Source: https://www.federalregister.gov/articles/2013/07/15/2013-16271/medicaid-and-childrens-health-insurance-programs-essential-health-benefits-in-alternative-benefit
Timestamp: 2014-03-11 06:03:13
Document Index: 614678652

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Federal Register | Medicaid and Children's Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment
Dates: The effective date for the additions of 42 CFR 435.118, 435.603, 435.911, 435.949, 435.956, 435.1200, 457.315, 457.330 and 457.348; amendments to 42 CFR 431.10, 431.11, 435.110, 435.116, 435.119, 435.907, 435.916, 435.940, 435.945, 435.948, 435.952, 457.340 and 457.350; the removal of 42 CFR 435.953 and 435.955; and the redesignation of 42 CFR 435.911 through 435.914 as 42 CFR 435.912 through 435.915 in CMS-2349 (FR Doc. 2012-6560) published on March 23, 2012, which were to become effective in January 1, 2014 are now effective October 1, 2013.
-42322 (164 pages)
Shorter URL: https://federalregister.gov/a/2013-16271 Related Topics
This final rule implements provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act. This final rule finalizes new Medicaid eligibility provisions; finalizes changes related to electronic Medicaid and the Children's Health Insurance Program (CHIP) eligibility notices and delegation of appeals; modernizes and streamlines existing Medicaid eligibility rules; revises CHIP rules relating to the substitution of coverage to improve the coordination of CHIP coverage with other coverage; and amends requirements for benchmark and benchmark-equivalent benefit packages consistent with sections 1937 of the Social Security Act (which we refer to as “alternative benefit plans”) to ensure that these benefit packages include essential health benefits and meet certain other minimum standards. This rule also implements specific provisions including those related to authorized representatives, notices, and verification of eligibility for qualifying coverage in an eligible employer-sponsored plan for Affordable Insurance Exchanges. This rule also updates and simplifies the complex Medicaid premium and cost sharing requirements, to promote the most effective use of services, and to assist states in identifying cost sharing flexibilities. It includes transition policies for 2014 as applicable.
A. Medicaid Eligibility Final Rule Part II
B. Essential Health Benefits in Alternative Benefit Plans
C. Exchanges: Eligibility and Enrollment
3. Structure of the Final Rule
D. Medicaid Premiums and Cost Sharing
II. Provisions of the Proposed Rule and Analysis of and Responses to Public Comments
A. Medicaid Eligibility Part II Final Rule
1. Responses to General Comments
2. Appeals—Delegation of Authority To Conduct Medicaid Fair Hearings
a. Electronic Notices (§ 435.918)
b. Coordinated Notices (§ 435.1200)
a. Certified Application Counselors (§ 435.908 and § 457.340)
b. Authorized Representatives (§ 435.923)
a. Presumptive Eligibility for Children (§ 435.1102)
b. Presumptive Eligibility for Other Individuals (§ 435.1103)
c. Presumptive Eligibility Determined by Hospitals (§ 435.1110)
6. Coordinated Medicaid/CHIP Open Enrollment Process (§ 435.1205 and § 457.370)
7. Children's Health Insurance Program Changes
a. CHIP Waiting Periods (§ 457.340, § 457.350, § 457.805 and § 457.810)
8. Premium Assistance (§ 435.1015)
9. Changes to Modified Adjusted Gross Income and MAGI Screen
10. Single State Agency—Delegation of Eligibility Determinations to Exchanges (§ 431.10 and § 431.11)
11. Conversion of Federal Minimum Income Standards for Section 1931 of the Act (§ 435.110 and § 435.116)
Conforming Changes to Medicaid To Align With Essential Health Benefits
2. Alignment With Essential Health Benefits Provisions
a. Scope of Alternative Benefit Plans (§ 440.305)
b. Exempt Individuals (Former Foster Care Children) (§ 440.315)
c. Benchmark-Equivalent Health Benefits Coverage (Prescription Drugs and Mental Health Benefits) (§ 440.335)
d. EPSDT and Other Required Benefits (Family Planning Services and Supplies) (§ 440.345)
e. EPSDT and Other Required Benefits (Mental Health Parity) (§ 440.345)
f. EPSDT and Other Required Benefits (ABPs Include EHBs and All Updates and Modifications) (§ 440.345)
g. EPSDT and Other Required Benefits (Process for Updating EHBs) (§ 440.345)
h. Essential Health Benefits (§ 440.347)
i. Essential Health Benefits (Non-Discrimination Policy) (§ 440.347)
3. Modifications in Applying the Provisions of This Final Rule to Medicaid
a. Essential Health Benefits (Rehabilitative and Habilitative Services and Devices) (§ 440.347)
b. Pediatric Oral and Vision and EPSDT Services
c. Essential Health Benefits (Prescription Drugs) (§ 440.347)
4. All Other Title XIX Provisions Apply
5. Preventive Services as an EHB
6. Other Changes To Simplify, Modernize, and Clarify Medicaid Benchmark Requirements and Coverage Requirements
a. Diagnostic, Screening, Preventive, and Rehabilitative Services (Preventive Services) (§ 440.130)
b. Public Notice (§ 440.386)
c. Exempt Individuals (Modifying Definition of Medically Frail) (§ 440.315)
d. Benchmark Health Benefits Coverage (Adding Benefits to Secretary-Approved Coverage) (§ 440.330)
e. Secretary-Approved Health Benefits Coverage and § 440.330(d) and State Plan Requirements for Providing Additional Services (Adding Benefits to Additional Coverage) (§ 440.335)
f. Benchmark-Equivalent Health Benefits Coverage and § 440.360 State Plan Requirements for Providing Additional Services (Adding Benefits to Additional Coverage) (§ 440.335)
g. Other Comments Received
4. Authorized Representatives (§ 155.227)
5. General Standards for Exchange Notices (§ 155.230)
6. Definitions and General Standards for Eligibility Determinations (§ 155.300)
7. Options for Conducting Eligibility Determinations (§ 155.302(a) and (b), and (d))
8. Eligibility Standards (§ 155.305)
9. Eligibility Process (§ 155.310)
10. Verification Process Related to Eligibility for Enrollment in a QHP Through the Exchange (§ 155.315)
11. Verifications Related to Eligibility for Insurance Affordability Programs (§ 155.320)
12. Eligibility Redetermination During a Benefit Year (§ 155.330)
13. Annual Eligibility Redetermination (§ 155.335)
14. Administration of Advance Payments of the Premium Tax Credit and Cost-Sharing Reductions (§ 155.340)
15. Coordination With Medicaid, CHIP, the Basic Health Program, and the Pre-existing Condition Insurance Plan (§ 155.345)
16. Special Eligibility Standards and Process for Indians (§ 155.350)
17. Enrollment of Qualified Individuals Into QHP's (§ 155.400)
18. Special Enrollment Periods (§ 155.420)
19. Termination of Coverage (§ 155.430)
1. Responses to General Comments (§ 447.51 through § 447.57)
2. Definitions (§ 447.51)
3. Update to Maximum Nominal Cost Sharing (§ 447.52)
4. Higher Cost Sharing Permitted for Individuals With Incomes Above 100 Percent of the FPL (§ 447.52)
5. Cost Sharing for Drugs (§ 447.53)
6. Cost Sharing for Emergency Department (ED) Services (§ 447.54)
7. Premiums (§ 447.55)
8. Limitations on Premiums and Cost Sharing (§ 447.56)
9. Beneficiary and Public Notice Requirements (§ 447.57)
Change to § 431.10
Change to § 431.201
Change to § 431.205
Change to § 431.206
Change to § 435.603
Change to § 435.908
Change to § 435.918
Change to § 435.923
Change to § 435.1015
Changes to § 435.1110
Change to § 435.1200
Changes to § 447.51
Changes to § 447.52
Changes to § 447.53
Changes to § 447.54
Changes to § 447.55
Changes to § 447.56
Changes to § 447.57
Change to § 457.110
Change to § 457.570
Change to § 457.810
Changes to § 155.20
Changes to § 155.200
Changes to § 155.227
Changes to § 155.230
Changes to § 155.300
Changes to § 155.302
Changes to § 155.305
Changes to § 155.310
Changes to § 155.315
Changes to § 155.320
Changes to § 155.330
Changes to § 155.340
Changes to § 155.345
Changes to § 155.420
Changes to § 155.430
Changes to § 156.270
1b. Sections 435.113, 435.114, 435.223, and 435.510
B. Medicaid Eligibility and Enrollment
1. ICRs Regarding Delegation of Eligibility Determinations and Appeals (§§ 431.10(c), 431.11. and 457.1120)
2. ICRs Regarding Fair Hearing Processes (§§ 431.205(e), and 431.206(d) and (e))
3. ICRs Regarding Application Counselors (§ 435.908(c))
4. ICRs Regarding Eligibility Determination Notices (§ 435.918, § 457.110)
5. ICRs Regarding Authorized Representatives (§ 435.923(a))
6. ICRs Regarding Presumptive Eligibility Determined by Hospitals (§ 435.1110)
7. ICRs Regarding ABP SPA-Related Requirements (§§ 440.305, 440.315, 440.330, 440.335, 440.345, 440.347, 440.360, and 440.386)
8. ICRs Regarding Cost Sharing and Premiums (§§ 447.52, 447.53, 447.54, 447.55 and 447.56)
9. ICRs Regarding Beneficiary and Public Notice Requirements (§ 447.57)
1. ICRs Regarding Authorized Representatives (§ 155.227)
2. ICRs Regarding Notices (§§ 155.302, 155.310, 155.315, 155.320, 155.330, 155.335, 155.345, 155.355, 155.410, 155.715, 155.720, 155.725, and 155.1080)
4. ICRs Regarding Electronic Transmissions (§§ 155.310, 155.315, 155.320, and 155.340)
5. ICRs Regarding Reporting Changes (§§ 155.315, 155.330, and 155.335)
6. ICRs Regarding Enrollment and Termination (§§ 155.400, 155.405, and 155.430)
7. ICRs Regarding Agreements (§§ 155.302 and 155.345)
8. ICRs Regarding Notices From QHP Issuers (§§ 156.260, 156.265, 156.270, and 156.290)
9. ICRs Regarding Notices and Third-Party Disclosures in the SHOP (§§ 157.205(e) and (f))
D. Summary of Annual Burden Estimates
E. Submission of PRA-Related Comments
B. Estimated Impact of the Medicaid Premium and Cost Sharing Provisions
C. Estimated Impact of Exchange Provisions
E. Limitations of the Analysis
1. QHP Issuers
Table 2—Estimated Total Impact of Changes in Maximum Medicaid Cost Sharing, FY 2014-2018
Table 3—Estimated Federal Government Outlays for the Affordable Insurance Exchanges FY 2013-FY2017
Table 4—Accounting Statement: Classification of Estimated Net Costs and Transfers
The effective date for the additions of 42 CFR 435.118, 435.603, 435.911, 435.949, 435.956, 435.1200, 457.315, 457.330 and 457.348; amendments to 42 CFR 431.10, 431.11, 435.110, 435.116, 435.119, 435.907, 435.916, 435.940, 435.945, 435.948, 435.952, 457.340 and 457.350; the removal of 42 CFR 435.953 and 435.955; and the redesignation of 42 CFR 435.911 through 435.914 as 42 CFR 435.912 through 435.915 in CMS-2349 (FR Doc. 2012-6560) published on March 23, 2012, which were to become effective in January 1, 2014 are now effective October 1, 2013.
Other provisions of this final rule that are codified in title 42 of the Code of Federal Regulations are effective January 1, 2014 with the exception of amendments to the following which are effective on October 1, 2013: 42 CFR 431.10, 431.11, 431.201, 431.205, 431.206, 431.211, 431.213, 431.230, 431.231, 431.240, 435.119, 435.603, 435.907, 435.918, 435.1200, 457.110, 457.348, and 457.350; and the addition of 42 CFR 435.1205 and 457.370, which are effective on October 1, 2013.
Regulations in this final rule that are codified in title 45 of Code of Federal Regulations are effective on September 13, 2013.
Melissa Harris, (410) 786-3397, for provisions related to essential health benefits.
This final rule implements provisions of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act). This rule reflects new statutory eligibility provisions, implements changes related to Medicaid and the Children's Health Insurance Program (CHIP) eligibility notices, delegation of appeals, and other related administrative procedures with similar procedures used by other health coverage programs authorized under the Affordable Care Act. This final rule also modernizes and streamlines existing rules.
This final rule amends the requirements applicable to Medicaid benefit packages that provide benchmark or benchmark-equivalent coverage, to include requirements to meet new minimum standards, including the provision of essential health benefits, as required by the Affordable Care Act. In an effort to bring consistency and clarity to part 440, we are removing the terms “benchmark and benchmark-equivalent plan” where they appear together and are replacing these terms with “Alternative Benefit Plan” (ABP).
Beginning in calendar year 2014, individuals and small businesses will be able to purchase private health insurance through competitive marketplaces called Affordable Insurance Exchanges, or “Exchanges.” This final rule: (1) Specifies standards related to authorized representatives, (2) outlines criteria related to the verification of enrollment in and eligibility for minimum essential coverage through an eligible employer-sponsored plan, and (3) further specifies or amends other eligibility and enrollment provisions. This final rule does not address proposed provisions regarding Exchange eligibility appeals, to provide additional time for the careful development of standards that can be effectively implemented, particularly for those regarding coordination with Medicaid and CHIP. Additionally, this final rule does not address proposed provisions regarding the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), certified application counselors in an Exchange and SHOP coordination with individual market Exchanges. We intend to address these provisions in a future issuance. The intent of this final rule is to afford each state substantial discretion in the design and operation of the Exchange established by the state, with greater standardization provided where directed by the statute or where there are compelling practical, efficiency or consumer protection reasons.
This final rule also updates and simplifies the complex Medicaid premium and cost sharing requirements to promote the most effective use of services and to assist states in identifying cost sharing flexibilities.
Finally, this final rule provides notice that we are considering, for purposes of the initial open enrollment period for enrollment in a Qualified Health Plan through the Exchange, whether various provisions of the Medicaid and CHIP regulations should be effective October 1, 2013, or whether a later effective date is appropriate.
In this final rule, we do not address all of the proposed regulatory changes to 42 CFR parts 431, 435 and 457. We are focusing on those changes that are most needed to implement the changes made by the Affordable Care Act starting in 2014. We intend to address certain of the other provisions in future rulemaking.
A. Medicaid Eligibility Expansion Part II
6. Coordinated Medicaid/CHIP Open Enrollment Process
8. Premium Assistance
10. Single State Agency—Delegation of Eligibility Determinations to Exchanges
11. Conversion of Federal Minimum Income Standards for Section 1931 of the Act
5. General Standards for Exchange Notices
6. Definitions and General Standards for Eligibility Determinations
7. Options for Conducting Eligibility Determinations
8. Eligibility Standards
9. Eligibility Process
10. Verification Process Related to Eligibility for Enrollment in a QHP Through the Exchange
11. Verifications Related to Eligibility for Insurance Affordability Programs
12. Eligibility Redetermination During a Benefit Year
13. Annual Eligibility Redetermination
14. Administration of Advance Payments of the Premium Tax Credit and Cost-Sharing Reductions
15. Coordination With Medicaid, CHIP, the Basic Health Program, and the Pre-Existing Condition Insurance Plan
16. Special Eligibility Standards and Process for Indians
17. Enrollment of Qualified Individuals Into QHP's
18. Special Enrollment Periods
19. Termination of Coverage
3. Update to Maximum Nominal Cost Sharing
4. Higher Cost Sharing Permitted for Individuals With Incomes Above 100 Percent of the FPL
5. Cost Sharing for Drugs
6. Cost Sharing for Emergency Department (ED) Services
8. Limitations on Premiums and Cost Sharing
9. Beneficiary and Public Notice Requirements
Acronyms and Terms Back to Top
[the]ActSocial Security Act
Affordable Care ActThe Affordable Care Act of 2010 (which is the collective term for the Patient Protection and Affordable Care Act (Pub. L. 111-148) and the Health Care and Education Reconciliation Act (Pub. L. 111-152))
[the]CodeInternal Revenue Code of 1986
FEHBPFederal Employees Health Benefits Program (5 U.S.C. 8901, et seq.)
MMEAMedicare Medicaid Extenders Act of 2010 (Pub. L. 111-309, enacted December 15, 2010)
SecretarySecretary of HHS
The Patient Protection and Affordable Care Act (Pub. L. 111-148, enacted on March 23, 2010), was amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30, 2010). These laws are collectively referred to as the Affordable Care Act. In addition, section 205 of the Medicare Medicaid Extenders Act of 2010 (Pub. L. 111-309, enacted December 15, 2010) (MMEA) and the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96, enacted February 22, 2012) made additional amendments to the Social Security Act (the Act) provisions affected by the Affordable Care Act.
The Affordable Care Act extends and simplifies Medicaid eligibility, and on March 23, 2012, we issued a final rule (referred to as the “Medicaid Eligibility final rule”) addressing certain key Medicaid and CHIP eligibility, enrollment, and renewal issues.
This final rule provides states with additional flexibility and guidance for delegation of appeals and implementation of electronic notices, and modernizes administrative procedures to further promote coordination across multiple health coverage programs, including enrollment in a qualified health plan through the Exchange with advance payments of the premium tax credits and cost-sharing reductions, as authorized by the Affordable Care Act, Medicaid and the Children's Health Insurance Program (CHIP). These coverage programs are collectively referred to as “insurance affordability programs.” For more information on the legislative overview, please refer to the Medicaid, CHIP, and Exchanges proposed rule (78 FR 4594).
For plan, policy, or coverage years (as applicable) beginning in 2014, most health insurance coverage
in the individual and small group markets, Medicaid benchmark and benchmark-equivalent plans (now also known as Alternative Benefit Plans (ABPs)), and Basic Health Programs (if applicable) will be required to cover essential health benefits (EHBs), consistent with the definition under section 1302 of the Affordable Care Act and implementing regulations at 45 CFR Parts 147, 155, and 156, Patient Protection and Affordable Care Act; Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation; Final Rule. Under that definition, EHBs include items and services in 10 statutory benefit categories, such as hospitalization, prescription drugs, and maternity and newborn care, and are equal in scope of benefits to a typical employer plan, which will constitute minimum coverage in an ABP.
Section 1311(b) and section 1321(b) of the Affordable Care Act provide that each state has the opportunity to establish an Exchange that: (1) Facilitates the purchase of insurance coverage by qualified individuals through qualified health plans (QHPs); (2) assists qualified employers with the enrollment of their employees in QHPs; and (3) meets other standards specified in the Affordable Care Act. Section 1311(k) of the Affordable Care Act specifies that Exchanges may not establish rules that conflict with or prevent the application of regulations promulgated by the Secretary under subtitle D of title I of the Affordable Care Act. Section 1311(d) of the Affordable Care Act describes the minimum functions of an Exchange, including the certification of QHPs.
Section 1321 of the Affordable Care Act discusses state flexibility in the operation and enforcement of Exchanges and related requirements. Section 1321(c)(1) directs the Secretary to establish and operate an Exchange within each state that either: (1) does not elect to establish an Exchange, or (2) as determined by the Secretary on or before January 1, 2013, will not have an Exchange operational by January 1, 2014. Section 1321(a) also provides broad authority for the Secretary to issue regulations setting standards to implement the statutory requirements related to Exchanges, QHPs, and other standards under title I of the Affordable Care Act.
Section 1401 of the Affordable Care Act creates new section 36B of the Internal Revenue Code of 1986 (the Code), which provides for a premium tax credit for eligible individuals who enroll in a QHP through an Exchange. Section 1402 of the Affordable Care Act establishes requirements for reducing the cost-sharing obligations of eligible individuals who enroll in a QHP through an Exchange, including special cost-sharing rules for certain Indians.
Under section 1411 of the Affordable Care Act, the Secretary is directed to establish a program for determining whether an individual meets the eligibility standards for enrollment in QHPs through the Exchange, advance payments of the premium tax credit, cost-sharing reductions, and exemptions from the shared responsibility payment under section 5000A of the Code.
Sections 1412 and 1413 of the Affordable Care Act and section 1943 of the Social Security Act (the Act), as added by section 2201 of the Affordable Care Act, contain additional provisions regarding eligibility for advance payments of the premium tax credit and cost-sharing reductions, as well as provisions regarding simplification and coordination of eligibility determinations and enrollment with other insurance affordability programs.
This final rule supplements and amends provisions originally published as the March 27, 2012 rule titled “Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers” (hereafter referred to as “Exchange Final Rule”) (77 FR 18310) which encompasses key functions of Exchanges related to eligibility and enrollment.
Unless otherwise specified, the provisions in this final rule related to the establishment of minimum functions of an Exchange are based on the general authority of the Secretary under section 1321(a)(1) of the Affordable Care Act.
HHS has consulted with interested stakeholders on policies related to the eligibility provisions and Exchange functions. HHS held a number of listening sessions with consumers, providers, employers, health plans, and state representatives to gather public input, and released several documents for public review and comment. HHS also released a bulletin that outlined our intended regulatory approach to verifying access to employer-sponsored coverage and sought public comment on the specific approaches.
Finally, HHS consulted with stakeholders through regular meetings with the National Association of Insurance Commissioners (NAIC), regular contact with states through the Exchange grant process, consultation with Medicaid directors, and meetings with tribal leaders and representatives, health insurance issuers, trade groups, consumer advocates, employers, and other interested parties.
We considered input from these stakeholder meetings and in response to the bulletin on verifying access to employer-sponsored coverage, as well as comments provided in response to the proposed rule as we developed the policies in this final rule.
The regulations related to Exchanges and QHPs outlined in this final rule are codified at 45 CFR parts 155 and 156. Part 155 outlines the standards related to eligibility for insurance affordability programs to facilitate a streamlined process for eligibility for enrollment in a QHP through the Exchange and in insurance affordability programs. Part 156 outlines the standards for health insurance issuers for participation in an Exchange. This final rule:
Revises existing definitions and finalizes new definitions to 45 CFR part 155 subpart A.
Provides a technical correction to 45 CFR part 155 subpart B.
Finalizes standards related to authorized representatives under 45 CFR part 155 subpart C.
Finalizes standards related to eligibility determinations for enrollment in a QHP and for insurance affordability programs under 45 CFR part 155 subpart D.
Finalizes standards related to enrollment-related transactions, special enrollment periods, and terminations under 45 CFR part 155 subpart E. Finalizes standards related to termination of coverage under 45 CFR part 156 subpart C.
As noted above, on March 27, 2012, we published the Exchange final rule. This final rule revises and supplements the Exchange final rule, including by finalizing Exchange and Medicaid provisions associated with the eligibility changes under the Affordable Care Act of 2010.
Section 1916 of the Act describes long-standing limitations and requirements applicable in states that elect to provide for premiums and other cost sharing under Medicaid. Under section 1916 of the Act, certain individuals are protected from premiums and cost sharing, and cost sharing cannot be imposed on certain services. Permissible cost sharing under section 1916 of the Act is limited to “nominal” amounts (except in some circumstances for non-emergency use of a hospital emergency room). Section 1916 of the Act also establishes authority for states to impose premiums on medically needy beneficiaries and specific groups of individuals with family incomes above 150 percent of the federal poverty level (FPL). The Deficit Reduction Act of 2005 (DRA) established a new section 1916A of the Act, which gives states additional flexibility, allowing for alternative premiums and cost sharing beyond what is permitted under section 1916 of the Act for somewhat higher income beneficiaries. Such alternative cost-sharing approaches may be targeted to specific groups of individuals and payment may be required as a condition of providing services. All premiums and cost sharing imposed under sections 1916 and 1916A of the Act cannot exceed 5 percent of a family's income. For more background information on the streamlined and expanded flexibility regarding premiums and cost sharing, please refer to (78 FR 4657 and 78 FR 4658).
We initially implemented the DRA authorities through regulations that mirrored the dual statutory provisions by adding a set of additional regulations on alternative cost sharing under section 1916A of the Act to existing regulations setting forth the framework for cost sharing under section 1916 of the Act. We believe states found this duality confusing and, in this final rule, we have integrated the two statutory authorities for premiums and cost sharing (sections 1916 and 1916A of the Act) into a unified framework.
II. Provisions of the Proposed Rule and Analysis of and Responses to Public Comments Back to Top
In the January 22, 2013 Federal Register (78 FR 4594), we published the proposed rule entitled “Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange Eligibility Appeals and Other Provisions Related to Eligibility and Enrollment for Exchanges, Medicaid and CHIP, and Medicaid Premiums and Cost Sharing.”
We received a total of 741 timely comments from individuals, state Medicaid and CHIP agencies, advocacy groups, tribes and tribal organizations, policy and research organizations, health care providers, employers, insurers, and health care associations. The comments ranged from general support or opposition to the proposed provisions to very specific questions or comments regarding the proposed changes.
In this final rule, we are only addressing some of the provisions of the proposed rule. We are reserving action on other provisions and intend to address those provisions in a subsequent final rule. We discuss below only those public comments associated with provisions addressed in this final rule.
We have revised some of the proposed regulations after careful consideration of the comments received. Some comments were outside the scope of the proposed rule, and therefore, are not addressed in this final rule. In some instances, commenters raised policy or operational issues that will be addressed through forthcoming regulatory and subregulatory guidance to be provided subsequent to this final rule; therefore, some, but not all comments are addressed in the preamble to this final rule.
Brief summaries of the proposed provisions that are being finalized in this rule, a summary of the public comments we received on those provisions (except specific comments on the paperwork burden or the economic impact analysis), and our responses to the comments are as follows. Comments related to the paperwork burden and the impact analyses are addressed in the “Collection of Information Requirements” and “Regulatory Impact Analysis” sections in this final rule.
The following sections summarize comments about the rule in general, as well as specific comments about certain policies. It should be noted that the summarized comments are structured to explain the provisions being finalized and do not necessarily follow the order of the regulation text:
Generally, commenters were supportive of the policies in the proposed rule to continue the process of streamlining Medicaid and CHIP eligibility rules, policies and procedures; to support a consumer friendly approach, and provide increased flexibility for states.
Comment: Several commenters were concerned about the complexity of the proposed rules and the significance of the changes that need to be made to fully implement the provisions of the Affordable Care Act. Many commenters were concerned about the short timeframes for implementation and about states' ability to make needed changes to policy, operations, and information technology systems.
Response: We recognize that the timing of this final rule may result in implementation challenges, especially from a systems perspective. As such, we have evaluated the provisions of the January proposed rule and are finalizing in this rule only those provisions that we believe states are already in the process of implementing or must be finalized to meet statutory deadlines. The remaining provisions of the proposed rule will be addressed at a later date.
We will continue to work with states to support their implementation efforts, ensure successful partnerships between states and the federal government. We will also continue to offer intensive technical assistance and support to states, and facilitate sharing of experience and knowledge across states. Consistent with one commenter's recommendation, we will also utilize other tools, including subregulatory guidance and the State Operations and Technical Assistance (SOTA) initiative to address additional state questions that arise.
We proposed to implement sections 1413 and 2201 of the Affordable Care Act in part through procedures to coordinate Medicaid fair hearings under section 1902(a)(3) of the Act concerning eligibility for populations whose income is determined using modified adjusted gross income (MAGI)-based methodologies of the Act with appeals of eligibility determinations that are made using MAGI-based methodologies by Exchanges for advance payment of premium tax credits and cost-sharing reductions under section 1411(f) of the Affordable Care Act. Consistent with the requirements to streamline and coordinate eligibility determinations, under section 1943(b)(3) of the Act, as added by section 2201 of the Affordable Care Act, we proposed to provide states with an option to delegate the authority to conduct appeals to an Exchange or Exchange appeals entity. The option is similar to the option states have to delegate Medicaid eligibility determinations to an Exchange under § 431.10. We also proposed changes to existing regulations at part 431 subpart E to support further modernization and streamlining of the Medicaid fair hearing process.
In this final rule, we are finalizing the provisions of our proposed rule related to delegation of authority to conduct Medicaid fair hearings to an Exchange and an Exchange appeals entity at sections §§ 431.10, 431.205(b), 431.206(d) and (e), 431.240 and the proposed rule related to reinstatement of an application at §§ 435.907(h) and 457.340(a). As discussed in section II.A.3. of this final rule (relating to notices), we also are adopting proposed revisions to the current regulations at sections §§ 431.211, 431.213, 431.230, and 431.231, related to modernizing the process of providing notices to applicants and beneficiaries of their fair hearing rights and decisions. In addition to providing substantive comments on the proposed regulations related to coordination of appeals across the Exchange, Medicaid and CHIP, a number of commenters requested delayed implementation of those provisions. To provide states with additional time to consider and effectuate implementation of such coordination, as well as to provide us with additional time to consider the comments received, we are not addressing proposed provisions at §§ 431.200, 431, 201, 431.205(e), 431.206(b), (c)(2), (e) as it relates to accessibility under § 435.905(b), 431.210, 431.220, 431.221, 431.224, 431.232, 431.241, 431.242, or 431.244. Further, we are not addressing the definitions related to appeals proposed in 435.4, nor the provisions related to coordination of appeals in § 435.1200. We expect to address these proposed provisions in a subsequent rulemaking. Until final regulations are released, current rules in part 431, subpart E continue to apply. We note that while we are not finalizing our proposed rules relating to accessibility in the fair hearing process or as it relates appeals and notices at § 431.205(e) and § 431.206(e) at this time, fair hearing processes and notices must continue to be provided in an accessible manner in accordance with relevant federal statutes, including the Americans with Disabilities Act and Title VI of the Civil Rights Act of 1964, as well as any applicable state laws.
We received the following comments regarding the proposed regulations related to delegation of fair hearings and reinstatement of applications in certain circumstances, which we are addressing in this rulemaking:
Comment: Many commenters supported our approach to permit delegation of fair hearings to an Exchange or Exchange appeals entity so that an integrated hearing could be conducted to address Medicaid and Exchange-related eligibility issues together. We also received comments supporting the proposals to streamline and simplify our current fair hearings rules. While not providing specific recommendations, the commenters asked that we consider additional measures to coordinate Medicaid and Exchange eligibility appeals even more effectively. A few commenters requested that the final rule maintain state flexibility for states to retain the Medicaid appeals function within the Medicaid agency.
Several commenters were concerned that our proposed rules require duplicative processes because states must maintain the infrastructure and capacity to hear MAGI-based appeals, even if the state delegates the authority to conduct fair hearings to an Exchange. One commenter requested that we eliminate the requirement at proposed § 431.10(c)(1)(ii) and § 431.205(b)(1)(ii) that an individual be provided an opportunity to request a fair hearing before the Medicaid agency when the state has otherwise delegated authority to conduct the individual's fair hearing to the Exchange, and instead make this provision a state option. The commenter believed that this requirement would undermine the efficiencies achieved through delegation. Another commenter recommended that only one hearing opportunity be made available to individuals, instead of requiring a hearing if determined ineligible for Medicaid and a hearing related to the eligibility for advance payment of premium tax credits and cost-sharing reductions.
Response: We appreciate the support for the proposal to permit states to delegate MAGI-based eligibility appeals to an Exchange or Exchange appeals entity. We note that such delegation is at state option. States are not required to delegate such authority, but may continue to have the Medicaid agency conduct all Medicaid fair hearings.
We understand commenters' concern about duplication of effort in requiring that Medicaid agencies retain an infrastructure independent of the Exchange appeals process to conduct MAGI-based Medicaid eligibility appeals when the state has delegated authority for MAGI-based eligibility appeals to an Exchange. There are two key reasons why the Medicaid agency must maintain its own appeals infrastructure. First, an individual whose application for Medicaid is denied or not acted upon with reasonable promptness has a right under section 1902(a)(3) of the Act to an opportunity for a fair hearing before the Medicaid agency. We do not anticipate that individuals will necessarily prefer to have their appeal heard by the Medicaid agency, but the statute requires that the option be provided in such delegation through our regulations. Second, in a state where the Federally-facilitated Exchange (FFE) is operating, the HHS appeals entity will only conduct appeals related to MAGI-based eligibility determinations made by the FFE. Thus, in states where the FFE is operating, the Medicaid agency will need to conduct all Medicaid fair hearings related to MAGI-based eligibility determinations made by the Medicaid agency. For these reasons, we are finalizing the requirement as proposed.
States have options to streamline the appeals infrastructure and reduce the number of appeals that will come before the Medicaid agency, in addition to the options to delegate Medicaid appeals authority under this final rule as discussed above. In a state that has established a state-based Exchange, the state Medicaid agency may delegate authority to conduct fair hearings of MAGI-based determinations to the state-based Exchange by requesting a waiver under the Intergovernmental Cooperation Act of 1968 (ICA), as long as the state-based Exchange is a state agency and the state can assure sufficient oversight of the delegated fair hearing process. As we noted in the preamble to the proposed rule, when a state has an ICA waiver permitting delegation of fair hearings to another state agency, the state is not required to offer individuals an option to have their hearing conducted by the Medicaid agency.
In states where the FFE is operating, a state Medicaid agency that allows the FFE to make a Medicaid eligibility determination delegating such authority under § 431.10(c)(1)(i) has appeal delegation options not available to a State that proceeds with the assessment model. If the Medicaid agency authorizes the FFE to make MAGI-based eligibility determinations, the agency may also delegate authority to the HHS appeals entity to conduct fair hearings related to determinations of Medicaid ineligibility made by the FFE, establishing an integrated appeals process with simultaneous appeals related to a determination of advance payments of the premium tax credits or cost-sharing reductions. The Medicaid agency would still need to maintain the ability to conduct fair hearings for eligibility determinations and denials made by the Medicaid agency, as well as when delegations are made under these regulations for individuals who opt out of a coordinated appeal before the Exchange or Exchange appeals entity, and specifically request a hearing before the Medicaid agency. States will also need to continue to conduct fair hearings related to non-MAGI based eligibility determinations, as well as fair hearings related to termination, suspension, or reduction of covered benefits and other adverse determinations.
Finally, with respect to the recommendation that a right to only one hearing be made available, we note that there are two separate statutory authorities for appeals related to Medicaid and enrollment in a QHP and eligibility for APTC and cost sharing reductions, at section 1902(a)(3) of the Act and section 1411(f) of the Affordable Care Act, respectively. While we permit states to integrate these hearings and processes as much as possible, both state Medicaid agencies and the Exchange have distinct responsibilities to provide for such hearings, and we do not have authority to eliminate individuals' statutory rights, or a Medicaid agency's or Exchange's statutory responsibility. We note that we are not addressing in this final rule the proposed requirements relating to coordination of notices. Those proposed rules will be addressed in future rulemaking.
Comment: Several commenters requested clarification of our proposals on delegation of Medicaid appeals to the FFE, a state-based Exchange, or a state with a partnership with the FFE. In addition, commenters sought clarification regarding when an individual's appeals rights are triggered in states which have delegated authority to make Medicaid eligibility determinations to the Exchange versus states in which the Exchange will make only an assessment of potential Medicaid eligibility. A few commenters requested clarification about whether a delegation of authority to conduct Medicaid fair hearings to a state-based Exchange would extend to an appeal to the HHS appeals entity. The commenters were concerned that appeals could not be coordinated at the HHS appeals entity, rendering meaningless any efforts to achieve coordination at the state level.
Response: States may choose to delegate authority to conduct Medicaid fair hearings for MAGI-based eligibility determinations to the Exchange operating in the state regardless of whether the Exchange is the FFE, the state-based Exchange or a partnership between the state and the FFE in accordance with the final rules at § 431.10(c) and (d). There is no difference in the delegation authority under the regulations, as proposed or as finalized, based on the type of Exchange. In accordance with such delegation, the Exchange or Exchange appeals entity may provide a fair hearing on Medicaid issues, but individuals must have the option to have their Medicaid fair hearing heard directly before the single state agency. As discussed below, states with state-based Exchanges that are state governmental agencies also have an additional way to coordinate appeals, beyond delegation under our rules, through a waiver granted under the Intergovernmental Cooperation Act. Under such a waiver, individuals would not have a right to have their Medicaid appeal heard by the single state agency.
In a state that has delegated authority to the Exchange to make Medicaid eligibility determinations based on MAGI, individuals have the right to request a fair hearing when the Exchange has determined the individual ineligible for Medicaid based on MAGI. Thus, the determination of ineligibility by the Exchange will trigger the individual's appeal rights. If the state has delegated authority to the Exchange to conduct fair hearings under these regulations, such an individual found ineligible for Medicaid by the Exchange could request a fair hearing at the Exchange or Exchange appeals entity so that there would be one integrated hearing conducting the Exchange-related and Medicaid appeals at the same time, or the individual may instead request his or her Medicaid issue be heard at the Medicaid agency. If, an individual who is found by the Exchange to be not eligible for Medicaid based on MAGI seeks a determination based on non-MAGI criteria, the individual's electronic account is transferred to the Medicaid agency for a full evaluation by the agency in accordance with § 155.345(b) or (c) of the March 2012 Exchange eligibility final rule. If the Medicaid agency still determines the individual ineligible, he or she would be able to appeal that decision using the Medicaid agency's fair hearing process.
In states in which the Exchange will make an assessment of Medicaid eligibility, and will not make final Medicaid eligibility determinations or denials, an assessment of ineligibility for Medicaid based on MAGI will not trigger Medicaid appeal rights. This is because an assessment is not a final Medicaid eligibility determination. As indicated in § 155.302(b)(4) of the March 2012 Exchange rule, as revised in this rulemaking, applicants assessed by the Exchange as not potentially eligible for Medicaid based on MAGI but as potentially eligible for Medicaid on another basis will be transferred to the Medicaid agency for a full Medicaid determination; for these applicants, Medicaid appeal rights will be triggered when the Medicaid agency makes a final eligibility determination. Under § 155.302(b)(4), applicants assessed as not potentially eligible for Medicaid on any basis will have a choice whether to withdraw their Medicaid application or obtain a full determination by the Medicaid agency. If the applicant withdraws his or her Medicaid application, a final determination or denial of Medicaid will not be made, and therefore no appeal rights arise at that point. (The applicant will have the ability to reinstate their Medicaid application in certain circumstances, discussed more fully below). When an applicant obtains a formal determination by the Medicaid agency, the Medicaid agency's determination will trigger appeal rights, if applicable.
Finally, if a state agency delegates authority to conduct MAGI-based eligibility appeals to an Exchange, including a state-based Exchange, in accordance with § 431.10(c) and (d) of this final rule, such a delegation would extend to any government agency adjudicating an Exchange appeal, including the HHS appeals entity. We note, however, that if a state delegates authority to conduct fair hearings through an ICA waiver to another state agency, including a state-based Exchange or state-based Exchange appeals entity, Medicaid decisions made by that entity could not be appealed to the HHS appeals entity. The ICA waiver is a waiver of single state agency requirements that permits alternative arrangements of state agency functions to another state agency. Once such an agency has issued a decision after a Medicaid fair hearing, that Medicaid decision would be the final decision of the Medicaid agency and thus no further right of appeal would be available to the individual. If the individual decided to appeal his or her advance payment of premium tax credit, cost-sharing reduction or Exchange eligibility decision to the HHS appeals entity, that entity would need to adhere to the Medicaid appeals entity decision under § 155.302(b)(5), as revised in this final rule, and § 155.345(h) which will prevent inconsistent decisions between the HHS appeals entity and the state-based Exchange or Exchange appeals entity.
Comment: Many commenters requested clarification on the scope of fair hearings that may be delegated from a Medicaid agency to an Exchange or Exchange appeals entity. Commenters specifically requested clarification regarding whether fair hearings of eligibility determinations on bases other than MAGI may be delegated to an Exchange or Exchange appeals entity, and whether findings other than MAGI-based income determinations may be delegated to an Exchange or Exchange appeals entity.
Response: The term “MAGI-based determinations” is used to refer to determinations in which financial eligibility is determined using the MAGI-based methods described in § 435.603 of the March 2012 final Medicaid eligibility rule. However, in accordance with § 435.911(c) of the March 2012 final Medicaid eligibility rule, a determination of eligibility based on MAGI also entails a determination that an individual meets the non-financial conditions of eligibility, including state residency and citizenship or satisfactory immigration status, and the denial of eligibility for an individual considered for coverage under a MAGI-based eligibility group may be based on failure to meet any of the financial or non-financial conditions of eligibility. A delegation of fair hearing authority under § 431.10(c)(1)(ii) to an Exchange or Exchange appeals entity regarding a denial of MAGI-based eligibility will need to address any or all of the bases of denial, just as a fair hearing conducted by the Medicaid agency would. We note that we have made some technical modifications to the regulation text at § 431.10(c)(1)(ii) to help clarify this point. As also noted in the preamble to the proposed rule, we remind states that while all appeals for an individual with a MAGI-based eligibility determination may be delegated to an Exchange or Exchange appeals entity under the regulation at § 431.10(c)(1)(ii), the FFE will only accept a delegation of appeals involving determinations rendered by the FFE.
The permissible scope of delegation under § 431.10(c)(1)(ii) to an Exchange or Exchange appeals entity is limited to appeals of MAGI-based eligibility determinations. Appeals related to denials of eligibility for individuals excepted from application of MAGI-based methodologies (for example, eligibility based on disability) may not be delegated under the regulation. As discussed above, states may delegate such appeals to another state agency, including a state-based Exchange, by requesting an ICA waiver.
Comment: One commenter asked whether there is a timeframe under which the individual must request a fair hearing before the Medicaid agency to effectuate the requirement under § 431.10(c)(1)(ii) that the state agency must provide an individual an option to have his or her Medicaid appeal conducted at the Medicaid agency when delegating authority to conduct fair hearings to an Exchange or Exchange appeals entity.
Response: An individual must be provided the opportunity to opt to have his or her Medicaid appeal adjudicated at a hearing conducted at the Medicaid agency, instead of having his or her appeal for both enrollment in a QHP and eligibility for APTC and CSR and eligibility for Medicaid addressed at an integrated hearing at the Exchange or Exchange appeals entity. Section 431.206(d) specifies that the individual must be informed of how to exercise this right. We note that we clarify our proposed regulation at § 431.206(d) to require that individuals must be informed of this option in writing. We are revising the regulation text at § 431.10(c)(1)(ii) to clarify that the request for a hearing before the Medicaid agency would need to be requested instead of the Exchange hearing. While we are not specifying a specific timeframe, we would expect that if an individual was opting for a hearing before the Medicaid agency, that request would be made at the time that the individual is requesting a hearing. Thus, we finalize these proposed regulations with these minor modifications.
Comment: Many commenters believed that delegation of fair hearing authority under the regulation should be permitted. Some of the commenters emphasized the need to permit delegation only in the simplest manner reducing burden to the consumer, and without any duplication of appeals processes. A few commenters suggested we permit delegation under the regulation only to an independent state agency employing Administrative Law Judges, and that delegation to any other state agency still require an ICA waiver to ensure transparency and opportunity for stakeholder input. A few commenters asked for clarification of the conditions and process required when requesting an ICA waiver. One commenter opposed delegation of authority to conduct fair hearings to any other state or Exchange entity stating that any delegation is duplicative, as state agencies still will be required to conduct Medicaid MAGI-based hearings.
Response: Under proposed § 431.10(c)(1)(ii), states would be able to delegate authority to conduct MAGI-based fair hearings to an Exchange or Exchange appeals entity, but to delegate Medicaid fair hearings to another state agency, states would need to request an ICA waiver. We sought comment on whether states also should be permitted to delegate authority to conduct fair hearings to another state agency under the regulation.
The purpose of the proposed rule is to promote coordination of appeals and simplification of the appeals process by permitting delegation of Medicaid appeals to the Exchange or Exchange appeals entity. Because coordination between insurance affordability programs is a key goal of the Affordable Care Act, we are finalizing, with minor modifications, the proposed regulations at § 431.10(c)(1)(ii) and at § 431.205(b)(1)(ii) to permit delegation of authority to conduct Medicaid fair hearings for denials of MAGI-based eligibility to the Exchange or Exchange appeals entity, including the FFE, state-based Exchange or HHS or state-based Exchange appeals entity, provided these entities are government agencies or public authorities that maintain personnel standards on a merit basis. After consideration of the comments, we have determined not to extend authority to delegate Medicaid fair hearings to state agencies other than a state-based Exchange or an Exchange appeals entity under the regulations because it is already allowed through an ICA waiver. We note that the main goal and justification for the delegation of fair hearings under the regulation is to achieve coordination across insurance affordability programs, something which would not be served by delegation to another state agency. Furthermore, Medicaid agencies already can delegate conduct of fair hearings to other state agencies through an ICA waiver, and there is nothing additional that states would be able to accomplish through delegation under the regulation as opposed to an ICA waiver. Indeed, the flexibility available to states under an ICA waiver is greater than that which is available under the regulation since delegation of fair hearings under an ICA waiver does not require that states provide individuals a right to opt for a hearing before the Medicaid agency, nor would the delegation be limited to MAGI-related appeals.
We have and will continue to apply similar conditions to the delegation of fair hearings under an ICA waiver as those we require under § 431.10(c) and (d). As explained in the proposed rule, an ICA waiver may be requested through a straightforward process using a state plan amendment (SPA), and CMS staff is available to provide technical assistance to states in completing that process. We note that our rules relating to hearing officers do not require that hearing officers be Administrative Law Judges or set any particular qualifications for hearing officers other than impartiality. States have flexibility to set such requirements in implementing fair hearings as they see appropriate. Thus, we do not set standards regarding the qualifications of hearing officers for states that delegate authority to conduct fair hearings or specify rules if the state agency employs Administrative Law Judges in this final rule.
Comment: One commenter expressed concern that the proposal to remove § 431.10(e)(2) and (e)(3) weakens the single state agency authority when delegating authority to conduct appeals to another agency. Other commenters supported the removal of those paragraphs because they are inconsistent with the goals of delegation of authority of appeals.
Response: We are finalizing our proposal to remove paragraphs § 431.10(e)(2) and (e)(3) as they are inconsistent with the option to delegate the authority to conduct fair hearings to an Exchange. We believe that the proposed language in § 431.10(e), which we are finalizing without modification, clearly provides that only the Medicaid agency may develop and issue rules and policy related to the Medicaid program.
Comment: Several commenters requested clarification of the kinds of conclusions of law that could be subject to review by the agency under § 431.10(c)(3)(iii). They also asked how the agency review process a state may establish to decisions made by an Exchange or Exchange appeals entity conducting Medicaid fair hearings under this provision relates to the “trumping rule” at § 155.302(b)(5), which provides that if an appeals decision rendered by the Exchange or Exchange appeals entity conflicts with a fair hearing decision concerning the same individual rendered by the Medicaid agency, the Exchange must adhere to the Medicaid fair hearing decision. A number of commenters supported the limitation of the agency review process to conclusions of law. One commenter requested that the option be extended to findings of fact. Others recommend that the option be eliminated altogether. These commenters discussed that any review by the state agency of a hearing officer's legal or factual conclusions would violate the due process protections afforded under Goldberg v. Kelly to have the appeal decided by a neutral arbiter. One commenter suggested that the regulation at § 431.10(c) specify the timeframe in which the Exchange or Exchange appeals entity be required to issue a decision for the state agency to complete its review within the time limits set forth in § 431.244.
Response: We are finalizing this provision as proposed with minor revisions to clarify the scope of the review process. We note the provision at § 431.10(c)(3)(iii) is a state option for Medicaid agencies to establish a process that permits a limited review of the decisions made by the Exchange or Exchange appeals entity to ensure Medicaid fair hearings are made with the proper application of federal and state Medicaid law and regulations, including subregulatory guidance and written interpretive policies. The proposed regulation text is being revised to clarify the scope of what the agency may review would be limited to the legal conclusions made during the fair hearing to ensure that they appropriately apply federal and state Medicaid law and regulations, including subregulatory guidance and written interpretive policies properly and that the review process be conducted by an impartial official who was not directly involved in the initial determination.
By way of example, suppose that the Exchange hearing officer finds that an individual has $800 in wages and $200 in child support income each month and, based on these amounts, concludes that the individual's MAGI-based household income is $1,000 per month. Suppose also that the applicable income standard for the applicable household size for this individual is $900 per month, and that the hearing officer upholds the initial denial of eligibility. The findings of $800 in wages and $200 of child support per month would be factual findings, which the Medicaid agency could not review under the option provided at § 431.10(c)(3)(iii). However, the hearing officer's inclusion of the wages and child support income in total MAGI-based household income involves an application of MAGI-based methodologies, described in § 435.603 of the March 2012 Medicaid eligibility final rule, as implemented by the state, which would be reviewable as a conclusion of law. In this case, the inclusion of wages would be correct, but the inclusion of child support income would be incorrect, and the agency upon finding such an erroneous application of state or federal rules could reverse the hearing officer's decision to conclude that, based on household income of $800, the individual is Medicaid eligible.
Because of the important role that an impartial hearing officer plays in evaluating evidence and weighing credibility in making findings of fact, we are not extending the option at § 431.10(c)(3)(iii) to include agency review of findings of fact. We note that fair hearings conducted under a delegation of authority in accordance with § 431.10(c)(1)(ii) must be conducted in accordance with § 431.10(d)(1), which requires that the delegation agreement between the agency and the Exchange or Exchange appeals entity must set forth the responsibilities of each party to effectuate the provisions of part 431 subpart E of the regulations. Section 431.205(d) provides that the fair hearing process under subpart E must meet the due process standards set forth in Goldberg v. Kelly, 397 U.S. 254 (1970), which requires that any review process be conducted by an impartial official, and be based solely on the information and evidence in the record. We have made a minor modification to § 431.205(b)(1)(ii) to clarify that the hearing process provided through delegation of authority to conduct a fair hearing to an Exchange or Exchange appeals entity would include the review by the agency of the Exchange or Exchange appeal entity's application of federal and state Medicaid law and regulations, if such review is elected by the state under § 431.10(c)(3)(iii) and conducted by an impartial official who was not directly involved in the initial determination. We note also that the state's election under § 435.10(c)(3)(iii) to conduct this limited review does not create a right for the individual to request or receive a de novo hearing before the agency.
The review process that can be established under § 431.10(c)(3)(iii) functions completely independently from the “trumping rule” at § 155.302(b)(5) of the Exchange proposed rule. The former comes into play when an individual's fair hearing has been delegated to, and is heard by, the Exchange or Exchange appeals entity. The “trumping rule” at § 155.302(b)(5) as modified by this rulemaking and at § 155.345(h) is invoked when the Medicaid agency has conducted the Medicaid fair hearing relating to the appeal of a denial of Medicaid eligibility and the Exchange or Exchange appeals entity also has conducted a hearing related to an appeal of an award of advance payments of premium tax credits. Similar to the “trumping rule” at § 155.302(b)(5) of the March 2012 Exchange final rule relating to initial eligibility determinations, if the Medicaid agency's fair hearing decision conflicts with the Exchange appeals decision, the Exchange must adhere to the Medicaid agency or fair hearing decision for Medicaid eligibility under § 155.302(b)(5) and § 155.345(h).
Finally, we do not believe it is necessary to require in the Medicaid regulations specified timeframes within which an Exchange, in conducting a delegated fair hearing, must transmit a decision to the Medicaid agency. Instead, as part of the agreement required under § 431.10(d), in delegating the fair hearing authority to the Exchange or Exchange appeals entity, the parties will need to stipulate each party's responsibilities to ensure that the time frames established under § 431.244(f) are met.
Comment: One commenter sought clarification of whether the review process of appeal decisions made by the Exchange which the commenter expressed as “required” at § 431.10(c)(3)(iii) is considered in the agency's quality assurance Payment Error Rate Measurement (PERM) sampling.
Response: The regulation at § 431.10(c)(3)(iii) does not set a requirement, but provides states an option to establish a review process of appeal decisions as a part of its oversight of the delegation of authority to conduct fair hearings to an Exchange or Exchange appeals entity. We note the agency has other means to oversee its delegation of authority to conduct hearings. Implications for PERM are beyond the scope of this regulation; we intend to issue additional guidance on PERM.
Comment: Many commenters supported the reinstatement of an individual's Medicaid application at § 435.907(h) when the individual had withdrawn his or her application after an assessment of Medicaid ineligibility by the Exchange, appealed the level of APTC and CSR awarded by the Exchange, and the Exchange or Exchange appeals entity reversed the initial assessment and found the individual to be potentially eligible for Medicaid. A few commenters sought clarification regarding the retroactive nature of the reinstatement effective as of the date the individual submitted the application to the Exchange. Another commenter asked how this provision relates to the timeliness requirements for Medicaid agencies to process an application under § 435.912 of the March 2012 Medicaid eligibility final rule. A few commenters raised a concern that if an Exchange appeals entity hearing officer upholds the finding of eligibility for advance payment for premium tax credit, the reinstatement would not take effect. These commenters recommended that the Medicaid application be reinstated whenever an individual files an appeal with the Exchange or Exchange appeals entity to capture a broader set of individuals who may be eligible for Medicaid or CHIP.
Response: We appreciate the support for the provision at § 435.907(h) to reinstate the Medicaid application of an individual who has withdrawn his or her Medicaid application upon initial assessment of Medicaid ineligibility by the Exchange, but who is subsequently assessed as potentially Medicaid eligible following an appeal related to an award of advance payments of the premium tax credits or cost sharing reductions. We are finalizing this provision as proposed, except to clarify that the 45-day or 90-day timeliness standards do not apply to these reinstated applications. By the time the Exchange appeal decision is rendered, 45 or 90 days from the date of application may already have elapsed, making compliance by the Medicaid agency unrealistic. Instead we clarify that the timeliness standards required under § 435.912 of the March 2012 Medicaid eligibility final rule apply based on the date the application is reinstated. However, we note that the 45 and 90 days prescribed in the regulation represent the outer limit for all applications. In the case of a reinstated application which has been the subject of an Exchange appeal, we would expect that the individual's electronic account would be comprehensive, and that considerably less time would be needed for the Medicaid agency to act on the case. We would expect states to take this into account in establishing timeliness standards for prompt determinations on reinstated applications under § 435.911(c) and § 435.912 of the March 2012 Medicaid eligibility final rule. The reinstated application must be made effective retroactive to the date the individual submitted his or her application to the Exchange (not the date the application is reinstated) to protect the effective date of coverage required under § 435.914 of the current regulations (redesignated at § 435.915 in the March 2012 Medicaid eligibility final rule). We also proposed a similar application reinstatement provision for CHIP at § 457.340(a), which we are finalizing as proposed with a minor modification to remove the reference to § 435.909 which was inadvertently inserted in the proposed rule and has no relationship to CHIP. We note that states also will need to develop reasonable timeliness standards for such reinstated applications in accordance with § 457.340(d) of the March 2012 Medicaid eligibility final rule.
We have not modified the proposed regulation text to reinstate the Medicaid or CHIP application of every individual who has withdrawn his or her Medicaid or CHIP application in accordance with § 155.302(b)(4) of the March 2012 Exchange final eligibility rule and who then subsequently appeals the determination of eligibility for advance payments of the premium tax credits or cost-sharing reductions at § 435.907(h) and § 457.340(a). We believe that the interests of individuals filing an Exchange appeal who should have been assessed as potentially Medicaid eligible by the Exchange, but who nonetheless withdrew their Medicaid application following the Exchange's assessment, will be protected through the Exchange appeals process because the Medicaid application for those assessed potentially Medicaid eligible will be reinstated, and their account transferred to the Medicaid agency for a full determination. On the other hand, to reinstate the Medicaid application of every applicant for whom the Exchange appeals processes ultimately confirms the initial assessment of Medicaid ineligibility made by the Exchange—regardless of how high above the Medicaid income standard the individual's income may be—would create confusion for individuals and impose, we believe, unnecessary administrative burden on state Medicaid agencies. We expect to work closely with Exchanges to ensure accurate assessments of Medicaid and CHIP eligibility in accordance with federal regulations.
Comment: One commenter sought clarification of when Medicaid agencies will have to decide whether or not to delegate eligibility determinations or fair hearings to the Exchange, and whether there will be additional requirements if the agency chooses not to delegate such responsibility.
Response: There is no deadline to elect to delegate eligibility determinations or appeals to an Exchange or Exchange appeals entity. As discussed in section II.A.6. of preamble, the regulation permitting delegation of eligibility and fair hearings goes into effect on October 1, 2013. Once a state decides to delegate authority to conduct eligibility or appeals, it must indicate such an election through the state plan, establish a written agreement with the Exchange or Exchange appeals entity, and otherwise comply with the provisions set forth in the regulation. A state may revoke its delegation at a later time through the same process. Whether or not a state chooses to delegate authority, it must comply with the provisions of § 435.1200, § 457.348 and § 457.350, issued in the March 2012 Medicaid eligibility final rule, to ensure coordination across all insurance affordability programs and a seamless consumer experience. We proposed revisions to these provisions in the January 2013 proposed rule to address the agencies' responsibilities to coordinate notices and appeals, but are not finalizing them in this final rule.
Comment: One commenter questioned whether a state might be able to obtain the enhanced matching funds for systems enhancement at a 90/10 match for enhancement of their appeals systems. Another commenter asked for clarification as to whether federal financial participation (FFP) would be available for appeals delegated to an Exchange.
Response: The enhanced FFP match rate of 90/10 for the design, development, and installation of eligibility systems is available only for components of the Medicaid Management Information System (MMIS), including eligibility and enrollment systems through the end of 2015, subject to meeting the seven conditions and standards outlined in the April 19, 2011 final rule at 74 FR 21950. A 75/25 match rate is available for operations and maintenance of these systems. Appeals systems do not qualify for enhanced funding under these rules. Instead, FFP at a 50/50 rate is available. For more details on 75/25 match rate discussion, see http://www.medicaid.gov/State-Resource-Center/FAQ-Medicaid-and-CHIP-Affordable-Care-Act-ACA-Implementation/Downloads/Affordable-Care-Act_-Newest-Version.pdf. The availability of FFP and responsibility for funding subject to cost allocation rules applies to administration of fair hearings in the same manner as any other context and is not affected by the state's delegation decision.
Comment: A few commenters suggested that we revise § 431.240 to require that hearing officers who adjudicate Medicaid fair hearings abide by specific ethical standards, either the National Association of Hearing Officials' Model Code of Ethics or the National Association of Administrative Law Judiciary's Model Code of Judicial Conduct for State Administrative Law Judges. We did not receive any comments related to our proposed modification of § 431.240 related to access to information.
Response: As discussed above, existing regulation at § 431.240 require hearing officers to be impartial. Additionally, existing regulations at § 431.205 require hearing systems to comport with due process standards of Goldberg v. Kelly, 397 U.S. 254 (1970). Current regulations do not require hearing officers to belong to a particular profession, and we did not propose to modify this policy in the proposed rule. Therefore, we are not making any changes to § 431.240 in response to this comment. However, as noted above, we are addressing this comment, in part, by including that an impartial decision-maker must be used if a state is electing to establish a review process of legal conclusions made by hearing officers operating under delegated fair hearing authority. We also encourage states to examine this issue further and to ensure that the requirement to utilize impartial hearing officers at § 431.240 are adhered to when conducting fair hearings. We finalize § 431.240(c) without modification.
Current notice regulations require paper-based, written notices. To establish a more timely and effective notification process, proposed § 435.918 would direct states to provide individuals with the option to receive notices through a secure, electronic format in lieu of written notice by regular mail. Consumer safeguards were proposed to ensure that individuals make a conscious choice to receive notices in electronic format, and would be able to opt-in and opt-out of their election. We solicited comments regarding the proposed consumer safeguards. In addition, we requested comments on whether other types of communications, in addition to eligibility notices, should be offered in electronic format. We are finalizing § 431.206(e), to permit beneficiaries to receive notices regarding fair hearings electronically, consistent with proposed § 435.918. We note that we are not addressing in this final rule comments related to accessibility of fair hearing notices. We will consider these comments and this portion of § 431.206(e) when we finalize our rules related to accessibility for individuals who are limited English proficient and individuals with disabilities in a future rulemaking. We also proposed modifications to §§ 431.211, 431.213, 431.230, and 431.231 to update and modernize the language in the regulation to remove the term “mail” and instead use “send,” to reflect the option for beneficiaries to receive notices electronically, consistent with the consumer protections in proposed § 435.918. We proposed in § 457.110(a)(1) the same consumer option and protections for electronic notices in CHIP, and we are making technical changes in the final rule to better align the provisions. A modification was also proposed to paragraph (a) in § 457.110 regarding the accessibility of information for individuals who are limited English proficient and individuals with disabilities. However, we will finalize this provision in future rulemaking.
We received many comments regarding the requirement to provide individuals with the option to receive notices electronically, the majority of which supported this option as an important part of modernizing the notification process provided that strong consumer protections are in place.
Comment: We received many comments regarding proposed § 435.918(a)(1), which would require the agency to confirm by regular mail the individual's election to receive notices electronically. Some commenters recommended, instead, allowing electronic confirmation for individuals applying on-line. One commenter suggested that in states with a FFE, the FFE should be responsible for issuing all mailed confirmations. Also, several commenters were concerned that the proposed written confirmation actually required individuals to choose receipt of electronic notices twice, and that this would be confusing and burdensome for the agency and these consumers. Many other commenters encouraged CMS to maintain the requirement to confirm an individual's election through regular mail to ensure that individuals have made an informed decision, and to provide them with an opportunity to change their election. One commenter suggested that the mailed confirmation include a list of the types of notices that the agency will send in electronic format.
Response: Proposed section § 435.918(a)(1), redesignated § 435.918(b)(1) in our final rule, requires the agency to send, via regular mail, written confirmation that an individual has elected to receive electronic notices and that forthcoming notices will be delivered electronically. This communication must also instruct the individual on how to change this election if the individual made the initial choice inadvertently or wishes to change his or her mind. The purpose of the mailed communication is to affirm the individual's choice and allow the individual an early opportunity to opt-out of receiving notices in electronic format. The individual does not have to respond to this written notice to complete his or her election to receive electronic notices; he or she need only respond if he or she wanted to change the initial election. Therefore, there will not be any need for individuals to request electronic notices twice, as some commenters thought. We are clarifying at § 435.918(b)(1) of the final regulation that it is the agency's responsibility to ensure that the individual's election to receive notices electronically is confirmed by regular mail, since the individual will receive all future communication from the Medicaid agency including information on how to establish an electronic account with the state, if he or she has not already done so. If a different arrangement makes more sense in a given state, the Medicaid agency and Exchange can delegate this responsibility to the other agency in the agreement entered into under § 435.1200(b)(3). We are not requiring that this communication specify which types of notices will be delivered in electronic format, but suggest that states take this under consideration as it would enable individuals to better anticipate the type of notices that will be posted to an electronic account. We anticipate, based on one state's experience piloting electronic notices, few individuals will revert back to paper notices. However, given that electronic notification will be a new approach for many individuals, we believe this is an important consumer protection to ensure that individuals make a deliberate choice regarding the format in which they receive information. In future years, when electronic notices are more prevalent, we will revisit whether written confirmation of the individuals choice to receive notices in electronic format is still a relevant consumer protection.
Comment: Several commenters requested that electronic notices be the default method for notice delivery such that if an individual fails to indicate whether he or she prefers an electronic or paper format for notices, notices would automatically be provided electronically. One commenter suggested that electronic notices should be the default for specific populations, such as those individuals determined eligible through an Exchange Web site.
Response: We maintain that electronic notices should be provided only if the individual affirmatively opts for such notices. The default approach makes an assumption that the individual has the technology to regularly retrieve notices posted to his or her electronic account. Even if an individual applies through an Exchange Web site, the individual may not have regular access to technology to enable ongoing retrieval of electronic notices. Consequently, we do not believe this change is appropriate at this time as it could pose a barrier to applicants and beneficiaries with limited access to technology.
Comment: Several commenters recommended that Medicaid and CHIP eligibility notices be provided in both electronic and in paper format until an individual indicates in writing that they no longer wish to receive such notices by regular mail. Some commenters also recommended that all notices regarding adverse actions always be sent in paper format via regular mail to allow for additional protection against delivery error. One commenter recommended that hearing scheduling notices should always be sent via regular mail to ensure adequate hearing slot availability.
Response: We are concerned that requiring agencies to provide dual electronic and paper notices may pose an administrative burden for some states. While we require that agencies provide individuals with a choice to receive notices in electronic format in lieu of paper format, at state option, all notices or a subset of notices, such as those relating to adverse actions, could be provided in dual formats. We appreciate the concern expressed for ensuring consumer protections against delivery error. In § 435.918(a)(4), the agency is required to send an email or other electronic communication alerting the individual that a notice has been posted to his or her account. To guard against delivery error, if the required alert is returned as undeliverable, the agency must send such notice by regular mail within three business days of the date of the failed electronic communication. This requirement has been further clarified by a revision to § 435.918(a)(5). We believe that electronic notices are likely to increase receipt of important eligibility information, as individuals will have greater flexibility to access notices regardless of changes to their postal address.
Comment: We received a few comments that recommended we amend § 435.918 to include specific language noting the importance of ensuring that the notice must be accessible to persons who are limited English proficient and individuals with disabilities.
Response: We agree that all eligibility notices must be accessible to persons who are limited English proficient and individuals with disabilities, and we will be addressing such rules in future rulemaking.
Comment: One commenter requested clarification on what constitutes an “undeliverable” communication in § 435.918(a)(5).
Response:“Non-delivery reports” are system messages that report the delivery status to the sender. We expect that if the agency receives a non-delivery report, this constitutes an undeliverable communication.
Comment: One commenter requested clarification regarding how to date a paper version of an electronic notice. When an electronic communication is undeliverable, indicating an individual may not be aware of an electronic notice posted to his or her account, § 435.918(a)(5) requires that the agency send a paper version of the electronic notice within three business days. The commenter, noting the ability to send the paper version of the electronic notice within 24 hours, supported maintaining the same date on both notices.
Response: It is important for the date of the paper notice to reflect the date it is sent, not the date of the undelivered electronic notice. We anticipate that while some states may be able to issue a paper version of the electronic notice within 24 hours, other states may take up to the required limit of 3 days. Individuals are given a limited time to take action, such as requesting a date for a hearing, and this is based on the date the notice is sent to the individual.
Comment: One commenter requested clarification as to whether agencies are required to monitor an individual's account to determine if a notice was accessed.
Response: We are not requiring that agencies monitor accounts to determine whether notices are accessed. If the electronic alert is not undeliverable, the agency should assume an individual is able to access his or her notice.
Comment: One commenter recommended that we include a requirement that allows the agency to limit the number of times an individual can request that an electronic notice be provided in paper format.
Response: We believe that it is an important consumer protection to allow individuals to request notices in a paper format. Some individuals may not have the technology available to readily print notices from an electronic account.
Comment: A number of commenters supported offering additional types of communications through an electronic format. In addition to eligibility notices and information specified in subpart E of part 431, there are other communications that occur between an individual and the Medicaid or CHIP agency. Some of these communications include requests for additional information, annual renewal forms and reminders, premium payment information, and information on covered services.
Response: We do not believe it is necessary to amend § 435.918(a) to include other types of communications. In § 435.918(a), we specify that eligibility notices and information in part 435, and notices and information required under subpart E of part 431, be provided in electronic format. For example, information on covered services must be available electronically in addition to paper format, as required by § 435.905(a). Annual renewal forms must also be offered in electronic format in accordance with § 435.916. We do not think it is appropriate or operationally feasible to require other types of communications to be provided electronically. We encourage states with the capacity to provide additional communications electronically, and with beneficiaries preferring that mode of communication, to do so, as long as in compliance with any existing regulations that govern the type of communication.
Comment: One commenter asked whether proposed § 435.918(b), which asserts that the agency may only provide electronic notices if the individual elected to receive electronic notices and must be permitted to change such election at any time, is duplicative of paragraph § 435.918(a).
Response: We agree with the commenter, and the provision has been amended by removing redundant language in § 435.918(b)(1) and § 435.918(b)(2).
Comment: A number of commenters requested a later effective date for implementing electronic notices.
Response: We recognize that states are at different places in the development of their eligibility and enrollment systems, and that the technology needs to be in place to offer beneficiaries and applicants the option to receive notices electronically. We have amended § 435.918(a) to delay the requirement to provide notices electronically until January 1, 2015, but permit states to implement October 1, 2013 if their systems are ready.
Comment: One commenter suggested that we clarify whether “send” in § 431.230 means send by mail or in electronic format consistent with § 435.918.
Response: Under proposed § 431.206(e), all information required under subpart E of part 431 must be provided in electronic format in accordance with § 435.918, if an individual elects to receive such information in electronic format. To further clarify, we have added to § 431.201, that the definition of “send” means deliver by mail or in electronic format consistent with § 435.918.
Comment: One commenter requested clarification regarding § 431.231(c)(2), which provides beneficiaries 10 days to request a hearing from receipt of the notice of action. The date on which the notice is received is considered to be 5 days after the date on the notice, unless the beneficiary shows that he or she did not receive the notice within the 5-day period. The commenter specifically requested clarification regarding how an individual might show proof that they did not receive an electronic notice within the 5-day time period.
Response: We understand the concern expressed by the commenter, but do not believe that this issue is specific to the receipt of electronic notices, but receipt of notices in general. It is challenging for an individual to provide proof of a negative, however, it is important to provide individuals with the opportunity to demonstrate that they did not receive notices. One example of how an individual might demonstrate that he did not receive an electronic eligibility notice is by providing documentation that he closed the email account on record with the agency. If an individual cannot receive the emailed alert that a notice is posted to the electronic account, the individual is not in receipt of the notice.
Comment: A few commenters requested that we define whether the “5 days” § 431.231(c)(2) refers to calendar days or business days.
Response: We are not defining whether the “5 days” refers to calendar days or business days, but allow states the flexibility to define this in their operating procedures.
For individuals whose electronic account is transferred to the Medicaid agency for a determination of eligibility from another insurance affordability program, § 435.1200(d)(6) of the March 2012 Medicaid eligibility final rule directs that the Medicaid agency notify such other program of its final determination of eligibility or ineligibility only for individuals who have enrolled in the other program pending completion of the agency's final determination. We proposed to redesignate and modify this requirement at § 435.1200(d)(5) to require that the Medicaid agency notify the other program of the final determination of Medicaid eligibility or ineligibility for all individuals whose electronic account was transferred from another insurance affordability program. The same requirement was proposed for CHIP at § 457.348(d)(5). No comments were received regarding these specific provisions. We also proposed a number of other changes to § 435.1200 and § 457.348 relating to coordination of notices and appeals. In this final rule, we are codifying § 435.1200(d)(5) of the proposed rule at paragraph § 435.1200(d)(6). Other proposed changes to § 435.1200 of the March 2012 Medicaid final eligibility rule, including the redesignation of paragraph (d)(6), as appropriate, will be addressed in subsequent rulemaking. We are also finalizing proposed § 457.348(d)(5) as § 457.348(c)(6), but other proposed changes to § 457.348 will be addressed in subsequent rulemaking.
Many state Medicaid and CHIP agencies have a long history of supporting providers and other organizations to assist individuals in applying for and maintaining coverage. Commonly referred to as “application assisters” and referred to in this rulemaking as “certified application counselors,” these organizations and individuals provide direct assistance to individuals seeking coverage, and can play a key role in promoting enrollment among low-income individuals. The proposed regulations at § 435.908(c) sought to ensure that certified application counselors, whom we expect to continue to play an important role in facilitating enrollment in the expanded coverage options available under the Affordable Care Act, will have the training and skills necessary to provide reliable, effective assistance to consumers. We proposed basic standards for states to certify application counselors, which we believe are consistent with the practice in many states today. These standards include proposed procedures to ensure that these trained certified application counselors have clear authority to access and protect confidential information about individuals they serve, and with that authority have a special relationship with the Medicaid agency that enables the counselors to track and monitor applications. The proposed regulations at § 435.908(c), as finalized in this rulemaking, are applicable to CHIP, as well under § 457.340(a) of the March 2012 Medicaid eligibility final rule; no revisions are needed or made to § 457.340(a). We received the following comments concerning the proposed certified application counselor provisions:
Comment: We received a few comments expressing support for the proposed requirement that states have a designated web portal for use by certified application counselors that has a secure mechanism for granting rights for only those activities the certified application counselor is certified to perform. Commenters stated that such a portal will increase the proportion of applications that are submitted electronically, thereby providing more applicants with access to electronic verification and real-time eligibility while increasing the state's administrative efficiency. Other commenters also recommended a clarification that states may use the same portal for Navigators and non-Navigator assistance personnel authorized under 45 CFR 155.205(d) and (e) with proper assignment of rights and functionality.
Response: We appreciate the support for the establishment of a designated web portal for use only by properly trained and certified application counselors. However, given the systems challenges states face in preparing for the initial open enrollment period and starting up the new system of insurance affordability programs, we are concerned that requiring such a portal could disrupt well-functioning application counselor programs that exist today. Therefore, while we encourage states to consider such portals as an effective vehicle for administering and overseeing certified application counselor programs, we are removing from the final rule the requirement that such portals be established as proposed at § 435.908(c)(3)(i). Although not required, states may elect to develop these portals to support the work of certified application counselors.
Comment: One commenter requested that we issue guidance on the availability of federal funding to help support grants or payments to certified application counselors—in particular information about how Medicaid administrative claiming can be used to match community-based investments in application assistance.
Response: FFP is available for state expenditures to certify and support certified application counselors, but, since community-based application counselors are not state or local employees, FFP is not available for salaries or other direct costs of certified application counselors.
Comment: Many commenters requested that we require that certified application counselors be trained to provide culturally and linguistically competent services. They believed that it is not sufficient to remind Medicaid and CHIP agencies of their responsibility to ensure access to individuals with limited English proficiency and those living with disabilities, and urged us to provide states with specific guidance and examples of how to fulfill this responsibility. Some commenters recommended that to be certified, application counselors must be trained in providing culturally and linguistically appropriate services. Some commenters recommended that we require training for application counselors include accommodating the health care needs of specific populations, such as children.
Response: Consistent with title VI of the Civil Rights Act of 1964, the Americans with Disabilities Act, and other civil rights laws, state Medicaid and CHIP agencies must ensure that their programs are accessible to individuals with limited English proficiency and individuals with disabilities. This responsibility is codified, in part, at § 435.905(b), § 435.907(g), § 435.908(a), and § 457.330 (incorporating by reference the requirements of § 435.907) of the March 2012 Medicaid eligibility final rule, and is also contained in non-Medicaid specific regulations implementing the Americans with Disabilities Act and other civil rights laws. Note that clarifying changes were proposed in the January 2013 proposed rule to the accessibility standard in § 435.905(b); those proposed changes are not addressed in this final rule, but we intend to address them in subsequent rulemaking. State agencies can use certified application counselors as a tool in meeting their responsibilities to make their programs accessible to individuals with limited English proficiency and individuals with disabilities. But, while some organizations providing application assistance to individuals applying for coverage under an insurance affordability program may be subject to civil rights laws independent of the fact that they are serving as a certified application assistor (for example, as a condition of accepting federal funding), we do not believe it appropriate to hold them responsible for meeting the accessibility standards established for state Medicaid and CHIP agencies under our regulations.
Moreover, to require a community organization or provider with a mission to provide targeted assistance to one segment of the population to also be able to provide assistance to all others, would threaten the participation of valuable state partners in maximizing enrollment across the state's entire population.
Comment: Some commenters supported the option provided to states to certify application counselors. These commenters pointed to existing programs in which states work with community organizations to expand enrollment, and that state flexibility to continue current, successful programs is important. Other commenters recommended that certification of application counselors be required for all Medicaid and CHIP agencies. These commenters discussed that there will be organizations providing application assistance in every state, that these organizations need to be trained, and that consumers need to know who is available to provide competent assistance.
Response: We agree that a network of application counselors can be a valuable asset and can support states' outreach and enrollment efforts. We urge all states to consider working with interested organizations and providers in creating an application counselor program. However, we believe states are best able to determine the need for such a program, and we do not believe it is necessary to require that state Medicaid programs create such programs.
Comment: We received a number of comments on certified application counselors and requirements related to conflicts of interest. Some commenters stated that in addition to receiving training on conflict of interests, certified application counselors should be contractually required to serve in the best interests of clients and to disclose any existing relationships with qualified health plans or insurance affordability programs to consumers. Some commenters recommended that health insurance issuers, their subsidiaries and licensed insurance brokers and agents be explicitly excluded from being certified as certified application counselors given their inherent financial conflict of interest.
Response: We are clarifying the language in § 435.908(c)(1)(iii) to make clear that certified application counselors must adhere to all rules prohibiting conflicts of interest. States may not certify any organization or individual who does not meet this standard, or who may be motivated to act in a manner contrary to best interest of the individual being helped. Thus, any organization that the state finds to have an inherent conflict could not, under the proposed regulation, be certified as an application counselor. We do not believe it necessary or appropriate to identify specific types of organizations as categorically barred from serving as application counselors and are finalizing this regulation as proposed.
Comment: A few commenters requested that we require states to maintain a current list of certified application counselors on the agency Web site, and the list should include any limitations on services that they are certified to provide. Commenters suggested that it will be important for consumers to not only be informed of the functions and responsibilities of certified application assisters, as required in § 435.908(c)(3)(i), but to also know who is certified and whether there are any limitations on the services each certified application counselor is certified to provide.
Response: We encourage states to adopt the practice recommended by the commenter, as an effective mechanism to connect consumers with needed assistance. However, utilization of certified application counselors is at state option, and while we believe such a mechanism will enhance consumers' ability to identify resources available to help with applications we do not think it appropriate to require states to post a current list of counselors on their Web site. We note that such a requirement could deter some states from creating or expanding their application counselor program if they do not have the resources to create and maintain such a list.
Comment: A commenter asked CMS to clarify that states can meet their outstationing requirements under § 435.904 with application counselors at the appropriate locations. They suggested that given the overlap of functions described it would seem inefficient to maintain separate systems of assistance.
Response: States may be able to use certified application counselors to help meet the outstationing requirements set forth in current regulations at § 435.904, under which state Medicaid agencies are required to provide pregnant women and children an opportunity to apply for coverage at designated “outstation locations.” Section 435.904(e) requires that, except for outstation locations that are infrequently used by the pregnant women and children targeted under the regulation, the state agency must have staff available at each outstation location. Under paragraph (e)(3) of that section, properly trained provider or contractor staff or volunteers—which could include organizations, staff and volunteers certified as application counselors—may be used in lieu of, or as a supplement to, agency staff to meet this requirement, subject to certain conditions set forth in the regulation.
Comment: Commenters asked for clarification on the overlap of functions and certification requirements between certified application counselors in Medicaid and application counselors as proposed for the Exchange at § 155.225.
Response: Although the exact language of the Exchange application counselor regulation at proposed 45 CFR 155.225 (which is not being finalized in this rulemaking) and that of the Medicaid regulation at § 435.908(c) differ, the policies reflected are consistent. The main substantive difference is that the Exchange regulation at proposed 45 CFR 155.225 would not permit certified application counselors to limit the activities that they agree to perform, but instead would require them to perform all assistance activities identified in the regulation, whereas states can permit Medicaid and CHIP application counselors to elect to limit the activities which they will perform for applicants.
As noted in the preamble to the proposed rule, we remind the commenters that state Medicaid and CHIP agencies and the Exchange are charged under § 435.1200 and § 457.348 of the Medicaid eligibility final rule and proposed § 155.345 of the Exchange rule to enter into agreements with each other to create a seamless and coordinated application and enrollment process across all insurance affordability programs, and the state agencies and the Exchange should consider such coordination in developing their application counselor programs. States could elect, for example, to create a single certification process for all insurance affordability programs, or each program could accept application counselors certified by another program. To the extent to which an application counselor is certified by one program but not the other, the counselor would assist the individual in submitting the single streamlined application for all insurance affordability programs to the entity by which they are certified. It is important to note that regardless of the entity to which the application counselor submits the application, the application will be evaluated for eligibility in QHPs and all insurance affordability programs.
Comment: One commenter requested more information about the development and review of training materials for certified application counselors. This commenter stated that although the regulations provide that any individual providing customer service must be trained in a host of areas related to the insurance affordability programs, no specificity is provided about the development and review of the materials, and they requested clarification on whether states will have the opportunity to review and comment on materials prior to their use. We also received comments that recommended we require certified application counselors to apply for recertification annually or biannually to ensure that they are qualified and up to date on changes in policy and procedures.
Response: Under § 435.908(c)(1)(ii) and (iii), states must ensure that application counselors are properly trained prior to certification, and we expect states will need to develop training and any training materials to be used to satisfy this requirement. We note that materials will be developed by HHS for use by certified application counselors registered with an FFE, including State Partnership Exchanges, and state Medicaid and CHIP agencies may adapt such materials to support their training efforts. FFP is available for costs to the state of conducting training or testing of certified application counselors, including any costs to the state for preparation and assembly of training materials. Being effectively trained in the rules and regulations of the different insurance affordability programs in accordance with § 435.908(c)(1)(ii) necessarily requires keeping abreast of any pertinent changes in those rules, and under these regulations states will need to ensure that application counselors are kept up-to-date. However, there are different ways to accomplish this goal—annual or periodic recertification is one-way, refresher trainings or written communications may be another—and we believe states should have flexibility in determining the process that best works in each state.
Comment: A few commenters recommended that applicants and enrollees be able to opt to designate their certified application counselor to receive copies of notices, or to access electronic notices in the client account.
Response: As discussed in the preamble of the proposed rule, the certified application counselor program is not designed to provide the level of personal assistance to applicants and beneficiaries that is provided by an authorized representative, discussed in the next section in the preamble. However, there is nothing to prevent an applicant or beneficiary from designating a certified application counselor to also serve as his or her authorized representative, and for such counselor to assume that function, in accordance with § 435.923, as finalized in this rulemaking.
Comment: One commenter suggested that regulations governing application assistance are not necessary. The commenter believed that, absent any evidence that application counselors currently working in states to help individuals apply for Medicaid do not have the training and skills necessary to provide reliable, effective assistance to consumers, or would not meet confidentiality requirements, there is no reason to regulate state practices in this area.
Response: We recognize the successful development of application assistor, or application counselor, programs by many states without the existence of federal regulations, and have aimed to develop regulations that will not disrupt existing, successful programs and practice. However, given the significant changes to the availability of and access to affordable health coverage created under the Affordable Care Act—including the advent of coverage in a QHP through the Exchange, with premium tax credits and cost sharing reductions available to qualifying individuals, the coordinated eligibility and enrollment process required across all insurance affordability programs, and the expansion in use of online applications, with the possibility confidential information being returned to consumers in real time through an electronic interface—we believe that establishment of baseline federal standards, to be applied consistently across states and programs, is important to safeguarding consumer interests and ensuring the integrity of the assistance provided.
We proposed regulations intended to be consistent with current state policy and practice, regarding the definition, designation, and responsibilities of “authorized representatives” to act on behalf of applicants and beneficiaries in applying for and maintaining coverage. Authorized representatives have historically provided valuable support to individuals needing help navigating the application and enrollment process, as well as ongoing communications with the agency, particularly to seniors and individuals with disabilities, and we expect their role to continue. We proposed to define the term “authorized representative” as an individual or organization that acts responsibly on behalf of an applicant or beneficiary in assisting with the individual's application and renewal of eligibility and other ongoing communications with the Medicaid or CHIP agency. Under current regulations at § 435.907, retained in the March 2012 Medicaid eligibility final rule, states must accept applications from authorized representatives acting on behalf of an applicant. We received the following comments concerning proposed provisions relating to authorized representatives:
Comment: One commenter requested clarification on whether states may enforce additional requirements not specifically listed in the federal regulations on authorized representatives. An example of this would be state specific regulations governing who may serve as an authorized representative for individuals who are not medically or legally competent.
Response: Under proposed § 435.923(a), legal documentation of authority to act on behalf of an applicant or beneficiary under state law, such as a court order establishing legal guardianship or power of attorney may serve in place of a written designation from the applicant or beneficiary, signed and submitted in accordance with § 435.923(f). Under the regulation, however, states may not limit authorized representatives to individuals identified in such a legal document or granted authorization under operation of state law or otherwise impose requirements other than those listed in § 435.923 on other individuals whom an applicant or beneficiary wishes to have serve as his or her authorized representative. We have separated the regulation text as proposed at § 435.923(a) at § 435.923(a)(1) and § 435.923(a)(2).
Comment: We received a number of comments regarding who may serve as an authorized representative. One commenter recommended that organizations should not be permitted to be designated as authorized representatives. Another commenter recommended that we allow states to decide whether to permit organizations to be authorized representatives. The commenter suggested that by permitting only individuals to serve as authorized representatives, states will be better able to ensure transparency and accountability of the authorized representative. Another commenter recommended that we add a definition of organization to § 435.923(e) to clarify what types of organizations may act as authorized representatives, for example, only non-profit organizations.
Response: We believe that there are situations in which an individual may need an organization to serve as his or her authorized representative and it is appropriate for an organization to serve in this capacity, such as for individuals residing in a nursing home who do not have family available to assist them. We are finalizing the regulation as proposed in this regard. Protections at proposed § 435.923(e), finalized in this rulemaking, are designed to ensure that organizations serving as an authorized representative adhere to laws and regulations relating to conflicts of interest and act in the best interest of the individual.
Comment: We received a number of comments related to the timeframe for designation of authorized representatives. One commenter recommended that states be given options or flexibility in this area, explaining that states may wish to make the designation of the authorized representative last for 12 months by default, for example, unless the applicant or beneficiary designates otherwise. Another commenter recommended that we add that the authorization is valid until the application is denied or benefits are terminated and the appeal process is completed.
Response: Our regulations clearly state that applicants and beneficiaries are able to change authorized representatives at any time. States may not make a designation automatically expire such that an individual would need to redesignate an authorized representative after a given period of time. However, they are allowed to provide beneficiaries with the opportunity to change their authorized representative at the renewal point. For example, states can indicate that a beneficiary has an authorized representative and remind the individual that they may keep or change the representative on the renewal document.
Comment: One commenter asked for clarification on whether the scope of the authorization is defined by the beneficiary or applicant, or whether, once invoked, the representative assumes all of the duties named in the regulations, including “all other matters” with either agency.
Response: We clarify that the scope of the authorization is defined by the Medicaid applicant or beneficiary.
Comment: We received a number of comments on § 435.923(c), specifically related to the fact that the designation of an authorized representative can only be revoked in writing. Commenters suggested that it would be more appropriate and efficient to allow the designation to be revoked by all of the modalities by which it can be made in the first place.
Response: We agree with the commenter's suggestion and have revised the regulation text accordingly.
Comment: One commenter requested clarification on whether the permissions given the authorized representative may be granted in part, for example in tiers, if an applicant so chooses. The commenter suggested that an applicant may wish to authorize someone to sign his or her application, but not to receive his or her notices, for example.
Response: We are clarifying that the permissions given to the authorized representative may be granted in part. The proposed regulation allows applicants and beneficiaries to designate an individual or organization to act on their behalf and that the scope of authorization is defined by the applicant or beneficiary.
Comment: One commenter asked us to confirm that the definition provided for authorized representatives is the same definition that the Social Security Administration uses.
Response: We clarify that the definition is not the same.
Comment: A few commenters requested additional clarification regarding situations in which an individual is unable to personally elect an authorized representative due to medical incapacity. One commenter agreed that written designation by the individual or legal documentation should be obtained in most instances, but the proposed rule may be overly restrictive in that it could result in unreasonable delay in determining some individuals' eligibility for Medicaid. The commenter recommends that states be given the authority to waive this regulation in instances when obtaining legal documentation to allow individuals or organizations to act as authorized representatives would be difficult. Another commenter suggested that legal documentation of authority to act on behalf of an application or beneficiary under state law, such as court order establishing legal guardianship or a power of attorney, should serve in place of written authorizations by the applicant or beneficiary.
Response: Under section § 435.923(a), legal documentation of authority to act on behalf of an applicant or beneficiary under state law, such as a court order establishing legal guardianship or power of attorney may serve in place of the applicant or beneficiary's designation. The option to submit such documentation is intended to enable applicants who do not have the capacity to provide a signature to authorize representation.
We proposed to revise existing regulations to align with the adoption of MAGI-based methodologies.
Comment: One commenter suggested that presumptive eligibility could be better streamlined by using only a gross income standard for eligibility determinations.
Response: Current regulations allow states to use either gross income or to have qualified entities make a closer approximation of the countable family income, which would be used for a regular determination by the state agency, by applying simple disregards. We believe it is appropriate to retain this flexibility for states once MAGI-based methodologies are in place. Therefore, we are codifying the flexibility of states in § 435.1102(a), as proposed, to direct qualified entities to use either gross income or to apply simplified methods, as prescribed by the state, to better approximate MAGI-based household income, as defined in § 435.603 of the March 2012 final rule.
Comment: Many commenters objected to the state option to obtain an attestation of citizenship or satisfactory immigration status, or state residency as part of a presumptive eligibility determination. They suggested that requiring an attestation of immigration status would likely deter some potentially eligible individuals who often need urgent access to health care services from receiving care. Further the commenters suggested that the rules on immigration status are detailed and complex, and qualified entities cannot reasonably be expected to understand or explain them to individuals being asked to attest their status. Some commenters stated that states should have the option to request self-attestation of citizenship.
Response: We clarify that our proposed rule gave states the option to require qualified entities or qualified hospitals to request this information but did not require it. We believe that this option is important in the context of extending the ability to conduct presumptive eligibility determinations to hospitals because it limits the possibility that individuals who are not citizens or qualified immigrants or residents of the state are found eligible on a presumptive basis, receive expensive services, only ultimately to be determined ineligible for Medicaid. Therefore, we are retaining the language as proposed and maintain this provision as a state option.
Comment: One commenter requested that we add current foster care children as a presumptive eligibility group in our final regulation.
Response: We clarify that former foster children are already a population that is eligible to be determined presumptively eligible. We do not currently have the authority to add current foster care children as a presumptive eligibility group, but this is unnecessary because current foster children are automatically eligible for Medicaid and do not need to be determined presumptively eligible.
Comment: Some commenters stated that states should have the option to elect how many presumptive eligibility periods should be allowed for each pregnancy. Others supported our proposed rule to permit only one presumptive eligibility period per pregnancy.
Response: We believe that providing pregnant women with one presumptive eligibility period per pregnancy is reasonable in accordance with section 1920 of the Act, under which pregnant women may receive ambulatory prenatal care during a presumptive eligibility period, defined as continuing through the date a full Medicaid determination is made under the State plan, or, if a woman does not submit a regular application through the end of the month following the month during which the presumptive eligibility determination was made. Therefore, we are finalizing the regulation as proposed to provide one presumptive eligibility period for pregnant women per pregnancy.
We proposed to add § 435.1110 to implement section 1902(a)(47)(B) of the Act, added by the Affordable Care Act, to give hospitals the option to determine presumptive eligibility for Medicaid. The statute provides hospitals participating in Medicaid with this option whether or not the state has elected to permit qualified entities of the state's selection to make presumptive eligibility determinations for children, pregnant women or other specific populations under other sections of the statute.
We received the following comments concerning the hospital presumptive eligibility provisions:
Comment: We received many comments related to the establishment of standards under proposed § 435.1110(d)(1) for hospitals that opt to make presumptive eligibility determinations. Some commenters encouraged CMS to provide states with maximum flexibility to implement presumptive eligibility standards for hospitals, while other commenters stated that the Secretary should establish federal standards applicable to hospitals making presumptive eligibility determinations in all states. Other commenters supported the flexibility given to state agencies to establish standards, and some stated that states should have even broader authority to establish clear criteria and qualifications which hospitals would have to meet to make presumptive eligibility determinations. Some believe that the Secretary should establish minimum federal standards and qualifications, with the state option to impose additional standards. Commenters generally requested additional guidance to states on how they must work with hospitals that elect to make presumptive eligibility determinations. Finally, some commenters stated that the Secretary should establish federal standards for hospitals that opt to make presumptive eligibility determinations under § 435.1110 of the regulations, related to the proportion of individuals determined presumptively eligible by the hospital that submits a regular application and the percent of such individuals who are ultimately determined eligible by the agency. Commenters suggested that states should use the federal standards to determine which hospitals are capable of making presumptive eligibility determinations.
Response: We are finalizing § 435.1110(d)(1) as proposed. Oversight of qualified entities making presumptive eligibility determinations, including qualified hospitals under § 435.1110, is a state responsibility. Under § 435.1110(d)(1), states may establish state-specific standards for qualified hospitals that conduct presumptive eligibility determinations related to the success of assisting individuals determined presumptively eligible who submit a regular application and/or are approved for eligibility by the agency. We believe this is an area more appropriate for state flexibility, than for imposition of a uniform federal standard for all participating hospitals across all states. Therefore, we are finalizing § 435.1110(d), as proposed. We will monitor implementation and consider whether further guidance is warranted.
Per § 435.1110(d)(2), which we also are finalizing as proposed, state agencies are required to take appropriate correction action for any hospital that does not meet the standards established by the st