DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
Center for Medicaid and CHIP Services 
 
CMCS Informational Bulletin 
  
DATE:  October 31, 2011 
 
FROM:  Cindy Mann 
  Director 
  Center for Medicaid, CHIP and Survey and & Certification (CMCS) 
 
SUBJECT:  Implementation of Section 3309 of the Affordable Care Act 
 
 
This Informational Bulletin provides information that we hope will be helpful to States as they 
work with CMS to implement section 3309 of the Affordable Care Act which eliminates Part D 
cost-sharing for full benefit dual eligible individuals receiving home and community-based 
services.  The effective date for Section 3309 is January 1, 2012. 
 
Background 
 
Section 3309 of the Affordable Care Act amends section 1860D-14 (a)(1)(D)(i) of the Social 
Security Act (the Act) to extend elimination of Medicare Part D cost-sharing to full benefit dual 
eligible individuals who would be institutionalized if they were not receiving services under a 
home and community-based waiver authorized by a State under section 1115, or subsections (c) 
or (d) of section 1915, or under a State plan amendment under section 1915(i), or if such services 
are provided through enrollment in a Medicaid managed care organization with a contract under 
section 1903(m) or under section 1932. 
 
New State Data   
 
In order to implement section 3309 of the Affordable Care Act, CMS needs data from States 
identifying full benefit dual eligible individuals who are receiving home and community-based 
services (HCBS) through one of the authorities listed in section 3309.  States are to report these 
data through an additional value in the Institutional Indicator field of the Medicare 
Modernization Act (MMA) file report.  The new value will be H for HCBS.  This new code 
now appears in the MMA File Specifications and Data Dictionary.  Beginning no later than 
January 1, 2012, States must identify their full dual beneficiaries who are receiving HCBS and 
code these individuals H for HCBS in the Institutional Indicator field of the MMA file report. 
 
Process for Beneficiaries to Correct HCBS Status 
 
In situations when CMS data systems do not reflect State data verifying HCBS status, 
individuals may provide certain State documents to verify their status as a full dual beneficiary 
receiving HCBS.  These documents would constitute Best Available Evidence (BAE), that is, 
 
  proof that the full dual beneficiary is receiving HCBS.  The individual would present the BAE 
document to their Part D plan sponsor, and the plan sponsor must forward the document to CMS 
agent for a correction of CMS data.  Plan sponsors will also be required to correct these 
individuals cost sharing levels in their own data systems, assigning copayment level 3 ($0) to a 
full dual individual receiving HCBS.  Below is a list of the types of State documents that Part D 
plan sponsors should accept as Best Available Evidence for receipt of HCBS.  Please note that 
CMS is not requesting States to create new documents to verify receipt of Home and 
Community-Based Services.  CMS expects plan sponsors to use existing State notices for the 
BAE process. 
 
One of the following forms of evidence from beneficiaries or pharmacists should be accepted as 
proof that a full dual beneficiary is receiving HCBS and qualifies for zero cost-sharing: 
a)  A copy of a State-issued Notice of Action, Notice of Determination, or Notice of 
Enrollment that includes the beneficiarys name and HCBS eligibility date during a 
month after June of the previous calendar year; 
b)  A copy of a State-approved HCBS Service Plan that includes the beneficiarys name 
and effective date beginning during a month after June of the previous calendar year; 
c)  A copy of a State-issued prior authorization approval letter for HCBS that includes the 
beneficiarys name and effective date beginning during a month after June of the 
previous calendar year; 
d)  Other documentation provided by the State showing HCBS eligibility status during a 
month after June of the previous calendar year; 
e)  A copy of a State-issued document confirming Medicaid payment for dates of  HCBS 
service on or after January 1, 2012, such as Remittance Advice, including the 
beneficiarys name and dates of HCBS. 
 
For any other State-issued document to be acceptable as BAE the minimum data elements are: 
a)  Beneficiarys name; 
b)  HCBS eligibility date. 
 
For further information or clarification on this Informational Bulletin letter, please contact 
Katherine Pokrzywa at 410-786-5530, or katherine.pokrzywa@cms.hhs.gov.