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January 21, 2013

CMS proposed rule addresses enrollment, eligibility, appeals, premiums and cost-sharing of health insurance affordability programs

By Susan L. Smith, JD, MA

CMS issued a proposed rule covering a broad spectrum of rules involving the health insurance affordability programs including the Medicaid Program, the Children's Health Insurance Program (CHIP), small business health option programs (SHOP) and employer-sponsored plans (Proposed rule, 78 FR 4594, January 22, 2013). The proposed rule would implement provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA) (P.L. 111-148), the Health Care and Education Reconciliation Act of 2010 (HCERA) (P.L.111-152) (together PPACA), and the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) (P.L. 111-3). The proposed rule provides states with additional flexibility in beneficiary appeals, notices, and related procedures; reflects changes in Medicaid eligibility created by PPACA; and modernizes administrative procedures to further promote coordination across multiple health coverage programs, including purchase of coverage through the Exchange with advance payments of the premium tax credits and cost reductions as authorized by PPACA, Medicaid, and CHIP.

Flexibility for Medicaid benefit packages. Beginning in 2014, all nongrandfathered health insurance coverage in the individual and small group markets, Medicaid benchmark and benchmark-equivalent plans (now also known as Alternative Benefit Plans), and Basic Health Programs will cover essential health benefits (EHBs), which include items and services in 10 statutory benefit categories, such as hospitalization, prescription drugs, and maternity and newborn care, and are equal in scope to a typical employer health plan. The proposed rule revises Medicaid regulations to conform to the statutory changes mandated by PPACA and aligns the regulatory requirements between Medicaid and the private insurance market where appropriate.

Enrollment and eligibility. PPACA required the Secretary to establish, subject to minimum requirements, a streamlined enrollment system for qualified health plans (QHP) and all insurance affordability programs. The proposed rule provides for Medicaid and CHIP agencies to begin accepting a single streamlined application during the initial open enrollment period to ensure a coordinated transition to new coverage that will become available in Medicaid and through Exchanges in 2014. CMS also announced that it is considering whether the provision of the Medicaid and CHIP provisions related to the initial open enrollment period for enrollment in a QHP through the Exchange should be effective October 1, 2013, or whether a later effective date is appropriate.

CMS also has proposed clarifications and technical corrections as well as additions to the definitions, standards, and options for conducting eligibility determinations for QHPs through the Exchange. The proposed rule include a certification program addressing the individuals on whose behalf advance payments of the premium tax credit and cost-sharing reductions are provided and individuals claiming the premium tax credit only on their tax returns. CMS also proposes to require Exchanges to redetermine eligibility on an annual basis for all qualified individuals, not only enrollees.

Eligibility appeals. Beginning in 2014, individuals and small businesses will be able to purchase private health insurance through competitive market places called Affordable Insurance Exchanges. CMS proposes to modify Medicaid procedures to promote coordination of notices and appeals of eligibility determinations. The proposed rule provides standards for adjudicating appeals of (1) individual eligibility determinations and exemptions from the individual responsibility requirements, (2) determinations of employer-sponsored coverage and SHOP coverage, and (3) determinations of SHOP and employer and employee eligibility. It also proposes standards for adjudicating appeals of employer and employee eligibility to participate in the SHOP and outlines criteria related to the verification of enrollment in and eligibility for minimum essential coverage through an eligible employer sponsored plan.

The proposed rule would amend modified adjusted gross income (MAGI) based financial eligibility methods regulations issued in the final rule of March 23, 2012 (see 77 FR 17144). Among the proposed amendments, instead of applying the five percent disregard to determine eligibility for a particular eligibility category, CMS has proposed a policy under which the five percent disregard would be applied when its application affects eligibility on the basis of MAGI. Specifically, the five percent disregard would be applied when an applicant or beneficiary would otherwise be ineligible for any medical assistance under any MAGI-based category in the program.

The proposed rules coordinate Medicaid fair hearings with appeals of eligibility determinations for enrollment in a qualified health plan (QHP) and for advance payment of the premium tax credit and cost-sharing reductions. Medicaid agencies would be able to delegate authority conduct fair hearings of eligibility denials based on the applicable modified adjusted gross income (MAGI) standard to an Exchange, provided that individuals are given the option to have the fair hearing on the Medicaid denial conducted instead by the Medicaid agency. If the Exchange appeals entity conducts the fair hearing on the Medicaid denial, that hearing decision would be final subject to the state's option to review the conclusions of the hearing officer. The Medicaid state agency would be required to treat an appeal of a determination of eligibility for enrollment in a QHP in the Exchange and for advance payment of the premium and tax credit or cost-sharing reduction as a request for a fair hearing of the denial of Medicaid to avoid the need for an individual to request multiple appeals. When an individual has been determined ineligible for Medicaid pursuant to a fair hearing conducted by a Medicaid agency, the agency would be required to assess the individual for potential eligibility for other insurance affordability programs.

CMS has proposed the state Medicaid and CHIP agencies and the Exchange produce a single combined notice after all MAGI-based eligibility determinations have been made and include basic content and accessibility standards for all eligibility notices. In addition, electronic eligibility notices would be made available as an option for applicants and beneficiaries. Compliance with the combined eligibility notices would not become effective until January 1, 2015, due to the time needed for system builds.

Verification of citizenship/immigration status. The proposed rule would establish an exception to the documentation requirement to verify eligibility status under circumstances that would create an insurmountable procedural barrier to accessing coverage while serving little evidentiary value. Except as specifically required under the Social Security Act, such as citizenship or immigration status, states would be prohibited from requiring documentation from individuals for whom documentation does not exist or is not reasonably available at the time of application or renewal. CMS said such circumstances include but are not limited to individuals who are homeless and victims of domestic violence or natural disasters. In addition, proposed rule would enable state agencies to verity status by conducting an electronic data match with the HHS Secretary through the federal hub based data base or directly with the Social Security Administration if the state has not been able to verify citizenship or immigration status from the Secretary. The proposed rule establishes a period of 90 days from the date an individual receives notice as reasonable opportunity to provide documentation and permits states to extend the reasonable period if the state or the individual need more time to complete the verification. Further, CMS would revise the rules for providing evidence of citizenship, by permitting copies rather than originals of documents, and adding documents not previously recognized to act as proof of citizenship.

Additional proposed rules. The proposed rule updates and simplifies the Medicaid premium cost-sharing requirements to promote the most effective use of services and identify cost-sharing flexibilities by updating the maximum allowable cost sharing levels, specifically providing new options for states to establish higher cost sharing for nonpreferred drugs and impose higher cost sharing for nonemergency use of the emergency department. In addition, CMS would streamline the premiums and cost sharing regulation by laying out parameters under which cost sharing is permitted rather than distinguishing between to statutory authorities. The proposed rule also (1) provides for electronic submission of state plans and plan amendments, (2) adds a new eligibility group related to family planning for individuals who are not pregnant and have an income that does not exceed the income level established by the state; (3) establishes regulations for certified application counselors to assistant individuals with applications, enrollment or other ongoing communications once the individual is determined eligible for Medicaid, CHIP or a QHP; and (4) establishes rules for authorized representatives.

MainStory: TopStory

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