Title 42—Public Health--Volume 1
PART 457—ALLOTMENTS AND GRANTS TO STATES
§ 457.614   General payment process.
(a) A State may make claims for Federal payment based on expenditures incurred by the State prior to or during the period of availability related to that fiscal year.
(b) In order to receive Federal financial participation (FFP) for a State's claims for payment for the State's expenditures, a State must—
(1) Submit budget estimates of quarterly funding requirements for Medicaid and the Children's Health Insurance Programs; and
(2) Submit an expenditure report.
(c) Based on the State's quarterly budget estimates, CMS—
(1) Issues an advance grant to a State as described in § 457.630;
(2) Tracks and applies Federal payments claimed quarterly by each State, the District of Columbia, and each Commonwealth and Territory to ensure that payments do not exceed the applicable allotments for the fiscal year; and
(3) Track and apply relevant State, District of Columbia, Commonwealth and Territory expenditures reported each quarter against the 10 percent limit on expenditures other than child health assistance for standard benefit package, on a fiscal year basis as specified in § 457.618.
§ 457.616   Application and tracking of payments against the fiscal year allotments.
(a) Categories of payments applied to reduce the State allotments. In accordance with the principles described in paragraph (c) of this section, the following categories of payments are applied to reduce the State allotments for a fiscal year:
(1) Payments made to the State for expenditures claimed during the fiscal year under its title XIX Medicaid program, to the extent the payments were made on the basis of the enhanced FMAP described in sections 1905(b) and 2105(b) of the Act for expenditures attributable to children described in section 1905(u)(2) of the Act.
(2) Payments made to the State for expenditures claimed during the fiscal year under its title XIX Medicaid program, to the extent the payments were made on the basis of the enhanced FMAP described in sections 1905(b) and 2105(b) of the Act for expenditures attributable to children described in section 1905(u)(3) of the Act.
(3) [Reserved]
(4) Payments made to a State under its title XXI State Children's Health Insurance Program with respect to section 2105(a) of the Act for expenditures claimed by the State during a fiscal year.
(b) Application of principles. CMS applies the principles in paragraph (c) of this section to—
(1) Coordinate the application of the payments made to a State for the State's expenditures claimed under the Medicaid and State Children's Health Insurance programs against the State allotment for a fiscal year;
(2) Determine the order of these payments in that application; and
(3) Determine the application of payments against multiple State Child Health Insurance Program fiscal year allotments.
(c) Principles for applying Federal payments against the allotment. CMS—
(1) Applies the payments attributable to Medicaid expenditures specified in paragraphs (a)(1) through (a)(3) of this section, against the State child health plan allotment for a fiscal year before State child health plan expenditures specified in paragraph (a)(4) of this section are applied.
(2) Applies the payments attributable to Medicaid and State child health plan expenditures specified in paragraph (a) of this section against the applicable allotments for a fiscal year based on the quarter in which the expenditures are claimed by the State.
(3) Applies payments against the State allotments for a fiscal year in a manner that is consistent for all States.
(4) Applies payments attributable to Medicaid expenditures specified in paragraphs (a)(1) through (a)(3) of this section, in an order that maximizes Federal reimbursement for States. Expenditures for which the enhanced FMAP is available are applied before expenditures for which the regular FMAP is available.
(5) Applies payments for expenditures against State Child Health Insurance Program fiscal year allotments in the least administratively burdensome, and most effective and efficient manner; payments are applied on a quarterly basis as they are claimed by the State, and are applied to reduce the earliest fiscal year State allotments before the payments are applied to reduce later fiscal year allotments.
(6) Subject to paragraphs (c)(6)(i) and (ii) of this section, applies payments for expenditures for a fiscal year's allotment against a subsequent fiscal year's allotment; however, the subsequent fiscal year's allotment must be available at the time of application. For example, if the allotment for fiscal year 1998 has been fully expended, payments for expenditures claimed in fiscal year 1998 are carried over for application against the fiscal year 1999 allotment when it becomes available.
(i) In accordance with § 457.618, the amount of non-primary expenditures that are within the 10 percent limit for the fiscal year for which they are claimed may be applied against a fiscal year allotment or allotments available in a subsequent fiscal year.
(ii) In accordance with § 457.618, the amounts of non-primary expenditures that exceed the 10 percent limit for the fiscal year for which they are claimed may not be applied against a fiscal year allotment or allotments available in a subsequent fiscal year.
(7) Carries over unexpended amounts of a State's allotment for a fiscal year for use in subsequent fiscal years through the end of the 3-year period of availability. For example, if the amounts of the fiscal year 1998 allotment are not fully expended by the end of fiscal year 1998, these amounts are carried over to fiscal year 1999 and are available to provide FFP for expenditures claimed by the State for that fiscal year.
(d) Amount of Federal payment for expenditures claimed. The amount of the Federal payment for expenditures claimed by a State, District of Columbia, or the Commonwealths and Territories is determined by the enhanced FMAP applicable to the fiscal year in which the State paid the expenditure. For example, Federal payment for an expenditure paid by a State in fiscal year 1998 that was carried over to fiscal year 1999 (in accordance with paragraph (c)(6) of this section), because the State exceeded its fiscal year 1998 allotment, is available at the fiscal year 1998 enhanced FMAP rate.
§ 457.618   Ten percent limit on certain Children's Health Insurance Program expenditures.
(a) Expenditures —(1) Primary expenditures are expenditures under a State plan for child health assistance to targeted low-income children in the form of a standard benefit package, and Medicaid expenditures claimed during the fiscal year to the extent Federal payments made for these expenditures on the basis of the enhanced FMAP described in sections 1905(b) and 2105(b) of the Act that are used to calculate the 10 percent limit.
(2) Non-primary expenditures are other expenditures under a State plan. Subject to the 10 percent limit described in paragraph (c) of this section, a State may receive Federal funds at the enhanced FMAP for 4 categories of non-primary expenditures:
(i) Administrative expenditures;
(ii) Outreach;
(iii) Health initiatives; and
(iv) Certain other child health assistance.
(b) Federal payment. Federal payment will not be available based on a State's non-primary expenditures for a fiscal year which exceed the 10 percent limit of the total of expenditures under the plan, as specified in paragraph (c) of this section.
(c) 10 Percent Limit. The 10 percent limit is—
(1) Applied on an annual fiscal year basis;
(2) Calculated based on the total computable expenditures claimed by the State on quarterly expenditure reports submitted for a fiscal year. Expenditures claimed on a quarterly report for a different fiscal year may not be used in the calculation; and
(3) Calculated using the following formula:
(d) The expenditures under section 2105(a)(2) of the Act that are subject to the 10 percent limit are applied—
(1) On an annual fiscal year basis; and
(2) Against the 10 percent limit in the fiscal year for which the State submitted a quarterly expenditure report including the expenditures. Expenditures claimed on a quarterly report for one fiscal year may not be applied against the 10 percent limit for any other fiscal year.
(e)(1) The 10 percent limit for a fiscal year, as calculated under paragraph (c)(3) of this section, may be no greater than 10 percent of the total computable amount (determined under paragraph (e)(2) of this section) of the State allotment or allotments available in that fiscal year. Therefore, the 10 percent limit is the lower of the amount calculated under paragraph (c)(3) of this section, and 10 percent of the total computable amount of the State allotment available in that fiscal year.
(2) As used in paragraph (e)(1) of this section, the total computable amount of a State's allotment for a fiscal year is determined by dividing the State's allotment for the fiscal year by the State's enhanced FMAP for the year. For example, if a State allotment for a fiscal year is $65 million and the enhanced FMAP rate for the fiscal year is 65 percent, the total computable amount of the allotment for the fiscal year is $100 million ($65 million/.65). In this example, the 10 percent limit may be no greater than a total computable amount of $10 million (10 percent of $100 million).
§ 457.622   Rate of FFP for State expenditures.
(a) Basis. Sections 1905(b), 2105(a) and 2105(b) of the Act provides for payments to States from the States' allotments for a fiscal year, as determined under § 457.608, for part of the cost of expenditures for services and administration made under an approved State child health assistance plan. The rate of payment is generally the enhanced Federal medical assistance percentage described below.
(b) Enhanced Federal medical assistance percentage (Enhanced FMAP)—Computations. The enhanced FMAP is the lower of the following:
(1) 70 percent of the regular FMAP determined under section 1905(b) of the Act, plus 30 percentage points; or
(2) 85 percent.
(c) Conditions for availability of enhanced FMAP based on a State's expenditures —The enhanced FMAP is available for payments based on a State's expenditures claimed under the State's title XXI program from the State's fiscal year allotment only under the following conditions:
(1) The State has an approved title XXI State child health plan;
(2) The expenditures are allowable under the State's approved title XXI State child health plan;
(3) State allotment amounts are available in the fiscal year, that is, the State's allotment or allotments (as reduced in accordance with § 457.616) remain available for a fiscal year and have not been fully expended.
(4) Expenditures claimed against the 10 percent limit are within the State's 10 percent limit for the fiscal year.
(5) For States that elect to extend eligibility to unborn children under the approved Child Health Plan, the State does not adopt eligibility standards and methodologies for purposes of determining a child's eligibility under the Medicaid State plan that were more restrictive than those applied under policies of the State plan in effect on June 1, 1997. This limitation applies also to more restrictive standards and methodologies for determining eligibility for services for a child based on the eligibility of a pregnant woman.
(d) Categories of expenditures for which enhanced FMAP are available. Except as otherwise provided below, the enhanced FMAP is available with respect to the following States' expenditures:
(1) Child health assistance under the plan for targeted low-income children in the form of providing health benefits coverage that meets the requirements of section 2103 of the Act; and
(2) Subject to the 10 percent limit provisions under § 457.618(a)(2), the following expenditures:
(i) Payment for other child health assistance for targeted low-income children;
(ii) Expenditures for health services initiatives under the State child health assistance plan for improving the health of children (including targeted low-income children);
(iii) Expenditures for outreach activities; and
(iv) Other reasonable costs incurred by the State to administer the State child health assistance plan.
(e) CHIP administrative expenditures and CHIP related title XIX administrative expenditures —(1) General rule. Allowable title XXI administrative expenditures should support the operation of the State child health assistance plan. In general, FFP for administration under title XXI is not available for costs of activities related to the operation of other programs.
(2) Exception. FFP is available under title XXI, at the enhanced FFP rate, for Medicaid administrative expenditures attributable to the provision of medical assistance to children described in sections 1905(u)(2) and 1905(u)(3), and during the presumptive eligibility period described in section 1920A of the Act, to the extent that the State does not claim those costs under the Medicaid program.
(3) FFP is not available in expenditures for administrative activities for items or services included within the scope of another claimed expenditure.
(4) FFP is available in expenditures for activities defined in sections 2102(c)(1) and 2105(a)(2)(C) of the Act as outreach to families of children likely to be eligible for child health assistance under the plan or under other public or private health coverage programs to inform these families of the availability of, and to assist them in enrolling their children in such a program.
(5) FFP is available in administrative expenditures for activities specified in sections 2102(c)(2) of the Act as coordination of the administration of the Children's Health Insurance Program with other public and private health insurance programs. FFP would not be available for the costs of administering the other public and private health insurance programs. Coordination activities must be distinguished from other administrative activities common among different programs.
§ 457.626   Prevention of duplicate payments.
(a) General rule. No payment shall be made to a State for expenditures for child health assistance under its State child health plan to the extent that:
(1) A non-governmental health insurer would have been obligated to pay for those services but for a provision of its insurance contract that has the effect of limiting or excluding those obligations based on the actual or potential eligibility of the individual for child health assistance under the State child health insurance plan.
(2) Payment has been made or can reasonably be expected to be made promptly under any other Federally operated or financed health insurance or benefits program, other than a program operated or financed by the Indian Health Service.
(3) Services are for an unborn child and are payable under Medicaid as a service to an eligible pregnant woman under that program.
(b) Definitions. As used in paragraph (a) of this section—
Non-governmental health insurer includes any health insurance issuer, group health plan, or health maintenance organization, as those terms are defined in 45 CFR 144.103, which is not part of, or wholly owned by, a governmental entity.
Prompt payment can reasonably be expected when payment is required by applicable statute, or under an approved State plan.
Programs operated or financed by the Indian Health Service means health programs operated by the Indian Health Service, or Indian tribe or tribal organization pursuant to a contract, grant, cooperative agreement or compact with the Indian Health Service under the authority of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450, et seq. ), or by an urban Indian organization in accordance with a grant or contract with the Indian Health Service under the authority of title V of the Indian Health Care Improvement Act (25 U.S.C. 1601, et seq. ).
§ 457.628   Other applicable Federal regulations.
Other regulations applicable to CHIP programs include the following:
(a) HHS regulations in §§ 431.800 through 431.1010 of this chapter (related to the PERM and MEQC programs); §§ 433.312 through 433.322 of this chapter (related to Overpayments); § 433.38 of this chapter (Interest charge on disallowed claims of FFP); §§ 430.40 through 430.42 of this chapter (Deferral of claims for FFP and Disallowance of claims for FFP); § 430.48 of this chapter (Repayment of Federal funds by installments); §§ 433.50 through 433.74 of this chapter (sources of non-Federal share and Health Care-Related Taxes and Provider Related Donations); and § 447.207 of this chapter (Retention of Payments) apply to State's CHIP programs in the same manner as they apply to State's Medicaid programs.
(b) HHS Regulations in 45 CFR subtitle A:
§ 457.630   Grants procedures.
(a) General provisions. Once CMS has approved a State child health plan, CMS makes quarterly grant awards to the State to cover the Federal share of expenditures for child health assistance, other child health assistance, special health initiatives, outreach and administration.
(1) For fiscal year 1998, a State must submit a budget request in an appropriate format for the 4 quarters of the fiscal year. CMS bases the grant awards for the 4 quarters of fiscal year 1998 based on the State's budget requests for those quarters.
(2) For fiscal years after 1998, a State must submit a budget request in an appropriate format for the first 3 quarters of the fiscal year. CMS bases the grant awards for the first 3 quarters of the fiscal year on the State's budget requests for those quarters.
(3) For fiscal years after 1998, a State must also submit a budget request for the fourth quarter of the fiscal year. The amount of this quarter's grant award is based on the difference between a State's final allotment for the fiscal year, and the total of the grants for the first 3 quarters that were already issued in order to ensure that the total of all grant awards for the fiscal year are equal to the State's final allotment for that fiscal year.
(4) The amount of the quarterly grant is determined on the basis of information submitted by the State (in quarterly estimate and quarterly expenditure reports) and other pertinent information. This information must be submitted by the State through the Medicaid Budget and Expenditure System (MBES) for the Medicaid program, and through the Child Health Budget and Expenditure System (CBES) for the title XXI program.
(b) Quarterly estimates. The Children's Health Insurance Program agency must submit Form CMS-21B (State Children's Health Insurance Program Budget Report for State Children's Health Insurance Program State expenditures) to the CMS central office (with a copy to the CMS regional office) 45 days before the beginning of each quarter.
(c) Expenditure reports. (1) The State must submit Form CMS-64 (Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program) and Form CMS-21 (Quarterlye Children's Health Insurance Program Statement of Expenditures for title XXI), to central office (with a copy to the regional office) not later than 30 days after the end of the quarter.
(2) This report is the State's accounting of actual recorded expenditures. This disposition of Federal funds may not be reported on the basis of estimates.
(d) Additional required information. A State must provide CMS with the following information regarding the administration of the title XXI program:
(1) Name and address of the State Agency/organization administering the program;
(2) The employer identification number (EIN); and
(3) A State official contact name and telephone number.
(e) Grant award —(1) Computation by CMS. Regional office staff analyzes the State's estimates and sends a recommendation to the central office. Central office staff considers the State's estimates, the regional office recommendations and any other relevant information, including any adjustments to be made under paragraph (e)(2) of this section, and computes the grant.
(2) Content of award. The grant award computation form shows the estimate of expenditures for the ensuing quarter, and the amounts by which that estimate is increased or decreased because of an increase or overestimate for prior quarters, or for any of the following reasons:
(i) Penalty reductions imposed by law.
(ii) Deferrals or disallowances.
(iii) Interest assessments.
(iv) Mandated adjustments such as those required by Section 1914 of the Act.
(3) Effect of award. The grant award authorizes the State to draw Federal funds as needed to pay the Federal share of disbursements.
(4) Draw procedure. The draw is through a commercial bank and the Federal Reserve system against a continuing letter of credit certified to the Secretary of the Treasury in favor of the State payee. (The letter of credit payment system was established in accordance with Treasury Department regulations—Circular No.1075.)
(f) General administrative requirements. With the following exceptions, the provisions of 45 CFR part 75, that establish uniform administrative requirements and cost principles, apply to all grants made to States under this subpart:
(1) Cost sharing or matching, 45 CFR 75.306; and
(2) Financial reporting, 45 CFR 75.341.
§ 457.700   Basis, scope, and applicability.
(a) Statutory basis. This subpart implements—
(1) Section 2101(a) of the Act, which sets forth that the purpose of title XXI is to provide funds to States to provide child health assistance to uninsured, low-income children in an effective and efficient manner that is coordinated with other sources of health benefits coverage;
(2) Sections 2107(a), (b) and (d) of the Act, which set forth requirements for strategic planning, reports, and program budgets;
(3) Section 2108 of the Act, which sets forth provisions regarding annual reports and evaluation; and
(4) Section 1139A and 1139B of the Act, which set forth the requirements for child and adult health quality measures and reporting.
(b) Scope. This subpart sets forth requirements for strategic planning, monitoring, reporting and evaluation under title XXI.
(c) Applicability. The requirements of this subpart apply to separate child health programs and Medicaid expansion programs, except that §§ 457.730, 457.731, and 457.732 do not apply to Medicaid expansion programs. Separate child health programs that provide benefits exclusively through managed care entities may meet the requirements of §§ 457.730, 457.731, and 457.732 by requiring the managed care entities to meet the requirements of § 457.1233(d).
§ 457.710   State plan requirements: Strategic objectives and performance goals.
(a) Plan description. A State plan must include a description of—
(1) The strategic objectives as described in paragraph (b) of this section;
(2) The performance goals as described in paragraph (c) of this section; and
(3) The performance measurements, as described in paragraph (d) of this section, that the State has established for providing child health assistance to targeted low-income children under the plan and otherwise for maximizing health benefits coverage for other low-income children and children generally in the State.
(b) Strategic objectives. The State plan must identify specific strategic objectives relating to increasing the extent of creditable health coverage among targeted low-income children and other low-income children.
(c) Performance goals. The State plan must specify one or more performance goals for each strategic objective identified.
(d) Performance measurements. The State plan must describe how performance under the plan is—
(1) Measured through objective, independently verifiable means; and
(2) Compared against performance goals.
(e) Core elements. The State's strategic objectives, performance goals and performance measures must include a common core of national performance goals and measures consistent with the data collection, standard methodology, and verification requirements, as developed by the Secretary.
§ 457.720   State plan requirement: State assurance regarding data collection, records, and reports.
A State plan must include an assurance that the State collects data, maintains records, and furnishes reports to the Secretary, at the times and in the standardized format the Secretary may require to enable the Secretary to monitor State program administration and compliance and to evaluate and compare the effectiveness of State plans under Title XXI of the Act. This includes collection of data and reporting as required under § 431.970 of this chapter.
§ 457.730   Beneficiary access to and exchange of data.
(a) Application Programming Interface to support CHIP beneficiaries. A State must implement and maintain a standards-based Application Programming Interface (API) that permits third-party applications to retrieve, with the approval and at the direction of the current individual beneficiary or the beneficiary's personal representative, data specified in paragraph (b) of this section through the use of common technologies and without special effort from the beneficiary.
(b) Accessible content. A State must make the following information accessible to its current beneficiaries or the beneficiary's personal representative through the API described in paragraph (a) of this section:
(1) Data concerning adjudicated claims, including claims data for payment decisions that may be appealed, were appealed, or are in the process of appeal, and provider remittances and beneficiary cost-sharing pertaining to such claims, no later than one (1) business day after a claim is processed;
(2) Encounter data no later than 1 business day after receiving the data from providers, other than MCOs, PIHPs, or PAHPs, compensated on the basis of capitation payments;
(3) All data classes and data elements included in a content standard in 45 CFR 170.213 that are maintained by the State no later than 1 business day after the State receives the data; and
(4) Information, about covered outpatient drugs and updates to such information, including, where applicable, preferred drug list information, no later than one (1) business day after the effective date of the information or updates to such information.
(5) Beginning January 1, 2027, the information in paragraph (b)(5)(i) of this section about prior authorizations for items and services (excluding drugs as defined in paragraph (b)(6) of this section), according to the timelines in paragraph (b)(5)(ii) of this section.
(i) The prior authorization request and decision, including all of the following, as applicable:
(A) The prior authorization status.
(B) The date the prior authorization was approved or denied.
(C) The date or circumstance under which the prior authorization ends.
(D) The items and services approved.
(E) If denied, a specific reason why the request was denied.
(F) Related structured administrative and clinical documentation submitted by a provider.
(ii) The information in paragraph (b)(5)(i) of this section must—
(A) Be accessible no later than 1 business day after the State receives a prior authorization request;
(B) Be updated no later than 1 business day after any status change; and
(C) Continue to be accessible for the duration that the authorization is active and at least 1 year after the prior authorization's last status change.
(6) Drugs are defined for the purposes of paragraph (b)(5) of this section as any and all drugs covered by the State.
(c) Technical requirements. A State implementing an API under paragraph (a) of this section:
(1) Must implement and maintain API technology conformant with 45 CFR 170.215(a)(1), (b)(1)(i), (c)(1), and (e)(1);
(2) Must conduct routine testing and monitoring, and update as appropriate, to ensure the API functions properly, including assessments to verify that the API technology is fully and successfully implementing privacy and security features such as, but not limited to, those required to comply with HIPAA privacy and security requirements in 45 CFR parts 160 and 164, 42 CFR parts 2 and 3, and other applicable law protecting the privacy and security of individually identifiable data;
(3) Must comply with the content and vocabulary standard requirements in paragraphs (c)(3)(i) and (ii) of this section, as applicable to the data type or data element, unless alternate standards are required by other applicable law:
(i) Content and vocabulary standards at 45 CFR 170.213 where such standards are applicable to the data type or element, as appropriate; and
(ii) Content and vocabulary standards at 45 CFR part 162 and § 423.160 of this chapter where required by law, or where such standards are applicable to the data type or element, as appropriate.
(4) May use an updated version of any standard or all standards required under paragraphs (c)(1) or (3) of this section, where:
(i) Use of the updated version of the standard is required by other applicable law, or
(ii) Use of the updated version of the standard is not prohibited under other applicable law, provided that:
(A) For content and vocabulary standards other than those at 45 CFR 170.213, the Secretary has not prohibited use of the updated version of a standard for purposes of this section or 45 CFR part 170;
(B) For standards at 45 CFR 170.213 and 170.215, the National Coordinator has approved the updated version for use in the ONC Health IT Certification Program; and
(C) Using the updated version of the standard, implementation guide, or specification does not disrupt an end user's ability to access the data specified in paragraph (b) of this section or §§ 457.731, 457.732, and 457.760 through the required APIs.
(d) Documentation requirements for APIs. For each API implemented in accordance with paragraph (a) of this section, a State must make publicly accessible, by posting directly on its website or via publicly accessible hyperlink(s), complete accompanying documentation that contains, at a minimum the information listed in this paragraph. For the purposes of this section, “publicly accessible” means that any person using commonly available technology to browse the internet could access the information without any preconditions or additional steps, such as a fee for access to the documentation; a requirement to receive a copy of the material via email; a requirement to register or create an account to receive the documentation; or a requirement to read promotional material or agree to receive future communications from the organization making the documentation available;
(1) API syntax, function names, required and optional parameters supported and their data types, return variables and their types/structures, exceptions and exception handling methods and their returns;
(2) The software components and configurations that an application must use in order to successfully interact with the API and process its response(s); and
(3) All applicable technical requirements and attributes necessary for an application to be registered with any authorization server(s) deployed in conjunction with the API.
(e) Denial or discontinuation of access to the API. A State may deny or discontinue any third-party application's connection to the API required under paragraph (a) of this section if the State:
(1) Reasonably determines, consistent with its security risk analysis under 45 CFR part 164 subpart C, that allowing an application to connect or remain connected to the API would present an unacceptable level of risk to the security of protected health information on the State's systems; and
(2) Makes this determination using objective, verifiable criteria that are applied fairly and consistently across all apps and developers through which parties seek to access electronic health information, as defined in 45 CFR 171.102, including but not limited to criteria that rely on automated monitoring and risk mitigation tools.
(f) Reporting on Patient Access API usage. Beginning in 2026, by March 31 of each year, a State must report to CMS the following metrics, in the form of aggregated, de-identified data, for the previous calendar year at the State level in the form and manner specified by the Secretary:
(1) The total number of unique beneficiaries whose data are transferred via the Patient Access API to a health app designated by the beneficiary; and
(2) The total number of unique beneficiaries whose data are transferred more than once via the Patient Access API to a health app designated by the beneficiary.
(g) Beneficiary resources regarding privacy and security. A State must provide in an easily accessible location on its public website and through other appropriate mechanisms through which it ordinarily communicates with current and former beneficiaries seeking to access their health information held by the State CHIP agency, educational resources in non-technical, simple and easy-to-understand language explaining at a minimum—
(1) General information on steps the individual may consider taking to help protect the privacy and security of their health information, including factors to consider in selecting an application including secondary uses of data, and the importance of understanding the security and privacy practices of any application to which they will entrust their health information; and
(2) An overview of which types of organizations or individuals are and are not likely to be HIPAA covered entities, the oversight responsibilities of OCR and FTC, and how to submit a complaint to—
(i) The HHS Office for Civil Rights (OCR); and
(ii) The Federal Trade Commission (FTC).
(h) Applicability. A State must comply with the requirements in paragraphs (a) through (e) and (g) of this section beginning January 1, 2021, and with the requirements in paragraph (f) of this section beginning in 2026, with regard to data:
(1) With a date of service on or after January 1, 2016; and
(2) That are maintained by the State.
§ 457.731   Access to and exchange of health data for providers and payers.
(a) Application programming interface to support data exchange from payers to providers—Provider Access API. Beginning January 1, 2027, unless granted an extension or exemption under paragraph (c) of this section, a State must do the following:
(1) API requirements. Implement and maintain an application programming interface (API) conformant with all of the following:
(i) Section 457.730(c)(2) through (4), (d), and (e).
(ii) The standards in 45 CFR 170.215(a)(1), (b)(1)(i), (c)(1), and (d)(1).
(2) Provider access. Make the data specified in § 457.730(b) with a date of service on or after January 1, 2016, excluding provider remittances and beneficiary cost-sharing information, that are maintained by the State, available to enrolled CHIP providers via the API required in paragraph (a)(1) of this section no later than 1 business day after receiving a request from such a provider, if all the following conditions are met:
(i) The State authenticates the identity of the provider that requests access and attributes the beneficiary to the provider under the attribution process described in paragraph (a)(3) of this section.
(ii) The beneficiary does not opt out as described in paragraph (a)(4) of this section.
(iii) Disclosure of the data is not prohibited by other applicable law.
(3) Attribution. Establish and maintain a process to associate beneficiaries with their enrolled CHIP providers to enable data exchange via the Provider Access API.
(4) Opt out and patient educational resources. (i) Establish and maintain a process to allow a beneficiary or the beneficiary's personal representative to opt out of the data exchange described in paragraph (a)(2) of this section and to change their permission at any time. That process must be available before the first date on which the State makes beneficiary information available via the Provider Access API and at any time while the beneficiary is enrolled with the State.
(ii) Provide information to beneficiaries in plain language about the benefits of API data exchange with their providers, their opt out rights, and instructions both for opting out of data exchange and for subsequently opting in, as follows:
(A) Before the first date on which the State makes beneficiary information available through the Provider Access API.
(B) No later than 1 week after enrollment.
(C) At least annually.
(D) In an easily accessible location on its public website.
(5) Provider resources. Provide on its website and through other appropriate provider communications, information in plain language explaining the process for requesting beneficiary data using the Provider Access API required in paragraph (a)(1) of this section. The resources must include information about how to use the State's attribution process to associate beneficiaries with their providers.
(b) Application programming interface to support data exchange between payers—Payer-to-Payer API. Beginning January 1, 2027, unless granted an extension or exemption under paragraph (c) of this section a State must do the following:
(1) API requirements. Implement and maintain an API conformant with all of the following:
(i) Section 457.730(c)(2) through (4), (d), and (e).
(ii) The standards in 45 CFR 170.215(a)(1), (b)(1)(i), and (d)(1).
(2) Opt in. Establish and maintain a process to allow beneficiaries or their personal representatives to opt into the State's payer to payer data exchange with the beneficiary's previous payer(s), described in paragraphs (b)(4) and (5) of this section, and with concurrent payer(s), described in paragraph (b)(6) of this section, and to change their permission at any time.
(i) The opt in process must be offered as follows:
(A) To current beneficiaries, no later than the compliance date.
(B) To new beneficiaries, no later than 1 week after enrollment.
(ii) If a beneficiary has coverage through any CHIP managed care entities within the same State while enrolled in CHIP, the State must share their opt in permission with those managed care entities to allow the Payer-to-Payer API data exchange described in this section.
(iii) If a beneficiary does not respond or additional information is necessary, the State must make reasonable efforts to engage with the beneficiary to collect this information.
(3) Identify previous and concurrent payers. Establish and maintain a process to identify a new beneficiary's previous and concurrent payer(s) to facilitate the Payer-to-Payer API data exchange. The information request process must start as follows:
(i) For current beneficiaries, no later than the compliance date.
(ii) For new beneficiaries, no later than 1 week after enrollment.
(iii) If a beneficiary does not respond or additional information is necessary, the State must make reasonable efforts to engage with the beneficiary to collect this information.
(4) Exchange request requirements. Exchange beneficiary data with other payers, consistent with the following requirements:
(i) The State must request the data specified in paragraph (b)(4)(ii) of this section through the beneficiary's previous payers' API, if all the following conditions are met:
(A) The beneficiary has opted in, as described in paragraph (b)(2) of this section, except for data exchanges between a State CHIP agency and its contracted managed care entities, which do not require a beneficiary to opt in.
(B) The exchange is not prohibited by other applicable law.
(ii) The data to be requested are all of the following with a date of service within 5 years before the request:
(A) Data specified in § 457.730(b), excluding the following:
( 1 ) Provider remittances and enrollee cost-sharing information.
( 2 ) Denied prior authorizations.
(B) Unstructured administrative and clinical documentation submitted by a provider related to prior authorizations.
(iii) The State must include an attestation with this request affirming that the beneficiary is enrolled with the State and has opted into the data exchange.
(iv) The State must complete this request as follows:
(A) No later than 1 week after the payer has sufficient identifying information about previous payers and the beneficiary has opted in.
(B) At a beneficiary's request, within 1 week of the request.
(v) The State must receive, through the API required in paragraph (b)(1) of this section, and incorporate into its records about the beneficiary, any data made available by other payers in response to the request.
(5) Exchange response requirements. Make available the data specified in paragraph (b)(4)(ii) of this section that are maintained by the State to other payers via the API required in paragraph (b)(1) of this section within 1 business day of receiving a request, if all the following conditions are met:
(i) The payer that requests access has its identity authenticated and includes an attestation with the request that the patient is enrolled with the payer and has opted into the data exchange.
(ii) Disclosure of the data is not prohibited by other applicable law.
(6) Concurrent coverage data exchange requirements. When a beneficiary has provided sufficient identifying information about concurrent payers and has opted in as described in paragraph (b)(2) of this section, a State must do the following, through the API required in paragraph (b)(1) of this section:
(i) Request the beneficiary's data from all known concurrent payers as described in paragraph (b)(4) of this section, and at least quarterly thereafter while the beneficiary is enrolled with both payers.
(ii) Respond as described in paragraph (b)(5) of this section within 1 business day of a request from any concurrent payers. If agreed upon with the requesting payer, the State may exclude any data that were previously sent to or originally received from the concurrent payer.
(7) Patient educational resources. Provide information to applicants or beneficiaries in plain language, explaining at a minimum: the benefits of Payer-to-Payer API data exchange, their ability to opt in or withdraw that permission, and instructions for doing so. The State must provide the following resources:
(i) When requesting a beneficiary's permission for Payer-to-Payer API data exchange, as described in paragraph (b)(2) of this section.
(ii) At least annually, in appropriate mechanisms through which it ordinarily communicates with current beneficiaries.
(iii) In an easily accessible location on its public website.
(c) Extensions and exemptions —(1) Extension. (i) A State may submit a written application to request a one-time, 1-year extension of the requirements in paragraph (a) or (b) (or paragraphs (a) and (b)) of this section for its CHIP fee-for-service program. The written application must be submitted as part of the State's annual Advance Planning Document (APD) for Medicaid Management Information System (MMIS) operations expenditures, as described in part 433, subpart C, of this chapter, and approved before the compliance date for the requirements to which the State is seeking an extension. It must include all the following:
(A) A narrative justification describing the specific reasons why the State cannot satisfy the requirement(s) by the compliance date and why those reasons result from circumstances that are unique to the agency operating the CHIP fee-for service program.
(B) A report on completed and ongoing State activities that evidence a good faith effort towards compliance.
(C) A comprehensive plan to meet the requirements no later than 1 year after the compliance date.
(ii) CMS grants the State's request if it determines, based on the information provided, that—
(A) The request adequately establishes a need to delay implementation; and
(B) The State has a comprehensive plan to meet the requirements no later than 1 year after the compliance date.
(2) Exemption. (i) A State operating a separate CHIP in which at least 90 percent of the State's CHIP beneficiaries are enrolled in CHIP managed care organizations, as defined in § 457.10, may request an exemption for its fee-for-service program from either or both of the following requirements:
(A) Paragraph (a) of this section.
(B) Paragraphs (b)(1) and (3) through (7) of this section.
(ii) The State's exemption request must:
(A) Be submitted in writing as part of a State's annual APD for MMIS operations expenditures before the compliance date for the requirements to which the State is seeking an exemption.
(B) Include both of the following:
( 1 ) Documentation that the State meets the threshold for the exemption, based on enrollment data from section 5 of the most recently accepted CHIP Annual Report Template System (CARTS).
( 2 ) An alternative plan to ensure that enrolled providers will have efficient electronic access to the same information through other means while the exemption is in effect.
(iii) CMS grants the exemption if the State establishes to CMS's satisfaction that the State—
(A) Meets the threshold for the exemption; and
(B) Has established an alternative plan to ensure that enrolled providers will have efficient electronic access to the same information through other means while the exemption is in effect.
(iv) The State's exemption expires if either—
(A) Based on the 3 previous years of available, finalized CHIP CARTS managed care and fee-for-service enrollment data, the State's managed care enrollment for 2 of the previous 3 years is below 90 percent; or
(B)( 1 ) CMS has approved a State plan amendment, waiver, or waiver amendment that would significantly reduce the percentage of beneficiaries enrolled in managed care; and
( 2 ) The anticipated shift in enrollment is confirmed by the first available, finalized CARTS managed care and fee-for-service enrollment data.
(v) If a State's exemption expires under paragraph (c)(2)(iv) of this section, the State is required to do both of the following:
(A) Submit written notification to CMS that the State no longer qualifies for the exemption within 90 days of the finalization of annual CARTS managed care enrollment data that demonstrates that there has been the requisite shift from managed care enrollment to fee-for-service enrollment resulting in the State's managed care enrollment falling below the 90 percent threshold.
(B) Obtain CMS approval of a timeline for compliance with the requirements in paragraph (a) or (b) (or paragraphs (a) and (b)) of this section within 2 years of the expiration of the exemption.
§ 457.732   Prior authorization requirements.
(a) Communicating a reason for denial. Beginning January 1, 2026, if the State denies a prior authorization request (excluding a request for coverage of drugs as defined in § 457.730(b)(6)), in accordance with the timeframes established in § 457.495(d), the response to the provider must include a specific reason for the denial, regardless of the method used to communicate that information.
(b) Prior Authorization Application Programming Interface (API). Unless granted an extension or exemption under paragraph (d) of this section, beginning January 1, 2027, a State must implement and maintain an API conformant with § 457.730(c)(2) through (4), (d), and (e), and the standards in 45 CFR 170.215(a)(1), (b)(1)(i), and (c)(1) that—
(1) Is populated with the State's list of covered items and services (excluding drugs as defined in § 457.730(b)(6)) that require prior authorization;
(2) Can identify all documentation required by the State for approval of any items or services that require prior authorization;
(3) Supports a HIPAA-compliant prior authorization request and response, as described in 45 CFR part 162; and
(4) Communicates the following information about prior authorization requests:
(i) Whether the State—
(A) Approves the prior authorization request (and the date or circumstance under which the authorization ends);
(B) Denies the prior authorization request; or
(C) Requests more information.
(ii) If the State denies the prior authorization request, it must include a specific reason for the denial.
(c) Publicly reporting prior authorization metrics. Beginning in 2026, a State must annually report prior authorization data, excluding data on drugs as defined in § 457.730(b)(6), at the State level by March 31. The State must make the following data from the previous calendar year publicly accessible by posting them on its website:
(1) A list of all items and services that require prior authorization.
(2) The percentage of standard prior authorization requests that were approved, aggregated for all items and services.
(3) The percentage of standard prior authorization requests that were denied, aggregated for all items and services.
(4) The percentage of standard prior authorization requests that were approved after appeal, aggregated for all items and services.
(5) The percentage of prior authorization requests for which the timeframe for review was extended, and the request was approved, aggregated for all items and services.
(6) The percentage of expedited prior authorization requests that were approved, aggregated for all items and services.
(7) The percentage of expedited prior authorization requests that were denied, aggregated for all items and services.
(8) The average and median time that elapsed between the submission of a request and a determination by the State, for standard prior authorizations, aggregated for all items and services.
(9) The average and median time that elapsed between the submission of a request and a decision by the State for expedited prior authorizations, aggregated for all items and services.
(d) Extensions and exemptions —(1) Extension. (i) A State may submit a written application to request a one-time, 1-year extension of the requirements in paragraph (b) of this section for its CHIP fee-for-service program. The written application must be submitted and approved as part of the State's annual Advance Planning Document (APD) for Medicaid Management Information System (MMIS) operations expenditures described in part 433, subpart C, of this chapter, and approved before the compliance date in paragraph (b) of this section. It must include all the following:
(A) A narrative justification describing the specific reasons why the State cannot satisfy the requirement(s) by the compliance date and why those reasons result from circumstances that are unique to the agency operating the CHIP fee-for service program;
(B) A report on completed and ongoing State activities that evidence a good faith effort toward compliance.
(C) A comprehensive plan to meet the requirements no later than 1 year after the compliance date.
(ii) CMS grants the State's request if it determines, based on the information provided, that—
(A) The request adequately establishes a need to delay implementation; and
(B) The State has a comprehensive plan to meet the requirements no later than 1 year after the compliance date.
(2) Exemption. (i) A State operating a separate CHIP in which at least 90 percent of the State's CHIP beneficiaries are enrolled in CHIP managed care organizations, as defined in § 457.10, may request an exemption for its fee-for-service program from the requirements in paragraph (b) of this section.
(ii) The State's exemption request must:
(A) Be submitted in writing as part of a State's annual APD for MMIS operations expenditures before the compliance date in paragraph (b) of this section.
(B) Include both of the following:
( 1 ) Documentation that the State meets the threshold for the exemption, based on enrollment data from section 5 of the most recently accepted CARTS.
( 2 ) An alternative plan to ensure that enrolled providers will have efficient electronic access to the same information through other means while the exemption is in effect.
(iii) CMS grants the exemption if the State establishes to CMS's satisfaction that the State—
(A) Meets the threshold for the exemption; and
(B) Has established an alternative plan to ensure that its enrolled providers will have efficient electronic access to the same information through other means while the exemption is in effect.
(iv) The State's exemption expires if either—
(A) Based on the 3 previous years of available, finalized CHIP CARTS managed care and fee-for-service enrollment data, the State's managed care enrollment for 2 of the previous 3 years is below 90 percent; or
(B)( 1 ) CMS has approved a State plan amendment, waiver, or waiver amendment that would significantly reduce the percentage of beneficiaries enrolled in managed care; and
( 2 ) The anticipated shift in enrollment is confirmed by the first available, finalized CARTS managed care and fee-for-service enrollment data.
(v) If a State's exemption expires under paragraph (d)(2)(iv) of this section, the State is required to do both of the following:
(A) Submit written notification to CMS that the State no longer qualifies for the exemption within 90 days of the finalization of annual CARTS managed care enrollment data that demonstrates that there has been the requisite shift from managed care enrollment to fee-for-service enrollment resulting in the State's managed care enrollment falling below the 90 percent threshold.
(B) Obtain CMS approval of a timeline for compliance with the requirements in paragraph (b) of this section within 2 years of the expiration of the exemption.
§ 457.740   State expenditures and statistical reports.
(a) Required quarterly reports. A State must submit reports to CMS that contain quarterly program expenditures and statistical data no later than 30 days after the end of each quarter of the Federal fiscal year. A State must collect required data beginning on the date of implementation of the approved State plan. Territories are exempt from the definition of “State” for purposes of the required quarterly reporting under this section. The quarterly reports must include data on—
(1) Program expenditures;
(2) The number of children enrolled in the title XIX Medicaid program, the separate child health program, and the Medicaid expansion program, as applicable, as of the last day of each quarter of the Federal fiscal year; and
(3) The number of children under 19 years of age who are enrolled in the title XIX Medicaid program, the separate child health program, and in the Medicaid expansion program, as appropriate, by the following categories:
(i) Age (under 1 year of age, 1 through 5 years of age, 6 through 12 years of age, and 13 through 18 years of age).
(ii) Gender, race, and ethnicity.
(iii) Service delivery system (managed care, fee-for-service, and primary care case management).
(iv) Household income as a percentage of the Federal poverty level as described in paragraph (b) of this section.
(b) Reportable household income categories. (1) A State that does not impose cost sharing or a State that imposes cost sharing based on a fixed percentage of income must report by two household income categories:
(i) At or below 150 percent of FPL.
(ii) Over 150 percent of FPL.
(2) A State that imposes a different level or percentage of cost sharing at different poverty levels must report by poverty level categories that match the poverty level categories used for purposes of cost sharing.
(c) Required unduplicated counts. Thirty days after the end of the Federal fiscal year, the State must submit an unduplicated count for the Federal fiscal year of children who were enrolled in the Medicaid program, the separate child health program, and the Medicaid expansion program, as appropriate, by age, gender, race, ethnicity, service delivery system, and poverty level categories described in paragraphs (a) and (b) of this section.
§ 457.750   Annual report.
(a) Report required for each Federal fiscal year. A State must report to CMS by January 1 following the end of each Federal fiscal year, on the results of the State's assessment of the operation of the State plan.
(b) Contents of annual report. In the annual report required under paragraph (a) of this section, a State must—
(1) Describe the State's progress in reducing the number of uncovered, low-income children and; in meeting other strategic objectives and performance goals identified in the State plan; and provide information related to a core set of national performance goals and measures as developed by the Secretary;
(2) Report on the effectiveness of the State's policies for discouraging the substitution of public coverage for private coverage;
(3) Identify successes and barriers in State plan design and implementation, and the approaches the State is considering to overcome these barriers;
(4) Describe the State's progress in addressing any specific issues (such as outreach) that the State plan proposed to periodically monitor and assess;
(5) Provide an updated budget for a 3-year period that describes those elements required in § 457.140, including any changes in the sources of the non-Federal share of State plan expenditures;
(6) Identify the total State expenditures for family coverage and total number of children and adults, respectively, covered by family coverage during the preceding Federal fiscal year;
(7) Describe the State's current income standards and methodologies for its Medicaid expansion program, separate child health program, and title XIX Medicaid program, as appropriate.
(c) Methodology for estimate of number of uninsured, low-income children. (1) To report on the progress made in reducing the number of uninsured, low-income children as required in paragraph (b) of this section, a State must choose a methodology to establish an initial baseline estimate of the number of low-income children who are uninsured in the State.
(i) A State may base the estimate on data from—
(A) The March supplement to the Current Population Survey (CPS);
(B) A State-specific survey;
(C) A statistically adjusted CPS; or
(D) Another appropriate source.
(ii) If the State does not base the estimate on data from the March supplement to the CPS, the State must submit a description of the methodology used to develop the initial baseline estimate and the rationale for its use.
(2) The State must provide an annual estimate of changes in the number of uninsured in the State using—
(i) The same methodology used in establishing the initial baseline; or
(ii) Another methodology based on new information that enables the State to establish a new baseline.
(3) If a new methodology is used, the State must also provide annual estimates based on either the March supplement to the CPS or the methodology used to develop the initial baseline.
§ 457.760   Access to published provider directory information.
(a) The State must implement and maintain a publicly accessible, standards-based Application Programming Interface (API) that is conformant with the technical requirements at § 457.730(c), excluding the security protocols related to user authentication and authorization and any other protocols that restrict the availability of this information to particular persons or organizations, the documentation requirements at § 457.730(d), and is accessible via a public-facing digital endpoint on the State's website.
(b) The API must provide a complete and accurate directory of—
(1) The State's provider directory information including provider names, addresses, phone numbers, and specialties, updated no later than 30 calendar days after the State receives provider directory information or updates to provider directory information.
(2) [Reserved]
(c) This section is applicable beginning January 1, 2021.
§ 457.770   Reporting on Health Care Quality Measures.
(a) Reporting the Child Core Set. The State must report on the Core Set of Health Care Quality Measures for Children in Medicaid and CHIP (Child Core Set) for a separate child health program in accordance with part 437 of this chapter.
(b) Reporting the Adult Core Set. The State may elect to report on the Core Set of Adult Health Care Quality Measures in Medicaid (Adult Core Set) established by the Secretary in accordance with part 437 of this chapter. If the State reports measures on the Adult Core Set, such reporting must be in accordance with part 437 of this chapter, except that reporting on behavioral health measures on the Adult Core Set is not mandatory.
(c) Reporting of Medicaid and CHIP beneficiaries. The State must report measures included in the Child Core Set and, if applicable, Adult Core Set for individuals enrolled in a separate CHIP separately from individuals enrolled in Medicaid in accordance with § 437.15(b) of this chapter, regardless of whether the State claims Federal financial participation for such Medicaid-enrolled individuals under title XIX or title XXI of the Act.
§ 457.800   Basis, scope, and applicability.
(a) Statutory basis. This subpart interprets and implements section 2102(b)(3)(C) of the Act, which provides that the State plan must include a description of procedures the State uses to ensure that health benefits coverage provided under the State plan does not substitute for coverage under group health plans.
(b) Scope. This subpart sets forth State plan requirements relating to substitution of coverage in general and specific requirements relating to substitution of coverage under premium assistance programs.
(c) Applicability. The requirements of this subpart apply to separate child health programs.
§ 457.805   State plan requirement: Procedures to address substitution under group health plans.
(a) State plan requirements. The state plan must include a description of reasonable procedures to ensure that health benefits coverage provided under the State plan does not substitute for coverage provided under group health plans as defined at § 457.10.
(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.
§ 457.810   Premium assistance programs: Required protections against substitution.
A State that operates a premium assistance program, as defined at § 457.10, must provide the protections against substitution of CHIP coverage for coverage under group health plans specified in this section. The State must describe these protections in the State plan; and report on results of monitoring of substitution in its annual reports.
(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.
(b) Employer contribution. For health benefits coverage obtained through premium assistance for group health plans, the employee who is eligible for the coverage must apply for the full premium contribution available from the employer.
(c) Cost effectiveness. In establishing cost effectiveness—
(1) The State's cost for coverage for children under premium assistance programs must not be greater than the cost of other CHIP coverage for these children; and
(2) The State may base its demonstration of cost effectiveness on an assessment of the cost of coverage for children under premium assistance programs to the cost of other CHIP coverage for these children, done on a case-by-case basis, or on the cost of premium assisted coverage in the aggregate.
(d) State evaluation. The State must evaluate and report in the annual report (in accordance with § 457.750(b)(2)) the amount of substitution that occurs as a result of premium assistance programs and the effect of those programs on access to coverage.
§ 457.900   Basis, scope and applicability.
(a) Statutory basis. This subpart implements—
(1) Section 2101(a) of the Act, which provides that the purpose of title XXI is to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner; and
(2) Section 2107(e) of the Act, which provides that certain title XIX and title XI provisions, including the following, apply to States under title XXI in the same manner as they apply to a State under title XIX:
(i) Section 1902(a)(4)(C) of the Act, relating to conflict of interest standards.
(ii) Paragraphs (2), (16), and (17), of section 1903(i) of the Act, relating to limitations on payment.
(iii) Section 1903(w) of the Act, relating to limitations on provider taxes and donations.
(iv) Section 1124 of the Act, relating to disclosure of ownership and related information.
(v) Section 1126 of the Act, relating to disclosure of information about certain convicted individuals.
(vi) Section 1128 of the Act, relating to exclusions.
(vii) Section 1128A of the Act, relating to civil monetary penalties.
(viii) Section 1128B(d) of the Act, relating to criminal penalties for certain additional charges.
(ix) Section 1132 of the Act, relating to periods within which claims must be filed.
(x) Sections 1902(a)(77) and 1902(kk) of the Act relating to provider and supplier screening, oversight, and reporting requirements.
(b) Scope. This subpart sets forth requirements, options, and standards for program integrity assurances that must be included in the approved State plan.
(c) Applicability. This subpart applies to separate child health programs. Medicaid expansion programs are subject to the program integrity rules and requirements specified under title XIX.
§ 457.910   State program administration.
The State's child health program must include—
(a) Methods of administration that the Secretary finds necessary for the proper and efficient operation of the separate child health program; and
(b) Safeguards necessary to ensure that—
(1) Eligibility will be determined appropriately in accordance with subpart C of this part; and
(2) Services will be provided in a manner consistent with administrative simplification and with the provisions of subpart D of this part.
§ 457.915   Fraud detection and investigation.
(a) State program requirements. The State must establish procedures for ensuring program integrity and detecting fraudulent or abusive activity. These procedures must include the following:
(1) Methods and criteria for identifying suspected fraud and abuse cases.
(2) Methods for investigating fraud and abuse cases that—
(i) Do not infringe on legal rights of persons involved; and
(ii) Afford due process of law.
(b) State program integrity unit. The State may establish an administrative agency responsible for monitoring and maintaining the integrity of the separate child health program.
(c) Program coordination. The State must develop and implement procedures for referring suspected fraud and abuse cases to the State program integrity unit (if such a unit is established) and to appropriate law enforcement officials. Law enforcement officials include the—
(1) U.S. Department of Health and Human Services Office of Inspector General (OIG);
(2) U.S. Attorney's Office, Department of Justice (DOJ);
(3) Federal Bureau of Investigation (FBI); and
(4) State Attorney General's office.
§ 457.925   Preliminary investigation.
If the State agency receives a complaint of fraud or abuse from any source or identifies questionable practices, the State agency must conduct a preliminary investigation or take otherwise appropriate action within a reasonable period of time to determine whether there is sufficient basis to warrant a full investigation.
§ 457.930   Full investigation, resolution, and reporting requirements.
The State must establish and implement effective procedures for investigating and resolving suspected and apparent instances of fraud and abuse. Once the State determines that a full investigation is warranted, the State must implement procedures including, but not limited to the following:
(a) Cooperate with and refer potential fraud and abuse cases to the State program integrity unit, if such a unit exists.
(b) Conduct a full investigation.
(c) Refer the fraud and abuse case to appropriate law enforcement officials.
§ 457.935   Sanctions and related penalties.
(a) A State may not make payments for any item or service furnished, ordered, or prescribed under a separate child health program to any provider who has been excluded from participating in the Medicare and Medicaid programs.
(b) The following provisions and their corresponding regulations apply to a State under title XXI, in the same manner as these provisions and regulations apply to a State under title XIX:
(1) Part 455, subpart B of this chapter.
(2) Section 1124 of the Act pertaining to disclosure of ownership and related information.
(3) Section 1126 of the Act pertaining to disclosure by institutions, organizations, and agencies of owners and certain other individuals who have been convicted of certain offenses.
(4) Section 1128 of the Act pertaining to exclusions.
(5) Section 1128A of the Act pertaining to civil monetary penalties.
(6) Section 1128B of the Act pertaining to criminal penalties for acts involving Federal health care programs.
(7) Section 1128E of the Act pertaining to the reporting of final adverse actions on liability findings made against health care providers, suppliers, and practitioners under the health care fraud and abuse data collection program.
§ 457.940   Procurement standards.
(a) A State must submit to CMS a written assurance that Title XXI services will be provided in an effective and efficient manner. The State must submit the assurance—
(1) With the initial State plan; or
(2) For States with approved plans, with the first request to amend the approved plan.
(b) A State must provide for free and open competition, to the maximum extent practical, in the bidding of all procurement contracts for coverage or other services in accordance with the procurement requirements of 45 CFR part 75, as applicable.
(c) All contracts under this part must include provisions that define a sound and complete procurement contract, as required by 45 CFR part 75, as applicable.
§ 457.945   Certification for contracts and proposals.
Entities that contract with the State under a separate child health program must certify the accuracy, completeness, and truthfulness of information in contracts and proposals, including information on subcontractors, and other related documents, as specified by the State.
§ 457.950   Contract and payment requirements including certification of payment-related information.
(a) MCOs, PAHPs, PIHPs, PCCMs, and PCCM entities. The contract requirements for MCOs, PAHPs, PIHPs, PCCMs, and PCCM entities are provided in § 457.1201.
(b) Fee-for-service entities. A State that makes payments to fee-for-service entities under a separate child health program must—
(1) Establish procedures to ensure that the entity certifies and attests that information on claim forms is truthful, accurate, and complete;
(2) Ensure that fee-for-service entities understand that payment and satisfaction of the claims will be from Federal and State funds, and that any false claims may be prosecuted under applicable Federal or State laws; and
(3) Require, as a condition of participation, that fee-for-service entities provide the State, CMS and/or the HHS Office of the Inspector General with access to enrollee health claims data, claims payment data and related records.
§ 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 § 435.907(a) of this chapter as referenced in § 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 § 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 § 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 § 457.340(e) and § 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 § 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 § 457.1110.
§ 457.980   Verification of enrollment and provider services received.
The State must establish and maintain systems to identify, report, and verify the accuracy of claims for those enrolled children who meet requirements of section 2105(a) of the Act, where enhanced Federal medical assistance percentage computations apply.
§ 457.985   Integrity of professional advice to enrollees.
The State must ensure through its contracts for coverage and services that its contractors comply with—
(a) Section 422.206(a) of this chapter, which prohibits interference with health care professionals' advice to enrollees and requires that professionals provide information about treatment in an appropriate manner; and
(b) Sections 422.208 and 422.210 of this chapter, which place limitations on physician incentive plans, and information disclosure requirements related to those physician incentive plans, respectively.
§ 457.990   Provider and supplier screening, oversight, and reporting requirements.
The following provisions and their corresponding regulations apply to a State under title XXI of the Act, in the same manner as these provisions and regulations apply to a State under title XIX of the Act:
(a) Section 455.107.
(b) Part 455, subpart E, of this chapter.
(c) Sections 1902(a)(77) and 1902(kk) of the Act pertaining to provider and supplier screening, oversight, and reporting requirements.
§ 457.1000   Basis, scope, and applicability.
(a) Statutory basis. This subpart interprets and implements—
(1) Section 2105(c)(2)(B) of the Act, which sets forth the requirements to permit a State to exceed the 10 percent cost limit on expenditures other than benefit expenditures; and
(2) Section 2105(c)(3) of the Act, which permits the purchase of family coverage.
(b) Scope. This subpart sets forth requirements for obtaining a waiver under title XXI.
(c) Applicability. This subpart applies to separate child health programs; and applies to Medicaid expansion programs when the State claims administrative costs under title XXI and seeks a waiver of limitations on such claims for use of a community-based health delivery system. This subpart does not apply to demonstrations requested under section 1115 of the Act.
§ 457.1003   CMS review of waiver requests.
CMS will review the waiver requests under this subpart using the same time frames used for State plan amendments, as specified in § 457.160.
§ 457.1005   Cost-effective coverage through a community-based health delivery system.
(a) Availability of waiver. The Secretary may waive the requirements of § 457.618 (the 10 percent limit on expenditures not used for health benefits coverage for targeted low-income children, that meets the requirements of § 457.410) in order to provide child health assistance to targeted low-income children under the State plan through a cost-effective, community-based health care delivery system, such as through contracts with health centers receiving funds under section 330 of the Public Health Service Act or with hospitals such as those that receive disproportionate share payment adjustments under section 1886(c)(5)(F) or section 1923 of the Act.
(b) Requirements for obtaining a waiver. To obtain a waiver for cost-effective coverage through a community-based health delivery system, a State must demonstrate that—
(1) The coverage meets all of the requirements of this part, including subpart D and subpart E.
(2) The cost of such coverage, on an average per child basis, does not exceed the cost of coverage under the State plan.
(c) Three-year approval period. An approved waiver remains in effect for no more than 3 years.
(d) Application of cost savings. If the cost of coverage of a child under a community-based health delivery system is equal to or less than the cost of coverage of a child under the State plan, the State may use the difference in the cost of coverage for each child enrolled in a community-based health delivery system for—
(1) Other child health assistance, health services initiatives, or outreach; or
(2) Any reasonable costs necessary to administer the State's program.
§ 457.1010   Purchase of family coverage.
A State may purchase family coverage that includes coverage for targeted low-income children if the State establishes that—
(a) Purchase of family coverage is cost-effective under the standards described in § 457.1015;
(b) The State does not purchase the coverage if it would otherwise substitute for health insurance coverage that would be provided to targeted, low-income children but for the purchase of family coverage; and
(c) The coverage for the family otherwise meets the requirements of this part.
§ 457.1015   Cost-effectiveness.
(a) Definition. For purposes of this subpart, “cost-effective” means that the State's cost of purchasing family coverage that includes coverage for targeted low-income children is equal to or less than the State's cost of obtaining coverage under the State plan only for the eligible targeted low-income children involved.
(b) Cost comparisons. A State may demonstrate cost-effectiveness by comparing the cost of coverage for the family to the cost of coverage only for the targeted low-income children under the health benefits package offered by the State under the State plan for which the child is eligible.
(c) Individual or aggregate basis. (1) The State may base its demonstration of the cost-effectiveness of family coverage on an assessment of the cost of family coverage for individual families, done on a case-by-case basis, or on the cost of family coverage in the aggregate.
(2) The State must assess cost-effectiveness in its initial request for a waiver and then annually.
(3) For any State that chooses the aggregate cost method, if an annual assessment of the cost-effectiveness of family coverage in the aggregate reveals that it is not cost-effective, the State must assess cost-effectiveness on a case-by-case basis.
(d) Reports on family coverage. A State with a waiver under this section must include in its annual report pursuant to § 457.750, the cost of family coverage purchased under the waiver, and the number of children and adults, respectively, covered under family coverage pursuant to the waiver.
§ 457.1100   Basis, scope and applicability.
(a) Statutory basis. This subpart interprets and implements—
(1) Section 2101(a) of the Act, which states that the purpose of title XXI of the Act is to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner;
(2) Section 2102(a)(7)(B) of the Act, which requires that the State plan include a description of the methods used to assure access to covered services, including emergency services;
(3) Section 2102(b)(2) of the Act, which requires that the State plan include a description of methods of establishing and continuing eligibility and enrollment; and
(4) Section 2103 of the Act, which outlines coverage requirements for a State that provides child health assistance through a separate child health program.
(b) Scope. This subpart sets forth minimum standards for privacy protection and for procedures for review of matters relating to eligibility, enrollment, and health services.
(c) Applicability. This subpart only applies to a separate child health program.
§ 457.1110   Privacy protections.
The State must ensure that, for individual medical records and any other health and enrollment information maintained with respect to enrollees, that identifies particular enrollees (in any form), the State establishes and implements procedures to—
(a) Abide by all applicable Federal and State laws regarding confidentiality and disclosure, including those laws addressing the confidentiality of information about minors and the privacy of minors, and privacy of individually identifiable health information;
(b) Comply with subpart F of part 431 of this chapter;
(c) Maintain the records and information in a timely and accurate manner;
(d) Specify and make available to any enrollee requesting it—
(1) The purposes for which information is maintained or used; and
(2) To whom and for what purposes the information will be disclosed outside the State;
(e) Except as provided by Federal and State law, ensure that each enrollee may request and receive a copy of records and information pertaining to the enrollee in a timely manner and that an enrollee may request that such records or information be supplemented or corrected.
§ 457.1120   State plan requirement: Description of review process.
(a) The State must have one of the following review processes:
(1) Program specific review. A process that meets the requirements of §§ 457.1130, 457.1140, 457.1150, 457.1160, 457.1170, and 457.1180; or
(2) Statewide Standard Review. A process that complies with State review requirements currently in effect for all health insurance issuers (as defined in section 2791 of the Public Health Service Act) in the State.
(b) The State plan must include a description of the State's review process.
§ 457.1130   Program specific review process: Matters subject to review.
(a) Eligibility or enrollment matter. A State must ensure that an applicant or enrollee has an opportunity for review, consistent with §§ 457.1140 and 457.1150, of a—
(1) Denial of eligibility;
(2) Failure to make a timely determination of eligibility; and
(3) Suspension or termination of enrollment, including disenrollment for failure to pay cost sharing.
(b) Health services matter. A State must ensure that an enrollee has an opportunity for external review of a—
(1) Delay, denial, reduction, suspension, or termination of health services, in whole or in part, including a determination about the type or level of services; and
(2) Failure to approve, furnish, or provide payment for health services in a timely manner.
(c) Exception. A State is not required to provide an opportunity for review of a matter described in paragraph (a) or (b) of this section if the sole basis for the decision is a provision in the State plan or in Federal or State law requiring an automatic change in eligibility, enrollment, or a change in coverage under the health benefits package that affects all applicants or enrollees or a group of applicants or enrollees without regard to their individual circumstances.
§ 457.1140   Program specific review process: Core elements of review.
In adopting the procedures for review of matters described in § 457.1130, a State must ensure that—
(a) Reviews are conducted by an impartial person or entity in accordance with § 457.1150;
(b) Review decisions are timely in accordance with § 457.1160;
(c) Review decisions are written; and
(d) Applicants and enrollees have an opportunity to—
(1) Represent themselves or have representatives of their choosing in the review process;
(2) Timely review their files and other applicable information relevant to the review of the decision;
(3) Fully participate in the review process, whether the review is conducted in person or in writing, including by presenting supplemental information during the review process; and
(4) Receive continued enrollment and benefits in accordance with § 457.1170.
§ 457.1150   Program specific review process: Impartial review.
(a) Eligibility or enrollment matter. The review of a matter described in § 457.1130(a) must be conducted by a person or entity who has not been directly involved in the matter under review.
(b) Health services matter. The State must ensure that an enrollee has an opportunity for an independent external review of a matter described in § 457.1130(b). External review must be conducted by the State or a contractor other than the contractor responsible for the matter subject to external review.
§ 457.1160   Program specific review process: Time frames.
(a) Eligibility or enrollment matter. A State must complete the review of a matter described in § 457.1130(a) within a reasonable amount of time. In setting time frames, the State must consider the need for expedited review when there is an immediate need for health services.
(b) Health services matter. The State must ensure that reviews are completed in accordance with the medical needs of the patient. If the medical needs of the patient do not dictate a shorter time frame, the review must be completed within the following time frames:
(1) Standard timeframe. A State must ensure that external review, as described in § 457.1150(b), is completed within 90 calendar days of the date an enrollee requests internal (if available) or external review. If both internal and external review are available to the enrollee, both types of review must be completed within the 90 calendar day period.
(2) Expedited timeframe. A State must ensure that external review, as described in § 457.1150(b), is completed within 72 hours of the time an enrollee requests external review, if the enrollee's physician or health plan determines that operating under the standard time frame could seriously jeopardize the enrollee's life or health or ability to attain, maintain or regain maximum function. If the enrollee has access to internal and external review, then each level of review may take no more than 72 hours. The State may extend the 72-hour time frame by up to 14 calendar days, if the enrollee requests an extension.
§ 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.
§ 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 § 457.1130 that includes the reasons for the determination, an explanation of applicable rights to review of that determination, the standard and expedited time frames for review, the manner in which a review can be requested, and the circumstances under which enrollment and benefits may continue pending review.
§ 457.1190   Application of review procedures when States offer premium assistance for group health plans.
A State that has a premium assistance program through which it provides coverage under a group health plan that does not meet the requirements of a program specific review or a Statewide standard review, as described in § 457.1120, must give applicants and enrollees the option to obtain health benefits coverage other than through that group health plan. The State must provide this option at initial enrollment and at each redetermination of eligibility.
§ 457.1200   Basis, scope, and applicability.
(a) Statutory basis. This subpart implements the following sections of the Act:
(1) Section 2101(a) of the Act, which provides that the purpose of Title XXI is to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner.
(2) Section 2103(f)(3) and 2107(e)(1)(M) of the Act, which apply certain provisions of Title XIX related to Medicaid managed care to CHIP.
(3) Sections 2107(b) and 2107(e)(2) of the Act, which relate to program integrity.
(b) Scope. This subpart sets forth requirements for the provision of services through MCOs, PIHPs, PAHPs, and PCCM entities, as defined in § 457.10.
(c) Applicability. The requirements of this subpart apply to child health assistance provided under a separate child health program operating a managed care delivery system. Regulations relating to managed care that are applicable to a Medicaid expansion program are found at part 438 of this chapter.
(d) Applicability dates. States will not be held out of compliance with the following requirements of this subpart prior to the dates established at §§ 438.3(v), 438.10(j), 438.16(f), 438.68(h), 438.206(d), 438.207(g), 438.310(d), 438.505(a)(2), 438.602(j), and 438.608(f) of this chapter, so long as they comply with the corresponding standard(s) of this subpart, edition revised as of July 9, 2024. States will not be held out of compliance with the requirement at § 457.1207 to post comparative summary results of enrollee experience surveys by managed care plan annually on State websites, nor the requirement for States to evaluate annual enrollee experience survey results as part of the State's annual analysis of network adequacy as described at § 457.1230(b), so long as they comply with the corresponding standard(s) of this subpart, 2 years after July 9, 2024.
§ 457.1201   Standard contract requirements.
(a) CMS review. The State must submit all MCO, PAHP, PIHP, PCCM, and PCCM entity contracts for review in the form and manner established by CMS.
(b) Entities eligible for comprehensive risk contracts. The State may enter into a comprehensive risk contract only with the entities specified in § 438.3(b)(1) through (3) of this chapter.
(c) Payment. The final capitation rates for all MCO, PIHP or PAHP contracts must be identified and developed, and payment must be made in accordance with §§ 438.3(c) and 438.16(c)(1) through (3) of this chapter, except that the requirement for preapproval of contracts, certifications by an actuary, annual cost reports, contract arrangements described in § 438.6(c), and references to pass through payments do not apply, and contract rates must be submitted to CMS upon request of the Secretary.
(d) Enrollment discrimination prohibited. Contracts with MCOs, PAHPs, PIHPs, PCCMs and PCCM entities must comply with prohibitions on enrollment discrimination in accordance with § 438.3(d) of this chapter, except that § 438.3(d)(2) of this chapter (related to voluntary enrollment) does not apply.
(e) Services that may be covered by an MCO, PIHP, or PAHP. An MCO, PIHP, or PAHP may cover, for enrollees, services that are not covered under the State plan in accordance with §§ 438.3(e) and 438.16(b), (d), and (e) of this chapter, except that references to § 438.7, IMDs, and rate certifications do not apply and that references to enrollee rights and protections under part 438 should be read to refer to the rights and protections under subparts K and L of this part.
(f) Compliance with applicable laws and conflict of interest safeguards. Contracts with MCOs, PAHPs, PIHPs, PCCMs or PCCM entities must comply with Federal laws and regulations in accordance with § 438.3(f) of this chapter.
(g) Inspection and audit of records and access to facilities. Contracts with MCOs, PIHPs, PAHPs, PCCMs or PCCM entities must allow for the inspection and audit of records and access to facilities in accordance with § 438.3(h) of this chapter.
(h) Physician incentive plans. If a contract with an MCO, PAHP, or PIHP provides for a physician incentive plan, it must comply with § 438.3(i) of this chapter (which cross references §§ 422.208 and 422.210 of this chapter).
(i) Subcontractual relationships and delegations. The state must ensure, through its contracts with MCOs, PIHPs, and PAHPs, that any contract or written agreement that the MCO, PIHP, or PAHP has with any individual or entity that relates directly or indirectly to the performance of the MCOs, PIHPs, or PAHPs obligations under its contract comply with § 457.1233(b) (which cross references § 438.230 of this chapter).
(j) Choice of network provider. The contract must allow each enrollee to choose his or her network provider in accordance with § 438.3(l) of this chapter.
(k) Audited financial reports. Contracts with MCOs, PAHPs, and PIHPs must comply with the requirements for submission of audited financial reports in § 438.3(m) of this chapter.
(l) Parity in mental health and substance use disorder benefits. Contracts with MCOs, PAHPs, and PIHPs must comply with the requirements of § 457.496.
(m) Additional rules for contracts with PCCMs. Contracts with PCCMs must comply with the requirements of § 438.3(q) of this chapter, except that the right to disenroll is in accordance with § 457.1212.
(n) Additional rules for contracts with PCCM entities. (1) States must submit PCCM entity contracts to CMS for review.
(2) Contracts with PCCMs must comply with the requirements of paragraph (o) of this section; § 457.1207; § 457.1240(b) (cross-referencing § 438.330(b)(2), (b)(3), (c), and (e) of this chapter); § 457.1240(e) (cross-referencing § 438.340 of this chapter).
(o) Attestations. Contracts with MCO, PAHP, PIHP, PCCM or PCCM entities must include an attestation to the accuracy, completeness, and truthfulness of claims and payment data, under penalty of perjury.
(p) Guarantee not to avoid costs. Contracts with an MCO, PAHP, PIHP, PCCM or PCCM entities must include a guarantee that the MCO, PAHP, PIHP, PCCM or PCCM entity will not avoid costs for services covered in its contract by referring enrollees to publicly supported health care resources.
(q) Recordkeeping requirements. Contracts with MCOs, PIHPs, and PAHPs, must comply with the recordkeeping requirements of § 438.3(u) of this chapter.
§ 457.1203   Rate development standards and medical loss ratio.
(a) A state must use payment rates based on public or private payment rates for comparable services for comparable populations, consistent with actuarially sound principles as defined at § 457.10. This requirement for using actuarially sound principles to develop payment rates does not prohibit a state from implementing value-based purchasing models for provider reimbursement, such as pay for performance arrangements, bundled payments, or other service payment models intended to recognize value or outcomes over volume of services; such alternate payment models should be developed using actuarially sound principles to the extent applicable.
(b) A State may establish higher rates than permitted under paragraph (a) of this section if such rates are necessary to ensure sufficient provider participation or provider access or to enroll providers who demonstrate exceptional efficiency or quality in the provision of services.
(c) The rates must be designed to reasonably achieve a medical loss ratio standard, calculated in accordance with the provisions of § 438.8 of this chapter, that—
(1) Is equal to at least 85 percent for the rate year; and
(2) Provides for reasonable administrative costs.
(d) The State must provide to CMS, if requested, a description of the manner in which rates were developed in accordance with the requirements of paragraphs (a), (b), or (c) of this section.
(e) The State must comply with the requirements related to medical loss ratios in accordance with the terms of § 438.74 of this chapter, except contract arrangements described in § 438.6(c) do not apply and the description of the reports received from the MCOs, PIHPs and PAHPs under § 438.8(k) of this chapter will be submitted independently, and not with the rate certification described in § 438.7 of this chapter.
(f) The State must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the requirements in § 438.8 of this chapter, except that contract arrangements described in § 438.6(c) do not apply.
§ 457.1206   Non-emergency medical transportation PAHPs.
(a) For purposes of this section Non-Emergency Medical Transportation (NEMT) Prepaid Ambulatory Health Plan (PAHP) means an entity that provides only NEMT services to enrollees under contract with the State, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates.
(b) The following requirements and options apply to NEMT PAHPs, NEMT PAHP contracts, and States in connection with NEMT PAHPs, to the same extent that they apply to PAHPs, PAHP contracts, and States in connection with PAHPs.
(1) All contract provisions in § 457.1201 except those set forth in § 457.1201(h) (related to physician incentive plans) § 457.1201(l) (related to mental health parity).
(2) The information requirements in § 457.1207.
(3) The provision against provider discrimination in § 457.1208.
(4) The State responsibility provisions in §§ 457.1212 and 457.1214, and § 438.62(a) of this chapter, as cross-referenced in § 457.1216.
(5) The provisions on enrollee rights and protections in §§ 457.1220, 457.1222, 457.1224, and 457.1226.
(6) The PAHP standards in § 438.206(b)(1) of this chapter, as cross-referenced by §§ 457.1230(a) and (d) and 457.1233(a), (b), and (d), excluding the requirement in § 438.242(b)(7) of this chapter to comply with § 431.61(a) of this chapter.
(7) An enrollee's right to a State review under subpart K of this part.
(8) Prohibitions against affiliations with individuals debarred or excluded by Federal agencies in § 438.610 of this chapter, as cross referenced by § 457.1285.
(9) Requirements relating to contracts involving Indians, Indian Health Care Providers, and Indian managed care entities in § 457.1209.
§ 457.1207   Information requirements.
The State must provide, or ensure its contracted MCO, PAHP, PIHP, PCCM, and PCCM entities provide, all enrollment notices, informational materials, and instructional materials related to enrollees and potential enrollees in accordance with the terms of § 438.10 of this chapter, except that the terms of § 438.10(c)(2), (g)(2)(xi)(E), and (g)(2)(xii) of this chapter do not apply and that references to enrollee rights and protections under part 438 should be read to refer to the rights and protections under subparts K and L of this part. The State must annually post comparative summary results of enrollee experience surveys by managed care plan on the State's website as described at § 438.10(c)(3) of this chapter.
§ 457.1208   Provider discrimination prohibited.
The state must ensure through its contracts that each MCO, PIHP, and PAHP follow the requirements related to the prohibition on provider discrimination in § 438.12 of this chapter.
§ 457.1209   Requirements that apply to MCO, PIHP, PAHP, PCCM, and PCCM entity contracts involving Indians, Indian health care provider (IHCP), and Indian managed care entities (IMCE).
The State must follow, and ensure through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follows, the requirements related to Indians, IHCPs, and IMCEs in accordance with the terms of § 438.14 of this chapter.
§ 457.1210   Enrollment process.
(a) Default enrollment process. (1) If a state uses a default enrollment process to assign beneficiaries to a MCO, PIHP, PAHP, PCCM, or PCCM entity, the process must:
(i) Assign beneficiaries to a qualified MCO, PIHP, PAHP, PCCM or PCCM entity. To be qualified, the MCO, PIHP, PAHP, PCCM or PCCM entity must:
(A) Not be subject to the intermediate sanction described in § 438.702(a)(4) of this chapter.
(B) Have capacity to enroll beneficiaries.
(ii) Maximize continuation of existing provider-beneficiary relationships. An “existing provider-beneficiary relationship” is one in which the provider was the main source of CHIP services for the beneficiary during the previous year. This may be established through State records of previous managed care enrollment or fee-for-service experience, encounter data, or through contact with the beneficiary.
(iii) If the approach in paragraph (a)(1)(ii) of this section is not possible, the State must distribute the beneficiaries equitably among the MCOs, PIHPs, PAHPs, PCCMs and PCCM entities. The State may not arbitrarily exclude any MCO, PIHP, PAHP, PCCM or PCCM entity from being considered.
(2) The State may consider additional reasonable criteria to conduct the default enrollment process, including the previous plan assignment of the beneficiary, quality assurance and improvement performance, procurement evaluation elements, accessibility of provider offices for people with disabilities (when appropriate), and other reasonable criteria that support the objectives of the managed care program.
(3) The State must send a confirmation of the enrollee's managed care enrollment to the enrollee within 5 calendar days of the date such enrollment is processed by the State. The confirmation must clearly explain the enrollee's right to disenroll within 90 days from the effective date of the enrollment.
(b) Priority for enrollment. The state must have an enrollment system under which beneficiaries already enrolled in an MCO, PIHP, PAHP, PCCM, or PCCM entity are given priority to continue that enrollment if the MCO, PIHP, PAHP, PCCM, or PCCM entity does not have the capacity to accept all those seeking enrollment under the program.
(c) Informational notices. A State must provide an informational notice to each potential enrollee who may enroll in an MCO, PIHP, PAHP, PCCM, or PCCM entity. Such notice must:
(1) Include the MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities available to the potential enrollee;
(2) Explain how to select an MCO, PIHP, PAHP, PCCM, or PCCM entity;
(3) Explain the implications of making or not making an active choice of an MCO, PIHP, PAHP, PCCM or PCCM entity;
(4) Explain the length of the enrollment period as well as the disenrollment policies in § 457.1212; and
(5) Comply with the information requirements in § 457.1207 and accessibility standards established under § 457.340.
§ 457.1212   Disenrollment.
The State must comply with and ensure, through its contracts, that each MCO, PAHP, PIHP, PCCM and PCCM entity complies with the disenrollment requirements in accordance with the terms of § 438.56 of this chapter, except that references to fair hearings should be read to refer to reviews as described in subpart K of this part.
§ 457.1214   Conflict of interest safeguards.
The State must have in effect safeguards against conflict of interest in accordance with the terms of § 438.58 of this chapter, except that references to § 438.54(b) should be read to refer to the enrollment processes described in § 457.1210(a).
§ 457.1216   Continued services to enrollees.
The State must follow the requirements related to continued services to enrollees in accordance with the terms of § 438.62 of this chapter.
§ 457.1218   Network adequacy standards.
The State must develop network adequacy standards in accordance with the terms of § 438.68 of this chapter, and, ensure through its contracts, that each MCO, PAHP, and PIHP meets such standards.
§ 457.1220   Enrollee rights.
The State must ensure, through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follow the enrollee rights requirements in accordance with the terms of § 438.100 of this chapter.
§ 457.1222   Provider-enrollee communication.
The State must ensure, through its contracts, that each MCO, PIHP, and PAHP protects communications between providers and enrollees in accordance with the terms of § 438.102 of this chapter.
§ 457.1224   Marketing activities.
The State must ensure, through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follows the requirements related to marketing activities in accordance with the terms of § 438.104 of this chapter, except § 438.104(c) of this chapter related to state agency review does not apply.
§ 457.1226   Liability for payment.
The State must ensure, through its contracts, that enrollees of MCOs, PIHPs, and PAHPs are not held liable for services or debts of the MCO, PIHP, or PAHPs in accordance with the terms of § 438.106 of this chapter.
§ 457.1228   Emergency and poststabilization services.
The State must ensure that emergency and poststabilization care services are available and accessible to enrollees in accordance with the terms of § 438.114 of this chapter.
§ 457.1230   Access standards.
(a) Availability of services. The State must ensure that the services are available and accessible to enrollees in accordance with the terms of § 438.206 of this chapter.
(b) Assurances of adequate capacity and services. The State must ensure, through its contracts, that each MCO, PIHP and PAHP has adequate capacity to serve the expected enrollment in accordance with the terms of § 438.207 of this chapter, except that the reporting requirements in § 438.207(d)(3)(i) of this chapter do not apply. The State must evaluate the most recent annual enrollee experience survey results as required at section 2108(e)(4) of the Act as part of the State's analysis of network adequacy as described at § 438.207(d) of this chapter.
(c) Coordination and continuity of care. The State must ensure, through its contracts, that each MCO, PIHP and PAHP complies with the coordination and continuity of care requirements in accordance with the terms of § 438.208 of this chapter, except that the applicability date in § 438.208(d) does not apply.
(d) Coverage and authorization of services. The State must ensure, through its contracts, that each MCO, PIHP, or PAHP complies with the coverage and authorization of services requirements in accordance with the terms of § 438.210 of this chapter, except that the following do not apply:
(1) Section 438.210(a)(5) of this chapter (related to medical necessity standard).
(2) Section 438.210(b)(2)(iii) of this chapter (related to authorizing long term services and supports (LTSS)).
§ 457.1233   Structure and operation standards.
(a) Provider selection. The State must ensure, through its contracts, that each MCO, PIHP or PAHP complies with the provider selection requirements as provided in § 438.214 of this chapter.
(b) Subcontractual relationships and delegation. The State must ensure, through its contracts, that each MCO, PIHP, PAHP, and PCCM entity complies with the subcontractual relationships and delegation requirements as provided in § 438.230 of this chapter.
(c) Practice guidelines. The state must ensure, through its contracts, that each MCO and, when applicable, each PIHP and PAHP, complies with the practice guidelines requirements as provided in § 438.236 of this chapter.
(d) Health information systems. The State must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the health information systems requirements as provided in § 438.242 of this chapter, except that the applicability date in § 438.242(e) of this chapter does not apply. The State is required to submit enrollee encounter data to CMS in accordance with § 438.818 of this chapter.
(e) Privacy protections. The state must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the privacy protections as provided in § 457.1110.
§ 457.1240   Quality measurement and improvement.
(a) Scope. This section sets forth requirements related to quality assessment and performance improvement that the State must meet in contracting with an MCO, PIHP, PAHP, or certain PCCM entities.
(b) Quality assessment and performance improvement program. (1) The State must require, through its contracts, that each MCO, PIHP, and PAHP establish and implement an ongoing comprehensive quality assessment and performance improvement program for the services it furnishes to its enrollees, in accordance with the requirements and standards in § 438.330 of this chapter, except that the terms of § 438.330(d)(4) of this chapter (related to dually eligible beneficiaries) do not apply.
(2) In the case of a contract with a PCCM entity described in paragraph (f) of this section, § 438.330(b)(2) and (3), (c), and (e) of this chapter apply.
(c) State review of the accreditation status of MCOs, PIHPs, and PAHPs. The State must review the accreditation status of each MCO, PIHP, and PAHP in accordance with the requirements as set forth in § 438.332 of this chapter.
(d) Managed care quality rating system. The State must determine a quality rating or ratings for each MCO, PIHP, and PAHP in accordance with the requirements set forth in subpart G of part 438 of this chapter, except that references to dually eligible beneficiaries, a beneficiary support system, and the terms related to consultation with the Medical Care Advisory Committee do not apply.
(e) Managed care quality strategy. The State must draft and implement a written quality strategy for assessing and improving the quality of health care and services furnished CHIP enrollees as described in § 438.340 of this chapter, except that the reference to consultation with the Medical Care Advisory Committee described in § 438.340(c)(1)(i) of this chapter does not apply.
(f) Applicability to PCCM entities. For purposes of paragraphs (b) and (e) of this section, a PCCM entity described in this paragraph is a PCCM entity whose contract with the State provides for shared savings, incentive payments or other financial reward for improved quality outcomes.
§ 457.1250   External quality review.
(a) Each State that contracts with MCOs, PIHPs, or PAHPs must follow all applicable external quality review requirements as set forth in §§ 438.350 (except for references to § 438.362), 438.352, 438.354, 438.356, 438.358 (except for references to § 438.6), 438.360 (only for nonduplication of EQR activities with private accreditation) and 438.364 of this chapter.
(b) A State may amend an existing EQRO contract to include the performance of EQR-related activities and/or EQR in accordance with paragraph (a) of this section.
§ 457.1260   Grievance system.
(a) Statutory basis and definitions —(1) Statutory basis. This section implements section 2103(f)(3) of the Act, which provides that the State CHIP must provide for the application of section 1932(a)(4), (a)(5), (b), (c), (d), and (e) of the Act (relating to requirements for managed care) to coverage, State agencies, enrollment brokers, managed care entities, and managed care organizations. Section 1932(b)(4) of the Act requires managed care plans to establish an internal grievance procedure under which an enrollee, or a provider on behalf of such an enrollee, may challenge the denial of coverage of or payment for covered benefits.
(2) Definitions. The following definitions from § 438.400(b) of this chapter apply to this section—
(i) Paragraphs (1) through (5) and (7) of the definition of “adverse benefit determination”; and
(ii) The definitions of “appeal”, “grievance”, and “grievance and appeal system”.
(b) General requirements. (1) The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions of § 438.402(a), (b), and (c)(2) and (3) of this chapter with regard to the establishment and operation of a grievances and appeals system.
(2) An enrollee may file a grievance and request an appeal with the MCO, PIHP, or PAHP. An enrollee may request a State external review in accordance with the terms of subpart K of this part after receiving notice under paragraph (e) of this section that the adverse benefit decision is upheld by the MCO, PIHP, or PAHP.
(3) If State law permits and with the written consent of the enrollee, a provider or an authorized representative may request an appeal or file a grievance, or request a State external review in accordance with the terms of subpart K of this part, on behalf of an enrollee. When the term “enrollee” is used throughout this section, it includes providers and authorized representatives consistent with this paragraph (b).
(c) Timely and adequate notice of adverse benefit determination. (1) The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at § 438.404(a) and (b)(1), (2), and (5) of this chapter (regarding the content of the notice of an adverse benefit determination).
(2) In addition to the requirements referenced in paragraph (c)(1) of this section, the notice must explain:
(i) The enrollee's right to request an appeal of the MCO's, PIHP's, or PAHP's adverse benefit determination, including information on exhausting the MCO's, PIHP's, or PAHP's one level of appeal described at § 438.402(b) of this chapter referenced in paragraph (b)(1) of this section, and the right to request a State external review in accordance with the terms of subpart K of this part; and
(ii) The procedures for the enrollee to exercise his or her rights provided under this paragraph (c).
(3) The MCO, PIHP, or PAHP must provide timely written notice to the enrollee of the adverse benefit determination. The terms of §§ 438.404(c)(6) and 438.210(d)(2) of this chapter apply in the circumstances of expedited service authorization decisions.
(d) Handling of grievances and appeals. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at § 438.406 of this chapter.
(e) Resolution and notification: Grievances and appeals. (1) The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at § 438.408(b) (relating to the timeframe for resolution of grievances and appeals), (c)(1) and (2) (the extension of timeframes for resolution of grievances and appeals), (d) (relating to the format of the notice of resolution for grievances and appeals), and (e)(1) (relating to the content of the notice of resolution for grievances and appeals) of this chapter.
(2) Each MCO, PIHP, or PAHP must resolve each grievance and appeal, and provide notice, as expeditiously as the enrollee's health condition requires, within State-established timeframes that may not exceed the timeframes specified in this paragraph (e).
(3) In the case of an MCO, PIHP, or PAHP that fails to adhere to the notice and timing requirements in this section, the enrollee is deemed to have exhausted the MCO's, PIHP's, or PAHP's appeals process. The enrollee may initiate a State external review in accordance with the terms of subpart K of this part.
(4) For appeals not resolved wholly in favor of an enrollee, in addition to the information required under paragraph (e)(1) of this section and § 438.408(e)(1) of this chapter, the content of the notice of appeal resolution must include the enrollee's right to request a State external review in accordance with the terms of subpart K of this part, and how to do so.
(5) Except as provided in paragraph (e)(3) of this section, an enrollee may request a State external review only after receiving notice that the MCO, PIHP, or PAHP is upholding the adverse benefit determination. The State must provide enrollees no less than 90 calendar days and no more than 120 calendar days from the date of the MCO's, PIHP's, or PAHP's notice of resolution to request a State external review. The parties to the State external review include the MCO, PIHP, or PAHP, as well as the enrollee and his or her representative or the representative of a deceased enrollee's estate.
(f) Expedited resolution of appeals. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at § 438.410 of this chapter.
(g) Information about the grievance and appeal system to providers and subcontractors. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at § 438.414 of this chapter.
(h) Recordkeeping requirements. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at § 438.416 of this chapter.
(i) Effectuation of reversed appeal resolutions. If the MCO, PIHP, or PAHP, or the result of a State external review, in accordance with the terms of subpart K of this part, reverses a decision to deny, limit, or delay services, the MCO, PIHP, or PAHP must authorize or provide the disputed services promptly and as expeditiously as the enrollee's health condition requires but no later than 72 hours from the date it receives notice reversing the determination.
§ 457.1270   Sanctions.
(a) General. The State must comply with §§ 438.700 through 438.704, 438.706(c) and (d), and 438.708 through 438.730 of this chapter.
(b) Optional imposition of temporary management. Except as provided in paragraph (c) of this section, the State may impose temporary management under § 438.702(a)(2) of this chapter as referenced in paragraph (a) of this section, only if it finds (through onsite surveys, enrollee or other complaints, financial status, or any other source) any of the following:
(1) There is continued egregious behavior by the MCO, including but not limited to behavior that is described in § 438.700 of this chapter (as referenced in paragraph (a) of this section), or that is contrary to any of the requirements of this subpart.
(2) There is substantial risk to enrollees' health.
(3) The sanction is necessary to ensure the health of the MCO's enrollees—
(i) While improvements are made to remedy violations under § 438.700 of this chapter as referenced in paragraph (a) of this section.
(ii) Until there is an orderly termination or reorganization of the MCO.
(c) Required imposition of temporary management. The State must impose temporary management (regardless of any other sanction that may be imposed) if it finds that an MCO has repeatedly failed to meet substantive requirements in this subpart. The State must also grant enrollees the right to terminate enrollment without cause, as described in § 438.702(a)(3) of this chapter as referenced in paragraph (a) of this section, and must notify the affected enrollees of their right to terminate enrollment.
§ 457.1280   Conditions necessary to contract as an MCO, PAHP, or PIHP.
(a) The State must assure that any entity seeking to contract as an MCO, PAHP, or PIHP under a separate child health program has administrative and management arrangements or procedures designed to safeguard against fraud and abuse.
(b) The State must ensure that the arrangements or procedures required in paragraph (a) of this section—
(1) Enforce MCO, PAHP, and PIHP compliance with all applicable Federal and State statutes, regulations, and standards.
(2) Prohibit MCOs, PAHPs, and PIHPs from conducting any unsolicited personal contact with a potential enrollee by an employee or agent of the MCO, PAHP, or PIHP for the purpose of influencing the individual to enroll with the entity.
(3) Include a mechanism for MCOs, PAHPs, and PIHPs to report to the State, to CMS, or to the Office of Inspector General (OIG) as appropriate, information on violations of law by subcontractors, providers, or enrollees of an MCO, PAHP, or PIHP and other individuals.
(c) With respect to enrollees, the reporting requirement in paragraph (b)(3) of this section applies only to information on violations of law that pertain to enrollment in the plan, or the provision of, or payment for, health services.
(d) The State may inspect, evaluate, and audit MCOs, PIHPs, and PAHPs at any time, as necessary, in instances where the State determines that there is a reasonable possibility of fraudulent or abusive activity.
§ 457.1285   Program integrity safeguards.
The State must comply with the program integrity safeguards in accordance with the terms of subpart H of part 438 of this chapter, except that the terms of §§ 438.66(e), 438.362(c), 438.602(g)(6) and (10), 438.604(a)(2), 438.608(d)(4) and references to LTSS of this chapter do not apply and that references to subpart K under part 438 should be read to refer to parity requirements at § 457.496.