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From Health Law Daily, April 2, 2013

CMS finalizes 2014 Medicaid eligibility determination rules for newly eligible group

By Michelle L. Oxman, JD, LLM

CMS has adopted regulations that specify the requirements for states’ expenditures for medical assistance for individuals who are newly eligible under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) (Final rule, 78 FR 19918, April 2, 2013). This major step in the implementation of the health reform law outlines the methodology that states will use to identify the expenditures that qualify for federal financial participation (FFP), i.e., reimbursement of 100 percent.

The newly eligible. The newly eligible group comprises adults (1) with incomes not exceeding 138 percent of the federal poverty level (FPL), who have not been determined disabled, and are not eligible for Medicaid under another category; and (2) who are not pregnant, caretaker relatives of an eligible child, or former foster children. Based on their current income and household composition, they also must not have been eligible for assistance under a state plan or any waiver programs as of December 1, 2009, unless the waiver program was full.

Financial eligibility. PPACA changed the methodology for determining financial eligibility for Medicaid to a modified adjusted gross income (MAGI) system. States must use an approved method to compare eligibility under the 2009 eligibility rules to the MAGI standard. Although the Proposed rule allowed states to choose from three proposed methodologies to make the comparison, the agency has adopted one required threshold which allows states more limited choices.

Changes from the proposed rule. Some questions about financial eligibility determinations have been clarified in the final rule. Individuals who might have been eligible as medically needy will be considered newly eligible if their incomes exceed the amount of the “spend-down” requirement. They will not be considered newly eligible if their incomes are at or below the spend-down amount. Because a number of states submitted comments that very few individuals were ineligible in 2009 solely because their assets exceeded eligibility limits, states will not be required to apply those resource limits to determine whether applicants would have been eligible for Medicaid in 2009; however, they may choose to submit data on the number of beneficiaries who would have been denied assistance. In addition, individuals who have pending applications for assistance due to disability will be counted as newly eligible until they have been determined disabled.

Expansion states. The Final rule also clarifies the requirements for the 2.2 percent increase in the federal medical assistance percentage (FMAP) for expansion states, the states that covered both parents or caretaker relatives and nonpregnant, childless adults with incomes exceeding 100 percent of FPL. The benefits offered must have been full benefits, benchmark or benchmark-equivalent benefits, or, at a minimum, included inpatient hospital services, without a high deductible, and were neither premium assistance benefits nor dependent on access to employer-sponsored coverage.

State plan requirements. States must amend their Medicaid plans to adopt a threshold methodology to convert the income eligibility requirements under MAGI to those in effect on December 1, 2009. The threshold methodology must not delay or affect the current eligibility determination and must yield valid, accurate results. The details of the threshold methodology must be described in an attachment to the state plan amendment.

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