
435.911(b)(1) and (2) or another basis) and for whom the agency is
considering eligibility on another basis--
(A) 90 calendar days following the determination of ineligibility
on the current basis, for beneficiaries whose eligibility is being
determined on the basis of disability; and
(B) 45 calendar days following the determination of ineligibility
on the current basis for all other beneficiaries.
(6) Standard for redeterminations based on anticipated changes. The
redetermination of eligibility for a beneficiary based on an
anticipated change in circumstances may not exceed the end of the month
in which the anticipated change occurs, except as provided in
paragraphs (e) and (c)(6)(i) and (ii) of this section.
(i) In the case of a beneficiary who returns information or
documentation requested pursuant to Sec. 435.919(b)(6) less than 30
calendar days prior to the end of the month in which the anticipated
change occurs, the redetermination of eligibility may not exceed the
end of the month following the month in which the anticipated change
occurs.
(ii) In the case of a beneficiary who is determined ineligible on
the basis for which they are currently receiving Medicaid (the
applicable modified adjusted gross income standard described in Sec.
435.911(b)(1) and (2) or another basis) and for whom the agency is
considering eligibility on another basis, the eligibility determination
on the new basis may not exceed--
(A) 90 calendar days for beneficiaries whose eligibility is being
determined on the basis of disability; and
(B) 45 calendar days 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.
[[Page 22869]]
(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 or benefits
as required under Sec. 435.930(b) (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
16. Section 435.914 is amended by-
0
a. In paragraph (a), 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 chapter''; and
0
b. In paragraph (b) introductory text, removing the phrase ``by a
finding of eligibility or ineligibility'' and adding in its place the
phrase ``and renewal or redetermination by a finding of eligibility or
ineligibility''.
0
17. 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 chapter, 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
18. 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 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 has reliable information
about a change in a beneficiary's circumstances that may impact the
beneficiary's eligibility for Medicaid, the amount of medical
assistance for which the beneficiary is eligible, or the beneficiary's
premiums or cost sharing charges. Such redetermination must be
completed in accordance with this paragraph (b) and paragraph (e) of
this section.
(1) The agency must redetermine eligibility based on available
information, if possible. When needed
[[Page 22870]]
information is not available, the agency must request such information
from the beneficiary in accordance with Sec. 435.952(b) and (c).
(2) Prior to furnishing additional medical assistance or lowering
applicable premiums or cost sharing charges based on a reported change:
(i) If the change was reported by the beneficiary, the agency must
verify the information in accordance with Sec. Sec. 435.940 through
435.960 and the agency's verification plan developed under Sec.
435.945(j).
(ii) If the change was provided by a third-party data source, the
agency may verify the information with the beneficiary.
(3) If the agency is unable to verify a reported change that would
result in additional medical assistance or lower premiums or cost
sharing, the agency may not terminate the beneficiary's coverage for
failure to respond to the request to verify such change.
(4) Prior to taking an adverse action, as defined in Sec. 431.201
of this chapter, based on information received from a third-party, the
agency must request information from the beneficiary to verify or
dispute the information received, consistent with Sec. 435.952(d).
(5) If the agency determines that a reported change results in an
adverse action, the agency must--
(i) Comply with the requirements at Sec. 435.916(d)(1) (relating
to consideration of eligibility on other bases) and (2) (relating to
determining potential eligibility for other insurance affordability
programs) prior to terminating a beneficiary's eligibility in
accordance with this section.
(ii) 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.
(6) If the agency has information about anticipated changes in a
beneficiary's circumstances that may affect his or her eligibility, the
redetermination of eligibility must be initiated at an appropriate time
based on such changes consistent with paragraphs (b)(1) through (5) of
this section and the timeliness standards at Sec. 435.912(c)(6).
(c) Beneficiary response times--(1) In general. The agency must--
(i) Provide beneficiaries with at least 30 calendar 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) 90-day reconsideration period. If an individual terminated for
not returning requested information in accordance with this section
subsequently submits the information within 90 calendar 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 updated address information--(1) Updated
address information received from a third party. (i) The agency must
have a process in place to regularly obtain updated address information
from reliable data sources and to act on such updated address
information in accordance with paragraphs (f)(2) and (3) of this
section.
(ii) The agency may establish a process to obtain updated address
information from other third-party data sources and to act on such
updated address information in accordance with paragraphs (f)(2) and
(3) of this section.
(iii) For purposes of paragraph (f)(1)(i) of this section, reliable
data sources include:
(A) Mail returned to the agency by the United States Postal Service
(USPS) with a forwarding address;
(B) The USPS National Change of Address (NCOA) database;
(C) The agency's contracted managed care organizations (MCOs),
prepaid inpatient health plans (PIHPs), prepaid ambulatory health plans
(PAHPs), primary care case managers (PCCMs), and PCCM entities as
defined in Sec. 438.2 of this chapter, provided the MCO, PIHP, PAHP,
PCCM, or PCCM entity received the information directly from or verified
it with the beneficiary; and
(D) Other data sources identified by the agency and approved by the
Secretary.
(2) In-State address changes. The following actions are required
when the agency receives updated in-State address information for a
beneficiary.
(i) If the information is provided by a reliable data source
described in paragraph (f)(1)(iii) of this section, the agency must--
(A) Accept the information as reliable;
(B) Update the beneficiary's case record; and
(C) Notify the beneficiary of the update.
(ii) If the information is provided by a data source not described
in paragraph (f)(1)(iii) of this section, the agency must check the
agency's Medicaid Enterprise System (MES) and the most recent address
information received from reliable data sources described in paragraph
(f)(1)(iii) of this section to confirm the accuracy of the information.
(A) If the updated address information is confirmed, the agency
must accept the information as reliable in accordance with paragraph
(f)(2)(i) of this section.
(B) If the updated address information is not confirmed by the MES
or a reliable data source, the agency must make a good-faith effort, as
described in paragraph (f)(5) of this section, to contact the
beneficiary to confirm the information.
(C) If the agency is unable to confirm the updated address
information, the agency may not update the beneficiary's address in the
case record or terminate the beneficiary's coverage for failure to
respond to a request to confirm their address or State residency.
(3) Out-of-State address changes. The following actions are
required when the agency receives updated out-of-State address
information for a beneficiary through the processes described in
paragraph (f)(1) of this section.
(i) The agency must make a good-faith effort, as described in
paragraph (f)(5) of this section, to contact the beneficiary to confirm
the information or obtain
[[Page 22871]]
information on whether the beneficiary continues to meet the agency's
State residency requirement.
(ii) If the agency is unable to confirm that the beneficiary
continues to meet State residency requirements, the agency must provide
advance notice of termination and fair hearing rights consistent with
part 431, subpart E, of this chapter.
(4) Whereabouts unknown. The following actions are required when
beneficiary mail is returned to the agency with no forwarding address.
(i) The agency must check the agency's MES and the most recently
available information from reliable data sources described in paragraph
(f)(1)(iii) of this section for additional contact information. If
updated in-State address information is available from such a reliable
data source, then accept the information as reliable in accordance with
paragraph (f)(2)(i) of this section.
(ii) If updated address information cannot be obtained and
confirmed as reliable in accordance with paragraph (f)(4)(i) of this
section, the agency must make a good-faith effort, as described in
paragraph (f)(5) of this section, to contact the beneficiary to obtain
updated address information.
(iii) If the agency is unable to identify and confirm the
beneficiary's address pursuant to paragraph (f)(4)(i) or (ii) of this
section and the beneficiary's whereabouts remain unknown, the agency
must take appropriate steps to move the beneficiary to a fee-for-
service delivery system, or to terminate or suspend the beneficiary's
coverage.
(A) If the agency elects to terminate or suspend coverage in
accordance with this paragraph (f)(4)(iii), 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, no
later than the date of termination or suspension and provide notice of
fair hearing rights in accordance with part 431, subpart E, of this
chapter.
(B) If whereabouts of a beneficiary whose coverage was terminated
or suspended in accordance with this paragraph (f)(4)(iii) become known
within the beneficiary's eligibility period, as defined in Sec.
435.916(b), the agency--
(1) 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.
(2) 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.
(5) A good-faith effort to contact a beneficiary. (i) For purposes
of this paragraph (f), a good-faith effort includes:
(A) At least two attempts to contact the beneficiary;
(B) Use of two or more modalities (such as, mail, phone, email);
(C) A reasonable period of time between contact attempts; and
(D) At least 30 calendar days for the beneficiary to respond to
confirm updated address information, consistent with paragraph (c)(1)
of this section.
(ii) If the agency does not have the information necessary to make
at least two attempts to contact a beneficiary through two or more
modalities in accordance with paragraph (f)(5)(i) of this section, the
agency must make a note of that fact in the beneficiary's case record.
0
19. Section 435.940 is revised to read 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
chapter, 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 chapter and section 1902(a)(19) of
the Act.
0
20. Section 435.952 is amended by revising paragraphs (b), (c)
introductory text, and (c)(1) 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, Sec. or 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, Sec. or 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 information obtained through an electronic data match
shall be considered reasonably compatible with income information
provided by or on behalf of an individual, and resource information
obtained through an electronic data match shall be considered
reasonably compatible with resource information provided by or on
behalf of an individual, if both the information obtained
electronically and the information provided by or on behalf of the
individual are either above or at or below the applicable standard or
other relevant threshold.
* * * * *
0
21. 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
22. Section 435.1200 is amended by--
0
a. Revising the heading for paragraph (b) and paragraph (b)(1);
0
b. Revising and republishing paragraph (b)(3);
0
c. Adding paragraph (b)(4);
0
d. Revising paragraphs (c) and (e)(1);
0
e. Adding paragraph (e)(4);
0
f. Revising paragraph (h)(1) and the introductory text of the first
paragraph (h)(3)(i); and
0
g. Redesignating the second paragraph (h)(3)(i) 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.
* * * * *
[[Page 22872]]
(3) Enter into and, upon request, provide to the Secretary one or
more agreements with the Exchange, Exchange appeals entity and the
agencies administering other insurance affordability programs as are
necessary to fulfill the requirements of this section, including a
clear delineation of the responsibilities of each program to--
(i) Minimize burden on individuals seeking to obtain or renew
eligibility or to appeal a determination of eligibility for enrollment
in a QHP or for one or more insurance affordability programs;
(ii) Ensure compliance with paragraphs (c) through (h) of this
section;
(iii) Ensure prompt determinations of eligibility and enrollment in
the appropriate program without undue delay, consistent with timeliness
standards established under Sec. 435.912, based on the date the
application is submitted to any insurance affordability program;
(iv) Provide for a combined eligibility notice and opportunity to
submit a joint fair hearing request, consistent with paragraphs (g) and
(h) of this section;
(v) If the agency has delegated authority to conduct fair hearings
to the Exchange or Exchange appeals entity under Sec. 431.10(c)(1)(ii)
of this chapter, provide for a combined appeals decision by the
Exchange or Exchange appeals entity for individuals who requested an
appeal of an Exchange-related determination in accordance with 45 CFR
part 155, subpart F, and a fair hearing of a denial of Medicaid
eligibility which is conducted by the Exchange or Exchange appeals
entity; and
(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 the requirement of this
paragraph (b)(4), 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 this chapter, 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 (c) 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 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) of this section.
* * * * *
(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 (h)(1)(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.
* * * * *
[[Page 22873]]
(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 436--ELIGIBILITY IN GUAM, PUERTO RICO, AND THE VIRGIN ISLANDS
0
23. The authority citation for part 436 continues to read as follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
Sec. 436.608 [Removed and Reserved]
0
24. Section 436.608 is removed and reserved.
0
25. Section 436.831 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. 436.831 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 of this chapter and expenses for
prescription drugs, projected to the end of the budget period at the
Medicaid reimbursement rate;
* * * * *
PART 447--PAYMENTS FOR SERVICES
0
26.The authority citation for part 447 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1396r-8.
0
27. Section 447.56 is amended by revising paragraph (a)(1)(v) to read
as follows:
Sec. 447.56 Limitations on premiums and cost sharing.
(a) * * *
(1) * * *
(v) At State option, individuals under age 19, 20 or age 21,
eligible under Sec. 435.222 or Sec. 435.223 of this chapter.
* * * * *
PART 457--ALLOTMENTS AND GRANTS TO STATES
0
28. The authority citation for part 457 continues to read as follows:
Authority: 42 U.S.C. 1302.
0
29. 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,
enrollment caps or closed enrollment periods is considered an amendment
that restricts eligibility and must meet the requirements in paragraph
(b) of this section.
* * * * *
0
30. Section 457.340 is amended by--
0
a. Revising the heading for paragraph (d) and paragraph (d)(1);
0
b. 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)(ii), (c)(5)(iii), and
(c)(6)(ii) 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
31. 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) of this
chapter, as cross-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 has reliable information
about a change in an enrollee's circumstances that may impact the
enrollee's eligibility for CHIP, the amount of child or pregnancy-
related health assistance for which the enrollee is eligible, or the
enrollee's premiums or cost sharing charges. Such redetermination must
be completed in accordance with paragraph (e) of this section.
(1) The State must redetermine eligibility based on available
information, if possible. When needed information is not available, the
State must request such information from the enrollee in accordance
with Sec. 435.952(b) and (c) of this chapter as referenced in Sec.
457.380(f).
(2) Prior to furnishing additional child or pregnancy-related
assistance or lowering applicable premiums or cost sharing charges
based on a reported change:
(i) If the change was reported by the enrollee, the State must
verify the information in accordance with Sec. Sec. 435.940 through
435.960 of this chapter and the State's verification plan as referenced
in Sec. 457.380.
(ii) If the change was provided by a third-party data source, the
State may verify the information with the enrollee.
(3) If the State is unable to verify a reported change that would
result in additional child or pregnancy-related health assistance or
lower premiums or cost sharing, the State may not
[[Page 22874]]
terminate the enrollee's coverage for failure to respond to the request
to verify such change.
(4) Prior to taking an action subject to review, as defined in
Sec. 457.1130, based on information received from a third-party data
source, the State must request information from the enrollee to verify
or dispute the information received consistent with Sec. 435.952(d) of
this chapter as referenced in Sec. 457.380(f).
(5) If the State determines that a reported change results in an
action subject to review, the State must:
(i) 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) Provide notice and State review rights, in accordance with the
requirements of Sec. 457.340(e), and subpart K of this part, prior to
taking any action subject to review resulting from a change in an
enrollee's circumstances.
(6) 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 paragraphs (b)(1) through (5) of
this section and the requirements at Sec. 435.912(c)(6) of this
chapter as referenced in Sec. 457.340(d)(1).
(c) Enrollee response times--(1) State requirements. The State
must--
(i) Provide enrollees with at least 30 calendar 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.
(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)(1); States must document the reason for
delay in the individual's case record.
(d) Ninety-day reconsideration period. If an individual terminated
for not returning requested information in accordance with this section
subsequently submits the information within 90 calendar 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)(1).
(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 updated address information--(1) Updated
address information received from a third party. (i) The State must
have a process in place to regularly obtain updated address information
from reliable data sources and to act on such updated address
information in accordance with paragraphs (f)(2) and (3) of this
section.
(ii) The State may establish a process to obtain updated address
information from other third-party data sources and to act on such
updated address information in accordance with paragraphs (f)(2) and
(3) of this section.
(iii) For purposes of paragraph (f)(1)(i) of this section, reliable
data sources include:
(A) Mail returned to the State by the United States Postal Service
(USPS) with a forwarding address;
(B) The USPS National Change of Address (NCOA) database;
(C) The State's contracted MCOs, PIHPs, PAHPs, PCCMs, and PCCM
entities as defined in Sec. 457.10, provided the MCO, PIHP, PAHP,
PCCM, or PCCM entity received the information directly from or verified
it with the enrollee; and
(D) Other data sources identified by the State and approved by the
Secretary.
(2) In-State address changes. The following actions are required
when the State receives updated in-State address information for an
enrollee.
(i) If the information is provided by a reliable data source
described in paragraph (f)(1)(iii) of this section, the State must--
(A) Accept the information as reliable;
(B) Update the enrollee's case record; and
(C) Notify the enrollee of the update.
(ii) If the information is provided by a data source not described
in paragraph (f)(1)(iii) of this section, the State must check the
State's Medicaid Enterprise System (MES) and the most recent address
information received from reliable data sources described in paragraph
(f)(1)(iii) of this section to confirm the accuracy of the information.
(A) If the updated address information is confirmed, the State must
accept the information as reliable in accordance with paragraph
(f)(2)(i) of this section.
(B) If the updated address information is not confirmed by the MES
or a reliable data source, the State must make a good-faith effort, as
described in paragraph (f)(5) of this section, to contact the enrollee
to confirm the information.
(C) If the State is unable to confirm the updated address
information, the State may not update the enrollee's address in the
case record or terminate the enrollee's coverage for failure to respond
to a request to confirm their address or State residency.
(3) Out-of-State address changes. The following actions are
required when the State receives updated out-of-State address
information for an enrollee through the processes described in
paragraph (f)(1) of this section.
(i) The State must make a good-faith effort, as described in
paragraph (f)(5) of this section, to contact the enrollee to confirm
the information or obtain information on whether the enrollee continues
to meet the State's residency requirement.
(ii) If the State is unable to confirm that the enrollee continues
to meet State residency requirements, the State must provide advance
notice of termination and individual's rights to a CHIP review
consistent with Sec. 457.340(e)(1).
(4) Whereabouts unknown. The following actions are required when
enrollee mail is returned to the State with no forwarding address.
(i) The State must check the State's MES and the most recently
available information from reliable data sources described in paragraph
(f)(1)(iii) of this section for additional contact information. If
updated in-State address information is available from such a reliable
data source, then accept the information as reliable in accordance with
paragraph (f)(2)(i) of this section.
[[Page 22875]]
(ii) If updated address information cannot be obtained and
confirmed as reliable in accordance with paragraph (f)(4)(i) of this
section, the State must make a good-faith effort, as described in
paragraph (f)(5) of this section, to contact the enrollee to obtain
updated address information.
(iii) If the State is unable to identify and confirm the enrollee's
address pursuant to paragraph (f)(4)(i) or (ii) of this section and the
enrollee's whereabouts remain unknown, the State must take appropriate
steps to move the enrollee to a fee-for-service delivery system, or to
terminate or suspend the enrollee's coverage.
(A) If the State elects to terminate or suspend coverage in
accordance with this paragraph (f)(4)(iii), 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).
(B) If whereabouts of an enrollee whose coverage was terminated or
suspended in accordance with this paragraph (f)(4)(iii) become known
within the enrollee's eligibility period, as defined in Sec.
435.916(b) of this chapter as referenced in Sec. 457.343, the State--
(1) Must reinstate coverage back to the date of termination without
requiring the individual to provide additional information to verify
their eligibility, unless the State has other information available to
it that indicates the enrollee may not meet all eligibility
requirements.
(2) 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.
(5) A good-faith effort to contact an enrollee. (i) For purposes of
this paragraph (f), a good-faith effort includes:
(A) At least two attempts to contact the enrollee;
(B) Use of two or more modalities (such as, mail, phone, email);
(C) A reasonable period of time between contact attempts; and
(D) At least 30 calendar days for the enrollee to respond to
confirm updated address information, consistent with paragraph (c)(1)
of this section.
(ii) If the State does not have the information necessary to make
at least two attempts to contact an enrollee through two or more
modalities in accordance with paragraph (f)(5)(i) of this section, the
State must make a note of that fact in the enrollee's case record.
0
32. Section 457.348 is amended by--
0
a. In paragraph (a)(4), 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. Adding paragraph (a)(6);
0
c. Revising paragraph (b);
0
d. In paragraph (c)(3), removing the reference to ``Sec. 457.350(i)''
and adding in its place the reference ``Sec. 457.350(g)''; and
0
e. 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 (b) 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 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 the
requirement in this paragraph (e), the agency may:
(1) Apply the same modified adjusted gross income (MAGI)-based
methodologies in accordance with Sec. 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 this chapter, 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
33. 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,
the Basic Health Program (BHP) in accordance with Sec. 600.305(a) of
this chapter, or insurance affordability programs available through
[[Page 22876]]
the Exchange, as indicated by information provided on the application
or renewal form provided by or on behalf of the beneficiary, including
information obtained by the agency from other trusted electronic data
sources.
(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) Disenroll 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 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
34. 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
35. Section 457.570 is amended by revising and republishing paragraph
(c) to read as follows:
Sec. 457.570 Disenrollment protections.
* * * * *
(c) The State must ensure that disenrollment policies, such as
policies related to non-payment of premiums, do not present barriers to
the timely determination of eligibility and
[[Page 22877]]
enrollment in coverage of an eligible child in the appropriate
insurance affordability program. A State may not--
(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
36. 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 into CHIP an eligible individual who
has been disenrolled from group health plan coverage, Medicaid, or
another insurance affordability program. States must conduct monitoring
activities to prevent substitution of coverage.
0
37. 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 waiting periods. A State may not, under this
section, impose a waiting period before enrolling into CHIP premium
assistance coverage an eligible individual who has access to, but is
not enrolled in, group health plan coverage.
* * * * *
Sec. 457.960 [Removed]
0
38. Section 457.960 is removed.
0
39. 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
all of the following:
(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(b) and (c).
(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 a result of a
change in circumstance, 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. 457.340(e) and Sec. 457.1180.
(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.
(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--
(1) Maintain the records described in paragraph (b) of this section
in an electronic format; and
(2) To the extent permitted under Federal law, 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 (or longer period specified in the
request), except when there is an administrative or other emergency
beyond the agency's control.
(e) Release and safeguarding information. The State must provide
safeguards that restrict the use or disclosure of information contained
in the records described in paragraph (b) of this section in accordance
with the requirements set forth in Sec. 457.1110.
0
40. 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
41. Section 457.1170 is revised to read as follows:
Sec. 457.1170 Program specific review process: Continuation of
enrollment.
A State must ensure the opportunity for continuation of enrollment
and benefits pending the completion of review of the following:
(a) A suspension or termination of enrollment, including a decision
to disenroll for failure to pay cost sharing; and
(b) A failure to make a timely determination of eligibility at
application and renewal.
0
42. 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
[[Page 22878]]
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 RECONCILIATION
0
43. 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
44. 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 Children's Health Insurance Program (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 Sec. 435.1200(d), (e)(1)(ii), and (e)(3)
of this chapter and, if applicable, paragraph (c) of this section for
BHP eligible individuals.
* * * * *
0
45. 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.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-06566 Filed 3-27-24; 8:45 am]
BILLING CODE 4120-01-P
