[Federal Register Volume 88, Number 182 (Thursday, September 21, 2023)]
[Rules and Regulations]
[Pages 65230-65271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20382]



[[Page 65229]]

Vol. 88

Thursday,

No. 182

September 21, 2023

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 406 and 435





Streamlining Medicaid; Medicare Savings Program Eligibility 
Determination and Enrollment; Final Rule

Federal Register / Vol. 88 , No. 182 / Thursday, September 21, 2023 / 
Rules and Regulations

[[Page 65230]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 406 and 435

[CMS-2421-F]
RIN 0938-AU00


Streamlining Medicaid; Medicare Savings Program Eligibility 
Determination and Enrollment

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule.

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SUMMARY: This final rule simplifies processes for eligible individuals 
to enroll and retain eligibility in the Medicare Savings Programs 
(MSPs). This final rule better aligns enrollment into the MSPs with 
requirements and processes for other public programs. Finally, this 
final rule reduces the complexity of applications and reenrollment for 
eligible individuals.

DATES: These regulations are effective November 17, 2023. Throughout, 
however, we identify separate compliance dates that vary by provision, 
thereby giving States additional time to implement the provisions of 
this final rule.

FOR FURTHER INFORMATION CONTACT: Kim Glaun, (410) 786-3849, 
<a href="/cdn-cgi/l/email-protection#046f6d692a636865716a446769772a6c6c772a636b72"><span class="__cf_email__" data-cfemail="0d666460236a616c78634d6e607e2365657e236a627b">[email protected]</span></a>, or Melissa Heitt, (410) 786-2484, 
<a href="/cdn-cgi/l/email-protection#adc0c8c1c4dedecc83c5c8c4d9d9edcec0de83c5c5de83cac2db"><span class="__cf_email__" data-cfemail="4f222a23263c3c2e61272a263b3b0f2c223c6127273c61282039">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This final rule addresses select provisions 
and public comments from the proposed rule, published in the September 
7, 2022 Federal Register (87 FR 54760). We intend to address the 
remaining provisions and public comments from the proposed rule in 
subsequent rulemaking.

I. Background

    Millions of individuals with limited income and resources rely on 
the Medicare Savings Programs (MSPs) to help cover Medicare Parts A and 
B premiums and, often, cost-sharing. In accordance with section 
1902(a)(10)(E) of the Social Security Act (the Act), MSPs are part of 
States' Medicaid programs and assist individuals who need help paying 
their Medicare costs.
    The MSPs are essential to the health and well-being of those 
enrolled, promoting access to care and helping free up individuals' 
limited income for food, housing, and other life necessities. Through 
the MSPs, Medicaid pays Medicare Part B premiums each month for over 10 
million individuals and Part A premiums for over 700,000 individuals. 
However, millions more are eligible but not enrolled. A 2017 study 
conducted for the Medicaid and CHIP Payment and Access Commission 
(MACPAC) estimated that only about half of eligible Medicare 
beneficiaries were enrolled in MSPs.\1\
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    \1\ Caswell, Kyle J., and Timothy A. Waidmann, ``Medicare 
Savings Program Enrollees and Eligible Non-Enrollees,'' The Urban 
Institute June 2017). https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf.
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    The Biden-Harris Administration is committed to protecting and 
strengthening Medicaid. On January 20, 2021, President Biden issued 
Executive Order 13985, charging Federal agencies with identifying 
potential barriers that underserved communities may face to enrollment 
in programs like Medicaid.\2\ This was followed on January 28, 2021 by 
Executive Order 14009 with a specific call to strengthen Medicaid and 
the Affordable Care Act and remove barriers to obtaining coverage for 
the millions of individuals who are potentially eligible but remain 
uninsured.\3\ The December 13, 2021 Executive Order 14058, 
``Transforming Federal Customer Experience and Service Delivery to 
Rebuild Trust in Government'' supports streamlining State enrollment 
and renewal processes and removing barriers to ensure eligible 
individuals are automatically enrolled in and retain access to critical 
benefit programs.\4\ The April 5, 2022 Executive Order 14070, 
``Continuing to Strengthen Americans' Access to Affordable, Quality 
Health Coverage'' charges Federal agencies with identifying ways to 
help more Americans enroll in quality health coverage.\5\ It calls upon 
Federal agencies to examine policies and practices that make it easier 
for individuals to enroll in and retain coverage. In response to these 
Executive Orders, we examined ways to improve access to the MSPs.
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    \2\ E.O. 13985, 86 FR 7009. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
    \3\ E.O. 14009, 86 FR 7793. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/.
    \4\ E.O. 14058, 86 FR 71357. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/13/executive-order-on-transforming-federal-customer-experience-and-service-delivery-to-rebuild-trust-in-government/.
    \5\ E.O. 14070, 87 FR 20689. https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/.
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    We have learned through our experiences in working with States and 
other interested parties that certain policies continue to result in 
unnecessary administrative burden and create barriers to enrollment and 
retention of coverage for eligible individuals. For example, there are 
no regulations to facilitate enrollment in the MSPs. In particular, we 
do not have regulations to link enrollment in other Federal programs 
with the MSPs, despite the high likelihood that individuals in such 
programs are eligible for the MSPs. This hinders States' ability to 
efficiently enroll those known to be eligible. Additionally, interested 
parties report that burdensome documentation requirements substantially 
impede eligible individuals from enrolling in the MSPs.\6\
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    \6\ In October 2020, CMS engaged with 55 interested parties 
across four States to better understand experiences when applying 
for the MSPs. One of the main findings was that burdensome 
documentation requirements substantially impede eligible individuals 
from enrolling in the MSPs and that easing these requirements is a 
critical step to ensuring individuals can obtain and retain these 
critical benefits.
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    In this rulemaking, we finalize policies to streamline MSP 
eligibility and enrollment processes, reduce administrative burden on 
States and applicants, and increase enrollment and retention of 
eligible individuals.
    Current regulations at 42 CFR 433.112 establish conditions that 
State eligibility and enrollment systems must meet to qualify for 
enhanced Federal matching funds. Among these conditions, Sec.  
433.112(b)(14) requires that each State system support accurate and 
timely processing and adjudications/eligibility determinations. As 
States submit proposed changes to their eligibility and enrollment 
systems and implement new and/or enhanced functionality, we will 
continue to provide them with technical assistance on the policy 
requirements, conduct ongoing reviews of both the State policy and 
State systems, and ensure that all proposed changes support more 
accurate and timely processing of eligibility determinations.
    We recognize that the COVID-19 pandemic disrupted routine 
eligibility and enrollment operations for Medicaid.\7\ As States have 
resumed

[[Page 65231]]

routine operations (a process we refer to as ``unwinding'') they are 
faced with the challenge of re-assessing eligibility for a 
significantly larger number of enrollees than ever before. From 
February 2020 through March 2023, enrollment in Medicaid increased by 
35.3 percent, or over 22 million individuals. Enrollment in Medicaid 
has increased in every State during that period. At the same time, many 
States report a shortage of eligibility workers. It is our priority to 
ensure that renewals of eligibility and transitions between coverage 
programs occur in an orderly process that minimizes beneficiary burden 
and promotes continuity of coverage and care.
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    \7\ Under the Families First Coronavirus Response Act (FFCRA, 
Pub. L. 116-127), States did not terminate enrollment for most 
individuals who were enrolled in Medicaid as of or after March 18, 
2020, as a condition of receiving a temporary increase in the 
Federal Medical Assistance Percentage. The Consolidated 
Appropriations Act, 2023 (CAA, 2023, Pub. L. 117-328), enacted on 
December 29, 2022, ended this Medicaid continuous enrollment 
condition on March 31, 2023, enabling States to begin the process of 
initiating Medicaid eligibility reviews as early as February 1, 
2023.
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    As we considered the challenges faced by States, we sought comment 
on reasonable implementation timelines for the provisions in our 
proposed rule, which would allow States to implement these important 
policies without negatively impacting the resumption of routine 
eligibility and enrollment operations. Certain provisions designed to 
improve the retention of eligible individuals could reduce the 
likelihood of eligible individuals losing health coverage during 
unwinding. However, we were also concerned that the work necessary to 
immediately implement such provisions would divert needed resources 
away from critical unwinding-related activities.
    Recognizing that each State faces a unique set of challenges 
related to unwinding, with differing needs and opportunities, we sought 
comment on whether an effective date of 30 days following publication 
would be appropriate when combined with a later date for compliance for 
most provisions. We also sought comment on the timeframe that would be 
most effective for compliance with each provision and whether the 
compliance date should vary by provision.
    In this final rule, we establish compliance dates that allow time 
for States to fully comply with new requirements while balancing other 
immediate priorities. Many of the provisions have compliance dates of 
April 1, 2026, one has a compliance date of October 1, 2024, and 
provisions that create State options generally take effect on the 
effective date of this final rule. We encourage States to comply with 
all new requirements as expeditiously as possible because they will 
improve access to MSPs for eligible new applicants and improve 
retention of eligible individuals who are already enrolled in an MSP, 
while reducing administrative burden on States and individuals.
    Finally, implementation of this final rule will complement other 
new policies to improve access to coverage and affordability of 
prescription drugs. Beginning January 1, 2024, section 11404 of the 
Inflation Reduction Act expands eligibility for the full Medicare Part 
D Low-Income Subsidy benefit. To the extent that this change increases 
the number of people who apply for the Low-Income Subsidy and are 
otherwise eligible for (but not yet enrolled in) the MSPs, provisions 
in this final rule will facilitate access to the MSPs while reducing 
administrative burdens. And to the extent this final rule improves 
access to the MSPs, it will also automatically improve access to the 
Low-Income Subsidy, as we describe later in this final rule. Based on 
the evidence that Medicare prescription drug subsidies improve access 
to treatment \8\ and overall access to health insurance improves health 
outcomes,\9\ our proposals are likely to improve the health of older 
adults and people with disabilities.
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    \8\ Dusetzina, S. et al., ``Many Medicare Beneficiaries Do Not 
Fill High-Price Specialty Drug Prescriptions,'' Health Affairs. 41: 
no. 4 (April 2022): 487-496. https://www.healthaffairs.org/doi/epdf/10.1377/hlthaff.2021.01742.
    \9\ Hoffman, Catherine, and Julia Paradise, ``Health Insurance 
and Access to Health Care in the United States,'' Ann. N.Y. Acad. 
Sci. 1136 (2008): 149-160. https://nyaspubs.onlinelibrary.wiley.com/doi/pdfdirect/10.1196/annals.1425.007.
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II. Provisions of the Proposed Rule and Analysis of and Response to 
Public Comments

A. Facilitating Medicaid Enrollment

1. Facilitate Enrollment Through Medicare Part D Low-Income Subsidy 
``Leads'' Data (42 CFR 435.4, 435.601, 435.911, and 435.952)
    Medicare Savings Programs and Part D Low- Income Subsidy 
Background. Under mandatory eligibility groups that are collectively 
referred to as MSPs, individuals with limited income and resources 
qualify for Medicaid coverage of Medicare Part A and/or B premiums and, 
often, cost-sharing. State Medicaid agencies receive applications and 
adjudicate eligibility for full Medicaid and MSP coverage. Currently, 
the MSP eligibility groups cover over 10 million low-income 
individuals. There are three primary MSP eligibility groups: \10\ the 
Qualified Medicare Beneficiary (QMB) group, through which Medicaid pays 
all of an individual's Medicare Parts A and B premiums and assumes 
liability for most associated Medicare cost-sharing charges for people 
with income that does not exceed 100 percent of the FPL; the Specified 
Low-Income Medicare Beneficiary (SLMB) group, through which Medicaid 
pays the Part B premium for people with income that exceeds 100 
percent, but is less than 120 percent, of the FPL; and the Qualifying 
Individuals (QI) group, through which Medicaid pays Part B premiums for 
people with income of at least 120 percent but less than 135 percent of 
the FPL.\11\ Individuals also must meet corresponding resource criteria 
to be eligible for an MSP. The income and resource requirements for 
coverage under the MSPs, and the benefits to which eligible individuals 
are entitled, are set forth at sections 1905(p)(1) and 1902(a)(10)(E) 
of the Act. Among other things, section 1905(p) of the Act directs that 
the income and resource methodologies applied by the Social Security 
Administration (SSA) in determining supplemental security income (SSI) 
eligibility per sections 1612 and 1613 of the Act be used to determine 
financial eligibility for the MSPs, except that States may employ less 
restrictive income and/or resource methodologies than those applied in 
determining SSI eligibility under the authority of section 1902(r)(2) 
of the Act.
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    \10\ There is a separate and fourth MSP eligibility group 
generally referred to as the ``Qualified Disabled Working 
Individuals (QDWI) group,'' or QDWI group. As described in section 
1902(a)(10)(E)(ii) of the Act, eligibility in the QDWI group is 
limited to individuals whose incomes do not exceed 200 percent of 
the FPL; whose resources do not exceed twice the relevant SSI 
resource standard (that is, for a single individual or couple); and 
who are eligible to enroll in Part A under section 1818A of the Act. 
Section 1818A of the Act permits individuals who became entitled to 
Part A on the basis of their receipt of Social Security disability 
insurance (SSDI) and who subsequently lose SSDI after returning to 
work (and, hence, entitlement to Part A) to enroll in Part A 
contingent on paying the Part A premiums. The medical assistance 
available to QDWIs is the coverage of the Part A premiums. The QDWI 
group is not included in this proposal, because the income limits of 
the QDWI group are significantly higher than LIS and there does not 
exist the flexibility to disregard resources that are available for 
the other MSPs.
    \11\ Unlike a subset of individuals enrolled in the QMB and SLMB 
groups, no individuals enrolled in the QI group are eligible for 
other Medicaid program benefits.
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    As discussed in the proposed rule at 87 FR 54763, the MSPs are 
essential to the health and economic well-being of low-income Medicare 
enrollees, helping to free up limited income for food, housing, and 
other life necessities. Despite the importance of the MSPs, a 2017 
study conducted for MACPAC estimated that only about half of eligible 
individuals enrolled in Medicare were also enrolled in the MSPs.\12\ 
This means

[[Page 65232]]

that millions of Medicare enrollees living in poverty are paying over 
10 percent of their income to cover Medicare premiums alone, despite 
being eligible for Medicaid coverage for these costs. Complex MSP 
enrollment processes contribute to this low participation 
rate.<SUP>13 14</SUP>
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    \12\ Caswell, Kyle J., and Timothy A. Waidmann, ``Medicare 
Savings Program Enrollees and Eligible Non-Enrollees,'' The Urban 
Institute, June 2017. https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf.
    \13\ Office of the Assistant Secretary for Planning and 
Evaluation, ``Loss of Medicare-Medicaid Dual Eligible Status: 
Frequency, Contributing Factors, and Implications,'' May 8, 2019. 
https://aspe.hhs.gov/basic-report/loss-medicare-medicaid-dual-eligible-status-frequency-contributing-factors-and-implications.
    \14\ Government Accountability Office, ``Medicare Savings 
Programs: Implementation of Requirements Aimed at Increasing 
Enrollment,'' September 2012. https://www.gao.gov/assets/gao-12-871.pdf.
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    The Medicare Improvements for Patients and Providers Act of 2008 
(MIPPA) (Pub. L. 110-275, enacted July 15, 2008), aimed to improve low-
income benefit programs for Medicare beneficiaries. MIPPA included new 
requirements for States to streamline enrollment of Medicare Part D 
Low-Income Subsidy (LIS) program enrollees into the MSPs. This final 
rule codifies provisions from MIPPA and builds upon its requirements to 
further streamline MSP enrollment for LIS enrollees and address 
persistent under enrollment in the MSPs.
    The Medicare Part D LIS program, also sometimes referred to as 
``Extra Help,'' is administered by SSA and pays Medicare Part D 
prescription drug premiums and cost-sharing for over 13 million 
individuals with low incomes. Most LIS enrollees are deemed eligible 
for LIS by virtue of their enrollment in Medicaid. Others apply for the 
benefit by completing an application and submitting it to SSA. Once 
received, SSA uses the information provided on the LIS application to 
determine LIS eligibility. Section 1860D-14(a)(3)(C) of the Act directs 
that the income methodologies for LIS are the MSP income methodologies 
described in section 1905(p)(1)(B) of the Act (that is, with very 
narrow exceptions, the SSI income methodologies). Similarly, section 
1860D-14(a)(3)(D) and (E) of the Act direct that the resource 
methodologies for LIS are the MSP resource methodologies described in 
section 1905(p)(1)(C) of the Act, which are also generally aligned with 
the SSI resource methodologies, except that the cash value of life 
insurance, which is typically countable under SSI resource 
methodologies, is not counted as a resource for LIS. The SSA has also 
adopted a few additional regulatory and sub-regulatory methodological 
simplifications for the LIS program that differ from SSI rules, as 
explained later in this section of the final rule.
    The MSP and LIS programs both assist low-income individuals in 
accessing the Medicare benefits to which they are entitled and, as 
described previously in this final rule, generally use a common 
methodology to determine income and resource eligibility. Current 
regulations at 42 CFR 423.773(c) require that individuals enrolled in 
MSPs be automatically enrolled in LIS. However, individuals who are 
enrolled in LIS are not automatically enrolled in MSPs. Many people 
enrolled in the LIS program are not enrolled in an MSP, despite likely 
being eligible. As discussed in the proposed rule at 87 FR 54764, MIPPA 
included several provisions to promote the enrollment of LIS applicants 
into the MSPs.
    In particular, section 113 of MIPPA requires SSA to transmit data 
from LIS applications (``leads data'') to State Medicaid agencies, and 
that the electronic transmission from SSA ``shall initiate'' an MSP 
application. MIPPA also requires States to accept leads data and ``act 
upon such data in the same manner and in accordance with the same 
deadlines as if the data constituted'' an MSP application submitted by 
the individual. As outlined under Sec.  435.912, States have 45 days to 
make an MSP eligibility determination based on the LIS data. The date 
of the MSP application is defined as the date of the individual's 
application for LIS under section 1935(a) of the Act.
    Despite these statutory requirements, not all States initiate an 
MSP application upon receipt of leads data from SSA. Based on program 
experience and comments submitted on the proposed rule, some States 
have been unaware or unclear of the steps required to meaningfully use 
the leads data to streamline eligibility and enrollment in the MSPs. 
Our data reflects that currently over a million individuals enrolled in 
full LIS are not enrolled in an MSP. Given near alignment of MSP and 
full LIS eligibility criteria, most of these individuals are likely 
eligible for an MSP eligibility group.
    The January 28, 2021 Executive Order on Strengthening Medicaid and 
the Affordable Care Act directs agencies to address policies and 
practices that may present unnecessary barriers to individuals and 
families attempting to access Medicaid coverage,\15\ the April 5, 2022 
Executive Order on Continuing to Strengthen Americans' Access to 
Affordable, Quality Health Coverage charges Federal agencies with 
identifying ways to help more Americans enroll in quality health 
coverage,\16\ and the December 13, 2021 Executive Order on Transforming 
Federal Customer Experience and Service Delivery to Rebuild Trust in 
Government supports streamlining State enrollment and renewal processes 
and removing barriers to ensure eligible individuals are automatically 
enrolled in and retain access to critical benefit programs.\17\ As 
such, we have evaluated CMS's regulatory authority to reduce barriers 
to enrollment of eligible individuals into the MSPs. Under the 
authority in section 1902(a)(4) of the Act to specify ``methods of 
administration'' that the Secretary finds to be ``necessary for the 
proper administration'' of State plans, we proposed several regulatory 
changes to promote efficient enrollment in the MSPs by maximizing 
States' use of LIS leads data. At 87 FR 54764, we explained that we 
anticipated these proposals would also have a positive impact on health 
equity by helping to provide more low-income individuals with access to 
additional health coverage consistent with the January 20, 2021 
Executive Order.\18\
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    \15\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/.
    \16\ https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/.
    \17\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/13/executive-order-on-transforming-federal-customer-experience-and-service-delivery-to-rebuild-trust-in-government/.
    \18\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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    Accepting LIS leads data as an MSP application. As discussed in the 
proposed rule at 87 FR 54764, SSA must transmit the LIS leads data to 
States, and States must use that data to initiate an application for 
the MSPs. CMS has reinforced this requirement multiple times.\19\
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    \19\ See February 18, 2010 State Medicaid Director Letter (SMDL 
#10-003), ``Medicare Improvements for Patients and Providers Act of 
2008 (MIPPA),'' explaining how to treat leads data as an application 
for MSPs. https://www.medicaid.gov/federal-policy-guidance/downloads/smd10003.pdf. We reiterated this 2010 guidance in 2020 in 
Chapter 1, section 1.6.2 of the Manual for the State Payment of 
Medicare Premiums, https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf, and in the November 1, 2021 Center 
for Medicaid and CHIP Services Informational Bulletin, 
``Opportunities to Increase Enrollment in Medicare Savings 
Programs.'' https://www.medicaid.gov/federal-policy-guidance/downloads/cib11012021.pdf.
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    We proposed to codify in regulation the statutory requirements for 
States to

[[Page 65233]]

maximize the use of leads data to establish eligibility for Medicaid 
and the MSPs. At 87 FR 54765, we foresaw that codifying these 
requirements would lead to more eligible individuals enrolling in MSPs 
because it was our understanding that some States may have been unaware 
or unclear of the steps required to meaningfully use the leads data to 
streamline eligibility and enrollment in the MSPs.
    Currently, all States receive leads data from SSA each business 
day. Per section 113 of MIPPA, States must accept, via secure 
electronic transfer, the SSA leads data and process that information to 
initiate an MSP application. However, as discussed at 87 FR 54765, we 
are aware that several States do not use the leads data to begin the 
application process. We proposed to add a definition of LIS leads data 
at Sec.  435.4 and a new paragraph (e) to Sec.  435.911 of the 
regulations to clearly delineate the steps States must take upon 
receipt of leads data from SSA. We proposed to define LIS leads data to 
mean data from an individual's application for low-income subsidies 
under section 1860D-14 of the Act that the SSA electronically transmits 
to the appropriate State Medicaid agency as described in section 
1144(c)(1) of the Act. We proposed at Sec.  435.911(e)(1) to require 
States to accept, via secure electronic interface, the SSA LIS leads 
data. We proposed paragraph (e)(2) to require that States treat receipt 
of the leads data as an application for Medicaid and promptly and 
without undue delay, consistent with the timeliness standards at Sec.  
435.912, determine MSP eligibility without requiring submission of a 
separate application.
    We proposed paragraph (e)(4) to prevent States from requesting that 
individuals attest or otherwise provide documentation to establish 
information contained in leads data, which SSA has already used for the 
LIS eligibility determination. We noted that a State is not in 
compliance with the statutory requirement in section 1935(a)(4) of the 
Act to initiate an application based on leads data or with the proposed 
regulation if it requires the individual to file a new application for 
MSP, since the leads data already provides much of the information that 
would otherwise be requested on an application.
    Further, because the LIS leads data that is transferred to State 
agencies has just been used by the SSA for the LIS determination, State 
verification of this data prior to adjudicating eligibility is 
duplicative and inefficient. As such, under the Secretary's authority 
under section 1902(a)(4) of the Act (relating to establishment of such 
methods of administration as the Secretary determines ``necessary for 
proper and efficient administration'' of the Medicaid program) and 
section 1902(a)(19) of the Act (relating to simplicity of 
administration and the best interests of recipients), we proposed at 
Sec.  435.911(e)(5) that States be required to accept information that 
is provided through the leads data without further verification, with 
certain exceptions, as described below.
    However, at 87 FR 54765, we recognized that State Medicaid agencies 
generally will need to obtain additional information beyond what is 
provided by the SSA that is necessary to determine eligibility, as some 
differences remain in income and resource counting methodologies 
between the LIS and MSPs, as described in more detail in the proposed 
rule. In addition, as discussed at 87 FR 54765 through 54766, the leads 
data transmitted to the State does not include information on an 
individual's citizenship or immigration status, and therefore, States 
will need to verify their status. In accordance with Sec.  435.406(a) 
and section 1137(d) of the Act, individuals must make a declaration of 
U.S. citizenship or satisfactory immigration status (subject to certain 
verification rules at Sec. Sec.  435.956 and 435.407 and exemptions for 
Medicare beneficiaries at Sec.  435.406(a)(1)(iii)(B)).
    As such, we proposed at paragraph (e)(3) of Sec.  435.911 that 
States must obtain additional information needed to make a 
determination of eligibility for MSPs. We also recommended that when 
States request additional information from individuals, they include 
information on how to contact the local State Health Insurance 
Assistance Program (SHIP) for assistance.
    Consistent with existing regulations at Sec. Sec.  435.907(e) and 
435.952(c), we proposed at paragraph (e)(4) of Sec.  435.911 that 
States may not request that individuals attest or otherwise provide 
documentation to establish information that SSA has already used for 
the LIS eligibility determination.
    Therefore, in instances in which the leads data would not support a 
determination of eligibility for MSPs, we proposed at Sec.  
435.911(e)(7) to require that States use the information provided by 
the applicant to SSA through the LIS application process and separately 
verify the individual's eligibility for Medicaid in accordance with the 
State's verification policies. Specifically, under proposed Sec.  
435.911(e)(7), the State would be required to: (1) determine whether 
additional information is needed to make a determination of eligibility 
for an MSP; (2) if additional information is needed, notify the 
individual that they may be eligible for assistance with their Medicare 
premium and/or cost-sharing charges, but that additional information is 
needed for the agency to make a determination of such eligibility; (3) 
provide the individual with a minimum of 30 days to furnish any 
information needed by the agency to determine MSP eligibility; and (4) 
verify the individual's eligibility for an MSP in accordance with the 
State's verification plan developed in accordance with Sec.  
435.945(j). We noted that, in the case of an applicant who has attested 
to income or assets over the applicable income or resource standard, 
States could, but would not be required to, request additional 
information from the individual to confirm ineligibility for coverage.
    Under our proposal, States would continue to be permitted to 
request from the individual information that is necessary to make an 
MSP eligibility determination if such information is missing from the 
leads data and cannot be obtained from other third-party sources 
consistent with current regulations, and as clarified in our proposed 
revisions to Sec.  435.952(c). Similarly, States may not reach out to 
individuals to request information already provided through leads data 
unless the State has current and reliable information that is not 
reasonably compatible \20\ with the leads data. We anticipate such 
circumstances with respect to financial eligibility would be rare since 
SSA has already used the leads data for the LIS determination just 
prior to State use, employing many of the same sources for financial 
eligibility data relied upon by States.
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    \20\ Under Sec.  435.952(c)(1), income information obtained 
through an electronic data match shall be considered ``reasonably 
compatible'' with income information provided by or on behalf of an 
individual if both are either above or at or below the applicable 
income standard or other relevant income thresholds.
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    Finally, individuals eligible for the LIS program may be eligible 
for full Medicaid benefits, in addition to the assistance with Medicare 
premiums and cost-sharing available under the MSPs. Under the current 
regulations at Sec.  435.911, for individuals who submit the single 
streamlined application for Medicaid on the basis of MAGI, but who may 
be eligible on a basis other than MAGI, States are required to collect 
any additional information that is needed to make a determination on a 
non-MAGI basis, and to make such determination if the individual 
provides the needed information. Consistent with sections 1902(a)(4) 
and (a)(19) of the Act, we proposed a similar requirement with

[[Page 65234]]

respect to individuals whose applications were initiated by receipt of 
LIS leads data. Specifically, we proposed new regulatory text at Sec.  
435.911(e)(6) to require States to obtain such additional information 
as may be needed to determine whether individuals whose MSP 
applications were initiated based on receipt of LIS leads data are 
eligible for Medicaid in any other eligibility groups (that is, other 
than the MSPs), including other non-MAGI groups and MAGI-based groups 
as well. This proposal aimed to codify a pathway for efficient 
enrollment of LIS enrollees into both the appropriate MSP eligibility 
group, as well as into a full-benefit group if eligible without 
imposing undue administrative burdens on States. We anticipated this 
would also promote program integrity by ensuring enrollment in the 
appropriate eligibility group. We noted that individuals can be 
eligible for both an MSP and an eligibility group that confers full 
Medicaid benefits. Therefore, the requirement under proposed Sec.  
435.911(e)(6) was in addition to the requirement to determine the 
individual's eligibility for an MSP.
    We received many comments on our proposals to streamline MSP 
determinations using LIS leads data, and our responses follow.
    Comment: Many commenters applauded CMS efforts to streamline MSP 
determinations using LIS leads data with this new rule. They noted that 
large numbers of eligible older adults and individuals with 
disabilities are missing out on the vital financial and health benefits 
the MSPs provide and cited burdensome paperwork requirements as a key 
driver of persistent under-enrollment in these programs for individuals 
who are eligible for them. They pointed out that, since 2010, Federal 
statute (MIPPA) has required States to leverage leads data to 
facilitate MSP enrollment for individuals enrolled in the LIS program, 
and asserted that CMS's proposal to codify and build upon these 
requirements is needed to ensure States fully leverage leads data for 
MSP determinations and to promote greater uniformity among States in 
application processes and MSP participation rates for individuals 
enrolled in LIS. MACPAC generally supported these provisions, noting 
that they would promote MSP enrollment by simplifying eligibility and 
enrollment processes and would improve health equity by increasing 
access to care for additional low-income individuals with Medicare.
    Response: We thank the commenters for their support. As we stated 
above, the MSPs are essential to the health and economic well-being of 
those enrolled, promoting access to care and helping free up 
individuals' limited income for food, housing, and other life 
necessities. We remain committed to increasing participation in these 
vital programs and foresee that simplifying enrollment processes would 
help hundreds of thousands of eligible individuals access these 
critical benefits.
    Comment: Some commenters expressed concerns that proposals at new 
Sec.  435.911(e) to facilitate MSP enrollment through leads data would 
be burdensome and costly for States. For example, while MACPAC 
generally supported these provisions, it noted that they would likely 
increase costs to States and add to their administrative burden. Other 
commenters relayed concerns with the quality and adequacy of the leads 
data which they asserted would require additional manual work and 
system upgrades for States. For that reason, the commenters requested 
that CMS work with SSA to improve leads data before adopting this 
proposal. For example, some commenters maintained that because leads 
data lacks all information necessary for MSP determinations, States 
must follow up to obtain missing information. In addition, a commenter 
incorrectly contended that leads income and resource data is unusable 
because the commenter believed that information appears as a lump sum 
total, without a breakdown of sources and amounts. A few commenters 
noted that leads data omits citizenship and immigration status 
information and requested that CMS and SSA explore adding it in the 
future.
    Response: We appreciate the commenters' perspectives and 
acknowledge that complying with our proposals to streamline MSP 
enrollment for LIS recipients could require some States to update their 
policy, operations, and/or systems--although we project reductions in 
administrative costs over the long term. We also recognize that 
increases in MSP enrollment as a result of our proposal could raise 
costs for States. However, Federal statute (MIPPA) has required States 
to use leads data to initiate an MSP application since January 1, 2010. 
Further, as we detailed in the proposed rule at 87 FR 54765, 
misalignments between the LIS and MSP programs may mean that leads data 
omits certain data needed to determine MSP eligibility. However, under 
Sec.  435.911(c)(2), States are already required to obtain additional 
information for applicants, including LIS applicants whose data has 
been transferred to the State through the leads data, when current 
information is insufficient to make a Medicaid eligibility 
determination.
    With respect to the commenter's contention that LIS leads data only 
contains undifferentiated total amounts of the individual's income and 
resources, this is incorrect. We clarify that an individual's leads 
data record includes a breakdown of income and resources, by source and 
amounts.\21\ In response to commenters' questions about expanding leads 
data to include citizenship information, we plan to explore with SSA 
the feasibility of adding this information in the future, as we foresee 
it could streamline processes for citizenship-related eligibility under 
Sec.  435.406 and reduce burden on States and individuals. With respect 
to the request to add immigration status information to the leads data, 
we plan to analyze further the feasibility and benefits of such an 
expansion to streamline eligibility determinations before exploring 
this step with SSA. In addition, as we reiterate in response to other 
comments below, if the State already has previously verified this 
information and it is included in the case record for the individual, 
the State must not request this information from the individual again 
in accordance with Sec.  435.956(a)(4)(ii).
---------------------------------------------------------------------------

    \21\ See LIS record. https://www.ssa.gov/dataexchange/documents/LIS%20record.pdf.
---------------------------------------------------------------------------

    Overall, States' comments revealed States' lack of familiarity with 
the leads data. We also acknowledge that States are engaged in 
unwinding from the Medicaid continuous enrollment condition, and our 
proposal adds some new requirements for States, despite the 
longstanding MIPPA requirements. Therefore, we will provide States more 
time to comply with these provisions after this final rule's effective 
date, as explained below. Prior to the compliance date, we plan to 
focus on providing technical assistance and guidance to States to 
assist them in achieving full compliance with these provisions.
    Comment: While supportive of this codification, a number of 
commenters urged CMS to pursue concerted monitoring and oversight of 
States' compliance with their obligations under MIPPA. These commenters 
reported widespread partial or full non-compliance with leads data 
requirements by States, including examples of States that lack the 
system capacity to leverage leads data and States that automatically 
send individuals identified through LIS leads data an MSP application 
or instructions on how to complete the process.

[[Page 65235]]

    Response: We appreciate the commenters' support for codifying in 
regulation the MIPPA requirements for how States must use LIS leads 
data for determining MSP eligibility and agree with their likely 
benefits, including clarity and accountability for States. We also 
agree with the commenters on the importance of effective oversight and 
monitoring. We intend to implement a robust oversight and monitoring 
approach, and we are currently exploring options on how best to ensure 
the LIS leads data provisions are effectively implemented.
    Comment: A commenter maintained that codifying MIPPA is 
unnecessary, stating that States currently use LIS leads data as 
required. Some commenters also noted that these proposals were already 
required by MIPPA.
    Response: We appreciate the commenters' input but disagree that 
codifying the MIPPA requirements is unnecessary. As described in the 
proposed rule (87 FR 54764) and reiterated by commenters and noted 
previously in this final rule, many States have only partially 
implemented these requirements, and some have yet to meaningfully do so 
at all. We believe that codifying the requirements for States will 
clarify State responsibilities under MIPPA and lead to more States 
using leads data as required. However, while we are codifying 
provisions already required by law, we disagree that all of our 
proposals are already required by MIPPA. For example, in our 2010 
guidance on implementing MIPPA, State Medicaid Director Letter, #10-
003, ``Medicare Improvements for Patients and Providers Act of 2008'' 
(the 2010 MIPPA SMDL),\22\ we advised that States are permitted to 
treat leads as verified for the purposes of MSP determinations. Under 
our proposal, we would newly require States to accept leads data 
without further verification unless the State has other information 
that is not reasonably compatible with the leads data.
---------------------------------------------------------------------------

    \22\ https://www.medicaid.gov/federal-policy-guidance/downloads/smd10003.pdf.
---------------------------------------------------------------------------

    Comment: Several commenters supported proposals in Sec.  
435.911(e)(4) on accepting leads data as verified if it supports an MSP 
eligibility determination and Sec.  435.911(e)(5) on refraining from 
requesting data already in leads data. Commenters noted that these 
proposals reduce duplication, reduce barriers to enrollment, and 
streamline the MSP determination process. A commenter stated that 
requiring States to treat leads data as verified would boost the share 
of individuals enrolled in LIS who would also get enrolled into MSPs.
    Response: We thank the commenters for their support about accepting 
leads data as verified and agree that these provisions reduce 
duplication and barriers to enrollment.
    Comment: A few commenters noted their opposition to our proposal to 
require States to accept leads data as verified without requesting 
further information from the individual or separate verification by the 
State. A commenter expressed program integrity concerns, asserting that 
LIS data is less reliable than other State sources of information. 
Another commenter explained that its State verification procedures 
require individuals to produce documentation when State information 
sources differ from the information the applicant has supplied. The 
commenter noted that these requirements are stricter than SSA's LIS 
program procedures which allow SSA to accept an individual's verbal 
explanation of a discrepancy between income and resources if it is 
reasonable. A commenter said that CMS's proposal is inconsistent, 
forcing States to accept leads data as verified if it supports an MSP 
eligibility determination, but not allowing States to accept leads data 
as verified if it does not support an MSP eligibility determination.
    Response: As noted in the proposed rule at 87 FR 54765, we maintain 
that accepting leads data as verified and not allowing States to 
request that the applicant provide information already sent to the 
State by SSA limits duplication and streamlines the MSP determination 
process. Additionally, we disagree with the commenters' assertion that 
the LIS information is inherently less reliable than other State 
sources of information. As we noted in the proposed rule at 87 FR 
54766, States and SSA are pulling electronic data from many of the same 
sources of information. Additionally, as explained previously in this 
final rule, if States have other information not reasonably compatible 
with leads data, they must request additional information from the 
individual before enrollment.
    With respect to the commenter's concerns about the differing 
requirements when leads data would lead to a denial, we stated in the 
proposed rule (87 FR 54765) that applying a different verification 
policy to the use of LIS leads data that supports an MSP eligibility 
determination versus the use of leads data that would result in an MSP 
denial is in keeping with provisions of the Computer Matching and 
Privacy Protection Act (CMPPA, Pub. L. 100-503) at 5 U.S.C. 522a(p)(1). 
The CMPPA requires States to take actions to independently verify 
information that SSA provides before the State may terminate, suspend, 
reduce, deny, or take other adverse action against an individual.
    Comment: A few commenters provided input about the processing of 
MSP applications under proposed Sec.  435.911(e). A commenter asserted 
the proposal requires States to process MSP applications 45 days from 
the date SSA receives the LIS application and requested a longer period 
to align its LIS and MSP processes to comply. A few commenters 
questioned what State action is appropriate (for example, a denial of 
eligibility) if an individual does not return information requested by 
the State that is absent from the leads data and needed to determine 
eligibility for the MSPs.
    Response: As we discussed in the 2010 MIPPA SMDL, States must treat 
the date the LIS application is filed with SSA as the date of 
application for purposes of establishing the effective date of 
eligibility for MSP benefits. However, States have flexibility 
regarding the calculation of the 45-day processing timeline under Sec.  
435.912(c)(3). States may either use the date that the State receives 
the LIS leads data from SSA or the date of the LIS application as the 
start of the calculation of the 45-day processing timeline under Sec.  
435.912(c)(3). This policy allows additional time to make this MSP 
determination based on the LIS leads data, while ensuring MSP coverage 
is not delayed for eligible individuals. Additionally, we clarify that 
for MSP applications based on leads data, if an individual fails to 
comply with a request for information within the requisite time, a 
State would issue a notice of denial consistent with 42 CFR 431.210 and 
435.917(b).
    Comment: Some commenters submitted suggestions regarding the 
proposed new Sec.  435.911(e)(3) that requires States to request 
additional information that is necessary for the MSP determination. 
Commenters suggested that CMS require States to collect additional 
relevant information through a pre-populated form that contains LIS 
leads data. These commenters maintained that individuals may be more 
likely to understand and timely respond to a prepopulated form. 
Further, a commenter stated that while States would generally need to 
obtain citizenship/immigration status, which is not in leads data, it 
is likely that many LIS applicants have been enrolled in Medicaid in 
the past. The commenter recommended that CMS re-emphasize

[[Page 65236]]

that Sec.  435.956(a)(4) requires States to maintain a record of having 
verified citizenship or immigration status and not re-verify or require 
MSP applicants to re-verify their status.
    Response: We agree that collecting missing information through a 
pre-populated form may help individuals respond timelier to States' 
request for additional information. As such, we encourage States to use 
pre-populated forms as a best practice. At this time, though, we 
decline to make this a requirement for States because we are interested 
in providing States some flexibility in carrying out this particular 
requirement. However, we will consider this recommendation in the 
future based on program experience. In addition, we agree that Sec.  
435.956(a)(4) requires States to maintain a record of previously 
verified citizenship or immigration status, in accordance with the 
State's records retention policy in accordance with Sec.  431.17(c). 
Further, States may not re-verify or require MSP applicants to re-
verify citizenship at renewal or subsequent application when such 
verification is documented in the individual's case record unless the 
individual has reported a change in citizenship, the agency has 
received information indicating a potential change, and the individual 
is not exempt from the requirement to provide documentation of 
citizenship under Sec.  435.406(a)(1)(iii). We note that consistent 
with current policy, States may refrain from verifying immigration 
status for individuals whose particular status is not subject to change 
if verification of such status is documented in the individual's case 
record, the individual has not reported a change, and the agency has 
not received information indicating a potential change.\23\
---------------------------------------------------------------------------

    \23\ See final rule titled ``Medicaid and Children's Health 
Insurance Programs: Eligibility Notices, Fair Hearing and Appeal 
Processes for Medicaid and Other Provisions Related to Eligibility 
and Enrollment for Medicaid and CHIP'' published in the November 30, 
2016 Federal Register (81 FR 86382, 86428).
---------------------------------------------------------------------------

    Comment: A few commenters shared feedback on CMS's recommendation 
that States include information on how to contact the local SHIP when 
asking individuals for more information to make an MSP determination. 
Some commenters supported this recommendation, including a commenter 
that recommended that CMS make it mandatory. These commenters pointed 
out that SHIPs may be uniquely equipped to provide individuals one-on-
one help to explain State communications and how to satisfy the State 
request for additional information. Conversely, a commenter shared 
concerns that SHIPs may lack access to Medicaid systems or have 
adequate resources to assist individuals. Another commenter opposed 
this recommendation, asserting that SHIPs are an inappropriate resource 
because they lack authorization to verify applicant information.
    Response: We thank the commenters for their input regarding our 
recommendation for States to provide contact information for SHIPs when 
sending information requests for MSP determinations. Our program 
experience and input from interested parties have indicated that 
individuals may struggle to understand State communications and 
complete documentation requests without personalized assistance from 
eligibility workers or counselors, such as SHIPs.\24\ As such, we agree 
with the commenters that SHIPs may be a valuable resource to help 
individuals comprehend and complete requests for information. We 
acknowledge that SHIPs may lack the authority to verify data or check 
Medicaid systems but clarify that States would remain responsible for 
completing the verification processes. Further, we recognize that 
State-specific variables, for example, the capacity and willingness of 
the region's SHIPs to provide this assistance, may affect whether a 
State Medicaid agency pursues our recommendation to include SHIPs as a 
resource in their requests for information from MSP applicants. Given 
all these considerations, we continue to recommend--rather than 
require--that States include contact information for SHIPs in their 
requests for additional information.
---------------------------------------------------------------------------

    \24\ See for example, CMS Office of Burden Reduction & Health 
Informatics, ``Navigating the Medicare Savings Program (MSP) 
Eligibility Experience,'' April 2022. https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf.
---------------------------------------------------------------------------

    Comment: Many commenters supported the proposal for States to 
screen MSP applications from leads data for full Medicaid benefits, 
indicating it would accelerate and streamline review of Medicaid 
eligibility for States and lower-income older adults and persons with 
disabilities who may not be able to separately navigate the Medicaid 
process. Some commenters further noted that States must screen 
individuals who apply for MAGI categories upon all bases and that 
failing to apply a similar ``no wrong door'' approach to MSP 
applications based on LIS data would disadvantage individuals who apply 
through the LIS application as compared to individuals who apply for 
MAGI-based Medicaid. These commenters also stated that adopting 
different screening standards across the MAGI and non-MAGI groups risks 
potential confusion and duplicative administrative work for State 
Medicaid agencies.
    Many of these same commenters, while supporting this proposal on 
balance, also expressed concerns that State implementation of the 
requirement to screen on all bases could undermine the streamlined 
application and enrollment processes for the MSPs that MIPPA and CMS' 
proposed changes aim to achieve. Some commenters indicated that 
requiring a full Medicaid screen could slow down the MSP determination 
process if CMS does not require States to extend the streamlined income 
and resource verification rules for the MSPs to non-MAGI groups. They 
explained that States with different verification rules for other non-
MAGI categories must routinely request additional documentation from 
MSP applicants and might wait to process the MSP application until the 
applicant provides additional documentation needed for the full 
Medicaid determination. For these reasons, some commenters requested 
that CMS clarify that the full Medicaid screen is separate from the MSP 
enrollment process and that States must not delay the MSP determination 
and approval for benefits to obtain information necessary for the full 
Medicaid determination. Similarly, some commenters shared concerns that 
State communications that combine requests for information missing from 
leads data and requests for information and disclosures about estate 
recovery needed for the full Medicaid determination could overwhelm and 
confuse applicants or give a false impression that estate recovery 
applies to the MSPs, thus deterring them from completing the MSP 
application. A commenter suggested that CMS work with States to test 
different approaches with consumers and develop best practices and 
options to seek additional information for full Medicaid, making State 
practices subject to our review. Another commenter suggested that CMS 
prohibit States from using the same notice to communicate a denial of 
full Medicaid coverage and a request for information for the MSPs, 
contending that individuals who receive combined notices are less 
likely to read and fulfill requests for additional information for the 
MSPs. A commenter recommended that SSA provide more information related 
to full Medicaid on the LIS application, including the required rights 
and responsibilities for the

[[Page 65237]]

Medicaid program. A few commenters suggested that our proposal would 
require States to accept leads data as verified for all non-MAGI 
eligibility groups and requested that CMS explicitly acknowledge this 
requirement.
    Some commenters expressed opposition to the proposal at Sec.  
435.911(e)(6) to require States to screen individuals who apply for 
MSPs through LIS leads data for Medicaid on all bases. They cited some 
of the same issues identified by those who expressed support, including 
that because the LIS application does not request the relevant data for 
full Medicaid determinations or provide rights and responsibilities and 
required disclosures (for example, an explanation that estate recovery 
applies to full Medicaid benefits), States would need to follow up with 
individuals, slowing down and complicating what is intended to be a 
streamlined process for MSP enrollment. A commenter noted that 
individuals may not realize that estate recovery applies to full 
Medicaid benefits since the LIS application does not mention full 
Medicaid benefits or its implications. A few commenters suggested that 
screening MSP applications based on leads data for full Medicaid 
eligibility would in effect require the completion of a full Medicaid 
application. Another commenter requested that CMS more clearly 
delineate State requirements to screen MSP applications based on leads 
data upon all bases. Another commenter requested that CMS clarify the 
proposed Sec.  435.911(e), contending that the regulation text is 
disjointed and disorganized, making it unclear what is required for the 
MSPs versus full Medicaid groups. Similarly, the same commenter stated 
that CMS is inconsistent in how we refer to the Medicare Savings 
Programs, sometimes referring to them as the Medicare Savings Programs 
and other times by referencing section 1905(a)(10)(E) of the Act, for 
example.
    Finally, some commenters, including those opposing and supporting 
the proposal, shared concerns that screening individuals who apply for 
the MSPs based on leads data on all bases would require significant 
policy changes, eligibility systems changes, and/or manual effort for 
which they would need additional implementation time.
    Response: We thank the commenters for feedback about our proposal 
to require individuals who apply for MSPs through LIS leads data be 
screened for Medicaid on all bases. In the proposed rule (87 FR 54766), 
we indicated that our proposal was consistent with section 1902(a)(4) 
and (a)(19) of the Act, as it would facilitate the efficient enrollment 
of LIS enrollees into both the appropriate MSP eligibility group and 
into a full-benefit group if eligible without imposing undue 
administrative burden on States. We also noted that the requirement to 
screen MSP applicants based on leads data was similar to the existing 
requirement for States to screen individuals who apply for MAGI-based 
Medicaid on all bases. We still share the view that requiring States to 
assess such applicants for full Medicaid would facilitate their access 
to full-scope Medicaid coverage. However, we appreciate commenters' 
concerns that certain ways of implementing our proposed requirement 
could potentially undermine the streamlined processes designed to 
facilitate MSP enrollment using leads data under MIPPA and this final 
rule.
    As commenters cited, the LIS application does not inform 
individuals that States will screen them on all bases or provide the 
rights and responsibilities, such as disclosures about estate recovery, 
that we require for Medicaid applications. Rather, the current LIS 
application obtains the individual's consent to share their LIS 
information with the State ``to start the application process for the 
Medicare Savings Programs.'' \25\ While it may be possible to add 
information about full Medicaid eligibility determinations to the LIS 
application, as a commenter suggested, we are concerned this could make 
it less likely that individuals complete the LIS application and agree 
to share their data with the State for an MSP determination.
---------------------------------------------------------------------------

    \25\ See cover letter, question number 15, and signatures pages 
in the LIS application. https://www.ssa.gov/forms/ssa-1020-ocr-sm-inst.pdf.
---------------------------------------------------------------------------

    Under proposed Sec.  435.911(e)(6), States would be required to 
both promptly complete a determination of eligibility for the MSPs and 
collect additional information needed to determine whether the 
individual is eligible for full Medicaid benefits. However, we 
recognize, after reviewing the comments, that the proposed rule was not 
clear about all of the steps States would need to make to determine 
eligibility for full Medicaid benefits, or all of the information they 
would need to make a determination for, and enroll an individual in, 
full Medicaid benefits. Specifically, in addition to obtaining 
additional information regarding eligibility criteria needed by the 
State for a full Medicaid determination, States would need to obtain 
the individual's consent to enroll in full Medicaid benefits, which 
would also necessitate the State informing an individual who applied 
for the MSPs through the LIS application about the additional benefits 
that may be available, the rights and responsibilities associated with 
enrolling for full benefits, and the potential for estate recovery, 
which under section 1917(b)(1)(B) of the Act States must employ for 
Medicaid coverage of long-term care services and supports and related 
services and can employ for coverage of other Medicaid items and 
services, not including premium and cost-sharing assistance under the 
MSPs.
    States may also need to reach out to individuals who are applying 
for the MSPs through the LIS application to obtain additional 
information that is needed for the MSP determination. We share 
commenters' concerns that a single communication that requests all of 
the information needed for the MSP determination and all of the 
information needed to determine full-benefit eligibility could 
overwhelm and confuse applicants and reduce their willingness and 
capacity to complete the steps required for States to make the MSP 
determination. Further, we agree with commenters that the full-benefit 
determination should not delay the MSP determination.
    After considering all of these factors raised by the commenters, we 
are revising the proposed regulation at Sec.  435.911(e)(6)(i) and 
(ii), redesignated at Sec.  435.911(e)(9)(i) and (ii), to specify that 
the State must provide individuals effectively applying for the MSPs 
through an LIS application--in addition to and separate from any 
requests for additional information necessary for the determination of 
MSP eligibility--(1) information about the availability of Medicaid 
benefits on other bases, including the scope of such benefits and 
responsibilities of the individual applying for such benefits; and (2) 
an opportunity to furnish such additional information as may be needed 
to determine whether the individual is eligible for such additional 
Medicaid benefits. Under this final rule, a State may request CMS 
approval of another approach to ensuring that applicants have the 
opportunity to receive determinations on whether they are eligible for 
Medicaid benefits other than through an MSP.
    This change to our proposal in response to comments would avoid 
delays in MSP enrollment and avoid drawbacks associated with modifying 
the LIS application itself, while still facilitating enrollment in full 
Medicaid coverage if an individual is eligible. To provide States 
sufficient time to make a

[[Page 65238]]

full Medicaid determination for individuals applying for the MSPs 
through the LIS application, for purposes of timeliness standards under 
Sec.  435.912, the process of obtaining the additional information 
needed for the full Medicaid determination would begin a new clock for 
determining timeliness, since the initial transfer of leads data only 
includes the applicant's authorization to initiate the application 
process for the MSPs and not full Medicaid.
    We encourage (but do not require) States to treat leads data as 
verified for the full-benefit Medicaid eligibility determination. 
However, in all cases, the State would still need to describe rights 
and responsibilities and applicable estate recovery rules, obtain a 
signature for enrollment, and seek additional information necessary for 
full Medicaid determinations. Further, in light of the commenter's 
suggestion to clarify the regulation text, we are revising the 
regulation text to clarify requirements for States and to use 
consistent terminology for the MSPs.
    Comment: Some commenters suggested that CMS provide technical 
assistance and education to facilitate enrollment through Medicare Part 
D LIS leads data. A commenter encouraged CMS to provide technical 
assistance on issues related to leads data and engage with SSA to 
ensure data feeds to States are working properly. In particular, a 
commenter noted that its State began using LIS leads data in March 2021 
and requested that SSA and CMS support the State in reconstructing LIS 
leads data before March 2021 to identify individuals contained in the 
leads data and to assess them for past eligibility for the MSPs. 
Another commenter requested that CMS do more to promote alignment 
between LIS and MSP programs such as by creating State plan amendment 
(SPA) templates and providing more technical assistance to States to 
illustrate how to align these methodologies. A commenter also urged CMS 
to provide States technical assistance on getting attestations over the 
phone and to encourage States to use telephonic attestations, instead 
of paper forms, to minimize situations where individuals are denied 
eligibility for failing to return paperwork. Another commenter urged 
CMS to provide technical assistance to Medicaid directors and their 
staff by holding a call or series of calls to address concerns about 
fraud in self-attestations. A commenter also recommended that CMS allow 
individuals to submit information through multiple modalities during 
the application process to support equity and inclusion. Another 
commenter recommended that CMS require States to use clear and simple 
language in the State's notice of the eligibility determination. 
Finally, a commenter noted that individuals may have had negative 
experiences with applying for benefits in the past and urged CMS to 
educate current and potential enrollees about the new, streamlined 
processes using outreach that is easily understood and accessible.
    Response: To the extent that States need support in complying with 
new requirements under Sec.  435.911(e), or are currently experiencing 
difficulties understanding, using, or manipulating the leads data, we 
are available to assist. In response to commenters' concerns, we can 
also facilitate State discussions with SSA should States require 
technical assistance to access the leads data files transferred from 
SSA. (State Medicaid officials can reach us through their dedicated CMS 
points of contact.) In addition, while SSA does not generally store LIS 
leads data for past years, we are available to answer questions from 
States and to assist them when feasible with their data needs. We also 
are happy to provide technical assistance and best practices to States 
on using telephonic attestations instead of paper forms and to address 
concerns about fraud regarding self-attestation. We note that SSA uses 
telephonic attestations, so Medicare enrollees may be familiar with 
this procedure already. We appreciate the recommendations on promoting 
alignment between LIS and MSP programs and will consider these 
recommendations, including SPA checklists, for future guidance to 
States. We also appreciate the recommendation about format flexibility 
during the application process and note that States must already allow 
individuals to submit information through multiple modalities under 
Sec.  435.907(a), as explained in the proposed rule (87 FR 54780). 
Further, in accordance with Sec.  435.917, State eligibility 
determination notices must be written in plain language and be 
accessible to individuals with limited English proficiency and 
disabilities, among other requirements. Finally, we agree with the 
importance of clear, accessible education and outreach regarding new 
streamlined MSP provisions and will explore ways to support States with 
their MSP education and outreach efforts.
    Comment: A number of commenters provided feedback regarding the 
implementation timeline for the proposed provisions to streamline MSP 
determinations using leads data in new Sec.  435.911(e). Several of 
these commenters supported a 30-day implementation timeline, noting 
that the proposed provisions implement a statutory requirement to use 
leads data to initiate an MSP application that was enacted over 13 
years ago. In contrast, some commenters, both supporting and opposing 
the leads data proposals, urged CMS to provide significant additional 
time to implement the proposed requirements in new Sec.  435.911(e) 
regarding leads data, since most of them constitute new substantive 
requirements established through this rulemaking under the authority in 
the leads data provisions under section 113 of MIPPA.
    Response: The general requirement to use leads data to trigger an 
MSP application has been in Federal statute for over 13 years, and its 
requirements have been interpreted in guidance issued by CMS in 
2010,\26\ 2020,\27\ and 2021.\28\ As such, the requirements for States 
to receive from SSA the LIS leads data and treat it as an MSP 
application as interpreted in existing guidance continue to apply as 
they have been applied under that guidance. However, new Sec.  
435.911(e) contains numerous new substantive regulatory requirements, 
and based on commenters' feedback on this proposed rule we foresee that 
some States will require time to come into compliance with these 
provisions. Therefore, in response to these comments, we are in this 
final rule establishing a compliance date for the requirements in new 
Sec.  435.911(e) of April 1, 2026. Prior to the compliance date, we 
plan to provide technical assistance and guidance to States as they 
come into compliance with the new rules.
---------------------------------------------------------------------------

    \26\ The 2010 MIPPA SMDL. https://www.medicaid.gov/federal-policy-guidance/downloads/smd10003.pdf.
    \27\ The Manual for the State Payment of Medicare Premiums, 
chapter 1, section 1.6.2. https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.
    \28\ Center for Medicaid and CHIP Services Informational 
Bulletin, ``Opportunities to Increase Enrollment in Medicare Savings 
Programs,'' November 1, 2021. https://www.medicaid.gov/federal-policy-guidance/downloads/cib11012021.pdf.
---------------------------------------------------------------------------

    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal at Sec.  435.911(e) with the following 
modifications:
    <bullet> We are replacing references to section 1902(a)(10)(E) of 
the Act with the term the ``Medicare Savings Programs'' throughout 
paragraph (e);
    <bullet> We are adding language to paragraph (e) to clarify that 
the obligations in this paragraph apply to MSP eligibility 
determinations for

[[Page 65239]]

individuals who have applied for LIS and have granted permission for 
SSA to share LIS leads data with the Medicaid agency for the purpose of 
submitting an application for the MSPs;
    <bullet> We are reordering the paragraphs, revising requirements, 
and clarifying language as follows:
    ++ Paragraph (e)(1): We are retaining the requirement to accept LIS 
leads data in paragraph (e)(1) but are removing the term ``Low Income 
Subsidy application data'' and using an acronym in place of ``Social 
Security Administration'' since ``LIS leads data'' and ``SSA'' are now 
established in paragraph (e);
    ++ Paragraph (e)(2): We are keeping the requirement to treat LIS 
leads data as an application for the MSPs without requiring submission 
of another application in paragraph (e)(2), but are moving the 
requirement regarding timely application processing to paragraph 
(e)(7).
    ++ Paragraph (e)(3): We are moving the requirement to accept data 
from SSA, which we are now specifying as LIS leads data for greater 
consistency in terminology throughout the regulation, without further 
verification, from proposed paragraph (e)(5) to paragraph (e)(3) and 
adding that this provision applies unless the State agency has 
information that is not reasonably compatible with the LIS leads data 
or the LIS leads data would not support a determination of MSP 
eligibility;
    ++ Paragraph (e)(4): We are retaining the requirement to not 
collect information or documentation from the individual in paragraph 
(e)(4) and are adding that this is unless the State agency has 
information that is not reasonably compatible with the LIS leads data;
    ++ Paragraph (e)(5): We are moving the requirement to request 
additional information from proposed paragraph (e)(3) to paragraph 
(e)(5), replacing the term ``request'' with the term ``seek,'' and 
defining additional information needed for the MSP determination as 
information that is not in the LIS leads data;
    ++ Paragraph (e)(6): We are moving the requirement to verify an 
individual's citizenship and immigration status from proposed paragraph 
(e)(6)(iii) to paragraph (e)(6), adding a citation to Sec.  435.406, 
and streamlining the regulation text;
    ++ Paragraph (e)(7): We are moving the requirement regarding timely 
application processing from paragraph (e)(2) to paragraph (e)(7);
    ++ Paragraph (e)(8): We are moving additional requirements if the 
LIS leads data does not support a determination of MSP eligibility from 
proposed paragraph (e)(7) to paragraph (e)(8).
    ++ Paragraph (e)(9): We are moving and modifying the proposal 
related to screening for full Medicaid from paragraphs (e)(6)(i) and 
(ii) to paragraphs (e)(9)(i) and (ii) to require States to provide 
individuals with--in addition to and separate from any requests for 
additional information necessary for a determination of Medicare 
Savings Program eligibility, unless CMS approves otherwise--information 
about the availability of additional Medicaid benefits on other bases, 
including the scope of such benefits and responsibilities of the 
individual applying for such benefits, and an opportunity to furnish 
such additional information as may be needed to determine whether the 
individual is eligible for such additional Medicaid benefits.
    <bullet> Finally, we are applying a compliance date of April 1, 
2026 for States to come into full compliance with all the provisions in 
new Sec.  435.911(e) to facilitate MSP enrollment through LIS leads 
data.
    Streamlining Methodologies. Prior to January 1, 2024, the Federal 
resource limits for full LIS and the MSPs are the same ($9,090 for an 
individual and $13,636 for a couple in 2023), and the income limits for 
full LIS and the highest income band MSP (the QI group) are both 135 
percent of the FPL. Beginning January 1, 2024, section 11404 of the 
Inflation Reduction Act (IRA) expands eligibility for the full LIS 
benefit by revising the statutory income limit to 150 percent of the 
FPL and increasing the resource limits for full LIS to the resource 
limits for partial LIS ($15,160 for an individual and $30,240 for a 
couple in 2023). The IRA did not make conforming changes to the income 
or resource standards for the MSPs.
    While the income and resources methodologies for the MSPs and LIS 
are very closely aligned, certain differences prevent LIS enrollees 
from being seamlessly enrolled into the MSPs unless the State has 
elected to align the MSP methodologies with LIS methodologies by 
adopting certain income and resource disregards under section 
1902(r)(2) of the Act. As we discussed in detail in the proposed rule 
(87 FR 54765), States have the flexibility to achieve full alignment of 
the MSP and LIS financial methodologies. If States choose to completely 
align MSP and LIS financial methodologies, they would disregard the 
following types of income: in-kind support and maintenance, dividend 
income, and interest income; and the value of the following types of 
resources: non-liquid resources, and life insurance. States would also 
disregard up to $1,500 in burial funds for an applicant (and an 
additional $1,500 for their spouse) that may be co-mingled with other 
accounts (that is, no longer require such funds are set aside in a 
separate burial account).
    As noted previously in this final rule, States that adopt less 
restrictive MSP eligibility methodologies to completely align them with 
the LIS methodologies would be able to use leads data to make a 
determination of MSP financial eligibility without requesting 
additional financial information from the individual.\29\
---------------------------------------------------------------------------

    \29\ Except, as noted previously in this final rule, information 
on citizenship and immigration status.
---------------------------------------------------------------------------

    However, States that have not fully aligned methodologies must 
determine financial eligibility by requesting additional information 
not provided through the leads data. In addition, as noted in the 
proposed rule at 87 FR 54766, if not already contained in the record 
from a prior application, all States--whether or not they have aligned 
their MSP financial methodologies with MSP--must request information 
relating to U.S. citizenship and immigration status to verify such 
status in accordance with the State's usual processes in accordance 
with Sec.  435.406(a) and section 1137(d) of the Act.
    In accordance with the authority at section 1902(a)(4) of the Act 
to promote the administrative efficiency of the program and section 
1902(a)(19) of the Act relating to simplicity of administration and the 
best interests of beneficiaries, we proposed to add a new paragraph (e) 
to Sec.  435.952 to require that States adopt a number of enrollment 
simplification policies related to the income and resources that are 
counted in determining MSP, but not LIS, eligibility that would enable 
State agencies to use the leads data more efficiently, reduce burden on 
applicants and States, and increase the number of LIS enrollees 
successfully enrolled in the MSPs. We also anticipate these policies 
will have a positive health equity impact by increasing access to 
Medicare coverage for low-income individuals and increasing the 
financial security of those who successfully enroll, consistent with 
the January 20, 2021 Executive Order.\30\
---------------------------------------------------------------------------

    \30\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
---------------------------------------------------------------------------

    Finally, we anticipate that these enrollment simplifications will 
help reduce the high rate of churn (cycling in and out of Medicaid 
coverage) that

[[Page 65240]]

dually eligible individuals experience largely due to administrative 
reasons such as providing documentation of certain income and assets to 
demonstrate their continued eligibility. Analyses by the Assistant 
Secretary for Planning and Evaluation (ASPE) of the Department of 
Health and Human Services found that almost 30 percent of individuals 
lost Medicaid eligibility for at least one month during the first year 
of transitioning to full-benefit dual eligibility and more than 20 
percent lost Medicaid eligibility for at least 3 months following the 
transition despite dually eligible individuals' relatively stable 
income and assets over time.<SUP>31 32</SUP> Experts interviewed noted 
that dually eligible individuals most often lost coverage because of 
failing to comply with administrative requirements as opposed to 
changes in income, assets, or functional status. We discuss our 
proposed simplifications for each source of income and resource below.
---------------------------------------------------------------------------

    \31\ Assistant Secretary for Planning and Evaluation (ASPE), 
``Loss of Medicare-Medicaid dual eligible status: Frequency, 
contributing factors and implications'' May 2019. https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf.
    \32\ CMS completed an updated internal analysis of ASPE's study 
in 2021 using data from 2015-2018 that shows that dually eligible 
individuals continue to lose Medicaid at a high rate in their first 
year due to administrative reasons.
---------------------------------------------------------------------------

    We received comments on our proposals to align the MSP and LIS 
programs in general, and our responses follow.
    Comment: Many commenters supported CMS's proposed alignments of MSP 
and LIS programs in general, citing that the proposed changes would 
allow States to use LIS leads data more efficiently, increase MSP 
enrollment for LIS enrollees, have a positive health equity impact, and 
reduce churn for all dually eligible individuals. Many commenters 
explained that procedural hurdles, particularly documentation 
requirements, are among the main reasons eligible individuals fail to 
complete the enrollment process or that benefits are delayed for 
individuals who manage to complete the process. A commenter explained 
that collecting paper records is particularly overwhelming for low-
income individuals, who disproportionately have unstable housing, low 
literacy, limited access and proficiency in internet usage, limited 
proficiency in English, and live with disabilities and chronic 
conditions. The commenter stated that adopting measures to reduce these 
unnecessary impediments falls squarely within CMS's legal authority. 
MACPAC supported this proposal, noting consistency with its June 2020 
recommendations to Congress to align MSP and LIS income and resource 
requirements. A few commenters shared that their States are moving 
toward complete alignment of LIS and MSPs and expressed support for 
CMS's proposal to determine individuals eligible for the MSPs based on 
LIS data without seeking additional information if the LIS and MSP 
programs are completely aligned.
    Response: As discussed in the proposed rule (87 FR 54766 & 54767), 
we anticipate that streamlining income and resources verification 
processes and improving alignment between the LIS and MSP programs will 
allow States to employ LIS data more effectively, reduce churn for 
dually eligible individuals, and increase the percentage of LIS 
enrollees who are enrolled in the MSPs, resulting in significant 
economic and health benefits and promoting health equity for low-income 
Medicare beneficiaries. For that reason, as explained in the proposed 
rule (87 FR 54766 and 54767), adopting enrollment simplifications for 
income and resources that are relevant to MSP determinations, but not 
LIS, implements our authority at section 1902(a)(4) of the Act to 
promote the administrative efficiency of Medicaid and section 
1902(a)(19) of the Act regarding simplicity of administration and the 
best interests of beneficiaries. We also appreciate that some States 
are moving toward full alignment, which we recommended in the proposed 
rule (87 FR 54765). We believe that full alignment of financial 
eligibility rules for LIS and the MSPs is the most efficient means for 
States to maximize leads data and improve participation in the MSPs for 
LIS enrollees.
    Comment: A number of commenters noted that the proposals would 
create different verification processes for the MSPs than for other 
Medicaid groups. Some commenters opposed applying different 
verification processes for the MSPs on the grounds that it would be 
administratively challenging and cause confusion and delays. Both the 
commenters that generally opposed and the commenters that generally 
supported our proposals expressed concerns that creating a separate 
process for the MSPs could require significant system modifications. A 
commenter, while supporting the proposals at new Sec.  435.952(e) to 
simplify income and resources verification procedures for MSP 
determinations, suggested that CMS consider adopting these requirements 
through sub-regulatory guidance to allow States flexibility to adopt 
less restrictive income and resource methodologies.
    Response: We generally agree with the aim of providing uniform 
eligibility and enrollment processes, and we are committed to ensuring 
their operational feasibility. However, many States already apply 
different rules to the MSPs than other non-MAGI populations. For 
example, many States have adopted disregards that effectively raise or 
remove the resource test for the MSPs only. Therefore, we conclude that 
applying separate rules for the MSPs is not an insurmountable barrier 
to effective implementation.
    Further, in addition to comments on the proposed rule, feedback 
from interested parties and program experience demonstrate that 
documentation requirements seriously hinder the ability of eligible 
individuals to enroll in the MSPs, with significant economic and health 
impacts for individuals.\33\ Reducing the burden on applicants to 
produce certain types of documentation prior to enrollment is warranted 
to meaningfully address documented under-enrollment in these programs. 
Through this final rule, we are allowing additional time for States to 
update State procedures and systems, as discussed below. In addition, 
with respect to the commenter's concerns that our regulations at Sec.  
435.952(e) may impede State flexibility to relax MSP eligibility 
requirements, we clarify that they would not impede State's ability to 
adopt more liberal income and resource methodologies under 1902(r)(2) 
of the Act.
---------------------------------------------------------------------------

    \33\ See for example, CMS Office of Burden Reduction & Health 
Informatics, ``Navigating the Medicare Savings Program (MSP) 
Eligibility Experience,'' April 2022. https://www.cms.gov/files/document/navigatingmedicare-savings-program-msp-eligibilityexperience-journey-map.pdf.
---------------------------------------------------------------------------

    Comment: Several other commenters opposed CMS's alignment of MSP 
and LIS programs, asserting that requiring States to accept self-
attestation would lead to fraud. A commenter cited difficulties with 
having their State legislature approve self-attestations due to program 
integrity concerns. Another commenter requested clarification regarding 
how reasonable compatibility standards would apply to resources 
obtained through electronic sources. In addition, a commenter, while 
supporting CMS proposals to require self-attestation of certain income 
and resources for the MSPs, requested that Federal audit protocols 
exempt States from penalties for errors related to self-attestation.
    Response: As stated elsewhere, self-attestation is an acceptable 
means of verification, and we note that many States have incorporated 
self-attestation

[[Page 65241]]

into their Medicaid verification plans. We also reiterate that, prior 
to enrollment, States must seek additional information if the self-
attested information is not reasonably compatible with State 
information and that States retain the option to verify self-attested 
information after the individual has been enrolled. We plan to address 
the commenter's question about how reasonable compatibility standards 
would apply to resources obtained through electronic sources in future 
rulemaking concerning the remaining provisions in the proposed rule 
published in the September 7, 2022 Federal Register.
    Regardless of whether a State legislature objects to self-
attestation as a means of verification, States are still required to 
follow Federal regulations. Further, as noted at 87 FR 54765, States 
also have the ability to align the MSP and LIS income and resource 
methodologies, which would remove the need for States to separately 
verify income and/or resources that are missing from leads data. In 
response to the question about Federal audits, we reiterate that we 
conduct audits based on Federal statutory and regulatory requirements. 
To the extent that we review compliance with Sec.  435.952(e), we would 
identify an error if a State has failed to comply with this provision 
and would not identify an error if the State is complying with this 
requirement.
    Comment: A few commenters sought clarifications or additional CMS 
action. For example, a commenter requested clarification on why MSP and 
LIS income and resources standards are only aligned until January 1, 
2024. Another commenter requested that CMS require States to adopt 
verification plans for the MSPs and other non-MAGI groups. A different 
commenter requested that CMS provisions to promote MSP enrollment and 
retention extend to the Programs of All-Inclusive Care for the Elderly 
(PACE) for individuals dually entitled to Medicare and Medicaid.
    Response: Prior to January 1, 2024, Federal resource limits for 
full LIS and the MSPs are aligned, and the income limits for the full 
LIS benefit and the highest band MSP (the QI group) are the same. 
Section 11404 of the IRA expanded eligibility for the full LIS benefit 
beginning January 1, 2024, but did not make any conforming changes for 
the MSPs. Starting January 1, 2024, individuals who previously were 
eligible only for partial LIS benefits may be eligible for full LIS 
benefits under the changes enacted under the IRA. This is because the 
resource limit for full LIS will increase to the current partial LIS 
resource limit ($15,160 for an individual and $30,240 for a couple in 
2023).
    While more individuals will qualify for full LIS beginning in 2024, 
and many full LIS enrollees will continue to qualify for the MSPs, 
beginning in 2024 there will be more full LIS enrollees who do not 
qualify for the MSPs. This is because the MSP resource limit will 
remain unchanged. Also, while the income threshold for full LIS will 
increase to 150 percent of the FPL beginning in 2024, the Federal 
income threshold for the QI group will remain at 135 percent of FPL. 
While we acknowledge that the income and resource limits for full LIS 
and MSPs will no longer align after January 1, 2024, we still expect 
that the methodological changes that we are finalizing in this final 
rule will result in streamlined enrollment into MSPs.

     Table 1--Comparison of MSP and LIS Income and Resource Limits *
------------------------------------------------------------------------
                                     Income limit       Resource limit
------------------------------------------------------------------------
QMB.............................  <=100% FPL........  3 x SSI limit
                                                       adjusted for
                                                       inflation per
                                                       section
                                                       1905(p)(1) of the
                                                       Act.
SLMB............................  >100% FPL, but      same as QMB.
                                   <120% FPL.
QI..............................  >=120% FPL, but     same as QMB.
                                   <135% FPL.
Full LIS before 2024............  <135% FPL.........  same as QMB.
Full LIS beginning 2024.........  <150% FPL.........  $15,160--Individua
                                                       l.
                                                      $30,240--Couple
                                                       plus inflation.**
------------------------------------------------------------------------
* These are the standard Federal income limits and resources. All of
  these income limits include a standard $20 disregard. States may use
  authority under section 1902(r)(2) of the Act to implement income and/
  or resource methodologies that are more generous than the Federal
  baseline for QMB, SLMB, and QI.
** The LIS resource methodology as of January 1, 2024 is no longer tied
  to the 3 x SSI resource limit, which is a lower rate, but is instead
  tied to a flat dollar amount of $10,000 for an individual and $20,000
  for a couple from 2006 and indexed for inflation every year. The rate
  listed is the 2023 rate, which will need to be adjusted upward by
  inflation for 2024.

    In addition, we clarify that, in accordance with Sec.  435.945(j), 
States must already adopt verification plans for all Medicaid 
eligibility groups, including the MSPs and other non-MAGI groups. 
Finally, we note that our proposals would apply to current and 
potential PACE participants.
    Interest and Dividend Income. Regulations governing LIS eligibility 
determinations at 20 CFR 418.3350(d) exclude all interest and dividend 
income earned on resources owned by the applicant or their spouse. 
However, under the SSI income methodologies applicable to MSP 
determinations, States must count interest and dividend income unless 
they have elected to disregard such income under section 1902(r)(2) of 
the Act and Sec.  435.601(d).
    In the proposed rule (87 FR 54767), citing reports from interested 
parties and program experience, we noted that the vast majority of 
individuals likely to qualify for an MSP eligibility group do not have 
significant interest or dividend income, whereas the requirement to 
timely obtain and furnish acceptable statements from financial 
institutions, sometimes extending back over a lengthy period of time, 
to document interest and dividend income earned is unduly burdensome 
for applicants and provides negligible program integrity value. 
Therefore, consistent with section 1902(a)(19) of the Act, to minimize 
undue administrative burden on applicants, we proposed at Sec.  
435.952(e)(1)(i) and (ii) to prohibit States from requesting 
documentation of dividend and interest income prior to making a 
determination of MSP eligibility, except when the agency has 
information that is not reasonably compatible with the applicant's 
attestation. Under the proposed rule, States would be required to 
accept self-attestation of dividend and interest income for MSP 
applicants and their spouse, but would retain the option to verify such 
income after the individual has been enrolled (a process, currently 
available at State option with respect to most eligibility criteria, 
which we refer to as ``post-enrollment verification''), including the 
option to require the

[[Page 65242]]

individual to provide documentation of interest or dividend income if 
electronic verification is not available.
    We received comments on our proposal to streamline eligibility and 
verification processes for dividend and interest income, and our 
responses follow.
    Comment: A few commenters indicated particular support for this 
provision, explaining dividend and interest information is often 
difficult for applicants to obtain and constitutes an unnecessary 
administrative burden for applicants. One commenter noted an example in 
which an applicant was required to provide dividend verification based 
on a report from the IRS of a total annual dividend of under $5 on a 
single share of stock of a former employer worth less than $50. The 
agency required documentation verifying both the value of the asset and 
the amount of the dividend. According to the commenter, the process of 
clarifying the source of the dividend at issue and then obtaining 
documentation of the share, its current value, and the dividend payment 
history for the last year took several months, even with the assistance 
of an advocate, significantly delaying completion of the application 
and receipt of benefits. Lastly, another commenter requested 
clarification about whether consideration of interest income applies 
only to screening MSP applications from LIS leads data or to 
eligibility determinations for all individuals who apply for MAGI-based 
groups.
    Response: Self-attestation minimizes undue administrative burden on 
applicants who are unlikely to have investments large enough to 
generate significant interest or dividend income and resources and 
still satisfy the resource test for the LIS or MSP benefit. States 
retain the option to verify the information from the self-attestation 
after the individual has been enrolled, including requiring the 
individual to provide documentation of interest or dividend income if 
electronic verification is unavailable.
    With respect to the commenter's requests for clarifications for how 
consideration of interest income applies to MAGI groups, we believe the 
commenter was referring instead to whether this provision requiring 
self-attestation of interest and dividend income applies to all 
individuals applying to MSP or only those who use the LIS process to 
apply. As such, we clarify that our proposal regarding required self-
attestation for MSP eligibility determinations applies regardless of 
whether an individual applies for an MSP directly through the Medicaid 
agency or indirectly through the LIS pathway. Additionally, we note 
that interest and dividend income is currently counted in both MAGI and 
non-MAGI eligibility determinations.
    After considering the comments we received and for the reasons 
outlined in the proposed rule under Sec.  435.952(e)(1)(i) and (ii) and 
our responses to comments, we are finalizing our proposal on self-
attestation for interest and dividend income, except with a modified 
compliance date of April 1, 2026.
    Post-eligibility Verification. We also sought comment on the 
utility of post-enrollment verification and whether it results in 
unnecessary procedural denials of eligible individuals. If a State 
chooses to conduct post-enrollment verification checks, under proposed 
Sec.  435.952(e)(1)(iii) it must allow individuals at least 90 calendar 
days to respond to requests for documentation. We sought comment on the 
proposal to require that States provide individuals with at least 90 
calendar days to respond to requests for additional information in this 
situation and whether States should be required to provide, at a 
minimum, a shorter period of time, such as at least 30 or 60 calendar 
days. If a State found that an individual has income exceeding the 
income standard during the post-enrollment verification process, the 
State would take appropriate action consistent with regulations at 
Sec.  435.916(d), which we proposed to redesignate and revise at Sec.  
435.919 in the proposed rule, including determining eligibility on 
other potential bases and, if not eligible on any basis, providing 
advance notice and fair hearing rights prior to terminating MSP 
coverage. We note that, consistent with current policy, when a State 
has information that is not reasonably compatible with the applicant's 
attestation of the value of any interest or dividend income, proposed 
Sec.  435.952(e)(1)(ii) would require the State to seek additional 
information in accordance with Sec.  435.952(c)(2), prior to enrolling 
the individual in Medicaid.
    We received the following comments on post-enrollment verification, 
including the timeline for responding to requests for additional 
information, and our responses follow.
    Comment: Some commenters requested CMS minimize post-enrollment 
verification as much as possible because it would be too burdensome and 
confusing for individuals and may lead to terminations for eligible 
individuals. A few commenters requested that CMS provide model notices 
to States because requests for information can cause confusion or be 
missed by individuals who have just been approved for benefits. A 
commenter also requested that States include information in these post-
eligibility verification notices on disputing errors. A few commenters 
requested clarification on how post-enrollment verification would 
affect eligibility for long-term care services and if a denial would 
trigger benefit recovery. Other commenters indicated the process would 
be too burdensome for States and, therefore, opposed requiring States 
to adopt post-eligibility verification.
    Response: We acknowledge that post-enrollment verification, like 
other requests for additional information/documentation, could pose a 
burden to individuals. However, to allow self-attestation of income and 
resources needed for MSP eligibility determinations but missing from 
leads data, we believe it is essential to provide States a mechanism to 
ensure program integrity. To help minimize burden and assist States in 
making beneficiary notices as comprehensive and clear as possible, we 
will explore providing model language for State communications 
regarding post-enrollment verification, including the instructions 
about disputing errors contained in the post-enrollment verification 
notice. With regard to the commenters' recommendation that post-
eligibility verifications be optional, we note that we did not propose 
making this mandatory for States. In response to the commenter's 
question about how post-eligibility verification may affect beneficiary 
coverage for long-term care services, we clarify that our proposal only 
requires self-attestation for the MSPs and not other non-MAGI groups.
    Comment: A number of commenters provided feedback on the proposed 
90-day minimum deadline for individuals to return information requested 
by a State. Several commenters supported providing at least 90 calendar 
days for individuals to respond with the requested information, citing 
longstanding barriers to verification for individuals. However, a 
commenter observed that 90 days was too long based on their State's 
experience using a 90-day timeline to resolve income discrepancies. The 
commenter noted that individuals forgot to supply the requested 
information as a result of the prolonged timeline and recommended 30 
days instead. Another commenter opposed a 90-day timeline for post-
enrollment verification because it could lead to 3 months of improper 
payments. Another commenter, while supporting the option for post-
eligibility

[[Page 65243]]

verification, sought clarification on whether States would need to 
recoup Medicaid provider payments for an individual for whom the State 
had accepted self-attestation prior to enrollment and then determines 
ineligible through post-eligibility verification.
    Response: We thank the commenters for their input on the 
appropriate minimum timeframe for individuals to respond to requests 
for information following enrollment. We do not agree with commenters 
that the 90-day timeframe is excessive given the challenges low-income 
individuals encounter in obtaining and furnishing paperwork, as 
described throughout this final rule and by commenters. Our position is 
also informed by our program guidelines and experience related to 
resolving income data matching issues (DMIs) following determinations 
of eligibility for Advance Premium Tax Credits (APTC) for the Exchanges 
that use the Federal eligibility and enrollment platform. A 90-day 
period aligns with the minimum deadline for individuals to respond to 
Exchange requests for additional information under 45 CFR 
155.315(f)(2)(ii). We note that in the April 2023 final rule titled 
``Patient Protection and Affordable Care Act, HHS Notice of Benefit and 
Payment Parameters for 2024'' (2024 Payment Notice) published in the 
Federal Register (88 FR 25740), we adopted an automatic 60-day 
extension for individuals applying for coverage through Exchanges who 
failed to respond in the 90-day period. We adopted that change in the 
2024 Payment Notice after observing that income DMI data indicates that 
when consumers receive additional time, they are more likely to 
successfully provide documentation to verify their projected household 
income. Between 2018 and 2021, over one third of consumers who resolved 
their income DMIs on the Exchange did so in more than 90 days. We also 
note that the Exchanges that use the Federal eligibility and enrollment 
platform send reminders to consumers through multiple modalities to 
prompt them to timely furnish the required information.
    In response to the commenters' concerns about the potential for 
increasing improper payments, we note that self-attestation is an 
acceptable means of verification and that many States have incorporated 
it into their verification policies as a generally reliable alternative 
to requiring applicants to produce documentation. As such, the period 
during which an individual would be enrolled in an MSP based on self-
attestation that proved to be incorrect would not be an improper 
payment, nor would an individual be subject to administrative benefit 
recovery if they are later found to be ineligible. In addition, we 
clarify that States would not administratively recoup payments already 
made on behalf of individuals if post-eligibility verification 
processes establish that the individual is ineligible for the MSPs. If 
a State suspects that an individual committed fraud or abuse in order 
to obtain or maintain MSP eligibility, the State should follow the 
processes described at 42 CFR part 455, subpart A of the regulations.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal to require States that choose to conduct post-
eligibility verification to provide individuals with at least 90 
calendar days to respond to requests for additional information, with a 
modified compliance date of April 1, 2026.
    Non-liquid resources. For LIS eligibility determinations, under 20 
CFR 418.3405, SSA only counts liquid resources, which it defines as 
cash, financial accounts, and other financial instruments that can be 
converted to cash within 20 business days. Non-liquid resources, such 
as an automobile, are not counted for LIS eligibility.\34\ However, MSP 
determinations generally use a broader definition of countable 
resources that includes non-liquid resources; for example, while one 
automobile is excluded for resource-eligibility purposes, a second 
automobile is countable. As we noted in the proposed rule at 87 FR 
54768, this can be onerous for MSP applicants because it can be 
difficult to timely determine, and furnish acceptable documentation of, 
the value of something that cannot easily be sold.
---------------------------------------------------------------------------

    \34\ The exception to this rule is that the equity value of any 
real property than an individual owns other than the individual's 
primary place of residence is counted as a resource.
---------------------------------------------------------------------------

    Similar to interest and dividend income, consistent with section 
1902(a)(19) of the Act and to minimize administrative burdens on 
individuals, we proposed at Sec.  435.952(e)(2)(i) to require that 
States accept applicants' attestation of the value of any non-liquid 
resources, except, as described at proposed Sec.  435.952(e)(2)(ii), 
when the State has information that is not reasonably compatible with 
the individual's attestation. As with dividend and interest income, 
proposed Sec.  435.952(e)(2)(ii) clarifies that States must request 
documentation prior to making an initial determination of eligibility 
if they have information that is not reasonably compatible with the 
applicant's attestation in accordance with Sec.  435.952(c)(2). 
However, as with dividend and interest income, States would retain the 
option to conduct post-enrollment verification, including the option to 
require the individual to provide documentation of non-liquid resources 
if electronic verification is not available, and to take appropriate 
action, consistent with regulations at Sec.  435.916(d), which we 
proposed to redesignate and revise at Sec.  435.919 in the proposed 
rule, if the State determines the individual greatly undervalued or 
failed to disclose resources. If the agency elects to conduct 
verifications post-enrollment, and documentation is requested, we 
proposed that the agency must provide the individual with at least 90 
calendar days from the date of the request to respond and provide any 
necessary information requested.
    We received comments on our proposal to require States to accept 
self-attestation on non-liquid assets and prohibit States from 
requesting documentation except where the agency has information 
incompatible with a self-attestation, and our responses follow.
    Comment: In addition to several commenters expressing general 
support for self-attestation for simplifying enrollment regarding 
income, one commenter supported the proposal on non-liquid assets 
because this information is often difficult for applicants to obtain 
and poses unnecessary administrative burdens on applicants.
    Response: Self-attestation minimizes undue administrative burden on 
applicants, including identifying the value of a non-liquid asset that 
cannot be sold. States retain the option to verify the information from 
the self-attestation with new information after the individual has been 
enrolled, including requiring the beneficiary to provide documentation 
of non-liquid resources if electronic verification is not available, 
and take appropriate action if the State determines the individual 
greatly undervalued or failed to disclose resources.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal on non-liquid assets with a modified compliance 
date of April 1, 2026.
    Burial funds. Under section 1613(d)(1) of the Act, which applies to 
both LIS and MSP determinations, up to

[[Page 65244]]

$1,500 in burial funds are to be excluded for the applicant (and an 
additional $1,500 for their spouse) so long as the burial fund is 
``separately identifiable and has been set aside.'' The statute does 
not, however, prescribe how the funds must be separately identifiable. 
As discussed in the proposed rule at 87 FR 54768, current SSA policy 
allows LIS applicants to attest to having $1,500 in burial funds, which 
may be co-mingled with other funds in a single account, but for MSP 
eligibility determinations States typically require applicants to 
provide documentation that their burial funds are set aside in a 
separate account. This creates a misalignment between LIS and MSP 
methodologies and imposes additional burdens on MSP applicants.
    We proposed at Sec.  435.952(e)(3)(i) to require that States, when 
determining eligibility for the MSPs, allow individuals to self-attest 
that up to $1,500 of their resources, and up to $1,500 of their 
spouse's resources, are set aside as burial funds in a separate 
account, and therefore, are not countable as resources for MSP 
determinations. Proposed Sec.  435.952(e)(3)(ii) clarifies that States 
must request documentation prior to making an initial determination of 
eligibility if they have information that is not reasonably compatible 
with the applicant's attestation in accordance with Sec.  
435.952(c)(2). As in the proposed provisions for interest and dividend 
income and non-liquid resources, and described at Sec.  
435.952(e)(3)(iii), States would retain the option to conduct post-
enrollment verification, including requiring documentation of resources 
in burial funds, and taking appropriate action, consistent with 
regulations at Sec.  435.916(d), which we proposed to redesignate and 
revise at Sec.  435.919 in the proposed rule. Under proposed Sec.  
435.952(e)(1)(iii), if the agency elects to conduct verifications post-
enrollment and requests documentation, the agency must provide the 
individual with at least 90 calendar days from the date of the request 
to respond and provide any necessary information requested.
    Finally, States may also use authority at section 1902(r)(2) of the 
Act to disregard all or a greater amount of burial funds or to not 
require that the burial funds be held in a separate set-aside account.
    We received comments on our proposals related to burial funds, and 
our responses follow.
    Comment: A few commenters specifically wrote in support of 
accepting self-attestation for burial funds. A commenter suggested that 
the rule be revised so that applicants are not required to maintain a 
separate account for burial funds or that they can acknowledge in their 
self-attestation that they will set up a separate account within 90 
days of the self-attestation. This commenter also noted that low-income 
individuals are disproportionately ``unbanked'' and thus do not have 
access to banks where they can segregate funds in separate accounts.
    Response: Self-attestation minimizes undue administrative burden on 
applicants. States retain the option to verify the information from the 
self-attestation after the individual has been enrolled, including 
requiring the beneficiary to provide documentation of burial fund 
resources and take appropriate action if the State determines the 
individual greatly undervalued or failed to disclose resources. We 
appreciate the commenter's concern that creating a separate account 
poses additional burdens on applicants, including those who are 
``unbanked.'' However, as described previously in this final rule, 
section 1613(d)(1) of the Act stipulates that the burial fund exclusion 
applies to funds that are ``separately identifiable'' and have been 
``set aside.'' Accordingly, in this final rule, we decline to 
incorporate the commenter's suggestions to require States to eliminate 
the requirement for a separate account for burial funds. We also 
decline to allow 90 days post self-attestation to create a separate 
account in this final rule, but we may consider whether there is a 
basis for such a policy in the future. As noted previously in this 
final rule, States may choose to eliminate the requirement that burial 
funds be held in a separate account under section 1902(r)(2) of the 
Act.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal on burial funds with a modified compliance date 
of April 1, 2026.
    Life Insurance Policies. Section 116 of MIPPA, codified at section 
1860D-14(a)(3)(G) of the Act, eliminated the value of life insurance 
policies as a countable resource for LIS determinations. However, under 
the SSI resource methodologies described in section 1613(a) of the Act, 
which applies to MSP-related resource eligibility determinations per 
section 1905(p)(1)(C) of the Act, the cash surrender value of life 
insurance with a total face value exceeding $1,500 is countable.
    As discussed in the proposed rule at 87 FR 54768, obtaining 
documentation of a life insurance policy's cash surrender value can be 
highly burdensome for applicants, as the cash surrender value is not 
knowable from the documents a policyholder is likely to have.
    Under proposed Sec.  435.952(e)(4)(i), if an individual attests to 
having a life insurance policy with a face value below $1,500, States 
must accept the attested face value for purposes of making an initial 
eligibility determination for MSP coverage, unless the State has 
information that is not reasonably compatible with attested 
information. If the total face value of all of an individual's life 
insurance policies does not exceed $1,500, the cash surrender value of 
the individual's policies is not counted in determining MSP eligibility 
pursuant to sections 1613(a)(16) and 1905(p)(1)(C) of the Act.
    Under proposed Sec.  435.952(e)(4)(i)(A), if an individual attests 
to having a life insurance policy with a face value in excess of 
$1,500, consistent with current regulations at Sec.  435.948, States 
may accept the attested cash surrender value.
    In both cases, if the State has information that is not reasonably 
compatible with the attested face value or cash surrender value of the 
policy, we proposed at Sec.  435.952(e)(4)(ii) that the State must seek 
additional information from the individual in accordance with Sec.  
435.952(c)(2). Per current Sec.  435.952(c)(2), the agency may accept a 
reasonable explanation from the applicant or require documentation.
    As with interest and dividend income, per proposed Sec.  
435.952(e)(4)(iii), States would have the option to conduct post-
enrollment verification for individuals enrolled based on an attested 
face value. In conducting post-enrollment verification, if a State 
determines that the face value of the policy exceeds $1,500, then the 
State must seek the cash surrender value on behalf of the individual in 
accordance with proposed Sec.  435.952(e)(4)(iv)(A) and take 
appropriate action, consistent with regulations relating to changes in 
circumstances at Sec.  435.916(d) (which we proposed to redesignate and 
revise at Sec.  435.919 in the proposed rule).
    We also proposed at Sec.  435.952(e)(4)(iv)(A) that when 
documentation of the cash surrender value of a life insurance policy is 
required, the State must assist the individual with obtaining this 
information and documentation by requesting that the individual provide 
the name of the insurance company and policy number and authorize the 
State

[[Page 65245]]

to obtain such documentation on the individual's behalf. The agency may 
also request, but may not require, additional information from the 
applicant to assist the agency in obtaining documentation of the cash 
surrender value, such as the name of an agent. If the individual does 
not provide basic information about the policy and an authorization, 
under proposed Sec.  435.952(e)(4)(iv)(B), the State may require that 
the individual provide documentation of the cash surrender value. Under 
proposed Sec.  435.952(e)(4)(iv)(C), the State must provide the 
individual with at least 15 calendar days to provide such documentation 
if required pursuant to paragraph (e)(4)(i) or (ii) of this section 
(that is, if documentation of the cash surrender value is needed prior 
to the agency's making a determination of eligibility) and at least 90 
calendar days if required pursuant to paragraph (e)(4)(iii) of this 
section (that is, post-enrollment). We note that the minimum of 15 
calendar days in proposed Sec.  435.952(e)(4)(iv)(C) for applicants to 
provide documentation of cash surrender value of a life insurance 
policy is consistent with the minimum 15 calendar days that we propose 
States must generally provide applicants to provide required 
documentation under proposed Sec.  435.907(d).
    We sought comment on whether 15 calendar days or a longer minimum 
period, such as 20 calendar days or 30 calendar days, appropriately 
balances the complexity of determining and obtaining documentation of 
the cash surrender value with the 45-day limit for States to complete 
Medicaid eligibility determinations for individuals applying on a basis 
other than disability status under Sec.  435.912(c)(3).
    In the proposed rule (87 FR 54768 through 54769), we acknowledged 
that our proposal would represent a significant change for a number of 
States and could present some administrative challenges to implement. 
However, documenting the cash surrender value of life insurance is a 
considerable hurdle for many applicants. Because the cash surrender 
value of most applicants' policies is likely very modest, we noted that 
the value of any life insurance policy likely would have a minimal 
impact on their financial eligibility for coverage, whereas obtaining 
documentation of the cash surrender value may pose a substantial 
administrative barrier to access. Implementing a process that places 
fewer burdens on applicants is in the interest of efficient 
administration of the program, consistent with section 1902(a)(4) of 
the Act. We also expected that States would be better able to navigate 
obtaining such documentation when needed.
    We received comments on our proposals related to life insurance, 
and our responses follow.
    Comment: Many commenters provided feedback on the proposals to 
streamline verification processes for life insurance. Some commenters 
supported the provision, agreeing with CMS that the need to verify the 
cash value of a life insurance policy is an extremely challenging 
hurdle for many MSP applicants. One commenter noted that obtaining a 
letter from the insurer providing cash value can take weeks and often 
longer and noted that finding the right contact can be challenging 
because many insurers have closed their businesses or merged or 
transferred portions of their insurance portfolios to other companies. 
Several commenters agreed with the proposal to shift the burden to 
States to verify the cash surrender value, concurring that States were 
in a better position to gather the information due to the demographics 
of the applicants and the complexities of tracking down the 
information. A commenter recommended that to obtain authorization from 
the applicant to reach out to the insurer, States should inform the 
individual of the reason for obtaining the information and that they 
will safeguard the information. A few commenters, while supporting the 
overall proposal, recommended that CMS extend the deadline for 
providing documentation to 20 to 30 days for individuals who must 
produce documentation after refusing to give consent to States to 
contacting life insurance companies. However, the commenters added that 
their primary concern is to avoid a requirement that impedes States 
from meeting the 45-day timeline for making eligibility determinations.
    Other commenters opposed our proposal to shift the burden to States 
to verify the cash surrender value of life insurance, citing concerns 
that it would increase work for eligibility workers and that insurance 
companies may refuse to disclose this information to anyone except the 
life insurance policy holder or their authorized representative. One 
commenter stated that this burden shifting was unnecessary and their 
State already provides help with obtaining the cash surrender value to 
any individual who requests such assistance.
    Response: We believe that our proposal appropriately balances the 
interests of low-income older adults and individuals with disabilities 
with the needs and resources of States. At the outset, we note that we 
anticipate the life insurance provisions will affect only a very small 
number of people. Applicants for MSPs tend to be low-income individuals 
who do not have many assets, especially if they have income low enough 
to qualify for the MSPs. Additionally, as discussed previously in this 
final rule, the most popular form of life insurance for lower income 
individuals, term life insurance, is not impacted by these proposals. 
Moreover, as noted previously in this final rule, several States have 
eliminated the asset test for the MSPs, while others have raised the 
asset limit to $10,000 or more for life insurance policies.
    In response to concerns about shifting the burden of verifying the 
cash surrender value of life insurance from individuals to States, we 
note that States can avoid this burden by simply disregarding life 
insurance as an asset or increasing the limit using authority under 
section 1902(r)(2) of the Act. Additionally, this policy is similar to 
the support that SSA provides. While commenters have stated that they 
prefer individuals have 30 days to provide life insurance 
documentation, we are doubtful that States will be able to process MSP 
applications in 45 days while providing 30 days to produce documents. 
As such, we believe 15 days strikes the more appropriate balance.
    In response to the commenter's suggestion to require States to 
inform applicants that their personal information will be properly 
safeguarded when the State requests authorization to contact the 
applicant's life insurance company, we note that States are required to 
safeguard information about applicants and beneficiaries obtained or 
used to verify eligibility in accordance with 42 CFR 431, subpart F. 
States must publicize their policies governing the confidential nature 
of information about applicants and beneficiaries, including the legal 
sanctions imposed for improper disclosure and use, as well as provide 
copies of these policies to applicants and beneficiaries and to other 
persons and agencies to whom information is disclosed in accordance 
with Sec.  431.304. In this context, States would be required to 
provide a copy of the State's policies related to confidentiality of 
information to the applicant and to any representative of the 
applicant's insurance company to whom applicant information may be 
disclosed during the verification process. We decline to make a new, 
more specific requirement, because we believe States should have 
flexibility with regard to how they implement this requirement.

[[Page 65246]]

    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal on life insurance, with a modified compliance 
date of April 1, 2026.
    In-Kind Support and Maintenance. In-kind support and maintenance is 
assistance an applicant receives that is paid for by someone else, such 
as groceries or utilities paid for by an adult child. Section 1860D-
14(a)(3)(C)(i) of the Act, added by section 116 of MIPPA, excludes in-
kind support and maintenance as countable income for LIS 
determinations. Under SSI methodologies at 20 CFR 416.1131, which apply 
to MSP determinations, the value of in-kind support and maintenance, if 
both food and shelter are received by an applicant, is presumed to be 
one-third of the Federal benefit rate ($914 per month in 2023 for a 
single person), unless the applicant provides documentation 
demonstrating a different amount.
    We did not propose any changes to regulations relating to in-kind 
support and maintenance, but we sought comment on whether obtaining 
documentation to rebut the one-third presumption poses a barrier to 
eligibility and whether we should require States to accept self-
attestation from individuals who seek to rebut a presumption of the 
amount of in-kind support and maintenance they receive subject to post-
enrollment verification.
    We received the following comments on in-kind maintenance and 
support, and our responses follow.
    Comment: A commenter requested that CMS require States to accept 
self-attestation for individuals seeking to rebut the presumption of 
the amount of in-kind support and maintenance they receive, while 
another commenter requested that CMS make this an option for States. 
However, we did not receive any other specific feedback on this 
proposal.
    Response: As we discussed in the proposed rule (87 FR 54769), 
States may already exercise the option of accepting self-attestation 
for individuals seeking to rebut the presumption of the amount of in-
kind support and maintenance they receive. Alternatively, States can 
further streamline the MSP eligibility and enrollment process for 
individuals with in-kind maintenance and support by disregarding in-
kind support and maintenance entirely under section 1902(r)(2) of the 
Act. While we decline to adopt specific requirements regarding 
requiring self-attestation for in-kind maintenance and support at this 
time, we will consider this input for future rulemaking.
    Streamlined Methodologies for Other Non-MAGI and MAGI Groups. Our 
proposals requiring States to apply enrollment simplifications to 
income and resources that are counted for MSP determinations but not 
for LIS only apply to MSPs. However, we sought comment on extending 
these proposals to all individuals seeking eligibility on a non-MAGI 
basis. We also sought comment on extending the proposal relating to 
verification of dividend and interest income to individuals seeking 
eligibility based on MAGI, as well as whether there are additional 
income or resource types to which the proposals below could be extended 
for all individuals.
    We received the following comments, and our responses follow.
    Comment: Some commenters opposed applying the proposed MSP 
requirements to all non-MAGI populations. Some others supported this 
concept, maintaining that applying uniform standards across eligibility 
groups would help promote clarity for applicants and enhance the 
utility of leads data for screening other bases of eligibility. A 
commenter noted that documentation barriers apply equally to these 
other non-MAGI groups and the need to simplify the processes for these 
other groups are just as urgent. A few commenters supported applying 
the income and dividend interest self-attestation requirements to MAGI 
groups.
    A commenter requested clarification on whether extending the 
exclusion of these income types using flexibility afforded in section 
1902(r)(2) of the Act would extend to post-eligibility treatment of 
income (PETI), which involves how income is counted for beneficiaries 
in a medically needy eligibility group, or if it would be similar to 
how Veterans Affairs'(VA) Aid and Attendance is treated (excluded for 
eligibility, included in PETI).
    Response: We appreciate the comments and will consider them for 
future rulemaking. With respect to the commenter's request for 
clarifications about whether income disregards under section 1902(r)(2) 
of the Act apply to post-eligibility treatment of income (PETI) 
calculations, we confirm that any income excluded in an eligibility 
determination using section 1902(r)(2) of the Act must be counted in 
the PETI calculation. In the post-eligibility process, income includes 
all amounts of income available to an individual from all sources that 
are considered income for purposes of underlying eligibility, even if 
such income is disregarded at the eligibility determination phase using 
section 1902(r)(2) authority. Only income which is expressly exempted 
from post-eligibility calculations under Federal law would not be 
included in the post-eligibility process. However, we note that the 
current proposal does not make any changes to how States may use 
section 1902(r)(2) authority.
    Comment: Several commenters expressed support for the proposed 
changes to facilitate enrollment through Medicare Part D LIS leads data 
in Sec. Sec.  435.4, 435.601, 435.911, and 435.952 but provided 
feedback on areas that were not addressed in the proposed rule. For 
example, a commenter requested that the definition of ``retirement 
funds'' for the LIS program be aligned with the SSI and Medicaid 
programs to exclude retirement funds that are in distribution status. 
Another commenter recommended several ways that CMS could leverage Area 
Agencies on Aging and SHIPs and other enrollment assistance providers 
to streamline the MSP application process, such as requiring States to 
allow such entities to access State eligibility systems and manage and 
submit data and verifications on behalf of applicants. In addition, a 
commenter recommended that CMS facilitate access to other public 
benefits, including by helping to create a combined application for 
Medicaid coverage and other benefits. A commenter recommended that CMS 
encourage States to share data with the Indian health care system, 
specifically Indian Health Services, Tribal, and Urban Indian 
Organizations. Another commenter urged CMS to improve MSP outreach to 
eligible individuals, for example, by updating CMS MSP outreach 
templates to allow States to enter their own income and asset limits 
and provide the contact information of the SHIP counselor. This 
commenter further recommended that CMS incentivize States to remove 
language access barriers for persons with limited English proficiency. 
A few commenters recommended that CMS consider further linkages between 
Medicaid applications and other social services. Another commenter 
sought clarification about whether an individual for whom the State had 
accepted self-attestation, but was later deemed ineligible would be 
treated as ``enrolled'' in Medicaid for purposes of the continuous 
enrollment condition under the Families First Coronavirus Response Act 
(FFCRA) (Pub. L. 116-127, enacted March 18, 2020) or any subsequent 
continuous enrollment conditions or requirements.
    Response: These areas are outside the scope of this rulemaking. 
With respect

[[Page 65247]]

to the question about the continuous eligibility condition under the 
FFRCA, we note that this provision expired on March 31, 2023.
2. Define ``Family of the Size Involved'' for the Medicare Savings 
Program Groups Using the Definition of ``Family Size'' in the Medicare 
Part D Low-Income Subsidy Program (Sec.  435.601)
    To further facilitate alignment of methodologies used to determine 
eligibility for the Medicare Part D LIS and MSP groups and facilitate 
enrollment in the MSPs based on LIS data, we proposed to amend Sec.  
435.601 (``Application of financial eligibility methodologies'') to 
create a new paragraph (e), in which we proposed to define ``family 
size'' for purposes of MSP eligibility.
    As discussed in the proposed rule at 87 FR 54770, the Act sets out 
income limits for MSP enrollment relative to the Federal poverty level 
(FPL) ``applicable to a family of the size involved.'' The statute does 
not define the phrase ``family of the size involved'' and CMS has 
historically permitted States to apply their own reasonable definition 
of this phrase.\35\
---------------------------------------------------------------------------

    \35\ Memorandum from Director, Center for Medicaid and State 
Operations, to Regional Administrator, re: Medicaid Eligibility--
Policy Governing Family Size in Determining Eligibility for 
Qualified Medicaid Beneficiaries and Specified Low-Income 
Beneficiaries. October 2, 1997. https://www.medicaid.gov/sites/default/files/2019-12/medicaid-eligibilty-memo.pdf.
---------------------------------------------------------------------------

    However, in light of the various statutory provisions to facilitate 
enrollment of LIS recipients into MSPs and vice versa, it is 
appropriate to establish Federal standards governing the phrase 
``family of the size involved.''
    Specifically, we proposed for purposes of determining eligibility 
for the MSP groups, consistent with our authority under section 
1902(a)(4) of the Act to facilitate methods of administration that 
promote the proper and efficient administration of the Medicaid 
program, that ``family of the size involved'' be defined to include at 
least the individuals included in the definition of ``family size'' in 
the LIS program. Under Sec.  423.772 (``Definitions'' relating to the 
LIS program), ``family size'' is defined to include the applicant, the 
applicant's spouse (if the spouse is living in the same household with 
the applicant), and all other individuals living in the same household 
who are related to the applicant and dependent on the applicant or 
applicant's spouse for one-half of their financial support.
    By proposing that a State's definition of ``family of the size 
involved'' include ``at least'' the individuals described in Sec.  
423.772 for purposes of the MSP groups, States would retain flexibility 
to include other individuals who are not described in Sec.  423.772. 
Additionally, this proposal would not affect the States' ability to 
adopt a different reasonable definition of the phrase for purposes of 
other eligibility groups. We sought comment on this proposal to define 
``family of the size involved'' for purposes of the MSP groups.
    We received the following comments on our proposals related to 
family size, and our responses follow.
    Comment: Many commenters supported aligning the definitions of 
family size for MSP with LIS. A number of these commenters specifically 
noted that communities of color and marginalized individuals were more 
likely to be part of multi-generational households. For that reason, 
they indicated this change would better reflect the household 
composition of low-income Medicare beneficiaries and promote health 
equity. MACPAC supported this proposal, noting consistency with its 
2020 recommendations to Congress to align the family size definition 
for the MSPs and LIS.
    A few commenters, while supporting the proposed change, requested 
specific modifications or clarifications. A commenter requested that 
CMS clarify in the regulation or commentary to the regulation that 
``relative'' includes anyone related by blood, marriage, or adoption 
based on 2009 CMS LIS guidance to States. The commenter further 
indicated that a particular State only counts the spouse in the 
household size if the individual's income is below the MSP income limit 
and requested that CMS issue a directive to States to clarify this is 
not allowed.
    Response: We thank the commenters for their support regarding our 
proposed MSP-related family size definition and agree that these 
provisions would promote health equity and increase access to the MSPs.
    The definition of ``family size'' in Sec.  423.772 includes the 
spouse of an applicant who is living in the same household. We 
therefore confirm that the requirement under the proposed rule that 
States use the definition of ``family size'' in Sec.  423.772 to 
determine MSP eligibility means that States would necessarily include 
an applicant's spouse in the applicant's family, if the spouse is 
living in the same household. We note, however, that, while being 
required to include the spouse in the applicant's household, States 
could exclude the spouse's income and/or resources in the applicant's 
MSP eligibility determination. As noted previously in this final rule, 
States may, under the authority of section 1902(r)(2)(A) of the Act, 
utilize methodologies less restrictive than the SSI program in 
determining MSP eligibility, which includes the authority to disregard 
otherwise-countable income and/or resources, such as the income and/or 
resources of a spouse.
    With regard to what constitutes a relative for purposes of the 
``family size'' definition in Sec.  423.772, as the commenter noted, in 
2009 CMS previously confirmed for States that the LIS ``family size'' 
definition includes the applicant, the applicant's spouse (if living 
with the applicant), and ``[a]ny persons who are related by blood, 
marriage, or adoption, who are living with the applicant and spouse and 
who are dependent on the applicant or spouse for at least one half of 
their financial support'' \36\ (emphasis added). Consistent with this 
guidance, we confirm that to comply with the proposed rule to use the 
``family size'' definition in Sec.  423.772 for MSP eligibility 
determinations, States would at least need to treat as ``related to'' 
the applicant individuals who are related by blood, marriage, or 
adoption. As noted previously in this final rule, however, States would 
retain the authority under the proposed rule to include individuals who 
are not required to be included in the definition of a ``family of the 
size involved'' for their MSP-related eligibility determinations. We 
intend to consider providing future guidance to States to further 
clarify this requirement.
---------------------------------------------------------------------------

    \36\ Centers for Medicare & Medicaid Services, Guidance to 
States on the Low-Income Subsidy, section 30.6 (Family Size), 
February 2009. https://www.cms.gov/Medicare/Eligibility-and-Enrollment/LowIncSubMedicarePresCov/downloads/StateLISGuidance021009.pdf.
---------------------------------------------------------------------------

    Comment: Some commenters shared concerns with the proposal to apply 
the LIS family size definition to the MSPs. For example, some 
commenters requested more time to complete systems changes and other 
updates (for example, SPAs) to implement the proposal, and a few 
commenters opposed the changes as overly burdensome and costly for 
States because it would require different eligibility and enrollment 
processes for the MSPs than for other non-MAGI groups. Further, some 
commenters suggested that extending the LIS family size definition to 
the MSPs could have an unintentional negative impact on current MSP 
enrollees if additional income from the relative/dependent is deemed to 
them, making them no longer eligible for the MSPs. Finally, some

[[Page 65248]]

commenters indicated that States may not have information about minor 
members of household and may find it difficult to verify dependency of 
non-minor household members. A few commenters questioned whether this 
information about household members outside of the spousal unit is 
contained in the LIS leads data transmitted.
    Response: We acknowledge that these changes may require many 
programmatic updates (including SPAs) and systems changes. As such, we 
are extending through this final rule the timeline for States to comply 
with this provision.
    Regarding the concern about the deeming to MSP applicants or 
enrollees the income of relatives or dependents, we note that 
preexisting non-MAGI deeming rules, under section 1902(a)(17)(D) of the 
Act and Sec.  435.602(a)(2)(i), prohibit States from deeming to an 
applicant the income or resources of anyone who is not the spouse or 
parent of that individual. Thus, although the proposal to use the 
definition of ``family size'' under Sec.  423.772 to determine MSP-
related eligibility may increase the family size of MSP applicants and 
enrollees, it will not expand the individuals whose income and/or 
resources may be deemed available to an MSP applicant or enrollee, as 
the non-MAGI deeming rule described in section 1902(a)(17)(D) of the 
Act and Sec.  435.602(a)(2)(i) continues to apply.
    Finally, we clarify that because the LIS definition of family size 
includes dependent relatives residing in the same house, SSA collects 
information to determine the number of relative dependents living in 
the household, excluding the beneficiary and spouse, and includes it in 
the LIS leads data sent to States.\37\ Again, as mentioned throughout, 
we plan to provide technical assistance and guidance to States to help 
them understand and use LIS leads data information for MSP eligibility 
determinations.
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    \37\ https://www.ssa.gov/dataexchange/documents/LIS%20record.pdf.
---------------------------------------------------------------------------

    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal at Sec.  435.601 on family size, with a 
modified compliance date of April 1, 2026.
3. Automatically Enroll Certain SSI Recipients Into the Qualified 
Medicare Beneficiaries Group (Sec.  435.909)
    SSI is a Federal cash assistance program that serves low-income 
individuals who are age 65 or older, or have blindness or a disability. 
SSI recipients typically qualify for other Federal and State programs. 
For example, many SSI recipients are entitled to Medicare under Sec.  
406.5(a) and (b). Additionally, in most States, the receipt of SSI is a 
mandatory basis for Medicaid eligibility pursuant to section 
1902(a)(10)(A)(i)(II)(aa) of the Act, implemented at Sec.  435.120 
(``Individuals receiving SSI group,'' hereafter the ``mandatory SSI 
group'').
    Thirty-three States and the District of Columbia (DC) that cover 
the mandatory SSI group have an agreement with SSA under section 
1634(a) of the Act under which SSA completes the determination of 
eligibility for the mandatory SSI group, and the Medicaid agency 
automatically enrolls the individual in Medicaid. We commonly refer to 
these States as ``1634 States.'' Nine States that cover the mandatory 
SSI group apply the SSI program's income and resource methodologies and 
disability criteria but require individuals to submit a separate 
application to the State Medicaid agency (``criteria States'').
    Eight States do not cover the mandatory SSI group. Instead, these 
States have elected to exercise authority provided to them under 
section 1902(f) of the Act to apply financial methodologies and/or 
disability criteria more restrictive than the SSI program in 
determining eligibility for individuals 65 years old or older or who 
have blindness or a disability, subject to certain conditions. These 
States are referred to as ``209(b) States,'' after the provision of 
section 209(b) of the Social Security Act Amendments of 1972 (Pub. L. 
92-603), which enacted the State authority codified at section 1902(f) 
of the Act. The eligibility group authorized by section 1902(f) of the 
Act is implemented at Sec.  435.121 (``Individuals in States using more 
restrictive requirements for Medicaid than the SSI requirements,'' 
hereafter ``mandatory 209(b) State group'').
    As discussed in the proposed rule at 87 FR 54771, because the 
income and resource standards for the QMB group exceed the income and 
resource standards for SSI, individuals entitled to Medicare Part A who 
meet the income and resource requirements for the mandatory SSI group 
or mandatory 209(b) group will always meet the income and resource 
requirements for the QMB group and be eligible for the QMB group.
    As discussed at 87 FR 54771, most individuals enrolled in Medicare 
qualify for Part A without paying a premium (premium-free Part A) and 
are automatically enrolled. According to internal SSA and CMS data, in 
2022, approximately 2.8 million individuals (over 75 percent) of 
Medicare-eligible SSI recipients were entitled to premium-free Part A.
    Under Sec.  406.20, many individuals who are not eligible for 
premium-free Part A may still enroll in Part A by applying for benefits 
at SSA and paying a premium (``premium Part A''). Individuals who are 
not eligible for premium-free Part A are not automatically enrolled in 
premium Part A and they must enroll in Part B prior to or at the same 
time as they enroll in Part A. For all Medicare beneficiaries, 
enrollment in Part B is contingent on a monthly premium, which is 
subject to an adjustment based on income.
    All States currently have entered into a voluntary ``buy-in 
agreement'' with the Secretary authorized under section 1843 of the Act 
which requires them to pay the Part B premiums for certain Medicaid 
beneficiaries known as ``(Part B buy-in''), including individuals 
enrolled in the QMB group and those receiving SSI (as described in the 
Medicare regulations at Sec.  407.42). A buy-in agreement permits 
States to directly enroll eligible individuals in Medicare Part B at 
any time of the year (without regard to Medicare enrollment periods or 
late enrollment penalties if applicable) and to pay the Part B premiums 
on the individual's behalf.
    In 1634 States, when SSA determines an individual eligible for both 
the mandatory SSI group and Medicare Part B, CMS automatically 
initiates Part B buy-in for the individual.\38\ In SSI criteria and 
209(b) States, SSA notifies both the State and CMS that an individual 
has been determined eligible for SSI and Medicare Part B; however, 
because such individuals must submit a separate Medicaid application 
for determinations of eligibility, we do not automatically initiate 
Part B buy-in. Rather, once the State determines an individual eligible 
for the mandatory SSI or 209(b) group, the State must initiate Part B 
buy-in for the individual pursuant to its buy-in agreement.
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    \38\ States with buy-in agreements must exchange buy-in 
enrollment data with CMS on a daily basis under Sec.  407.40(c)(4), 
and CMS also exchanges buy-in data with SSA on a daily basis. CMS 
collectively refers to these data exchange processes as the ``buy-in 
data exchange.'' See Manual for the State Payment of Medicare 
Premiums, chapter 2, sections 2.0 and 2.1. https://www.cms.gov/files/document/chapter-2-data-exchange-processes.pdf.
---------------------------------------------------------------------------

    While individuals enrolled in the mandatory SSI or 209(b) group 
receive full Medicaid benefits and Part B buy-in, enrollment in the QMB 
group provides these individuals with additional protection from out-
of-pocket health care costs--specifically Medicare

[[Page 65249]]

Part A premiums, if applicable, and Parts A and B cost-sharing charges. 
Moreover, Federal law prohibits all Medicare providers and suppliers, 
not just those participating in Medicaid, from charging QMBs for 
Medicare cost-sharing.
    Maximizing the number of Medicaid beneficiaries who are also 
enrolled in Medicare is advantageous to such individuals, and it can 
also result in cost savings for States. As a third-party payer, 
Medicare pays primary to Medicaid for Medicare Part A (inpatient 
hospital and skilled nursing facility services) and Medicare Part B 
(outpatient medical care). In addition, Medicaid beneficiaries who are 
enrolled in both Medicare Parts A and B may join Medicare-Medicaid 
integrated care plans, which coordinate care across the two payers and 
may generate savings to the State by helping beneficiaries avoid 
institutional placement and by providing supplemental benefits, such as 
dental, transportation, hearing, or other benefits that otherwise would 
have been covered by Medicaid.
    Despite the potential benefits for Medicaid beneficiaries and State 
agencies, our data from 2022 indicates that over 500,000 or 16 percent 
of SSI recipients who are eligible to enroll in Medicare are not 
enrolled in the QMB eligibility group. It is our understanding that a 
major barrier to QMB enrollment is that many States require SSI 
recipients to file a separate application with the State Medicaid 
agency to be evaluated for eligibility for the QMB group, even though 
they have been determined eligible for the mandatory SSI or 209(b) 
groups, and all SSI recipients who are entitled or able (with a 
premium) to enroll in Part A necessarily meet the requirements for QMB 
eligibility.
    We proposed several changes to facilitate the enrollment of SSI 
recipients into the QMB eligibility group, consistent with our 
authority in section 1902(a)(4) of the Act to establish standards 
promoting the proper and efficient administration of the Medicaid 
program, the requirements in the January 28, 2021 Executive Order on 
Strengthening Medicaid and the Affordable Care Act, the April 5, 2022 
Executive Order on Continuing to Strengthen Americans' Access to 
Affordable, Quality Health Coverage, and the December 13, 2021 
Executive Order on Transforming Federal Customer Experience and Service 
Delivery to Rebuild Trust in Government. Specifically, we proposed to 
add a new paragraph (b) at Sec.  435.909 that generally would require 
States to deem an individual enrolled in the mandatory SSI or 209(b) 
group eligible for the QMB group the month the State becomes 
responsible for paying the individual's Part B premiums under its buy-
in agreement pursuant to Sec.  407.47(b). We also proposed technical 
changes to remove reserved paragraph (a) at Sec.  435.909, redesignate 
Sec.  435.909 paragraph (b) as (a), and add a new header to new Sec.  
435.909(a).
    We noted (87 FR 54772) that under section 1902(e)(8) of the Act, 
QMB eligibility is effective the month following the month in which the 
determination of eligibility for the QMB group is made. Thus, under our 
proposal, QMB coverage would start the month following the month the 
State deems an individual eligible for the QMB group and starts paying 
the individual's Part B premiums under the buy-in agreement. For 
example, if an individual is first enrolled in both the mandatory SSI 
or 209(b) Medicaid group and entitled to Part A in January 2025, the 
State would start paying the individual's Part B premiums under the 
buy-in agreement and deem the individual eligible for the QMB group in 
January 2025. The individual's QMB coverage would start February 1, 
2025.
SSI Recipients Who Have Premium-Free Medicare Part A
    As noted at 87 FR 54771, SSA automatically enrolls individuals who 
receive Social Security or railroad retirement benefits or disability 
benefits for 24 months into premium-free Part A. SSA data for States 
(including those with a 1634 agreement and those without a 1634 
agreement) indicates whether an SSI recipient is entitled to premium-
free Part A. As discussed previously in this final rule, because all 
SSI recipients meet the financial eligibility requirements for the QMB 
group, proposed Sec.  435.909(b)(1)(i) would require all States to deem 
SSI recipients who are determined eligible for either the mandatory SSI 
group at Sec.  435.120 or the mandatory 209(b) group at Sec.  435.121 
as eligible for the QMB group if they are entitled to premium-free 
Medicare Part A. Under the proposed rule, when a 1634 State receives 
from CMS the Part B buy-in enrollment for an SSI recipient who is 
entitled to premium-free Medicare Part A, the State would automatically 
enroll the individual in both the mandatory SSI group and the QMB 
group; such individuals would not be required to submit a separate 
application to the Medicaid agency to determine eligibility for the QMB 
group.
    SSI recipients in criteria States and 209(b) States must submit a 
separate application to the Medicaid agency which determines 
eligibility for either the mandatory SSI or the 209(b) group. Thus, 
under proposed Sec.  435.909(b)(1)(i), once the State has determined an 
SSI recipient eligible for the mandatory SSI or the 209(b) group, the 
State also would start paying the Part B premiums for the individual 
the first month they are entitled to Part A and receiving SSI-based 
Medicaid and start QMB group coverage the first day of the following 
month.
    In some instances, individuals enrolled in the mandatory SSI or 
209(b) group become retroactively entitled to premium-free Medicare 
Part A based on a retroactive award of Social Security Disability 
Insurance (SSDI). Under the Medicare regulations at Sec.  407.47(b), 
States generally become responsible for retroactive Part B premiums for 
such individuals dating back to the first month they were enrolled in 
the mandatory SSI or 209(b) group and eligible for Part B.\39\ In the 
proposed rule entitled, ``Implementing Certain Provisions of the 
Consolidated Appropriations Act and other Revisions to Medicare 
Enrollment and Eligibility Rules'' (87 FR 25090) (referred to hereafter 
as the ``2022 Medicare eligibility and enrollment proposed rule''), we 
proposed adding a new paragraph (f) at Sec.  407.47 to limit State 
liability for retroactive Part B premiums for full-benefit Medicaid 
beneficiaries, including individuals receiving SSI-based Medicaid, to a 
period of no greater than 36 months prior to the date of the Medicare 
enrollment determination.
---------------------------------------------------------------------------

    \39\ Individuals who are entitled to premium-free Part A are 
eligible to enroll in Medicare Part B under Sec.  407.10(a)(1).
---------------------------------------------------------------------------

    In the proposed rule, we proposed at Sec.  435.909(b)(3) that 
retroactive QMB coverage for individuals in the mandatory SSI or 209(b) 
group be limited to the same period for retroactive Part B premium 
liability that was set forth in the then-proposed Sec.  407.47(f), 
which we have now finalized (to take effect starting January 1, 2024) 
in the 2022 Medicare eligibility and enrollment final rule. For 
example, if SSA determines an individual enrolled in the mandatory SSI 
or 209(b) group eligible for premium-free Part A in January 2025 with 
an effective date back to January 2023, the State would deem the 
individual eligible for the QMB group retroactive to January 2023. 
Because coverage under the QMB group begins the month after the month 
of the eligibility determination, QMB coverage in this example would be 
effective February 1, 2023. Alternatively, if SSA determines an 
individual enrolled in the

[[Page 65250]]

mandatory SSI or 209(b) group eligible for premium-free Part A in 
January 2025 with an effective date back to January 2021, the State 
would deem the individual eligible for the QMB group retroactive to 
January 2022, with QMB coverage effective February 1, 2022.
    Additionally, at 87 FR 54772, we reminded States that individuals 
deemed eligible for Medicaid are not exempt from regularly-scheduled 
renewals of Medicaid eligibility in accordance with Sec.  435.916. 
However, 1634 agreement States do not need to take affirmative steps to 
renew Medicaid for individuals who continue to receive SSI. Such 
individuals remain eligible for Medicaid based on their continued 
receipt of SSI. 1634 States can rely on information electronically 
transmitted by SSA (for example, the State Data Exchange (``SDX), State 
Verification Exchange System (SVES), or State Online Query System 
(SOLQ)), to renew on an ex parte basis, individuals who continue to 
receive SSI. States may consider SSA's original notification 
identifying an SSI recipient as verification that the individual is 
still receiving SSI and eligible for Medicaid on that basis until the 
State receives new information from SSA reflecting a change in 
circumstances. However, for an individual eligible under both the 
mandatory SSI and QMB groups, the State need only verify that the 
individual still receives SSI and is entitled to Medicare Part A to 
renew their eligibility in both groups. When an individual no longer 
meets the eligibility requirements for the eligibility group under 
which they have been receiving coverage, the State must determine 
eligibility on all bases before terminating eligibility.
    We received the following comments, and our responses follow.
    Comment: Several commenters expressed support for our proposal at 
Sec.  435.909(b)(1) to require States to automatically enroll most SSI 
recipients in the QMB group as they are by definition eligible for this 
coverage. MACPAC stated that the proposal aligns with its goal of 
improving participation in the MSPs and, from a health equity 
perspective, could promote access to care for the lowest-income 
Medicare beneficiaries by improving their access to Medicare cost-
sharing assistance. Similarly, some commenters anticipated that our 
proposal would substantially boost MSP enrollment for SSI recipients 
because procedural barriers to the MSPs have an outsize impact on this 
population, who are among those least able to navigate enrollment 
processes due to multiple social risk factors and physical and mental 
disabilities. Finally, a few commenters indicated that this proposal 
would reduce administrative work for State Medicaid staff and thus 
benefit States and SSI recipients alike.
    Response: We agree that requiring automatic enrollment of certain 
SSI recipients in QMB is an impactful and efficient step to break down 
barriers to MSP enrollment and advance health equity for this extremely 
low-income, high-need population.
    Comment: Commenters provided differing perspectives about the time 
and effort needed for States to comply with this provision. One 
commenter noted that a certain State already has plans to automate QMB 
enrollment for SSI recipients in late 2023, while another commenter 
described another State as equipped to make system updates within 30 
days of a final rule's effective date. In contrast, one commenter 
contended that the proposal, particularly its creation of a limited 
retroactive QMB benefit for individuals who become retroactively 
entitled to premium-free Part A, may require changes in State law, 
lengthy and complicated systems changes, and employee training.
    Response: As noted in section II.A.1. of this final rule, we 
recognize that effectuating this change may require States to update to 
their systems and/or State laws, and that unique circumstances may 
affect the timeline by which States can make these changes. However, 
relative to other types of eligibility changes (such as implementing 
provisions leveraging use of LIS leads data discussed in section 
II.A.1. of this final rule and aligning non-MAGI enrollment and renewal 
requirements with MAGI requirement discussed in the proposed rule at 87 
FR 54780), this proposal is less likely to require complex and lengthy 
systems updates. Plus, we believe that since all SSI recipients are 
eligible for the QMB group, it is appropriate to provide access to this 
vitally important benefit as soon as possible. In addition, under all 
State buy-in agreements, States must already have mechanisms in place 
to provide a period of retroactive Part B buy-in for SSI recipients who 
become retroactively entitled to premium-free Part A based on a 
retroactive SSDI award under Sec.  407.47(b) and (f). We anticipate 
that States would build upon these processes to retroactively deem SSI 
recipients into the QMB group as well. To balance the likelihood of 
modest systems updates and the benefits of our proposal, we are 
adopting a modified compliance date of October 1, 2024.
    Comment: One commenter agreed the proposal would help beneficiaries 
and States but requested clarification on whether SSI recipients have 
the option to decline QMB and, if so, whether declining QMB would 
affect their overall eligibility for Medicaid.
    Response: Under Sec.  435.404, individuals who may be eligible 
under more than one category may have their Medicaid eligibility 
determined under the category they select. This means that individuals 
who may be eligible for QMB and another eligibility group may choose to 
have eligibility determined only under one category. Therefore, SSI 
recipients can decline eligibility for QMB coverage without it 
impacting their eligibility for other Medicaid groups. However, we note 
that even if SSI recipients eligible for the mandatory SSI or 209(b) 
group opt out of the QMB group, States would still pay their Part B 
premiums under their State buy-in agreements because this is a 
mandatory population for buy-in, and buy-in is involuntary. See 
Sec. Sec.  407.40(c)(1) and 407.42(b). Because declining QMB 
eligibility could expose these very low-income individuals to high 
Medicare cost-sharing, we would expect very few SSI recipients to opt 
out of QMB eligibility.
    Additionally, while SSI recipients (and other individuals) may 
decline QMB enrollment without it impacting their Medicaid eligibility 
for other eligibility groups, they may still be required to apply for 
Medicare (if they have not already done so) where States have elected 
under their State plans to require Medicaid applicants and 
beneficiaries to apply for Medicare as a condition of Medicaid 
eligibility.
    Comment: One commenter noted that CMS did not provide evidence to 
justify the need for automatic enrollment and requested that CMS 
withdraw this proposal and instead develop a pilot with States to 
determine the reasons why eligible individuals do not apply for 
benefits. The commenter also questioned whether the proposal would 
inappropriately limit State flexibility to enroll SSI recipients in the 
medically needy eligibility group.
    Response: We decline the recommendation for a pilot project. As 
explained in the proposed rule (87 FR 54761 through 54762), our 
engagement with States and other interested parties \40\ as well as 
numerous other

[[Page 65251]]

studies \41\ have demonstrated that burdensome documentation 
requirements hinder the ability of eligible individuals to enroll in 
the MSPs and that easing these requirements is key to ensuring 
individuals can obtain these benefits. Automating QMB enrollment 
removes the need for this low-income, high-need population to undergo a 
redundant application process.
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    \40\ See for example, CMS Office of Burden Reduction & Health 
Informatics, ``Navigating the Medicare Savings Program (MSP) 
Eligibility Experience'' April 2022. https://www.cms.gov/files/document/navigatingmedicare-savings-program-msp-eligibilityexperience-journey-map.pdf.
    \41\ See, for example, MACPAC, ``Improving Participation in the 
Medicare Savings Programs,'' Report to Congress, June 2020. https://www.macpac.gov/publication/chapter-3-improving-participation-in-the-medicare-savings-programs/; Office of the Assistant Secretary for 
Planning and Evaluation, Loss of Medicare-Medicaid Dual Eligible 
Status: Frequency, Contributing Factors, and Implications, May 8, 
2019. https://aspe.hhs.gov/basic-report/loss-medicare-medicaid-dual-eligible-status-frequency-contributing-factors-and-implications; and 
Caswell, Kyle J., and Timothy A. Waidmann, ``Medicare Savings 
Program Enrollees and Eligible Non-Enrollees,'' The Urban Institute, 
June 2017. https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf.
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    Separately, we note that 209(b) States that have elected to extend 
eligibility to medically needy individuals under Sec.  435.330 
(``Medically needy coverage of the aged, blind, and disabled in States 
using more restrictive eligibility requirements for Medicaid than those 
used under SSI'') do not have the flexibility to enroll SSI recipients 
who meet a spenddown in a medically needy group. Under section 1902(f) 
of the Act and Sec.  435.121(e)(5), SSI recipients (and certain other 
individuals) who meet a spenddown based on the deduction of incurred 
medical expenses must be treated as categorically needy.
    Comment: Many commenters expressed support for the proposed changes 
but provided feedback on areas that were not addressed in the proposed 
rule. For example, many commenters requested that CMS require all 
States to automatically enroll SSI recipients in Medicaid coverage. One 
commenter recommended that CMS work with other agencies to streamline 
processes for enrolling Medicaid beneficiaries in other Federal 
benefits, when there is data indicating that there is a high likelihood 
that Medicaid beneficiaries would be eligible for those other Federal 
benefits.
    Response: We thank the commenter for their support of the proposed 
changes but note that these comments are outside the scope of this 
rulemaking.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal to require States to deem individuals enrolled 
in the mandatory SSI or 209(b) group who have premium-free Medicare 
Part A as eligible for the QMB group under new Sec.  435.909(b)(1), 
with a modified compliance date of October 1, 2024 to allow States more 
time for implementation.
QMB Eligibility for Individuals Eligible for Premium Part A
    As we noted previously in this final rule and in the proposed rule 
(87 FR 54772), individuals age 65 and over who lack the sufficient work 
history for premium-free Part A may qualify to pay, or have paid on 
their behalf, a monthly premium to receive Medicare Part A 
benefits.<SUP>42 43</SUP>
---------------------------------------------------------------------------

    \42\ Note that all individuals receiving title II benefits based 
on disability who have met the 24-month waiting period to enroll in 
Medicare are entitled to premium-free Part A.
    \43\ To meet the requirements for premium Part A at Sec.  
406.20(b), the individual must be: age 65 or older, a U.S. resident, 
not otherwise entitled to Part A, entitled to Part B or in the 
process of enrolling in it, and a U.S. citizen or lawful permanent 
resident who has resided in the U.S. continuously during the 5 years 
immediately preceding the month they enrolled in Medicare.
---------------------------------------------------------------------------

    All States must pay the Part A premium for individuals who are 
enrolled in the QMB eligibility group. However, as discussed in the 
proposed rule at 87 FR 54773, States can choose one of two methods to 
pay the Part A premium for QMBs.\44\ First, States can expand their 
buy-in agreement with us under section 1818(g) of the Act to include 
enrollment and payment of Part A premiums for QMBs who do not have 
premium-free Part A. Currently, 36 States and the District of Columbia 
have chosen this option and are called ``Part A buy-in States.'' In 
Part A buy-in States, individuals determined eligible for the QMB group 
can enroll in premium Part A at any time of the year and without regard 
to late enrollment penalties. Fourteen States do not include Part A in 
their buy-in agreements and instead pay the Part A premiums for QMBs 
using a group payer arrangement, which allows certain third parties 
(for example, States) to pay the Part A premiums for a class of 
beneficiaries.\45\ States that use a group payer arrangement for QMBs 
are known as ``Part A group payer States.''
---------------------------------------------------------------------------

    \44\ See chapter 1, section 1.7 of the CMS Manual for the State 
Payment of Medicare Premiums. https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.
    \45\ See SSA Program Operations Manual System (POMS) HI 
01001.230 Group Collection-General. http://policynet.ba.ssa.gov/poms.nsf/lnx/0601001230.
---------------------------------------------------------------------------

    As previously noted, to qualify for the QMB eligibility group under 
section 1905(p)(1) of the Act, an individual must be entitled to 
hospital insurance benefits under Part A of title XVIII. In general, an 
individual becomes entitled to Part A if: (1) they are eligible for 
premium-free Part A based on payment of a payroll tax; or (2) are 
eligible to enroll in premium Part A and do enroll (creating a Part A 
premium obligation).
    Further, as noted in the proposed rule at 87 FR 54773, section 
1905(a) of the Act specifies that payments of Medicare cost-sharing for 
QMBs (including Part A premiums) are ``medical assistance'' for 
purposes of FFP, if made in the month following the month in which the 
individual becomes a QMB. Thus, under a literal reading of the words of 
the statute, a State would not be able to claim or receive FFP under 
the QMB group for an individual without Premium-free Part A until the 
month after the month in which the individual is ``entitled to Part 
A,'' which would require that a Part A premium be billed to the 
individual until QMB coverage of the premium would begin. This would 
create a ``catch 22'' in which low-income individuals without premium-
free Part A could only be eligible for QMB coverage that makes Part A 
enrollment affordable if they first became personally liable for the 
high cost of paying the Part A premium to become ``entitled'' to Part 
A, and thus eligible for QMB status.
    As we explained in the proposed rule at 87 FR 54773, this result 
would eviscerate the purpose of sections 1843 and 1818(g) of the Act 
(``buy-in statute'') to avoid undue delays in QMB enrollment. Under a 
literal reading, States with a Part A buy-in agreement could 
theoretically use only 100 percent State funds to pay Part A premiums 
the first month to allow the individual to become entitled to Part A 
and start QMB coverage the next month. However, in Harris v. McCrae, 
448 U.S. 297 (1980), the U.S. Supreme Court held that States cannot be 
required to provide Medicaid using only State funds. Further, while 
individuals can enroll in Part A at any time of the year without regard 
for Medicare enrollment periods or applicable late enrollment penalties 
if the State pays their Part A premium under its buy-in agreement, this 
is not the case for individuals who are paying the premium themselves. 
Individuals who must pay the Part A premium themselves must wait until 
a Medicare enrollment period to enroll in Part A and may be subject to 
late enrollment penalties. Thus, a literal read of the statute would 
defeat the purpose of buy-in statute--to avoid delays in QMB enrollment 
by allowing QMB-eligible individuals who reside in Part A buy-in States 
to enroll in Part A at any time of the year, without the imposition of 
Medicare enrollment penalties.

[[Page 65252]]

    Recognizing that a literal read of the statute would produce a 
result that essentially nullifies the impact of the QMB and buy-in 
statutory provisions, we instituted a policy over 30 years ago under 
which States can receive FFP for paying an individual's Part A premium 
the first month of entitlement, thereby triggering both Part A 
entitlement and QMB coverage. Under this longstanding policy, Part A 
buy-in States can determine an individual eligible for QMB status, and 
thus for their Part A premiums to be paid, if they are enrolled in Part 
B but not yet entitled to Part A.\46\ Group payer States similarly can 
approve eligibility for individuals under the QMB eligibility group if 
SSA has determined them conditionally eligible for premium Part A, 
through a process known as ``conditional enrollment.'' The conditional 
enrollment process enables low-income individuals to apply at SSA for 
premium Part A on the condition that they will only be enrolled in Part 
A if the State determines they would become eligible for the QMB group 
upon payment of the Part A premium.\47\
---------------------------------------------------------------------------

    \46\ Chapter 1, section 1.10 of the CMS Manual for the State 
Payment of Medicare Premiums, https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf, and SSA POMS HI 
00801.140.C Premium Part A Enrollments for Qualified Medicare 
Beneficiaries (QMBs)--Part A Buy-In States and Group Payer States. 
http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140.
    \47\ The conditional enrollment process is described in chapter 
1, section 1.11 of the CMS Manual for the State Payment of Medicare 
Premiums, https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf, and in SSA POMS HI 00801.140 Premium Part A 
Enrollments for Qualified Medicare Beneficiaries (QMBs)--Part A Buy-
In States and Group Payer States. http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140.
---------------------------------------------------------------------------

    For multiple decades, the conditional enrollment policy has helped 
hundreds of thousands of individuals, many of whom are poorer and more 
likely to be non-native English speakers, to obtain essential 
assistance with Medicare premiums and cost-sharing by allowing States 
to pay the first month's premium needed to trigger Medicare Part A 
entitlement (note that they do not actually become ``entitled'' to Part 
A until this payment is made). Without this policy, the subsidies 
available under the QMB group to make Part A affordable would only be 
available to individuals who somehow found a way to pay the initial 
Part A premium (including a late enrollment penalty if applicable) 
themselves.
    We proposed to amend the regulations to reflect the foregoing 
longstanding approach to implementing the statute in a manner that 
gives full effect to our understanding of the law's intended policy in 
this rare instance in which implementing the plain meaning of the words 
of the statute would produce a result that is at odds with this 
statutory purpose. As noted in the proposed rule at 87 FR 54774 through 
54775, this approach is consistent with United States v. Ron Pair 
Enterprises, Inc., 489 U.S. 235 (1989) and other court opinions. We 
noted at 87 FR 54774 through 54775 that there also is CMS precedent for 
not applying the plain meaning of the words of the statute when it 
leads to an absurd result contrary to our understanding of the purpose 
of the statute.
    For the reasons set forth previously in this final rule, in this 
case also, reversing our decades-long method of implementing the 
statute to instead apply the plain meaning of the words literally would 
be contrary to the fundamental purpose of the QMB statutory provisions. 
Therefore, as noted previously in this final rule, we proposed to 
incorporate in the regulations our longstanding practice of providing 
FFP for State payments of the first month of an individual's Part A 
premium for individuals who are eligible for the QMB group based on 
enrollment in Part B in Part A buy-in States or conditional enrollment 
in Part A in group payer States. This also would facilitate enrollment 
into the QMB group for SSI recipients who need to pay a premium to 
enroll in Part A.
    We received comments on our proposed incorporation of this 
longstanding policy into regulations, and our responses follow.
    Comment: Several commenters expressly supported our proposal to 
codify our decades-old practice of paying Federal matching funds to 
States that pay the first month's Part A premium for individuals 
eligible for the QMB group in Part A buy-in and group payer States, 
while no commenters opposed it. They concurred that a literal read of 
the relevant statutory provisions would create a ``catch-22'' in which 
low-income individuals cannot obtain QMB coverage that makes it 
affordable to enroll in Medicare until they become liable for the Part 
A premiums. They indicated that CMS's longstanding method of 
implementing the statute has helped to prevent a substantial financial 
barrier that is wholly inconsistent with the purpose of QMB statute. A 
commenter expressed hope that codifying the longstanding workaround 
will prompt the few Part A group payer States that have not yet 
recognized conditional Part A enrollments to now accept them as a valid 
basis for QMB eligibility.
    Response: We thank the commenters for their support of the proposal 
to codify our longstanding practice to facilitate QMB enrollment for 
individuals without premium-free Part A. Over 700,000 individuals 
without premium-free Part A are currently enrolled in the QMB group. As 
indicated at 87 FR 54760 we estimated that if CMS were to remove this 
work-around, over 78,000 individuals without premium-free Part A each 
year would be prevented from enrolling in the QMB group. We anticipate 
that codification will provide additional clarity to States, 
beneficiaries, and organizations that assist them.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing without modification our proposal to codify our existing 
practice allowing States to receive Federal matching funds for the 
payment of Part A premiums the first month an individual is entitled to 
premium Part A.
SSI Recipients Eligible for Premium Part A
    Based on the longstanding policy described previously in this final 
rule, in Part A buy-in States, when an SSI recipient who lacks 
sufficient work history for premium-free Part A has been determined 
eligible for the mandatory SSI or 209(b) group and is enrolled in Part 
B, the State can determine the individual eligible for the QMB 
eligibility group and enroll the individual in Part A buy-in.
    To streamline QMB enrollment for SSI recipients who must pay a 
premium to enroll in Part A, we proposed at Sec.  435.909(b)(1)(ii) to 
require Part A buy-in States to deem those individuals who are 
determined eligible for the mandatory SSI or 209(b) groups as eligible 
for the QMB group and initiate their enrollment into Medicare Part A 
the month they are enrolled in Part B buy-in.
    In Part A buy-in States with a 1634 agreement, once the State 
receives the automated Part B buy-in enrollment from CMS for an SSI 
recipient who lacks a sufficient work history for premium-free Part A, 
under proposed Sec.  435.909(b)(1)(ii) the State would enroll the 
individual in the mandatory SSI group, deem the individual eligible for 
the QMB group, and effectuate enrollment in Medicare Part A through the 
buy-in agreement.
    In a Part A buy-in State without a 1634 agreement (that is, a 
criteria or 209(b) State), once the individual applies to the Medicaid 
agency, some States currently only determine

[[Page 65253]]

eligibility for the mandatory SSI or 209(b) group, as applicable, and 
initiate Part B enrollment per their buy-in agreement. Under proposed 
Sec.  435.909(b)(1)(ii), these Part A buy-in States also would be 
required to deem any individuals determined by the State to be eligible 
for the mandatory SSI or 209(b) groups as eligible for the QMB group 
and initiate enrollment in both Medicare Part A and Part B buy-in.
    In the 14 group payer States, it is more challenging for SSI 
recipients to enroll in Medicare Part A and the QMB eligibility group. 
Unlike in Part A buy-in States, individuals determined eligible for the 
mandatory SSI or 209(b) group in group payer States who are enrolled in 
Part B pursuant to the State's buy-in agreement will not necessarily 
satisfy the eligibility requirement for the QMB group that the 
individual be entitled to Part A. Even though the State will initiate 
enrollment of the individual in Part B, pursuant to its buy-in 
agreement, it will not cover the individual's Part A premium or 
initiate Part A enrollment under the buy-in agreement. Instead, the 
individual must separately apply for premium Part A at SSA using the 
conditional enrollment process, which is administratively burdensome 
for both individuals and the State, and the vast majority of 
individuals fail to complete the process unless an eligibility worker 
or other application assistor provides hands-on assistance 
throughout.\48\
---------------------------------------------------------------------------

    \48\ Medicare Rights Center,``Streamlining Medicare and QMB 
Enrollment for New Yorkers: Medicare Part A Buy-In Analysis and 
Policy Recommendations,'' February 2011. https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf.
---------------------------------------------------------------------------

    Two other challenges currently make QMB enrollment harder for SSI 
recipients without premium-free Part A in group payer States. First, 
group payer States can only enroll individuals in premium Part A during 
the general Medicare enrollment period that runs from January through 
March each year. Second, group payer States are required to pay late 
enrollment penalties, if applicable, for those Medicaid beneficiaries 
who did not enroll in Medicare Part A timely when they first became 
eligible to do so.
    To streamline QMB enrollment for SSI recipients without premium-
free Part A in group payer States, we proposed to add a State option 
for deeming individuals eligible for the QMB group. Specifically, 
proposed Sec.  435.909(b)(2) would allow, but not require, group payer 
States to directly initiate Medicare Part A enrollment for individuals 
who are not entitled to premium-free Part A without first sending them 
to SSA to apply for conditional Part A enrollment. Under this proposed 
State option, once the State has determined the individual eligible for 
the mandatory SSI or 209(b) group and become liable for paying their 
Part B premiums under the buy-in agreement pursuant to Sec.  407.42, 
the State would also be able to deem them eligible for the QMB group.
    We received the following comments, and our responses follow.
    Comment: Several commenters supported our proposal to require Part 
A buy-in States to deem as eligible for the QMB group certain SSI 
recipients who must pay a premium to enroll in Part A because it would 
meaningfully improve the ability of this low-income, at-risk population 
to access the benefits for which they qualify and that they distinctly 
need.
    Response: We thank commenters for their support. We anticipate it 
will measurably increase the number of SSI recipients without premium-
free Part A who participate in the QMB group.
    Comment: Some commenters sought clarifications about our proposals 
to require QMB deeming in Part A buy-in States and allow it in group 
payer States. A few commenters questioned whether our proposal would 
require States to deem SSI recipients without premium-free Part A into 
the QMB eligibility group retroactively. One commenter inquired whether 
Federal statute permits retroactive coverage of Medicare Part A 
premiums or allows States to provide retroactive Part A buy-in coverage 
to SSI recipients, but not other QMB-eligible individuals. Another 
commenter inquired whether the proposal would require States to modify 
their systems to enroll SSI recipients in Part A buy-in. The commenter 
went on to question whether Part A buy-in States would need to align 
the QMB start date with the individual's Part A enrollment during the 
GEP and whether individuals who lose Part A buy-in may be required to 
pay late enrollment penalties. The commenter also noted that 
streamlining QMB enrollment processes for non-SSI recipients who 
qualify for premium Part A, including non-citizens, is equally 
important and suggested that CMS consider facilitating QMB enrollment 
for this population. The commenter indicated that LIS leads data would 
not include records for such individuals.
    Response: At the outset, we clarify that our proposal would not 
permit States to retroactively enroll SSI recipients in Part A buy-in 
since, under section 1902(e)(8) of the Act, QMB coverage is effective 
the month following ``the month in which the [QMB] determination first 
occurs'' (that is, the month the State deems the SSI recipient eligible 
for the QMB group). For individuals who lack premium-free Part A, 
deeming would occur the month they are enrolled in the mandatory SSI or 
209(b) group and Part A buy-in, and QMB coverage would start the month 
following the deeming month. For example, if an individual were 
enrolled in the mandatory SSI or 209(b) group and Part B buy-in in 
April 2025, the State would deem the individual eligible for QMB in 
April 2025, with Part A buy-in and QMB coverage effective May 1, 2025. 
As explained at 87 FR 54772 and in our comment response in this final 
rule, States would only deem individuals eligible for QMB coverage 
during a past period if they are eligible for the mandatory SSI or 
209(b) group and are retroactively determined eligible for premium-free 
Part A due to a delayed SSDI award.
    In addition, we anticipate that States may need to modify their 
processes and systems to enroll SSI recipients in Part A buy-in the 
month after they are deemed eligible for QMB and expect that the nature 
and design of operations and system changes will vary by State. We are 
available to provide technical assistance to States as they make 
operational and systems changes to implement this proposal.
    We clarify that Part A buy-in States would deem SSI recipients in 
QMB and enroll them in Part A buy-in throughout the year, not just 
during the GEP, since individuals covered under State buy-in agreements 
are not subject to Medicare enrollment periods. Further, we clarify 
that while residents of group payer States who lose eligibility for 
Part A buy-in may be subject to a late enrollment penalty, residents of 
Part A buy-in States who lose Part A buy-in are not liable for a late 
enrollment penalty even if they had been paying one prior to enrollment 
in Part A buy-in.\49\
---------------------------------------------------------------------------

    \49\ CMS Manual for the State Payment of Medicare Premiums, 
chapter 1, section 1.15. https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.
---------------------------------------------------------------------------

    Finally, we agree with the importance of simplifying QMB enrollment 
for individuals who are not entitled to SSI and lack premium-free Part 
A, many of whom are otherwise ineligible for Medicaid coverage and 
would solely rely on Medicare for health insurance. As such, we may 
consider whether a basis exists to streamline QMB enrollment for non-
SSI recipients who lack premium-free Part A in future rulemaking. We 
are also available to explore with States options to streamline their 
current QMB eligibility and enrollment processes for this

[[Page 65254]]

population. We also clarify that LIS leads data may include records for 
non-SSI recipients who lack premium-free Part A, do not already have 
Medicaid, and have applied for LIS.
    Comment: Many commenters supported our proposal to permit group 
payer States to deem SSI recipients without Part A eligible for QMB by 
employing processes used by Part A buy-in States to directly initiate 
Part A entitlement for individuals enrolled in Part B (avoiding the 
need to first send them to SSA to enroll in conditional Part A). They 
agreed that it would significantly simplify QMB enrollment for 
beneficiaries and promote administrative efficiencies for States. A few 
commenters supported keeping this an option rather than a requirement 
because increasing QMB enrollment through streamlined processes could 
increase States costs and require systems updates.
    Other commenters urged CMS to require group payer States to bypass 
the conditional enrollment process, citing numerous challenges arising 
from this process. These commenters indicated that the complexity of 
the conditional enrollment process presents an almost insurmountable 
obstacle for SSI recipients, who are among those least able to navigate 
complex application processes. They contended that requiring the lowest 
income, high needs older adults to first apply for conditional Part A 
at a separate agency is unrealistic and unfair and that getting lost in 
the process is the rule rather than the exception for those who lack 
assistance from an advocate, particularly for individuals with limited 
English proficiency and low literacy skills. They explained that having 
to wait until the GEP to file a conditional enrollment further 
complicates and delays the process. Some commenters noted that SSI 
recipients in States with group payer and 209(b) status face the 
steepest obstacles to obtain the benefits to which they are entitled 
because they must file an application for the 209(b) eligibility group 
with their State before completing the two-step application process to 
enroll in QMB. Some commenters stated that, despite the release of 
clearer program instructions to SSA field offices, government offices 
commonly provide incorrect information about the process or fail to 
properly enroll individuals in benefits. One commenter suggested that 
CMS has legal authority to mandate that group payer States deem SSI 
recipients without premium-free Part A eligible for QMB because doing 
so would still leave the administrative Part A group payment option 
intact. Finally, another commenter requested that CMS require the 
remaining group payer States to convert to Part A buy-in status since a 
particular group payer State has not voluntarily taken that step 
despite requests from interested parties.
    Response: We appreciate the commenters' support for allowing group 
payer States to bypass the conditional enrollment process for SSI 
recipients and deem them eligible for the QMB group. As we explained 
previously in this final rule and as noted by the commenters, although 
the conditional enrollment process provides a way for individuals to 
enroll in the QMB without paying the Part A premiums upfront, it is 
still extremely difficult for this very low-income, high-need 
population to traverse. We encourage group payer States to adopt the 
more streamlined processes used in Part A buy-in States. However, we 
recognize that the 14 group payer States may face unique challenges, 
with differing needs and opportunities. Therefore, we decline to adopt 
the commenters' recommendations to require group payer States to deem 
SSI recipients without Part A in QMB, or to convert to Part A buy-in 
status in this final rule, but we may consider whether there is a basis 
for such requirements in future rulemaking.
    Comment: Several commenters recommended that CMS take steps to 
persuade group payer States to become Part A buy-in States in the event 
we permit--but do not require--group payer States to deem SSI 
recipients eligible for the QMB group. For example, some commenters 
suggested that CMS provide direct outreach to group payer States to 
explain how they would achieve savings by enrolling more Medicaid 
beneficiaries in Part A, which pays primary to Medicaid for Part A-
covered services like inpatient hospital and skilled nursing facility 
care. Another commenter requested that CMS consider levers to 
incentivize group payer States to convert to Part A buy-in status, for 
example, charging group payer States for the additional administrative 
costs SSA incurs for processing conditional Part A applications for 
their residents. A commenter suggested that CMS require group payer 
States that decline to deem SSI recipients eligible for the QMB group 
to actively assist individuals in completing the conditional enrollment 
process at SSA rather than requiring individuals to navigate the 
process themselves.
    Response: We agree with the importance of working with group payer 
States to assess the impact of entering into a Part A buy-in agreement. 
Part A buy-in agreements are beneficial to individuals and may also 
reduce administrative burden and costs for providers and States. To 
that end, we commissioned a decision support tool and offered technical 
assistance to group payer States to help them analyze the fiscal impact 
of newly executing a Part A buy-in agreement with us.\50\ We will 
continue such education and outreach to group payer States. We decline 
to adopt the commenter's suggestion to charge group payer States for 
costs associated with conditional enrollments at SSA, but we may 
consider other steps to promote QMB enrollment group payer States in 
the future. We also highly encourage States to help individuals in 
completing the conditional enrollment process at SSA, but we decline to 
make such assistance a requirement at this time.
---------------------------------------------------------------------------

    \50\ See Dujack, Andrew et al., ``Assessing the Fiscal Viability 
of a Medicare Part A Buy-in Agreement in Group Payer States,'' The 
Integrated Care Resource Center, December 2021. https://www.integratedcareresourcecenter.com/sites/default/files/Assessing%20the%20Fiscal%20Viability%20of%20a%20Medicare%20Part%20A%20Buy-in%20Agreement%20in%20Group%20Payer%20States.pdf.
---------------------------------------------------------------------------

    After considering the comments received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal to require Part A buy-in States to deem 
individuals enrolled in the mandatory SSI or 209(b) group eligible for 
the QMB group and to permit group payer States to adopt the same 
streamlined procedures used in Part A buy-in States under new 
Sec. Sec.  435.909(b)(1) and 435.909(b)(1) with a modified compliance 
date to allow States more time for implementation. This modification 
extends the compliance date for this provision to October 1, 2024.
4. Clarifying the Qualified Medicare Beneficiary Effective Date for 
Certain Individuals (Sec.  406.21)
    We proposed to clarify the effective date of coverage under the QMB 
group for individuals who must pay a premium to enroll in Part A and 
reside in a group payer State to provide individuals with protection 
from Medicare premiums and cost-sharing costs on the earliest possible 
date.
    As discussed in the proposed rule at 87 FR 54775, eligible 
individuals who do not enroll in premium Part A during their initial 
enrollment period (IEP), the 7-month period that starts the third month 
before the individual qualifies for Medicare, or who disenroll from 
premium Part A and wish to re-enroll, must generally do so during the 
general

[[Page 65255]]

enrollment period (GEP). The GEP, established under section 1837(e) of 
the Act, is the period beginning on January 1 and ending on March 31 of 
each year. Section 120 of the Consolidated Appropriations Act, 2021 
(CAA, 2021, Pub. L. 116-260) revised the Part A entitlement effective 
date for individuals who enroll during the GEP beginning on or after 
January 1, 2023 from the first of July following their enrollment to 
the first day of the month following the month in which they enroll. In 
the November 3, 2022 regulation entitled ``Medicare Program; 
Implementing Certain Provisions of the Consolidated Appropriations Act, 
2021 and Other Revisions to Medicare Enrollment and Eligibility Rules'' 
(87 FR 66454), we revised Sec.  406.21(c) to implement the GEP 
effective dates outlined in section 120 of the CAA.
    To align with that change, we proposed at 87 FR 54775 to clarify 
the applicable effective date of QMB coverage for an individual who 
resides in a group payer State and enrolls in conditional Part A during 
the GEP. As discussed previously in this final rule, in the proposed 
rule (87 FR 54773 & 54774), in a Part A buy-in State, we consider 
enrollment in Part B sufficient to meet the requirement that an 
individual be entitled to Part A for the purposes of the QMB 
eligibility determination. However, in a group payer State, enrollment 
in QMB for individuals who need to pay a premium to enroll in Part A is 
always a two-step process. The State cannot determine individuals 
eligible for QMB and enroll them in Part A buy-in until SSA establishes 
actual or conditional Part A enrollment. With respect to QMB enrollment 
under a buy-in agreement under Sec.  406.26, Medicare Part A coverage 
begins the first month an individual is entitled to Part A under Sec.  
406.20(b) and has QMB status. We consider a conditional Part A filing 
to be sufficient to fulfill the requirement for entitlement to Part A 
as applicable for QMB coverage.\51\
---------------------------------------------------------------------------

    \51\ See CMS Manual for the State Payment of Medicare Premiums, 
chapter 1, section 1.11. https://www.cms.gov/files/document/chapter-1-program-overview-and-policy.pdf.
---------------------------------------------------------------------------

    Specifically, we proposed in new Sec.  406.21(c)(5) to codify 
existing policy that individuals who reside in group payer States and 
enroll in actual or conditional Part A during the GEP can obtain QMB as 
early as the month Part A entitlement begins. Beginning on or after 
January 1, 2023, for individuals who enroll in Medicare during the GEP, 
QMB coverage starts the month premium Part A entitlement begins (if the 
State determines the individual has met the eligibility requirements 
for QMB coverage in the same month that Part A enrollment occurs), or a 
month later than the month of Part A entitlement (if the individual is 
determined eligible for QMB the month Part A entitlement begins or 
later).
    We received the following comments on our proposed codification of 
the effective date in Sec.  406.21(c)(5), and our responses follow.
    Comment: Multiple commenters expressed thanks for our proposal to 
codify our existing policy regarding the applicable effective date of 
QMB coverage for an individual who resides in a group payer State and 
enrolls in conditional Part A during the GEP. According to the 
commenters, codifying the policy would aid beneficiaries and promote 
clarity and accountability for States as they adjust their processes to 
align with changes to the effective date of Part A entitlement for 
enrollments made during the IEP and GEP and the creation of new SEPs 
under the CAA, 2021. A commenter supported the policy but noted that it 
would take 18-24 months for a specific State to implement this change.
    Response: We thank the commenters for their support for 
incorporating into our regulations our existing policy regarding the 
QMB start date in group payer States. To provide States more time to 
implement this proposal, we plan to modify the compliance date to April 
1, 2026.
    Comment: A few commenters encouraged CMS to provide technical 
assistance and information to States and education to SHIPs, advocates, 
and counselors to help ensure individuals in group payer States receive 
benefits at the earliest possible date. For example, a commenter 
suggested that CMS produce FAQs explaining how the conditional 
enrollment process generally works and how the change in the effective 
date of GEP enrollments under the CAA, 2021 (that is, the month 
following the month of enrollment) means that individuals will lose 
valuable months of benefits if they do not apply for QMB the same month 
they conditionally enroll in Part A. The commenter also requested that 
CMS clarify that individuals who enroll in conditional Part A would not 
become liable for Part A premiums if they are not approved for the QMB 
group and address uncommon occurrences, such as if an individual wants 
to change their conditional Part A enrollment to actual Part A 
enrollment if they experience a medical emergency and need Part A 
coverage before QMB benefits can start. The commenter further 
recommended that, as group payer States update their processes, CMS act 
quickly to help correct any QMB enrollment delays and ensure that 
individuals receive refunds for any Medicare cost-sharing amounts they 
incur before such corrections are made. Another commenter requested 
clarification on whether a group payer State must provide Part A buy-in 
and QMB benefits to individuals who enroll in premium Part A during an 
SEP, such as the new SEP for formerly incarcerated individuals.
    Response: We agree with the importance of providing education and 
assistance to promote the earliest access to QMB benefits. We will 
consider these issues and others as we update our existing materials to 
inform States, beneficiaries, SHIPs, advocates, and other interested 
parties about these policies. In response to the question about Part A 
enrollments in group payer States during an SEP, we clarify that 
individuals can use the new SEPs to enroll in premium Part A under 
existing SSA processes for the purposes of enrolling in the QMB 
eligibility group. As such, a group payer State must determine eligible 
individuals who enroll in premium Part A during an SEP eligible for 
Part A buy-in and QMB coverage. Further, if a group payer State 
recognizes conditional enrollments filed during a GEP as meeting the 
requirement for entitlement to Part A for the purposes of QMB 
eligibility, it would be required to treat conditional enrollments made 
during an SEP as a basis for QMB eligibility.
    After considering the comments we received and for the reasons 
outlined in the proposed rule and our responses to comments, we are 
finalizing our proposal to codify existing policy that individuals who 
reside in group payer States and enroll in actual or conditional Part A 
during the GEP can obtain QMB as early as the month Part A entitlement 
begins under Sec.  406.21(c)(5), with a modified compliance date to 
allow States more time to implement this provision. This modification 
extends the compliance deadline to April 1, 2026.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to provide 60-day notice in the Federal Register 
and solicit public comment before a ``collection of information'' 
requirement is submitted to the Office of Management and Budget (OMB) 
for review and approval. For the purposes of the PRA and this section 
of the preamble, collection of information

[[Page 65256]]

is defined under 5 CFR 1320.3(c) of the PRA's implementing regulations.
    To fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we 
solicit comment on the following issues:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection 
burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In our September 7, 2022 (87 FR 54760) proposed rule, we solicited 
public comment on each of the required issues under section 
3506(c)(2)(A) of the PRA for the following collection of information 
requirements. We did not receive comments related to any of the 
proposed collection of information requirements or associated burden 
estimates.
    We have made changes from the proposed rule to this final rule to 
the wages identified immediately below, the associated cost estimates, 
the number of States impacted by our change to the definition of family 
size, associated cost estimates (see discussion in section IV.C.1. of 
this final rule) and cost estimates impacted by changes related to the 
modification of our proposal to screen LIS applicants for full Medicaid 
(see discussion in section IV.C.1. of this final rule). At this time, 
we are not making changes to other proposed collection of information 
requirements and time estimates in this rule. As described later in 
this section, we are reorganizing (relative to the proposed rule) the 
Collection of Information and Regulatory Impact Analysis sections of 
this final rule. However, we discuss wage, FMAP, and other related info 
here in this section to match its placement in the proposed rule.

A. Wage Estimates

    Wage Changes. In this final rule, we are adjusting the wage for 
individuals from $28.01/hr to $21.98/hr. The adjustment from the 
proposed rule is based on internal review as we changed the source of 
the wage figure from U.S. Bureau of Labor Statistics' (BLS) May 2021 
National Occupational Employment and Wage Estimates at $28.01/hr (see 
87 FR 54817) to HHS guidance at $21.98/hr (see Wages for Individuals, 
below). This change affects the cost estimates in sections IV.C.1. and 
2. of this final rule.
    We are also adjusting the wages for State government respondents. 
At the time of publication of the proposed rule the most recent BLS 
wage figures were from May 2021 (see 87 FR 54817). At the time of 
publication of this final rule the most recent BLS wage figures are 
from May 2022. This change affects the cost estimates in sections 
IV.C.1., 2. and 5. of this final rule.
    Wages for State Governments. To derive average State-specific 
costs, we used data from the BLS May 2022 National Occupational 
Employment and Wage Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 2 presents 
the BLS' mean hourly wage, our estimated cost of fringe benefits and 
other indirect costs (calculated at 100 percent of salary), and our 
adjusted hourly wage.

                          Table 2--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                             Fringe benefits
                                                          Mean hourly wage      and other       Adjusted hourly
          Occupation title             Occupation code         ($/hr)         indirect costs      wage ($/hr)
                                                                                  ($/hr)
----------------------------------------------------------------------------------------------------------------
Business Operations Specialist......            13-1000              40.04              40.04              80.08
Computer Programmer.................            15-1251              49.42              49.42              98.84
Database and Network Administrator              15-1240              53.08              53.08             106.16
 and Architect......................
Eligibility Interviewers, Government            43-4061              24.05              24.05              48.10
 Programs...........................
General and Operations Mgr..........            11-1021              59.07              59.07             118.14
----------------------------------------------------------------------------------------------------------------

    As indicated, we are adjusting our employee hourly wage estimates 
by a factor of 100 percent. This is necessarily a rough adjustment, 
both because fringe benefits and other indirect costs vary 
significantly from employer to employer, and because methods of 
estimating these costs vary widely from study to study. Nonetheless, we 
believe that doubling the hourly wage to estimate total cost is a 
reasonably accurate estimation method.
    Cost to State Governments. To estimate State costs, it was 
important to take into account the Federal Government's contribution to 
the cost of administering the Medicaid program. The Federal Government 
provides funding based on a Federal Medical Assistance Percentage 
(FMAP) that is established for each State, based on the per capita 
income in the State as compared to the national average. FMAPs range 
from a minimum of 50 percent in States with higher per capita incomes 
to a maximum of 76.25 percent in States with lower per capita incomes. 
For Medicaid, all States receive a 50 percent FMAP for administration. 
As noted previously, States also receive higher Federal matching rates 
for certain services and for systems improvements or redesign, so the 
level of Federal funding provided to a State can be significantly 
higher. As such, in taking into account the Federal contribution to the 
costs of administering the Medicaid program for purposes of estimating 
State burden with respect to the collection of information 
requirements, we elected to use the higher-end estimate that the States 
would contribute 50 percent of the costs, even though the burden will 
likely be much smaller.
    Wages for Individuals. We believe that the cost for beneficiaries 
undertaking administrative and other tasks on their own time is a post-
tax wage of $21.98/hr.
    The Valuing Time in U.S. Department of Health and Human Services 
Regulatory Impact Analyses: Conceptual Framework and Best Practices 
\52\ identifies the approach for valuing time when individuals 
undertake activities on their own time. To derive the costs for 
beneficiaries, we used a measurement of the usual weekly earnings of 
wage and salary workers of $1,059 \53\ for 2022 and then divided by 40 
hours to calculate an hourly pre-tax wage rate of $26.48/hr. This rate 
is adjusted downwards by an estimate of the effective tax rate for 
median income households of about 17 percent or $4.50/hr ($26.48/hr x 
0.17), resulting in the post-tax hourly wage rate of $21.98/

[[Page 65257]]

hr ($26.48/hr-$4.50/hr). Unlike our State wage adjustments, we are not 
adjusting beneficiary wages for fringe benefits and other indirect 
costs since the individuals' activities, if any, would occur outside 
the scope of their employment.
---------------------------------------------------------------------------

    \52\ https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//176806/VOT.pdf.
    \53\ https://fred.stlouisfed.org/series/LEU0252881500A.
---------------------------------------------------------------------------

B. Information Collection Requirements (ICRs)

    In the proposed rule, we projected both new burdens and savings 
based on how our proposed rule would change burdens relative to the 
status quo. Because the Medicaid program predates the enactment of PRA 
and we viewed many longstanding basic Medicaid requirements as 
customary business practices for State Medicaid agencies,\54\ we did 
not have specific PRA packages outlining these burdens inherent to the 
Medicaid program, including application \55\ (burden on State in 
processing the application and burden on individual in filling out 
application); requests for additional information (burden on State in 
assessing application and burden on individual in responding to State); 
making eligibility determinations and providing appeal rights (burden 
on State in making determinations and burden on individual if filing 
appeal); verifying information in the application (burden on State in 
conducting verifications and burden on individual in supplying 
supporting documentation); and renewal process (burden on State in 
conducting renewals and burden on individual in responding to State). 
However, we now recognize that creating PRA packages for the 
longstanding Medicaid functions, plus the changes from this final rule, 
would improve transparency for the public. In the proposed rule, we 
incorrectly referenced PRA packages that did not contain these 
longstanding provisions. As such, after publication of this final rule, 
we plan to develop and publish new PRA packages that consist of both 
the longstanding MSP application and enrollment provisions and the 
changes made by this final rule. In the meantime, we are moving our 
estimates for burden and savings to the Regulatory Impact Analysis 
(RIA) section.
---------------------------------------------------------------------------

    \54\ See final rule titled ``Eligibility Notices, Fair Hearing 
and Appeal Processes for Medicaid and Other Provisions Related to 
Eligibility and Enrollment for Medicaid and CHIP'' published in the 
November 30, 2016 Federal Register (81 FR 86382, 86438). https://www.federalregister.gov/documents/2016/11/30/2016-27844/medicaid-and-childrens-health-insurance-programs-eligibility-notices-fair-hearing-and-appeal; final rule titled ``Essential Health Benefits in 
Alternative Benefit Plans, Eligibility Notices, Fair Hearing and 
Appeal Processes, and Premiums and Cost Sharing; Exchanges: 
Eligibility and Enrollment'' published in the July 15, 2013 Federal 
Register (78 FR 42159, 42288). https://www.federalregister.gov/documents/2013/07/15/2013-16271/medicaid-and-childrens-health-insurance-programs-essential-health-benefits-in-alternative-benefit; 
and final rule titled ``Eligibility Changes Under the Affordable 
Care Act of 2010'' published in the March 23, 2012 Federal Register 
(77 FR 17143, 17197). https://www.federalregister.gov/documents/2012/03/23/2012-6560/medicaid-program-eligiblity-changes-under-the-affordable-care-act-of-2010.
    \55\ There is a current package for burdens related to Medicaid 
application (0938-1191 (CMS-10440)), but it focuses on MAGI 
eligibility groups, not non-MAGI eligibility groups.
---------------------------------------------------------------------------

IV. Regulatory Impact Analysis

A. Statement of Need

    We have learned through our experiences in working with States and 
other interested parties that certain policies result in unnecessary 
burdens and create barriers to enrollment and retention of coverage. As 
a result, many older adults and people with disabilities experience 
administrative confusion, economic hardships, and challenges accessing 
health care services. In response to multiple Executive Orders, as 
cited in section I. of this final rule, we reviewed existing 
regulations for areas where access could be improved.
    In this rulemaking, we finalize policies to streamline processes to 
enroll in (and maintain enrollment in) Medicaid through the MSPs. 
Together, the changes in this final rule would reduce administrative 
burden on States and enrollees, expand coverage of eligible applicants, 
increase retention of eligible enrollees, and improve health equity.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), Executive Order 14094 entitled ``Modernizing 
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96354), section 1102(b) of the Act, 
section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 (March 
22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 
4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). The 
Executive Order 14094 entitled ``Modernizing Regulatory Review'' 
(hereinafter, the Modernizing E.O.) amends section 3(f)(1) of Executive 
Order 12866 (Regulatory Planning and Review). The amended section 3(f) 
of Executive Order 12866 defines a ``significant regulatory action'' as 
an action that is likely to result in a rule: (1) having an annual 
effect on the economy of $200 million or more in any 1 year (adjusted 
every 3 years by the Administrator of the Office of Information and 
Regulatory Affairs (OIRA) for changes in gross domestic product), or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, territorial, or Tribal governments 
or communities; (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raising legal or policy issues for which centralized 
review would meaningfully further the President's priorities or the 
principles set forth in this Executive Order, as specifically 
authorized in a timely manner by the Administrator of OIRA in each 
case.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with significant regulatory action(s) or with significant effects ($200 
million or more in any 1 year). Based on our estimates, OMB's OIRA has 
determined this rulemaking is significant per section 3(f)(1) as 
measured by the $200 million threshold. Accordingly, we have prepared 
an RIA that to the best of our ability presents the costs and benefits 
of the rulemaking.
    The aggregate economic impact of this final rule is estimated to be 
$26.16 billion (in real FY 2025 dollars) over 5 years. This represents 
additional health care spending made by Medicaid on behalf of 
beneficiaries, with $10.67 billion paid by the Federal Government and 
$7.89 billion paid by the States, and an additional $7.60 billion in 
Medicare spending.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
less than $8.0 million to $41.5 million in any one year. Individuals 
and States are not included in the definition of a small entity. Since 
this final rule

[[Page 65258]]

would only impact States and individuals, we do not believe that this 
final rule will have a significant economic impact on a substantial 
number of small businesses.
    In addition, section 1102(b) of the Act requires CMS to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside a Metropolitan Statistical Area and has fewer than 
100 beds. This final rule applies to State Medicaid agencies and would 
not add requirements to rural hospitals or other small providers. 
Therefore, we are not preparing an analysis for section 1102(b) of the 
Act because we have determined, and the Secretary certifies, that this 
final rule would not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the UMRA also requires that agencies assess 
anticipated costs and benefits before issuing any rule whose mandates 
require spending in any one year of $100 million in 1995 dollars, 
updated annually for inflation. In 2023, that is approximately $177 
million. We believe that this final rule would have such an effect on 
spending by State, local, or Tribal governments but not by private 
sector entities.
Overall Assumptions
    In developing these estimates, we have relied on several global 
assumptions. All estimates are based on the projections from the 
President's FY 2024 Budget. We have assumed that new enrollees would 
have the same average costs as current enrollees by eligibility group, 
unless specified in the description of the estimates (for example, some 
enrollees only would receive Medicare premium assistance). We have also 
updated the implementation dates of the provisions, with provisions to 
require States to automatically enroll SSI recipients as QMBs starting 
in October 2024 and all other provisions requiring compliance by April 
2026. We have also relied on the data sources and assumptions described 
in the next section to develop estimates for specific provisions of 
this final rule.

C. Anticipated Effects

1. Facilitate Enrollment Through Medicare Part D LIS Leads Data
    As described in section II.A.1. of this final rule, we are 
finalizing the addition of Sec.  435.911(e), which focuses on using the 
SSA data from processing LIS applications ``LIS leads data'' to 
streamline MSP eligibility determinations. Relative to our proposal, 
the finalized paragraph (e) has three main differences. First, we are 
modifying the proposed requirement at paragraphs (e)(6)(i) and (ii) for 
States to collect additional information to screen individuals for full 
Medicaid eligibility to require that distinct from the MSP enrollment 
process unless otherwise approved by CMS, States separately provide the 
individual the opportunity to authorize the Medicaid agency to 
determine full Medicaid eligibility and furnish any additional needed 
information. We decided to modify this proposal based on comments 
received to avoid delays in MSP enrollment and disadvantages associated 
with modifying the LIS application, while also ensuring that we 
facilitate individuals' access to full-scope Medicaid coverage. We are 
also moving this requirement from paragraphs (e)(6)(i) and (ii) to 
paragraph (e)(9). Second, we are applying a compliance date of April 1, 
2026 for States to come into full compliance with all the provisions in 
new Sec.  435.911(e). Third, we revised some wording and reordered the 
other paragraphs in Sec.  435.911(e) for clarity and flow as noted 
below:
    <bullet> Paragraph (e)(1): We are retaining the requirement to 
accept LIS leads data in paragraph (e)(1), but are removing the term 
``Low Income Subsidy application data'' and using an acronym in place 
of ``Social Security Administration'' since ``LIS leads data'' and 
``SSA'' are now established in paragraph (e).
    <bullet> Paragraph (e)(2): We are keeping the requirement to treat 
LIS leads data as application for the MSPs without requiring submission 
of another application in finalized paragraph (e)(2), but are moving 
the requirement regarding timely application processing to finalized 
paragraph (e)(7).
    <bullet> Paragraph (e)(3): We are moving the requirement to accept 
any information provided by SSA, which we are now specifying as LIS 
leads data for greater consistency in terminology throughout the 
regulation, without further verification, from proposed paragraph 
(e)(5) to finalized paragraph (e)(3) and adding that this provision 
applies unless the State agency has information that is not reasonably 
compatible with the LIS leads data or the LIS leads data would not 
support a determination of MSP eligibility.
    <bullet> Paragraph (e)(4): We are retaining the requirement to not 
collect information or documentation from the individual in finalized 
paragraph (e)(4) and are adding that this is unless the State agency 
has information that is not reasonably compatible with the LIS leads 
data.
    <bullet> Paragraph (e)(5): We are moving the requirement to seek 
additional information from proposed paragraph (e)(3) to finalized 
paragraph (e)(5) and defining additional information needed for the MSP 
determination as information that is not in the leads data.
    <bullet> Paragraph (e)(6): We are moving the requirement to verify 
an individual's citizenship and immigration status from proposed 
paragraph (e)(6)(iii) to finalized paragraph (e)(6), adding a citation 
to Sec.  435.406, and streamlining the regulation text.
    <bullet> Paragraph (e)(7): We are moving the requirement regarding 
timely application processing from proposed paragraph (e)(2) to 
finalized paragraph (e)(7).
    <bullet> Paragraph (e)(8): We are moving additional requirements if 
the LIS leads data does not support a determination of MSP eligibility 
from proposed paragraph (e)(7) to finalized paragraph (e)(8).
    <bullet> Paragraph (e)(9): We are moving and modifying the proposal 
related to screening for full Medicaid from proposed paragraphs 
(e)(6)(i) and (ii) to finalized paragraphs (e)(9)(i) and (ii) to 
require States to provide individuals with--in addition to and separate 
from any requests for additional information necessary for a 
determination of Medicare Savings Program eligibility, unless CMS 
approves otherwise--information about the availability of additional 
Medicaid benefits on other bases and responsibilities of the individual 
applying for such benefits, and an opportunity to furnish such 
additional information as may be needed to determine whether the 
individual is eligible for such additional Medicaid benefits.
    The clarifications in paragraph (e)(9) requiring screening of LIS 
applicants for full Medicaid to be separate from a request for 
additional information necessary for a determination of MSPs does not 
represent a major change to the proposal. However, we neglected to make 
an initial burden estimate for the proposed requirement to screen LIS 
applicants for full Medicaid. As such, we now make an estimate for the 
new requirement in paragraph (e)(9) that would require States to 
collect new information, provide beneficiaries with an opportunity to 
authorize this new information collection, and make a determination for 
full Medicaid based on the information collection. We are permitting 
significant flexibility to States for how they implement the 
requirement at paragraph (e)(9), and we

[[Page 65259]]

expect States will make varying use of automation and different forms 
of communication to applicants. For efficiency reasons, we believe that 
a State would send the required disclosures/consent for the agency to 
make a full Medicaid eligibility determination as well as the request 
for additional information needed to make a full Medicaid determination 
in one correspondence. Moreover, instead of asking many questions in 
order to gain additional information necessary to make a full Medicaid 
eligibility determination, we anticipate that States will instead 
merely highlight the additional information individuals need to fill 
out on the full Medicaid application form. We expect the State burden 
would be, an ongoing burden of, on average, 15 minutes per LIS 
applicant (400,000 total) to provide the required disclosures/consent 
and highlight the additional information individuals need to fill out 
on the full Medicaid application form. The full Medicaid application 
form will not need to be revised.
    We believe most individuals would not have an additional burden 
associated with this provision because we assume that the vast majority 
(85 percent) of individuals will not respond to the States' request for 
additional information. In reaching this conclusion, we note that 
individuals are generally discouraged from applying for Medicaid by 
burdensome application processes and repeated requests for additional 
information. Given that the determination of full Medicaid for LIS 
applicants would inevitably require individuals to face these hurdles, 
we believe it is reasonable to conclude that only around 15 percent of 
individuals will respond to States' requests for information. States 
will then only need to process and make full Medicaid determinations 
for the remainder of individuals (15 percent or 60,000 individuals 
[400,000 LIS applicants x 0.15]), which will take about 1 hour at 
$48.10/hr. The annual State burden for sending individuals the new 
information is 100,000 hours (400,000 LIS applicants x 0.25 hr) at a 
cost of $4,810,000 (100,000 hr x $48.10/hr).
    For processing the information received from individuals, we 
estimate an annual State burden of 60,000 hours (60,000 applicants x 1 
hr/application) at a cost of $2,886,000 (60,000 hr x $48.10/hr).
    The total State burden is 160,000 hours (100,000 hr + 60,000 hr) 
and $7,696,000 ($4,810,000 + $2,886,000).
    However, when taking into account the 50 percent Federal 
contribution to Medicaid program administration, the estimated State 
cost is $3,848,000 ($7,696,000 x 0.50).
    For individuals to respond to States' request for information (that 
is, complete the remainder of the full Medicaid application), we 
estimate that it will take 4 hours at $21.98/hr. In aggregate, we 
estimate an annual burden of 240,000 hours (60,000 applicants x 4 hr/
application) at a cost of $5,275,200 (240,000 hr x $21.98/hr).
    New requirements in this final rule at Sec.  435.911(e)(1) require 
States to accept, via secure electronic interface, the SSA LIS leads 
data, while Sec.  435.911(e)(2) requires that States treat receipt of 
the leads data as an application for the MSPs. Section 435.911(e)(3) 
requires States to accept information provided through the leads data 
relating to a criterion of eligibility without further verification 
unless information available to the agency is not reasonably compatible 
with information provided by or on behalf of the individual, while 
Sec.  435.911(e)(4) requires States to refrain from requesting 
information from individuals already provided through leads data unless 
information available to the agency is not reasonably compatible with 
information provided by or on behalf of the individual. Sections 
435.911(e)(5) and (6) require States to seek additional information as 
needed to determine MSP eligibility. Section 435.911(e)(7) requires 
State agencies to promptly determine MSP eligibility. Finally, Sec.  
435.911(e)(8) requires further steps if the leads data does not support 
a determination of eligibility.
    We estimate that as a result of finalized provisions in Sec.  
435.911(e), States will be able to adjudicate over 90 percent of MSP 
applications for LIS enrollees without gathering additional 
documentation from the applicants. Therefore, as there are about 
400,000 new LIS applicants approved annually in 51 States (all 50 
States and the District of Columbia),\56\ we estimate that 360,000 
(400,000 x 0.9) of those applicants will be able to enroll in an MSP 
without providing additional income and resource related documentation, 
and without the State receiving and adjudicating such data.
---------------------------------------------------------------------------

    \56\ Over the past 5 years (2017-2021), SSA approved an average 
of 394,025 LIS applications annually. https://www.ssa.gov/open/data/Data-about-Extra-Help-with-Medicare-Prescription-Drug-Plan-Cost.html. We do not have estimates for any potential increases in 
application volume or approval rates based on changes to LIS 
eligibility criteria in the Inflation Reduction Act.
---------------------------------------------------------------------------

    The finalized provisions in Sec.  435.911(e) are associated with a 
reduction in burden for States and beneficiaries associated with 
application completion and eligibility determinations at the State 
Medicaid agency, including: reduced verification work for States that 
do not need to adjudicate the leads data for approximately 360,000 new 
LIS applicants; reduced paperwork to submit for the LIS applicants 
applying to MSPs in 51 States; reduced burden for LIS applicants who 
were previously expected to obtain, print, copy, mail and fax documents 
to the State to support the State's verification of income and 
resources; and reduced LIS applicant burden related to the need for 
public transportation and cell phone usage in relation to said document 
activities (obtaining, printing, copying, mailing, and faxing).
    Reduced Verification Burden. We estimate that the finalized 
provisions in Sec.  435.911(e) will save an Eligibility Interviewer 25 
minutes (0.42 hr) per eligibility determination at $48.10/hr for the 
360,000 new LIS applicants from reduced paperwork to review because of 
the provisions in Sec.  435.952(e) that require States to accept self-
attestation of interest and dividend income, non-liquid resources, 
burial funds, and the face value of life insurance by individuals 
applying to MSPs and the reduced verification work due to considering 
the leads data as verified.
    In aggregate, we estimate an annual savings of minus 151,200 hours 
(360,000 applicants x 0.42 hr) and minus $7,272,720 (151,200 hr x 
$48.10/hr). Taking into account the 50 percent Federal contribution to 
Medicaid program administration, the estimated State savings is 
approximately minus $3,636,360 ($7,272,720 x 0.5).
    Reduced LIS Applicant Burden for Applying to MSPs. We estimate 
these provisions will reduce the time needed for LIS applicants 
applying to MSPs to submit paperwork from 4 hours to 15 minutes, for a 
savings of 3.75 hours per applicant per year across all 51 States. In 
aggregate, we estimate an annual savings of minus 1,350,000 hours 
(360,000 applicants x 3.75 hr) and minus $29,673,000 (1,350,000 hr x 
$21.98/hr).
    Reduced Burden for LIS Applicants to Support the State's 
Verification of Income and Resources. We also estimate LIS applicant 
non-labor savings from the changes to Sec.  435.911(e) from public 
transportation, printing, copying, postage, and fax expenses to be 
about $10 [($4.50 postage for small package or $1.75/page for faxing) + 
$4 roundtrip bus ride (from home to printing or copying place to post 
office and back home) + $0.13/page for printing or copying)] per LIS 
applicant per year for all 51 States (including DC). In

[[Page 65260]]

aggregate, we estimate an annual non-labor savings of minus $3,600,000 
(360,000 enrollees x $10/enrollee).
    Finalized Sec.  435.952(e)(1) through (4) is unchanged from the 
proposed rule, except for applying a delayed compliance date of April 
1, 2026 for States to come into full compliance with all of these 
provisions, and newly requiring States to accept self-attestation of 
certain income and resources for MSP applicants and beneficiaries--
including dividend and interest income, burial funds of spouse and 
individual, and the face value of life insurance policy unless the 
State has information that is not reasonably compatible with the 
applicant's attestation. Because around 10 States (including DC) (about 
20 percent of all 51 States, including DC) do not have asset tests and 
do not require documentation to complete an eligibility determination 
or redetermination at the State Medicaid agency, we expect the savings 
from the self-attestation provisions would only apply to approximately 
8.4 million individuals (80 percent of 11 million applications/renewals 
\57\ minus 400,000 individuals who applied to LIS counted previously in 
this final rule) in the other 41 States. We estimate that under Sec.  
435.952(e)(1) through (4), these 8.4 million individuals will see a 
reduction from 4 hours to 2 hours, for a savings of 2 hours per 
individual, to complete an application/renewal in all 41 States. In 
aggregate, we estimate an annual savings of minus 16,800,000 hours 
(8,400,000 individuals x 2 hr) and minus $369,264,000 (16,800,000 hr x 
$21.98/hr).
---------------------------------------------------------------------------

    \57\ Based on States adjudicating 1.5 million new applications 
and 10 million for redetermination annually.
---------------------------------------------------------------------------

    We also estimate the non-labor savings under Sec.  435.952(e)(1) 
through (4) to be about $10 [($4.50 postage for small package or $1.75/
page for faxing) + $4 roundtrip bus ride (to/from post office, 
printing/copying place and home) + $0.13/page for printing/copying)] 
per MSP applicant/renewal per year for all 51 States. In aggregate, we 
estimate an annual non-labor savings of minus $84,000,000 (8,400,000 
individuals x $10/individual).
    Reduced State Burden for Verification of New MSP Applicants. We 
also estimate that Sec.  435.952(e)(1) through (4) will save an 
Eligibility Interviewer 15 minutes (0.25 hr) per eligibility 
determination or renewal for these 8,400,000 applicants/beneficiaries. 
In aggregate, we estimate an annual labor savings for States of minus 
2,100,000 hours (8,400,000 applications x 0.25 hr) and minus 
$101,010,000 (2,100,000 hr x $48.10/hr). Taking into account the 50 
percent Federal contribution to Medicaid program administration, the 
estimated State savings is approximately minus $50,505,000 
($101,010,000 x 0.5).
    State Burden for Verification of the Face Value of Life Insurance. 
We are also finalizing Sec.  435.952(e)(4) to require States to develop 
a verification process to determine the cash surrender value of life 
insurance policies over $1,500. We anticipate this will be a change for 
10 States in their process for verifying the cash surrender value of 
life insurance policies over $1,500. We do not anticipate an impact in 
around 16 States that are using authority in section 1902(r)(2) of the 
Act to disregard the cash surrender value of life insurance in whole or 
part. We estimate that 25 of the remaining 35 States (51 States-16 
States) will choose to use authority in section 1902(r)(2) of the Act 
to disregard the cash surrender value of life insurance rather than 
opting to verify the cash surrender value of life insurance. As noted 
previously in this final rule, we expect that this change will only 
impact 20 percent or approximately 10 States (51 States x 0.2).\58\ 
Based on enrollment in past years, we anticipate that all 51 States 
will adjudicate 1,000,000 new MSP applications a year plus 10 million 
renewals. However, we anticipate this policy will only affect 2 percent 
of applicants and beneficiaries, or 44,000 individuals across 10 States 
(11,000,000 individuals x 0.02 of applicants x 0.2 of States) because 
of the small number of people who could both afford this type of life 
insurance (which is much more expensive than term life insurance) and 
are also likely to apply for MSPs (which tends to be lower-income 
individuals).
---------------------------------------------------------------------------

    \58\ We are not including impacts for territories in these 
estimates because territories do not have any enrollment in MSPs.
---------------------------------------------------------------------------

    The burden associated with Sec.  435.952(e)(4) will consist of the 
time and effort for eligibility workers in 10 States to collect 
information regarding the cash surrender value of life insurance from 
44,000 applicants. The savings associated with Sec.  435.952(e)(4) 
consists of eligibility workers in 10 States not having to spend time 
coaching 44,000 applicants how to gather and find information on the 
cash surrender value of life insurance and eligibility workers in 10 
States not having to review life insurance documents for individuals 
with life insurance less than $1,500.
    Under Sec.  435.952(e)(4), we estimate that it will take an 
Eligibility Interviewer 1 hour at $48.10/hr to verify the cash 
surrender value of each life insurance policy over $1,500. In 
aggregate, we estimate an annual burden of 44,000 hours (1 hr x 44,000 
individuals) at a cost of $2,116,400 (44,000 hr x $48.10/hr). Taking 
into account the 50 percent Federal contribution to Medicaid program 
administration, the estimated State share is approximately $1,058,200 
($2,116,400 x 0.5).
    Reduced State Burden for Verification of the Face Value of Life 
Insurance. We estimate the changes under Sec.  435.952(e)(4) will save 
Eligibility Interviewers an average 45 minutes (0.75 hr) per applicant 
from not needing to coach applicants on how to gather and find 
information on the cash surrender value of life insurance. In 
aggregate, we estimate an annual savings of minus 33,000 hours (44,000 
applicants x 0.75 hr) and $1,587,300 (33,000 hr x $48.10/hr). Taking 
into account the 50 percent Federal contribution to Medicaid program 
administration, the estimated State savings is approximately minus 
$793,650 ($1,587,300 x 0.5).
    We also estimate State savings under Sec.  435.952(e)(4) from 
eligibility workers not having to review life insurance documents for 
individuals with life insurance less than $1,500. We anticipate it will 
take an eligibility worker about 10 minutes (0.167 hr) to review a life 
insurance document and that this savings will affect 3 percent or 
66,000 applicants and beneficiaries or individuals (11,000,000 
individuals x 0.03 x 0.2) across 10 States. In aggregate, we estimate 
an annual savings of minus 11,022 hours (66,000 individuals x -0.167 
hr) and minus $530,158 (- 11,022 hr x $48.10/hr). Taking into account 
the 50 percent Federal contribution to Medicaid program administration, 
the estimated State savings is approximately minus $265,079 ($530,158 x 
0.5).
    As indicated in Table 3, we estimate a net State annual burden 
reduction of minus 2,091,222 hours and minus $50,293,889.

[[Page 65261]]



                                  Table 3--Summary of State Burden for Facilitating Medicaid Enrollment Through LIS Leads Data and Self-Attestation Provisions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Total       Time per                   Hourly                                    Total  non-
          Regulation section(s)              Number of respondents      number of     response    Total time   labor cost    Total labor     Total state    labor cost          Frequency
                                                                        responses     (hours)      (hours)       ($/hr)       cost ($)       share  ($)        ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   435.911..........................  51 States..................      400,000         0.25      100,000        48.10       4,810,000       2,405,000            0  Annual
Sec.   435.911..........................  51 States..................       60,000            1       60,000        48.10       2,886,000       1,443,000            0  Annual.
Sec.  Sec.   435.911 and 435.952........  51 States..................      (7,059)         0.42    (151,200)        48.10     (7,272,720)     (3,636,360)            0  Annual.
Sec.   435.952..........................  51 States..................  (8,400,000)         0.25  (2,100,000)        48.10   (101,010,000)    (50,505,000)            0  Annual.
Sec.   435.952..........................  10 States..................        4,400            1       44,000        48.10       2,116,400       1,058,200            0  Annual.
Sec.   435.952..........................  10 States..................      (4,400)         0.75     (33,000)        48.10     (1,587,300)       (793,550)            0  Annual.
Sec.   435.952..........................  10 States..................      (6,600)        0.167     (11,022)        48.10       (530,158)       (265,079)            0  Annual.
                                                                      -------------             -----------------------------------------------------------------------
    Total...............................  51 States..................  (7,953,659)       Varies  (2,091,222)        48.10   (100,587,778)    (50,293,889)            0  Annual.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    As indicated in Table 4, for individuals, we estimate an annual 
burden reduction of minus 17,910,000 hours and minus $481,261,800.

                                Table 4--Summary of Individual Burden for Facilitating Medicaid Enrollment Through LIS Leads Data and Self-Attestation Provisions
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Total number       Time per        Total time     Hourly labor     Total labor    Total state  Total non-labor
       Regulation section(s)          Number of respondents   of responses   response (hours)      (hours)       cost ($/hr)      cost  ($)     share  ($)      cost  ($)          Frequency
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   435.911.....................  60,000 individuals....          60,000  4...............         240,000  21.98.........       5,275,200             0        5,275,200  Annual
Sec.  Sec.   435.911 and 435.952...  360,000 individuals...       (360,000)  (3.75)..........     (1,350,000)  21.98.........    (29,673,000)             0     (29,673,000)  Annual.
Sec.  Sec.   435.911 and 435.952...  360,000 individuals...       (360,000)  0...............             n/a  n/a...........               0   (3,600,000)      (3,600,000)  Annual.
Sec.   435.952.....................  8,400,000 individuals.     (8,400,000)  (2).............    (16,800,000)  21.98.........   (369,264,000)             0    (369,264,000)  Annual.
Sec.   435.952.....................  8,400,000 individuals.     (8,400,000)  0...............             n/a  n/a...........               0  (84,000,000)     (84,000,000)  Annual.
                                                            ----------------                  ----------------                -----------------------------------------------
    Total..........................  8,820,000 individuals.    (17,580,000)  Varies..........    (17,910,000)  Varies........   (393,661,800)  (87,600,000)    (481,261,800)  Annual.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    When combined (see Table 5), we estimate an annual burden reduction 
of minus 20,001,222 hours and minus $531,555,689.

       Table 5--Summary of State and Individual Burden for Facilitating Medicaid Enrollment Through LIS Leads Data and Self-Attestation Provisions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Number of    Total number     Total time     Hourly labor                  Non-labor cost
       Respondent type         respondents   of responses       (hours)      cost ($/hr)   Labor cost ($)        ($)       Total cost ($)    Frequency
--------------------------------------------------------------------------------------------------------------------------------------------------------
States.......................           51     (7,953,659)     (2,091,222)  Varies.......    (50,293,889)               0    (50,293,889)  Annual.
Individuals..................    8,760,000    (17,580,000)    (17,910,000)  Varies.......   (393,661,800)    (87,600,000)   (481,261,800)  Annual.
                              ---------------------------------------------               ------------------------------------------------
    Total....................    8,820,051    (25,533,659)    (20,001,222)  Varies.......   (443,955,689)    (87,600,000)   (531,555,689)  Annual.
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Defining ``Family of the Size Involved'' for the Medicare Savings 
Program Groups Using the Definition of ``Family Size'' in the Medicare 
Part D Low-Income Subsidy Program
    As described in section II.A.2. of this final rule, Sec.  435.601 
aligns the definition of ``family size'' for purposes of MSP 
eligibility with that of the LIS program. Specifically, we newly define 
``family of the size involved'' to include at least the individuals 
included in the definition of ``family size'' in the LIS program: the 
applicant, the applicant's spouse, and all other individuals living in 
the same household who are related to and dependent on the applicant or 
applicant's spouse. While some States either already define family size 
to match the LIS definition or use a family size that is less 
restrictive than this definition, we estimated in the proposed rule 
that 10 States use SSI methodologies to determine family size, which 
means that these States only use an individual or couple and any other 
deemed individuals as part of the family size. As such, we estimated in 
the proposed rule that 10 States will need to submit a SPA to change 
their definition of family size for MSP eligibility groups to comply 
with this regulation. However, based on subsequent internal analysis, 
we believe our proposed estimate of 10 States was too low and that 35 
States may be impacted by the changes to this definition of family 
size. As such, we have revised our active estimate to reflect a higher 
impact.
    We estimate that it will take each State 3 hours to submit a SPA to 
update the definition of ``family size'' in their Medicaid State plans. 
Of those 3 hours, we estimate it will take a Business Operations 
Specialist 2 hours at $80.08/hr and a General Operations Manager 1 hour 
at $118.14/hr to update and submit each SPA to CMS for review. In 
aggregate, we estimate a one-time burden of 105 hours (35 States x 3 
hr) at a cost of $9,741 (35 States x [2 hr x $80.08/hr] + [1 hr x 
$118.14/hr]) for completing the necessary SPA updates.

[[Page 65262]]

Taking into account the 50 percent Federal contribution to Medicaid 
program administration, the estimated State cost is approximately 
$4,871 ($9,741 x 0.5). Under Sec.  423.772, ``family size'' is defined 
to include the applicant, the applicant's spouse (if the spouse is 
living in the same household with the applicant), and all other 
individuals living in the same household who are related to the 
applicant and dependent on the applicant or applicant's spouse for one-
half of their financial support. By requiring that a State's definition 
of ``family of the size involved'' include ``at least'' the individuals 
described in Sec.  423.772 for purposes of the MSP groups, States would 
retain flexibility to include other individuals who are not described 
in Sec.  423.772. Additionally, this requirement would not affect the 
States' ability to adopt a different reasonable definition of the 
phrase for purposes of other eligibility groups.
    As such, we estimate that it will take each State on average 200 
hours to develop questions and code the changes to its Medicaid 
application(s) to identify other third parties in the households of MSP 
applicants. These changes will impact any of the State's applications 
that focus on non-MAGI eligibility groups only and do not collect 
information about other household members. As such, it would apply to 
both a non-MAGI-only application or an MSP-only application. On the 
other hand, a single streamlined application that individuals use to 
apply both to Medicaid and the Marketplace already captures information 
about third parties in the applicant's household and would not be 
impacted. We will be revising the model MSP-only form to take into 
account these changes to family size, which States have the option to 
use as well. As such, each individual State may have greater or lesser 
impact depending on what application form(s) it uses. Of the 200 hours, 
we estimate it will take a Database and Network Administrator and 
Architect 50 hours at $106.16/hr and a Computer Programmer 150 hours at 
$98.84/hr. In aggregate, we estimate a one-time burden of 7,000 hours 
(35 States x 200 hr) at a cost of $704,690 (35 States x [(50 hr x 
$106.16/hr) + (150 hr x $98.84/hr)]) for completing the necessary 
updates to the Medicaid application. Taking into account the 50 percent 
Federal contribution to Medicaid program administration, the estimated 
State cost is approximately $352,345 ($704,690 x 0.5).
    These changes do not revise or create additional burden on 
applicants as the new questions will be in lieu of prior questions 
regarding ``family size.'' As such, the removed/added questions require 
programming changes that have a neutral impact on applicants.
    Summary: As demonstrated in Table 6, when taking into account the 
Federal contribution, we estimate a one-time State burden of 7,105 
hours at a cost of $357,216.

                                         Table 6--Summary of State Burden for MSP Family Size Definition Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Total       Time per                                                         Total non-
    Regulation section(s)         Number of      number of     response    Total time  Hourly labor  Total labor  Total state   labor cost    Frequency
                                 respondents     responses     (hours)      (hours)     cost ($/hr)    cost ($)    share ($)       ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   435.601...............  35 States......           35            3          105  Varies......        9,741        4,871            0  One time.
Sec.   435.601...............  35 States......           35          200        7,000  Varies......      704,690      352,345            0  One time.
                                               ---------------------------------------              ---------------------------------------
    Total....................  35 States......           70          203        7,105  Varies......      714,431      357,216            0  One time.
--------------------------------------------------------------------------------------------------------------------------------------------------------

MSP Enrollment Increases as a Result of Facilitating Enrollment Through 
Medicare Part D LIS Leads Data
    To calculate the impact of streamlining enrollment for persons in 
the LIS program, we analyzed data from the Medicare Integrated Data 
Repository (IDR) from July 2020. We determined the number of people who 
were enrolled in the LIS program by: (1) State; (2) the category of LIS 
benefit they received; and (3) whether or not they were also enrolled 
in Medicaid. We identified 13.1 million persons receiving the Part D 
LIS, of which 11.1 million were enrolled in Medicaid and 2.0 million 
were not.
    We developed a regression using the percentage of LIS enrollees who 
were also dually eligible as the dependent variable, and used several 
policy factors as independent variables: State use of LIS leads data to 
make MSP eligibility determinations; verification policies and 
procedures; grace period for providing verifications after initial 
denial; redetermination grace period; counting children towards income; 
income disregard; and asset disregard. While the latter three policies 
would not change under this final rule, we believed that they may 
explain some of the variation in the percentage of LIS recipients who 
are dually eligible. We found that this model explained some amount of 
the variation in the percentage of LIS enrollees who are enrolled as 
dually eligible, and that the most significant variable was the State 
use of LIS leads data to make MSP eligibility determinations. Other 
policies appeared to have weak correlations. The model suggested that 
the use of these policies--and in particular the use of the Part D LIS 
leads data--would result in an average increase in the percentage of 
LIS recipients who are dually eligible from 84.6 percent to 88.0 
percent (an increase of 3.4 percentage points). We estimated that about 
0.44 million additional persons would have been enrolled in the QMB 
eligibility group as a result of these changes, had they been made in 
2020. We assume that the increase in enrollment will be among people 
who do not qualify for full Medicaid benefits.
    We assumed these enrollees, as QMBs, would receive coverage of 
their Medicare Part B premium. The premium is $164.90 per month in 
2023. We also assumed that beneficiaries would receive Medicaid 
coverage for cost sharing for Medicare services.
    To calculate future impacts to enrollment, we assumed that the 
increase in enrollment due to this provision would grow at the same 
rate as Medicaid enrollment among aged persons and persons with 
disabilities. We estimate that this would increase enrollment by about 
0.54 million persons by FY 2029 and would increase total Medicaid 
spending for Medicaid coverage of Medicare premiums and cost sharing by 
$6.26 billion from FY 2025 through FY 2029. Detailed estimates are 
shown in Table 7.

[[Page 65263]]



           Table 7--Impact of Facilitating Medicaid Enrollment Through Medicare Part D LIS Leads Data on Medicaid Expenditures and Enrollment
                                [Expenditures in millions of dollars, enrollment in millions of person-year equivalents]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2025            2026            2027            2028            2029          2025-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enrollment..............................................            0.12            0.38            0.52            0.53            0.54  ..............
Total Spending..........................................             380           1,160           1,560           1,570           1,590           6,260
Federal Spending........................................             220             670             900             900             920           3,610
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Automatically Enroll Certain SSI Recipients Into the QMB Group
    As described in section II.A.3. of this final rule, Sec.  435.909 
newly requires that States deem certain individuals who are eligible 
for Medicare Part A, and who are SSI beneficiaries eligible for QMB 
coverage, without requiring an application. In particular, Sec.  
435.909 newly requires that: (1) States with 1634 agreements must deem 
SSI recipients eligible for QMB coverage who are entitled to premium-
free Medicare Part A; (2) States without 1634 agreements must deem SSI 
recipients eligible for QMB coverage who are entitled to premium-free 
Medicare Part A and have been determined eligible for Medicaid under 
either Sec.  435.120 or Sec.  435.121; and (3) Part A buy-in States 
must deem individuals eligible for QMB coverage if the individual is 
determined eligible for Medicaid under either Sec.  435.120 or Sec.  
435.121, entitled to SSI, only qualifies for premium Part A, and is 
enrolled in Part B.
    To implement these new requirements, States will need to identify 
Medicare-eligible SSI recipients to enroll them in the MSPs. States 
will also need to trigger deeming of Medicare-eligible SSI recipients 
to QMB by making eligibility systems changes to trigger QMB enrollment 
once the SSI-individual is Medicare eligible. Current regulations do 
not allow State Medicaid agencies to forgo an eligibility determination 
for Medicaid beneficiaries who are eligible for SSI when they become 
newly eligible for Medicare Part A and B. Therefore, this new 
requirement will require system changes for all 51 States (including 
DC).
    While these deeming provisions are intended to enroll more SSI 
recipients in QMB, this rulemaking will not reach all SSI recipients 
eligible for QMB. We estimate currently 16 percent or 566,556 
(3,540,975 x 0.16) SSI recipients are eligible but not enrolled in QMB, 
and nearly 500,000 new SSI recipients who are enrolled in Medicaid 
under either Sec.  435.120 or Sec.  435.121 will enroll in QMB as a 
result of the changes to Sec.  435.909(b).
    As discussed in section II.A.3. of this final rule, in the 34 
States with a 1634 agreement, the Medicaid agency automatically enrolls 
the SSI recipients in Medicaid following a data exchange with SSA and 
then we automatically initiate Part B buy-in for the individual through 
the ``buy-in data exchange.'' In the remaining States, individuals must 
submit a separate application to the State Medicaid agency to be 
determined eligible for Medicaid.
    We do not automatically initiate Part B buy-in for SSI individuals 
who live in SSI criteria and 209(b) States; rather, States must 
initiate Part B buy-in once the SSI recipient has separately applied 
for and been determined eligible for the mandatory SSI or 209(b) group. 
Additionally, SSI recipients who live in group payer States and are 
eligible for premium Part A are still required to go through a 
complicated two-step application process to establish QMB eligibility 
once an individual is determined eligible for the mandatory SSI or 
209(b) groups and has been enrolled in Part B pursuant to the State's 
buy-in agreement.
    Under this final rule, the application process for SSI recipients 
who live in criteria and 209(b) States will remain the same and so will 
the two-step application process to establish QMB eligibility for SSI 
recipients living in group payer States and having premium part A.
    Based on SSA data and internal CMS analysis of the 566,556 SSI 
recipients eligible for QMB but not enrolled, we estimate almost 83 
percent (469,820 = 566,556 x 0.829257) were likely eligible for 
premium-free Part A, while approximately 17 percent (96,736 = 566,556 x 
0.170744) were eligible for premium Part A. Of the 469,820 who were 
eligible for premium-free Part A, we estimate that approximately 86 
percent (405,963 = 469,820 x 0.864082) reside in States with 1634 
agreements, and approximately 14 percent (63,857 = 469,820 x 0.135918) 
reside in 209(b) or SSI criteria States. Because Medicaid is automatic 
in States with 1634 agreements, we estimate that 405,963 individuals 
(all of the previously-mentioned SSI recipients in 1634 States) will be 
automatically enrolled in QMB under this new provision.
    In contrast, we estimate that only 65 percent of the previously-
mentioned 63,857 SSI recipients in 209(b) States or SSI criteria 
States, or 41,507 individuals (63,857 individuals x 0.65), will be 
enrolled under the new provision. This is because it is unlikely that 
all SSI recipients who live in SSI or 209(b) States will complete the 
Medicaid application process in their State.
    Of the 96,736 individuals eligible for premium Part A, we estimate 
33 percent (31,923 = 96,736 x 0.33) are in Part A buy-in States and 67 
percent (64,813 = 96,736 x 0.67) of those eligible for premium Part A 
are in group payer States, where deeming will be optional. We estimate 
that 95 percent (30,327 = 31,923 x 0.95) of individuals in Part A buy-
in States who are eligible for premium Part A will enroll as a result 
of the new provision because we estimate that all of those individuals 
live in States with 1634 agreements. However, for the individuals 
eligible for premium Part A in group payer States where deeming will be 
optional, we expect some more populous States will use this option, so 
we are estimating 33 percent (21,388 = 64,813 x 0.33) of all 
individuals with premium Part A living in group payer States will newly 
enroll.
    Therefore, we estimate a total of 499,185 individuals (405,963 + 
41,507 + 30,327 + 21,388) will newly enroll without the need to 
complete an application. We estimate that those individuals will each 
save 2 hours from not filling out Medicaid applications and compiling 
associated documentation (going from 2 to 0 hours) at $21.98/hr. We 
estimate an annual savings of minus 998,370 hours (499,185 individuals 
x 2 hr) and minus $21,944,173 (998,370 hr x $21.98/hr).
    All 51 States (including DC) will need to make eligibility systems 
changes to deem an SSI individual in QMB once they are eligible for 
Medicare. We estimate it will take a Computer Programmer an average of 
180 hours per State at $98.84/hr to make systems changes to set their 
systems to search for Medicare eligibility in Federal systems and then 
enroll that individual in QMB. In aggregate, we estimate a one-time 
burden of 9,180 hours (51 States x 180

[[Page 65264]]

hr) at a cost of $907,351 (9,180 hr x $98.84/hr). Taking into account 
the 50 percent Federal contribution to Medicaid program administration, 
the estimated State share is approximately $453,676 ($907,351 x 0.5).
    We also estimate that this provision will result in an annual 
reduction of burden for the State to no longer review and adjudicate 
QMB applications from SSI recipients. We estimate this will save an 
Eligibility Interviewer 1 hour (going from 1 hour to 0) per QMB 
determination at $48.10/hr. We also estimate that States conduct QMB 
eligibility determinations for approximately 250,000 SSI individuals 
across 51 States, which will no longer be necessary. In aggregate, we 
estimate an annual burden savings of minus 250,000 hours (250,000 
individuals x -1 hr/response) and minus $12,025,000 (-250,000 hr x 
$48.10/hr). Taking into account the 50 percent Federal contribution to 
Medicaid program administration, the estimated State savings is 
approximately minus $6,012,500 ($12,025,000 x 0.5).
    Summary: As demonstrated in Table 8, when taking into account the 
Federal contribution, we estimate a State savings of minus 240,820 
hours and minus $5,558,824. We also estimate individual savings of 
minus 998,370 hours minus $21,944,173.

                                           Table 8--Summary of State and Individual Burden for Automatic Enrollment of Certain SSI Recipients Into QMB
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Total
       Regulation section(s)        Number of respondents   number of    Time per response    Total time    Hourly labor cost    Total labor     Total state     Total non-        Frequency
                                                            responses         (hours)           (hours)           ($/hr)          cost ($)        share ($)    labor cost ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   435.909....................  51 States............           51  180...............           9,180  98.84............         907,351         453,676               0  One-time.
Sec.   435.909....................  51 States............    (250,000)  (1)...............       (250,000)  48.10............    (12,025,000)     (6,012,500)               0  Annual.
                                                          -------------                    ----------------                   ------------------------------------------------
    Subtotal: States..............  51 States............    (249,949)  Varies............       (240,820)  Varies...........    (11,117,649)     (5,558,824)               0  Varies.
Sec.   435.909....................  499,185 individuals..    (499,185)  (2)...............       (998,370)  21.98............    (21,944,173)             n/a               0  Annual.
                                                          -------------                    ----------------                   ------------------------------------------------
        Total.....................  499,236..............    (749,134)  Varies............     (1,239,190)  Varies...........    (33,061,822)     (5,558,824)               0  Varies.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

QMB Enrollment Increases as a Result of Automatically Enrolling Certain 
SSI Recipients Into the QMB Group
    To calculate the impact of automatically enrolling SSI recipients 
into QMB Medicaid coverage, we examined data on SSI recipients and 
their health care coverage.\59\ As of 2017, about 17 percent of all SSI 
recipients had Medicare coverage but were not dually enrolled in 
Medicaid.
---------------------------------------------------------------------------

    \59\ https://www.census.gov/content/dam/Census/library/publications/2021/demo/p70br-171.pdf.
---------------------------------------------------------------------------

    First, we estimated how many persons would enroll who already 
receive Medicare Part A without paying a premium. We estimated that 
there are 2.6 million people enrolled in SSI who are enrolled in Part A 
and do not pay the premium. Of these, we estimated about 82 percent 
reside in ``1634 States'' (about 2.1 million) and therefore are 
automatically enrolled in Medicaid. Of the remaining 0.48 million, we 
have assumed that 90 percent would enroll in the QMB group and receive 
Medicare Part B premium and cost-sharing assistance. We estimated those 
benefits to be about $5,000 per enrollee per year for 2023.
    Second, we estimated how many persons would enroll who receive 
Medicare Part A but have to pay a premium. We estimate that there are 
5.2 million such people enrolled in SSI. We estimated that 34 percent 
of this population lives in States that do not automatically enroll 
these individuals in the QMB group. Of States that do not automatically 
enroll these individuals in the QMB group, we assumed that about 20 
percent of States would use the option provided in this final rule, and 
that about 50 percent of this population would be enrolled in the QMB 
group as a result.
    Third, we also considered that many of these individuals are 
already enrolled as dually eligible in Medicare and Medicaid, but not 
as QMBs. For current dually eligible individuals, we assumed that they 
were already receiving Medicaid coverage for the Part B premium and 
most Medicare cost sharing. For those not currently enrolled as a 
dually eligible, we assumed that they would be eligible for Medicaid to 
pay for the Part B premium and Medicare cost sharing, and the Part A 
premium if they are required to pay it. We estimated that 75 percent of 
new QMBs were already enrolled as dually eligible.
    To calculate future impacts to enrollment, we assumed that the 
increase in enrollment due to this provision would grow at the same 
rate as Medicaid enrollment among aged persons and persons with 
disabilities.
    We estimate that this provision would increase QMB enrollment among 
persons who are not currently dually eligible by 0.16 million by FY 
2029. We also estimate about 0.50 million additional QMBs who are 
already dually eligible, of whom 0.14 million would have their Part A 
premiums paid by Medicaid under this provision. We estimate that this 
provision would increase total Medicaid spending by $10.23 billion from 
FY 2025 through FY 2029 for Medicaid coverage of Medicare premiums and 
cost sharing and, in some cases, other Medicaid benefits. Detailed 
estimates are shown in Table 9.

               Table 9--Impact of Automatically Enrolling Certain SSI Recipients Into QMB Program on Medicaid Expenditures and Enrollment
                                [Expenditures in millions of dollars, enrollment in millions of person-year equivalents]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2025            2026            2027            2028            2029          2025-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional QMB Enrollees................................            0.28            0.30            0.30            0.30            0.30  ..............
Previous Dual Eligibles.................................            0.13            0.14            0.14            0.14            0.14  ..............
New Medicaid Enrollees..................................            0.15            0.16            0.16            0.16            0.16  ..............
Total Spending..........................................           2,010           2,020           2,040           2,060           2,100          10,230

[[Page 65265]]

 
Federal Spending........................................           1,150           1,160           1,170           1,190           1,200           5,870
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. Other Provisions To Facilitate Medicaid Enrollment
    For other provisions that would facilitate Medicaid enrollment 
(including the definition of family size; and making the QMB effective 
date earlier), we assumed that these provisions would increase 
enrollment by about 0.1 percent among aged enrollees and enrollees with 
disabilities and would have a negligible impact on other categories of 
enrollees. We estimate that this would increase enrollment by about 
0.02 million person-year equivalents by 2029. These provisions are 
estimated to increase Medicaid spending by $2.07 billion from FY 2025 
through FY 2029 for Medicaid coverage of Medicare premiums and cost 
sharing and, in some cases, other Medicaid benefits. Detailed estimates 
are shown in Table 10.

                          Table 10--Impact of Other Provisions To Facilitate Enrollment on Medicaid Expenditures and Enrollment
                                [Expenditures in millions of dollars, enrollment in millions of person-year equivalents]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2025            2026            2027            2028            2029          2026-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enrollment..............................................            0.01            0.02            0.02            0.02            0.02            0.02
Total Spending..........................................             120             380             510             530             530           2,070
Federal Spending........................................              70             220             290             300             310           1,190
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. Impacts on Medicare
    It is likely that those SSI enrollees newly gaining Medicaid 
coverage would also have higher Medicare costs following enrollment. 
Primarily, receiving cost-sharing assistance for Medicare would lead to 
these individuals seeking out more care that may have been difficult to 
afford previously, also known as induction.
    To estimate these impacts, we reviewed research on the effects of 
changing out-of-pocket costs on total health care costs, and 
specifically on Medicare. In general, we have historically estimated 
that reductions in out-of-pocket costs would increase total spending by 
$0.60 to $1.30 for every $1.00 reduction in out-of-pocket costs. Among 
research on health care costs, we relied primarily on research that 
examined the impacts on changing Medicare out-of-pocket costs.\60\
---------------------------------------------------------------------------

    \60\ B Garrett, A Gangopadhyaya, A Shartzer, and D Arnos, ``A 
Unified Cost-Sharing Design for Medicare: Effects on Beneficiary and 
Program Spending,'' The Urban Institute, July 2019. https://www.urban.org/sites/default/files/publication/100528/a_unified_cost-sharing_design_for_medicare_effects_on_beneficiary_an_1.pdf.
---------------------------------------------------------------------------

    This research is useful, particularly because of the analysis 
reviewing cost-sharing among those Medicare enrollees without any other 
coverage, those with supplemental coverage (such as ``Medigap'' plans 
or retiree health benefits), and those with Medicaid. First, the 
analysis found that Medicare enrollees without other coverage had an 
average of $13,693 in costs, of which $2,399 was paid out of pocket (18 
percent). Among those with supplemental coverage, average costs were 
$14,349, with $594 paid out of pocket (4 percent) and $2,095 paid 
through supplemental coverage (15 percent). Enrollees with Medicaid 
coverage had $26,181 in average costs, with $209 paid out of pocket (1 
percent) and $3,190 paid by Medicaid (12 percent). A significant amount 
of cost differences is likely due to health status. Most notably, those 
with Medicaid coverage are on average older and more likely to have a 
disability or chronic condition, which would result in higher costs 
regardless of who pays for care.
    The analysis also examines the effect of changing Medicare cost-
sharing structures on total, Medicare, and out-of-pocket spending. 
While the specific proposed benefit changes are not related to this 
final rule, it does provide the relative magnitude of changes between 
Medicare and out-of-pocket costs. The analysis found a larger change in 
costs for those without any other coverage than those with supplemental 
coverage. For those without other coverage, out-of-pocket costs 
decreased by $428 while total costs increased by $764 (or $1.80 for 
every $1.00 reduction in out-of-pocket costs). For those with 
supplemental coverage, there was a decrease of $158 in out-of-pocket 
costs and an increase of $130 in total costs (or $0.80 for every $1.00 
reduction in out-of-pocket costs).
    We also reviewed how many Medicare enrollees have supplemental 
coverage or Medicaid. Research from the Kaiser Family Foundation 
recently looked at this.\61\ This analysis found that 26 percent of 
Medicare beneficiaries had annual income of less than $20,000 (which is 
reasonably close to the SSI income limit of $1,767 monthly, which would 
be $21,204 annually). Of these beneficiaries, 37 percent had Medicaid 
and 11 percent had supplemental coverage. Excluding those with Medicaid 
and assuming the two groups are mutually exclusive, 17 percent of low-
income beneficiaries without Medicaid had supplemental coverage. We 
believe it is reasonable to assume that very few beneficiaries had both 
Medicaid and other supplemental coverage.
---------------------------------------------------------------------------

    \61\ W Koma, J Cubanski, and T Neuman, ``A Snapshot of Coverage 
Among Medicare Beneficiaries in 2018,'' Kaiser Family Foundation, 
March 23 2021. https://www.kff.org/medicare/issue-brief/a-snapshot-of-sources-of-coverage-among-medicare-beneficiaries-in-2018/.
---------------------------------------------------------------------------

    We estimated the impact assuming that the overall increase in total 
costs would be $0.80 for every $1.00 reduction in out-of-pocket costs. 
For those without supplemental coverage, this would be expected to 
result in an increase of 14 percent in total costs and 20 percent in 
Medicare costs, and for those without supplemental coverage, increases 
of 3 percent for total costs and 10 percent for Medicare costs. Using 
the analysis on SSI enrollees and coverage, this is a weighted average 
of an 18 percent increase in Medicare costs for those newly gaining 
Medicaid.

[[Page 65266]]

    To calculate the annual impacts, we multiply the Medicare per 
enrollee costs each year by 18 percent and by the number of SSI 
enrollees newly receiving Medicaid, and then adjust for cost-sharing to 
calculate the Federal Medicare spending amounts. This excludes those 
who were previously dually eligible but not QMBs. Using total Medicare 
per enrollee costs (as projected in the 2022 Trustees Report \62\), we 
project that this would increase Medicare spending by $7.6 billion over 
2025 to 2029 under this final rule. Annual impacts are shown in Table 
11.
---------------------------------------------------------------------------

    \62\ ``2022 Annual Report of the Boards of Trustees of the 
Federal Hospital Insurance and Federal Supplementary Medical 
Insurance Trust Funds.'' https://www.cms.gov/files/document/2022-medicare-trustees-report.pdf.

 Table 11--Projected Change in Medicare Expenditures From Additional SSI
                      Enrollees Receiving Medicaid
                      [In millions of real dollars]
------------------------------------------------------------------------
                                                             Medicare
                                                           expenditures
------------------------------------------------------------------------
2025....................................................             600
2026....................................................           1,400
2027....................................................           1,800
2028....................................................           1,900
2029....................................................           1,900
                                                         ---------------
    Total...............................................           7,600
------------------------------------------------------------------------

    There is a wide range of possible costs due to this effect of this 
final rule. Most notably, and described previously in this section, is 
that the impact of reducing out-of-pocket costs could have different 
impacts than estimated here. Thus, individuals could use greater or 
lesser levels of additional services, resulting in different levels of 
Medicare spending changes than estimated here. This uncertainty is 
addressed in the high and low range estimates provided in the 
accounting statement (see section IV.F. of this final rule).
6. Summary of Administrative Impacts
    Table 12 summarizes this rule's requirements and associated burden 
estimates.

[[Page 65267]]



                                                                          Table 12--Summary of Administrative Estimates
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Total                                                                                             Total
     Regulation section(s)          Number of       number of   Time per response    Total time     Hourly labor     Total labor     Total state     beneficiary     Total non-      Frequency
                                   respondents      responses        (hours)           (hours)       cost ($/hr)      cost ($)        share ($)       cost ($)     labor cost ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   435.601................  35 States........           35  200..............           7,000          Varies         704,960         352,345             n/a             n/a  One-Time.
Sec.   435.909................  499,185                499,185  (2)..............       (998,370)           21.98             n/a             n/a    (21,944,173)             n/a  Annual.
                                 individuals.
Sec.   435.909................  51 States........           51  180..............           9,180           98.84         907,351         453,676             n/a             n/a  One-Time.
Sec.   435.909................  51 States........      250,000  (1)..............       (250,000)           48.10    (12,025,000)     (6,012,500)             n/a             n/a  Annual.
Sec.   435.911................  51 States........      400,000  0.25.............         100,000           48.10       4,810,000       2,405,000             n/a             n/a  Annual.
Sec.   435.911................  51 States........       60,000  1................          60,000           48.10       2,886,000       1,443,000             n/a             n/a  Annual.
Sec.   435.911................  60,000                  60,000  4................         240,000           21.98       5,275,200               0       5,275,200             n/a  Annual.
                                 individuals.
Sec.  Sec.   435.911, and       360,000                360,000  (3.75)...........     (1,350,000)           21.98             n/a             n/a    (29,673,000)             n/a  Annual.
 435.952.                        individuals.
Sec.  Sec.   435.911, and       360,000                360,000  0................             n/a             n/a             n/a             n/a             n/a     (3,600,000)  Annual.
 435.952.                        individuals.
Sec.   435.952................  51 States........    8,400,000  (2)..............    (16,800,000)           21.98             n/a             n/a   (369,264,000)             n/a  Annual.
Sec.   435.952................  8,400,000........    8,400,000  0................             n/a             n/a             n/a             n/a             n/a   -(84,000,000)  Annual.
Sec.   435.911, and 435.952...  51 States........        7,059  (0.42)...........       (151,200)           48.10     (7,272,720)     (3,636,360)             n/a             n/a  Annual.
Sec.   435.952................  51 States........    8,400,000  (0.25)...........     (2,100,000)           48.10   (101,010,000)    (50,505,000)             n/a             n/a  Annual.
Sec.   435.952................  10 States........        4,400  1................          44,000           48.10       2,116,400       1,058,200             n/a             n/a  Annual.
Sec.   435.952................  10 States........        4,400  (0.75)...........        (33,000)           48.10     (1,587,300)       (793,550)             n/a             n/a  Annual.
Sec.   435.952................  10 States........        6,600  (0.167)..........        (11,022)           48.10       (530,158)       (265,079)             n/a             n/a  Annual.
    Subtotal..................  9,679,185........   27,211,730  Varies...........    (21,233,412)          Varies   (105,725,267)    (55,500,268)   (415,605,973)   -(87,600,000)  Varies.
Sec.   435.601................  35 States........            1  3................             105          Varies           9,741           4,871             n/a             n/a  One-Time.
    Subtotal..................  35 States........            1  3................             105          Varies           9,741           4,871             n/a             n/a  One-Time.
                                                                                  ----------------                ----------------------------------------------------------------
                                                                Total--annual....    (21,249,592)  ..............   (107,337,578)    (56,306,289)   (415,605,973)    (87,600,000)  .............
                                                                                  ----------------
                                                                Total--one-time..          16,285  ..............       1,622,052         810,892             n/a             n/a  .............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 65268]]

7. Summary of Medicaid Spending and Enrollment
    In total, these provisions are projected to increase Medicaid 
spending by $18.56 billion and Federal Medicaid spending by $10.67 
billion from 2025 through 2029. Medicaid enrollment is projected to 
increase by 0.70 million by 2029, with an additional 0.16 million 
individuals who are currently dually eligible gaining coverage as QMBs.

                                       Table 13--Impact of All Provisions on Medicaid Expenditures and Enrollment
                                [Expenditures in millions of dollars, enrollment in millions of person-year equivalents]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2025            2026            2027            2028            2029          2025-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional Medicaid Enrollees...........................            0.26            0.53            0.68            0.69            0.70  ..............
Additional QMBs.........................................            0.15            0.16            0.16            0.16            0.16  ..............
Total Spending..........................................           2,510           3,560           4,110           4,160           4,220          18,560
Federal Spending........................................           1,440           2,050           2,360           2,390           2,430          10,670
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We received comments on our estimated impacts on Federal and State 
spending for this final rule, and our responses follow.
    Comment: Some commenters expressed concern with the projected 
increase in State spending estimated in the regulatory impact analysis. 
These commenters noted that the magnitude of additional State spending 
projected over the next five years would impose significant burden on 
State budgets including State reserve funds. Conversely, a few 
commenters that opposed provisions in the proposed rule cited the 
modest fiscal impact projected in the regulatory impact analysis as 
evidence of limited benefit and the rationale for their opposition.
    Response: We appreciate the commenters' perspectives and 
acknowledge that this final rule may require programmatic updates and 
systems changes, and lead to increases in Medicaid and MSP enrollment, 
that could raise costs for States. To mitigate these concerns, and to 
allow more time to provide technical assistance to States, we are 
extending through this final rule the timeline for States to comply 
with many provisions.
    Comment: One commenter expressed concern that we did not 
appropriately factor social benefits and other distributional impacts 
attributable to increased enrollment in the Medicaid and MSPs into the 
regulatory impact analysis. This commenter noted that factoring social 
benefits, including reduced income- and race-based health disparities, 
in the regulatory impact analysis would strengthen the economic 
justification for the provisions in this rule. This commenter also 
highlighted that the provisions to streamline enrollment in Medicaid 
and the MSPs would result in a transfer of $61.9 billion over 5 years 
to Medicaid and CHIP beneficiaries through additional healthcare 
spending by those programs.
    Response: We note that in section IV.F of this final rule we 
classify the impacts of this final rule as transfers, with the Federal 
Government and States incurring additional costs and beneficiaries 
receiving medical benefits and reductions in out-of-pocket health care 
costs (although the dollar value differs from the comment because we 
have updated our estimates and are only finalizing certain provisions 
of the proposed rulemaking in this final rule). Further, we acknowledge 
the potential benefit of factoring in social benefits into the 
regulatory impact analysis, but note that our current analysis does not 
include any potential economic effects associated with the impact of 
our provisions on social determinants of health. Lastly, we do believe 
the regulatory impact analysis accounts for distributional impacts in 
its discussion of transfers and total impacts.

D. Alternatives Considered

    In developing this final rule, we considered the following 
alternatives:
1. Not Finalizing the Rule
    We considered not finalizing this rule and maintaining the status 
quo. However, we believe this final rule will lead to more eligible 
individuals gaining access to coverage and maintaining their coverage 
across all States.
2. Providing States With Discretion Regarding the Date of Application 
for QMBs
    Section 406.26 describes enrollment in Medicare Part A through the 
buy-in process. We considered proposing modifications to Sec.  
406.26(b) to provide States with discretion to use the Part A 
conditional enrollment filing date as the date of the Medicaid 
application for QMB eligibility. As background, the QMB eligibility 
group covers Part A premiums for individuals who do not qualify for 
premium-free Part A. However, to apply for the QMB eligibility group, 
an individual must be entitled to Part A and many cannot afford the 
monthly premium ($499 in 2022). Such individuals have to navigate a 
complex two-step process where they first apply for conditional 
enrollment in Part A at SSA, then go to the State Medicaid agency to 
apply for the QMB eligibility group. Providing States the option to use 
the date of application at SSA for conditional enrollment as the date 
of application for a QMB application could permit States to offer an 
earlier effective date for QMB. We chose not to propose a regulatory 
change because we did not have enough information to accurately assess 
its impact. However, we sought comments on this alternative considered 
that might be adopted in this final rule based on comments received. In 
this final rule, we are not finalizing any such alternatives and 
instead, are finalizing what we proposed (albeit with a compliance date 
in 2026) for the reasons we cited in section II.A.1. of this final 
rule.

E. Limitations of the Analysis

    There are a number of caveats to these estimates. Foremost, there 
is significant uncertainty about the actual effects of these 
provisions. Each of these provisions could be more or less effective 
than we have assumed in developing these estimates, and for many of 
these provisions we have made assumptions about the impacts they would 
have. In many cases, determining the reasons why a person may not be 
enrolled despite being eligible for Medicaid is difficult to do in an 
analysis such as this. Therefore, these assumptions rely heavily on our 
judgment about the impacts of these provisions. While we believe these 
are reasonable estimates, we note that this could have a substantially 
greater or lesser impact than we have projected.
    Second, there is uncertainty even under current policy in Medicaid. 
Due to the COVID-19 pandemic and legislation to address the pandemic, 
Medicaid has experienced significant increases in enrollment since the 
beginning of 2020. Actual underlying

[[Page 65269]]

economic and public health conditions may differ than what we assume 
here.
    In addition to the sources of uncertainty described previously, 
there are other reasons the actual impacts of these provisions may 
differ from the estimates. There may be differences in the impacts of 
these provisions across eligibility groups or States that are not 
reflected in these estimates. There may also be different costs per 
enrollee than we have assumed here because those gaining coverage 
altogether or keeping coverage for longer durations of time may have 
different costs than those who were already assumed to be enrolled in 
the program. Lastly, to the extent that States have discretion in 
provisions that are optional in this final rule or in the 
administration of their programs more broadly, States' efforts to 
implement these provisions may lead to larger or smaller impacts than 
estimated here.
    To address these limitations, we have developed a range of impacts 
for Medicaid spending. We believe that the actual impacts would likely 
fall within a range 50 percent higher or lower than the estimates we 
have developed. While this is a significant range, we would note that 
in the context of the entire Medicaid program ($743 billion in FY 
2021), this is still a relatively narrow range.

F. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in 
Table 14 showing the classification of the transfer payments with the 
provisions of this final rule. These impacts are classified as 
transfers, with the Federal Government and States incurring additional 
costs and beneficiaries receiving medical benefits and reductions in 
out-of-pocket health care costs.
    This provides our best estimates of the transfer payments outlined 
in section IV.C. (Anticipated Effects) of this final rule. To address 
the significant uncertainty related to these estimates, we have assumed 
that the costs could be 50 percent greater than or lesser than we have 
estimated here. We recognize that this is a relatively wide range, but 
we note several reasons for uncertainty regarding these estimates. 
First, there are numerous provisions that affect Medicaid in this rule. 
For several provisions, we have limited information, analysis, or 
comparisons to prior experience to use in developing our estimates. 
Thus, the range reflects that impacts of these provisions could be 
greater or lesser than we assume. We also note that there are expected 
impacts on Medicare; we believe this range adequately accounts for the 
potential variation in costs or savings to that program as well. 
Finally, given the significant effects of the COVID-19 pandemic and 
legislation intended to address it, the current outlook for Medicaid is 
less certain than typical. We provide this wider range to account for 
this uncertainty as well. This range provides the high cost and low 
cost ranges shown in Table 14.

                                                             Table 14--Accounting Statement
                                                       [Expenditures in millions of 2025 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               Units
                                                              Primary                                    -----------------------------------------------
                        Category                             estimate      Low estimate    High estimate                   Discount rate
                                                                                                           Year dollars         (%)       Period covered
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annualized Monetized Transfers from Federal Government            $3,579          $1,790          $5,369            2025               7       2025-2029
 to beneficiaries.......................................
                                                                   3,622           1,811           5,433            2025               3       2025-2029
Annualized Monetized Transfers from States to                      1,555             777           2,332            2025               7       2025-2029
 beneficiaries..........................................
                                                                   1,568             784           2,352            2025               3       2025-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------

    This final regulation is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress 
and the Comptroller General for review.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on September 15, 2023.

List of Subjects

42 CFR Part 406

    Diseases, Health facilities, Medicare.

42 CFR Part 435

    Aid to Families with Dependent Children, Grant programs--health, 
Medicaid, Reporting and recordkeeping requirements, Supplemental 
Security Income (SSI), Wages.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

0
1. The authority citation for part 406 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395i-2, 1395i-2a, 1395p, 1395q and 
1395hh.


0
2. Section 406.21 is amended by adding paragraph (c)(5) to read as 
follows:


Sec.  406.21  Individual enrollment.

* * * * *
    (c) * * *
    (5) If an individual resides in a State that pays premium hospital 
insurance for Qualified Medicare Beneficiaries under Sec.  406.32(g) 
and enrolls or reenrolls during a general enrollment period after 
January 1, 2023, QMB coverage is effective the month entitlement begins 
(if the individual is determined eligible for QMB before the month 
following the month of enrollment), or a month later than the month 
entitlement begins (if the individual is determined eligible for QMB 
the month entitlement begins or later).
* * * * *

PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE 
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA

0
3. The authority citation for part 435 continues to read as follows:

    Authority:  42 U.S.C. 1302.


0
4. Section 435.4 is amended by adding a definition for ``Low Income 
Subsidy Application data (LIS leads data)'' in alphabetical order to 
read as follows:

[[Page 65270]]

Sec.  435.4  Definitions and use of terms.

* * * * *
    Low-Income Subsidy Application data (LIS leads data) means data 
from an individual's application for low-income subsidies under section 
1860D-14 of the Act that the Social Security Administration 
electronically transmits to the appropriate State Medicaid agency as 
described in section 1144(c)(1) of the Act.
* * * * *

0
5. Section 435.601 is amended by adding paragraph (e) to read as 
follows:


Sec.  435.601  Application of financial eligibility methodologies.

* * * * *
    (e) Procedures for determining eligibility for the Medicare Savings 
Program groups. When a State determines eligibility for a Medicare 
Savings Program group, for income eligibility the agency must include 
at least the individuals described in Sec.  423.772 of this chapter in 
determining family of the size involved.
* * * * *

0
6. Revise Sec.  435.909 to read as follows:


Sec.  435.909  Automatic entitlement to Medicaid following a 
determination of eligibility under other programs.

    (a) Automatic enrollment of certain individuals in Medicaid. The 
agency must not require a separate application for Medicaid from an 
individual, if the agency has an agreement with the Social Security 
Administration (SSA) under section 1634 of the Act for determining 
Medicaid eligibility; and--
    (1) The individual receives SSI;
    (2) The individual receives a mandatory State supplement under 
either a federally-administered or State-administered program; or
    (3) The individual receives an optional State supplement and the 
agency provides Medicaid to beneficiaries of optional supplements under 
Sec.  435.230.
    (b) Automatic enrollment of SSI recipients in the Qualified 
Medicare Beneficiary group. (1) The agency must deem individuals 
eligible for the Qualified Medicare Beneficiary group as described in 
Sec.  400.200 of this chapter if the individual receives SSI and is 
determined eligible for medical assistance under Sec.  435.120 or Sec.  
435.121; and--
    (i) The individual is entitled to Part A under part 406, subpart B, 
of this chapter; or
    (ii) The individual is entitled to Part A under Sec.  406.20 of 
this chapter and the agency has a State buy-in agreement authorized 
under section 1843 of the Act and modified under section 1818(g) of the 
Act.
    (2) The agency may deem individuals eligible for the Qualified 
Medicare Beneficiary group as described in Sec.  400.200 of this 
chapter if the individual receives SSI and is determined eligible for 
medical assistance under Sec. Sec.  435.120 or 435.121; and--
    (i) The individual is entitled to Part A under Sec.  406.5(b) of 
this chapter; and
    (ii) The agency uses the group payer arrangement under Sec.  
406.32(g) of this chapter to pay Part A premiums for Qualified Medicare 
Beneficiaries.
    (3) The automatic enrollment of SSI recipients in the Qualified 
Medicare Beneficiaries group described in paragraphs (b)(1) and (2) of 
this section is effective no earlier than the effective date of 
coverage under a buy-in agreement for individuals described in Sec.  
407.47(b) of this chapter.

0
7. Section 435.911 is amended by adding paragraph (e) to read as 
follows:


Sec.  435.911  Determination of eligibility.

* * * * *
    (e) For each individual who has applied for the Part D Low Income 
Subsidy through the Social Security Administration (SSA) and granted 
permission for the Social Security Administration to share Low Income 
Subsidy application data (LIS leads data) with the Medicaid agency for 
the purpose of submitting an application for the Medicare Savings 
Programs, the agency must--
    (1) Accept, via secure electronic interface, LIS leads data 
transmitted to the agency from SSA;
    (2) Treat received LIS leads data relating to an individual as an 
application for eligibility under the Medicare Savings Programs, 
without requiring submission of another application;
    (3) Accept LIS leads data, without further verification, unless-
    (i) The agency has information that is not reasonably compatible 
with the leads data; or
    (ii) The information provided through the LIS leads data does not 
support a determination of eligibility for the Medicare Savings 
Programs;
    (4) Not request information or documentation from the individual 
already provided to SSA through the LIS application and included in the 
transmission to the agency by SSA unless the agency has information 
that is not reasonably compatible with the LIS leads data;
    (5) Seek additional information that is not in the LIS leads data 
if needed by the agency to make a determination of eligibility for the 
Medicare Savings Programs;
    (6) Verify an individual's U.S. citizenship or satisfactory 
immigration status in accordance with Sec. Sec.  435.406 and 435.956;
    (7) Determine the eligibility of the individual for the Medicare 
Savings Programs promptly and without undue delay, consistent with 
timeliness standards established under Sec.  435.912; and
    (8) If any of the LIS leads data does not support a determination 
of eligibility under the Medicare Savings Programs--
    (i) Determine what additional information is needed to make a 
determination of eligibility for the Medicare Savings Programs;
    (ii) Notify the individual that they may be eligible for assistance 
with their Medicare premium and/or cost sharing charges, but that 
additional information is needed for the agency to make a determination 
of such eligibility;
    (iii) Provide the individual with a minimum of 30 days to furnish 
any information needed by the agency to make such determination of 
eligibility; and
    (iv) Verify the individual's eligibility for the Medicare Savings 
Programs in accordance with the agency's verification plan developed in 
accordance with Sec.  435.945(j).
    (9) Provide the individual with, in addition to and separate from 
any requests for additional information necessary for a determination 
of Medicare Savings Program eligibility, unless CMS approves 
otherwise,--
    (i) Information about the availability of additional Medicaid 
benefits on other bases, including the scope of such benefits and 
responsibilities of the individual applying for such benefits; and
    (ii) An opportunity to furnish such additional information as may 
be needed to determine whether the individual is eligible for such 
additional Medicaid benefits on other bases.

0
8. Section 435.952 is amended by adding paragraph (e) to read as 
follows:


Sec.  435.952  Use of information and requests for additional 
information from individuals

* * * * *
    (e) When determining eligibility for individuals applying for the 
Medicare Savings Programs specified in sections 1902(a)(10)(E)(i), 
(iii) and (iv) and 1905(p) of the Act, the agency must accept 
attestation (either self-attestation by the individual or attestation 
by an adult who is in the applicant's household, as defined in Sec.  
435.603(f), or family, as defined in section 36B(d)(1)

[[Page 65271]]

of the Internal Revenue Code, an authorized representative, or, if the 
individual is a minor or incapacitated, someone acting responsibly for 
the individual) of the following income and asset information without 
requiring further information (including documentation) from the 
individual:
    (1) Income and interest income. (i) Except as provided in paragraph 
(e)(1)(ii) of this section, the agency must accept an applicant's 
attestation of the value of any dividend and interest income earned on 
resources owned by the applicant or the applicant's spouse.
    (ii) If the agency has information that is not reasonably 
compatible with an applicant's attestation, the agency must seek 
additional information from the individual in accordance with paragraph 
(c) of this section.
    (iii) The agency may verify interest and dividend income after the 
agency has determined that an applicant is eligible for the Medicare 
Savings Programs, in accordance with paragraph (c) of this section. If 
the agency requests documentation in accordance with this paragraph, 
the agency must provide the individual with at least 90 days from the 
date of the request to provide any necessary information requested and 
must allow the individual to submit such documentation through any of 
the modalities described in Sec.  435.907(a).
    (2) Non-liquid resources. (i) Except as provided in paragraph 
(e)(2)(ii) of this section, the agency must accept an applicant's 
attestation of the value of any non-liquid resources owned.
    (ii) If the agency has information that is not reasonably 
compatible with an applicant's attestation, the agency must seek 
additional information from the individual in accordance with paragraph 
(c) of this section.
    (iii) The agency may verify the value of non-liquid resources after 
the agency has determined that an applicant is eligible for the 
Medicare Savings Programs, in accordance with paragraph (c) of this 
section. If the agency requests documentation in accordance with this 
paragraph, the agency must provide the individual with at least 90 days 
from the date of the request to provide any necessary information 
requested and must allow the individual to submit such documentation 
through any of the modalities described in Sec.  435.907(a).
    (3) Burial funds. (i) Except as provided in paragraph (e)(3)(ii) of 
this section, the agency must accept an applicant's attestation that up 
to $1,500 of their resources, and up to $1,500 of their spouse's 
resources, are set aside in a separate account and are not countable as 
resources when determining eligibility for the Medicare Savings 
Programs.
    (ii) If the agency has information that is not reasonably 
compatible with an applicant's attestation, the agency must seek 
additional information from the individual in accordance with paragraph 
(c) of this section.
    (iii) The agency may verify resources in burial funds after the 
agency has determined that an applicant is eligible for the Medicare 
Savings Programs, in accordance with paragraph (c) of this section. If 
the agency requests documentation in accordance with this paragraph, 
the agency must provide the individual with at least 90 days from the 
date of the request to provide any necessary information requested and 
must allow the individual to submit such documentation through any of 
the modalities described in Sec.  435.907(a).
    (4) Life insurance policies. (i) Except as provided in paragraph 
(e)(4)(ii) of this section, the agency must accept an applicant's 
attestation of the face value of life insurance.
    (A) If an individual attests to a face value of life insurance 
policy that is above $1,500, the State may accept an attestation of the 
cash surrender value of the life insurance policy for the purpose of 
determining resource eligibility for the Medicare Savings Programs.
    (B) [Reserved]
    (ii) If the agency has information about either the face value or 
the cash surrender value that is not reasonably compatible with an 
applicant's attestation, the agency must seek additional information 
from the individual in accordance with paragraph (c) of this section, 
which may include a reasonable explanation of the discrepancy or 
documentation.
    (iii) The agency may verify the face value of a life insurance 
policy after the agency has determined that an applicant is eligible 
for a Medicare Savings Program, in accordance with paragraph (c) of 
this section.
    (iv)(A) When an individual must provide documentation of the cash 
surrender value of a life insurance policy, the agency must assist the 
individual with obtaining this information and documentation by 
requesting that the individual provide the name of the insurance 
company and policy number and authorize the agency to obtain such 
documentation from the issuer of the policy on the individual's behalf. 
The agency may also request, but may not require, additional 
information from the applicant to assist the agency in obtaining the 
needed documentation, such as the name of an agent.
    (B) If the individual does not provide the information and 
authorization in paragraph (e)(4)(iv)(A) of this section, the agency 
may require that the individual provide documentation of the cash 
surrender value.
    (C) The agency must allow the individual to submit documentation 
through any of the modalities described in Sec.  435.907(a) and provide 
the individual with at least 15 days to provide information or 
documentation described in this paragraph if such information or 
documentation is requested pursuant to paragraph (e)(4)(i) or (ii) of 
this section and at least 90 days if required pursuant to paragraph 
(e)(4)(iii) of this section.

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-20382 Filed 9-18-23; 4:15 pm]
BILLING CODE 4120-01-P


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