Volume 27, Issue 10

4VAC15-320-90. Exception to requirement of national forest permit.

A national forest permit, as provided for in § 29.1-408 of the Code of Virginia shall not be required to fish from national forest lands in the North and South forks of the Shenandoah River, in the James River, in Skidmore Lake in Rockingham County, in Lake Moomaw (Gathright Project), in the Jackson River below Gathright Dam, in North Fork Pound Reservoir, and in Wilson Creek downstream of Douthat Lake in Alleghany and Bath Counties.

4VAC15-320-130. ~~Special provision applicable to a portion of Witcher Creek (Cedar Key) within Smith Mountain Lake.~~ (Repealed.)

It shall be lawful to fish using only bait with a single point unweighted bait hook (no artificial lures allowed) in that portion of Witcher Creek in Smith Mountain Lake from behind the no wake buoy line at the mouth of the cove known as Cedar Key to the back of the cove from April 15 to May 31, both dates inclusive. For the purpose of this chapter, a single point unweighted bait hook is defined as a hook that does not have a weight affixed to the hook. Any other weight must be attached to the line at least 12 inches above the hook (no weights below the hook).

VA.R. Doc. No. R11-2592; Filed December 30, 2010, 10:57 a.m.

Final Regulation

Title of Regulation: 4VAC15-330. Fish: Trout Fishing (amending 4VAC15-330-120, 4VAC15-330-140, 4VAC15-330-150, 4VAC15-330-160, 4VAC15-330-171; adding 4VAC15-330-175).

Statutory Authority: §§ 29.1-103, 29.1-501, and 29.1-502 of the Code of Virginia.

Effective Date: January 1, 2011.

Agency Contact: Phil Smith, Regulatory Coordinator, Department of Game and Inland Fisheries, 4016 West Broad Street, Richmond, VA 23230, telephone (804) 367-8341 or email phil.smith@dgif.virginia.gov.

Summary:

The amendments adjust trout fishing requirements on multiple sections of trout waters within the Commonwealth.

4VAC15-330-120. Special provisions applicable to certain portions of Buffalo Creek, Dan River, Pound River, Roaring Run, ~~Smith River~~ South River, and South Fork Holston River.

A. It shall be lawful year around to fish using only artificial lures with single hooks in that portion of Buffalo Creek in Rockbridge County from the confluence of Colliers Creek upstream 2.9 miles to the confluence of North and South Buffalo Creeks, in that portion of ~~Smith River in Henry County from signs below the east bank of Towne Creek downstream to the State Route 666 (Trent Hill Road) bridge~~ South River from the N. Oak Lane Bridge in Waynesboro upstream to a sign posted 1.5 miles above the State Route 632 (Shalom Road) Bridge, in that portion of the Dan River in Patrick County from Talbott Dam approximately six miles downstream to a sign posted just upstream from the confluence of Dan River and Townes Reservoir, in that portion of the Pound River from a sign posted 0.4 miles below the Flannagan Dam, downstream 1.2 miles to a sign posted just upstream of the confluence of the Pound River and the Russell Fork River, in that portion of the South Fork Holston River in Smyth County from a sign posted at the upper Jefferson National Forest boundary downstream approximately four miles to a sign posted 500 feet upstream of the concrete dam at Buller Fish Culture Station, and in that portion of Roaring Run in Botetourt County from a sign posted at the third footbridge above the Roaring Run Furnace Day Use Area upstream approximately one mile to a sign posted at the Botetourt/Alleghany County line.

B. The daily creel limit in these waters shall be two trout a day year around and the size limit shall be 16 inches or more in length. All trout caught in these waters under 16 inches in length shall be immediately returned to the water unharmed. It shall be unlawful for any person to have in his possession any bait or any trout under 16 inches in length in these areas.

4VAC15-330-140. Special provision applicable to certain portions of Big Wilson Creek, Cabin Creek, Conway River, Little Stony Creek, Little Wilson Creek, Mill Creek, North Fork Buffalo River, St. Mary's River and Ramsey's Draft.

It shall be lawful to fish using only artificial lures with single hooks in that portion of the Conway River and its tributaries in Greene and Madison Counties within the Rapidan Wildlife Management Area, in that portion of Big and Little Wilson Creeks and their tributaries and Cabin Creek and its tributaries in Grayson County within the Grayson Highlands State Park and the Jefferson National Forest Mount Rogers National Recreation Area, in that portion of Little Stony Creek in Giles County within the Jefferson National Forest, in that portion of Little Stony Creek in Shenandoah County within the George Washington National Forest, in Mill Creek and its tributaries upstream of the Poplar Street Bridge in the Town of Narrows (Mill Creek flows through the Town of Narrows and Jefferson National Forest in Giles County), in the North Fork Buffalo River and its tributaries in Amherst County within the George Washington National Forest, in that portion of St. Mary's River in Augusta County and its tributaries upstream from the gate at the George Washington National Forest property line, and in that portion of Ramsey's Draft and its tributaries in Augusta County within the George Washington National Forest. All trout caught in these waters under nine inches in length shall be immediately returned to the water unharmed. It shall be unlawful for any person to have in his possession any bait or any trout under nine inches in length while in these areas.

4VAC15-330-150. Special provision applicable to Stewarts Creek Trout Management Area; certain portions of Dan, Rapidan, South Fork Holston and Staunton rivers, the East Fork of Chestnut Creek, Roaring Fork, North Creek, Spring Run, Venrick Run, Brumley Creek, and their tributaries.

It shall be lawful year around to fish for trout using only artificial lures with single hooks within the Stewarts Creek Trout Management Area in Carroll County, in the Rapidan and Staunton rivers and their tributaries upstream from a sign at the Lower Shenandoah National Park boundary in Madison County, in the Dan River and its tributaries between the Townes Dam and the Pinnacles Hydroelectric Project powerhouse in Patrick County, in the East Fork of Chestnut Creek (Farmer's Creek) and its tributaries upstream from the Blue Ridge Parkway in Grayson and Carroll Counties, in Roaring Fork and its tributaries upstream from the southwest boundary of Beartown Wilderness Area in Tazewell County and in that section of the South Fork Holston River and its tributaries from the concrete dam at Buller Fish Culture Station downstream to the lower boundary of the Buller Fish Culture Station in Smyth County, and in North Creek and its tributaries upstream from a sign at the George Washington National Forest North Creek Campground in Botetourt County, in Spring Run from it confluence with Cowpasture River upstream to a posted sign at the discharge for Coursey Springs Hatchery in Bath County, in Venrick Run and its tributaries within the Big Survey Wildlife Management Area and Town of Wytheville property in Wythe County, and in Brumley Creek and its tributaries from the Hidden Valley Wildlife Management Area boundary upstream to the Hidden Valley Lake Dam in Washington County. All trout caught in these waters must be immediately returned to the water. No trout or bait may be in possession at any time in these areas.

4VAC15-330-160. Special provisions applicable to certain portions of Accotink Creek, Back Creek, Chestnut Creek, Hardware River, Holliday Creek, Holmes Run, North River, Passage Creek, Peak Creek, Pedlar River, North Fork of Pound and Pound rivers, Roanoke River, and South River.

It shall be lawful to fish from October 1 through May 31, both dates inclusive, using only artificial lures in Accotink Creek (Fairfax County) from King Arthur Road downstream 3.1 miles to Route 620 (Braddock Road), in Back Creek (Bath County) from the Route 600 bridge just below the Virginia Power Back Creek Dam downstream 1.5 miles to the Route 600 bridge at the lower boundary of the Virginia Power Recreational Area, in Chestnut Creek (Carroll County) from the U.S. Route 58 bridge downstream 11.4 miles to the confluence with New River, in the Hardware River (Fluvanna County) from the Route 646 bridge upstream ~~2.6~~ 3.0 miles to Muleshoe Bend as posted, in Holliday Creek (Appomattox/Buckingham Counties) from the Route 640 crossing downstream 2.8 miles to a sign posted at the headwaters of Holliday Lake, in Holmes Run (Fairfax County) from the Lake Barcroft Dam downstream 1.2 miles to a sign posted at the Alexandria City line, in the North River (Augusta County) from the base of Elkhorn Dam downstream 1.5 miles to a sign posted at the head of Staunton City Reservoir, in Passage Creek (Warren County) from the lower boundary of the Front Royal State Hatchery upstream 0.9 miles to the Shenandoah/Warren County line, in Peak Creek (Pulaski County) from the confluence of Tract Fork downstream 2.7 miles to the Route 99 bridge, in the Pedlar River (Amherst County) from the City of Lynchburg/George Washington National Forest boundary line (below Lynchburg Reservoir) downstream 2.7 miles to the boundary line of the George Washington National Forest, in North Fork of Pound and Pound rivers from the base of North Fork of Pound Dam downstream to the confluence with Indian Creek, in the Roanoke River (Roanoke County) from the Route 760 bridge (Diuguids Lane) upstream 1.0 miles to a sign posted at the upper end of Green Hill Park (Roanoke County), in the Roanoke River (City of Salem) from the Route 419 bridge upstream 2.2 miles to the Colorado Street bridge, and in the South River from the Second Street Bridge upstream 2.4 miles to the base of Rife Loth Dam in the City of Waynesboro. From October 1 through May 31, all trout caught in these waters must be immediately returned to the water unharmed, and it shall be unlawful for any person to have in possession any bait or trout. During the period of June 1 through September 30, the above restrictions will not apply.

4VAC15-330-171. Special provisions applicable to certain portions of Jackson River.

A. ~~The~~ In that portion of the Jackson River from Gathright Dam downstream to the Westvaco Dam at Covington in Allegheny County, the daily creel limit shall be four trout per day and only one of the four may be a brown trout, the minimum size limit for brown trout shall be 12 20 inches in length ~~on that portion of the Jackson River from Gathright Dam downstream to the Westvaco Dam at Covington in Alleghany County~~, and the protected slot limit for rainbow trout shall be 12 to 16 inches. All brown trout caught in this section of the Jackson River under 12 20 inches in length and all rainbow trout between 12 and 16 inches in length caught in this section of Jackson River shall be immediately returned to the water. It shall be unlawful for any person to ~~have in his possession~~ possess any brown trout under 12 20 inches in length or any rainbow trout between 12 and 16 inches in length in this area. Because of the 12-inch to 16-inch protected slot limit for rainbow trout, the statewide seven-inch minimum trout limit does not apply to rainbow trout in this section of Jackson River.

B. The trout daily creel limit shall be two, the minimum size limit shall be 16 inches in length, and only artificial lures may be used in that portion of Jackson River in Bath County from the swinging bridge located just upstream from the mouth of Muddy Run, upstream three miles to the last ford on FS 481D. All trout caught in these waters under 16 inches in length shall be immediately returned to the water unharmed. It shall be unlawful for any person to have in his possession any bait or any trout under 16 inches in length in these areas.

4VAC15-330-175. Special provisions applicable to certain portions of Smith River.

In that portion of the Smith River from Philpott Dam downstream to the State Route 636 Bridge crossing (Mitchell Bridge), the protected slot limit for brown trout shall be 10 to 24 inches and only one brown trout longer than 24 inches can be harvested per day. All brown trout caught in this section of Smith River between 10 and 24 inches in length must be immediately returned to the water unharmed. It shall be unlawful for any person to possess any brown trout between 10 and 24 inches or more than one brown trout longer than 24 inches in length in this section of Smith River. Because of the 10-inch to 24-inch protected slot limit for brown trout, the statewide seven-inch minimum trout limit does not apply to brown trout in this section of Smith River. Statewide creel and size limits shall apply to all other trout species caught in this section of the Smith River, and the statewide daily creel limit of six trout per day applies to all trout species combined, in aggregate.

VA.R. Doc. No. R11-2593; Filed December 30, 2010, 10:56 a.m.

Final Regulation

Title of Regulation: 4VAC15-350. Fish: Gigs, Grab Hooks, Trotlines, Snares, Etc (amending 4VAC15-350-10, 4VAC15-350-60; repealing 4VAC15-350-80).

Statutory Authority: §§ 29.1-103, 29.1-501, and 29.1-502 of the Code of Virginia.

Effective Date: January 1, 2011.

Summary:

The amendments (i) add the use of SCUBA (Self-Contained Underwater Breathing Apparatus) gear as an unlawful method of taking or attempting to take freshwater fish; (ii) limit the number of jugs that an angler may set and retrieve, and require that jugs be labeled with a reflective marker and attended within sight by anglers at all times; and (iii) eliminate dulling and noosing as fishing methods to take suckers in Highland County.

4VAC15-350-10. Gigs, grab hooks, etc.; generally.

Except as otherwise provided by local legislation and with the specific exceptions provided in the sections appearing in this chapter, it shall be unlawful to take or attempt to take fish at any time by snagging, grabbing, snaring, and gigging~~, and~~; with a striking iron; and with the use of SCUBA (Self-Contained Underwater Breathing Apparatus) gear.

4VAC15-350-60. Trotlines, juglines or set poles.

A. Generally. Except as otherwise provided by local legislation and by ~~subsection~~ subsections B and C of this section, and except on waters stocked with trout and within 600 feet of any dam, it shall be lawful to use trotlines, juglines (single hook, including one treble hook, and line attached to a float) or set poles for the purpose of taking nongame fish (daily creel (possession) and length limits for nongame fish are found in 4VAC15-320-25) and turtles (limits for turtles are found in 4VAC15-360-10), provided that no live bait is used. Notwithstanding the provisions of this section, live bait other than game fish may be used on trotlines to take catfish in the Clinch River in the Counties of Russell, Scott and Wise. Any person setting or in possession of a trotline, jugline or set pole shall have it clearly marked by permanent means with his name, address and telephone number, and is required to check all lines at least once each day and remove all fish and animals caught. This requirement shall not apply to landowners on private ponds, nor to a bona fide tenant or lessee on private ponds within the bounds of land rented or leased ~~by him~~, nor to anyone transporting any such device from its place of purchase.

B. Quantico Marine Reservation. It shall be unlawful to fish with trotlines in any waters within the confines of Quantico Marine Reservation.

C. Additional jugline requirements. Jugline sets (except as exempt under subsection A of this section) shall be restricted to 20 per angler and must be attended (within sight) by anglers at all times. Also, in addition to being labeled with the angler's name, address and telephone number, jugs shall also be labeled with a reflective marker that encircles the jugs to allow for visibility at night.

4VAC15-350-80. ~~Dulling suckers in Highland County.~~ (Repealed.)

~~It shall be lawful to take suckers in the daytime only with a dull or noose in Highland County from December 1 through February 28, both dates inclusive.~~

VA.R. Doc. No. R11-2594; Filed December 30, 2010, 10:56 a.m.

Final Regulation

Title of Regulation: 4VAC15-360. Fish: Aquatic Invertebrates, Amphibians, Reptiles, and Nongame Fish (amending 4VAC15-360-10).

Statutory Authority: §§ 29.1-103, 29.1-501, and 29.1-502 of the Code of Virginia.

Effective Date: January 1, 2011.

Summary:

The amendments reduce the recreational daily bag limit on snapping turtles, prohibit the collection of freshwater mussels statewide, and allow the unlimited collection of Asian clams statewide.

4VAC15-360-10. Taking aquatic invertebrates, amphibians, reptiles, and nongame fish for private use.

A. Possession limits. Except as otherwise provided for in § 29.1-418 of the Code of Virginia, 4VAC15-20-130, subdivision 8 of 4VAC15-320-40 and the sections of this chapter, it shall be lawful to capture and possess live for private use and not for sale no more than five individuals of any single native or naturalized (as defined in 4VAC15-20-50) species of amphibian and reptile and 20 individuals of any single native or naturalized (as defined in 4VAC15-20-50) species of aquatic invertebrate and nongame fish unless specifically listed below:

1. The following species may be taken in unlimited numbers from inland waters statewide: carp, bowfin, longnose gar, mullet, yellow bullhead, brown bullhead, black bullhead, flat bullhead, snail bullhead, white sucker, northern hogsucker, gizzard shad, threadfin shad, blueback herring (see 4VAC15-320-25 for anadromous blueback herring limits), white perch, yellow perch, alewife (see 4VAC15-320-25 for anadromous alewife limits), stoneroller (hornyhead), fathead minnow, golden shiner, ~~and~~ goldfish, and Asian clams.

2. See 4VAC15-320-25 for American shad, hickory shad, channel catfish, white catfish, flathead catfish, and blue catfish limits.

3. For the purpose of this chapter, "fish bait" shall be defined as native or naturalized species of minnows and chubs (Cyprinidae), salamanders (each under six inches in total length), crayfish, and hellgrammites. The possession limit for taking "fish bait" shall be 50 individuals in aggregate, unless said person has purchased "fish bait" and has a receipt specifying the number of individuals purchased by species, except salamanders and crayfish which cannot be sold pursuant to the provisions of 4VAC15-360-60 and 4VAC15-360-70. However, stonerollers (hornyheads), fathead minnows, golden shiners, and goldfish may be taken and possessed in unlimited numbers as provided for in subdivision 1 of this subsection.

4. The daily limit for bullfrogs shall be 15 and for snapping turtles shall be ~~15 and bullfrogs~~ 5. Bullfrogs and snapping turtles may not be taken from the banks or waters of designated stocked trout waters.

5. The following species may not be taken in any number for private use: candy darter, eastern hellbender, diamondback terrapin, and spotted turtle.

6. Native amphibians and reptiles, as defined in 4VAC15-20-50, that are captured within the Commonwealth and possessed live for private use and not for sale may be liberated under the following conditions:

a. Period of captivity does not exceed 30 days;

b. Animals must be liberated at the site of capture;

c. Animals must have been housed separately from other wild-caught and domestic animals; and

d. Animals that demonstrate symptoms of disease or illness or that have sustained injury during their captivity may not be released.

B. Methods of taking species in subsection A. Except as otherwise provided for in the Code of Virginia, 4VAC15-20-130, 4VAC15-320-40, and other regulations of the board, and except in any waters where the use of nets is prohibited, the species listed in subsection A may only be taken by hand, hook and line, with a seine not exceeding four feet in depth by 10 feet in length, an umbrella type net not exceeding five by five feet square, small minnow traps with throat openings no larger than one inch in diameter, cast nets, and hand-held bow nets with diameter not to exceed 20 inches and handle length not to exceed eight feet (such cast net and hand-held bow nets when so used shall not be deemed dip nets under the provisions of § 29.1-416 of the Code of Virginia). Gizzard shad and white perch may also be taken from below the fall line in all tidal rivers of the Chesapeake Bay using a gill net in accordance with Virginia Marine Resources Commission recreational fishing regulations. Bullfrogs may also be taken by gigging or bow and arrow and, from private waters, by firearms no larger than .22 caliber rimfire. Snapping turtles may be taken for personal use with hoop nets not exceeding six feet in length with a throat opening not exceeding 36 inches.

C. Areas restricted from taking mollusks. Except as provided for in §§ 29.1-418 and 29.1-568 of the Code of Virginia, it shall be unlawful to take ~~mussels and~~ the spiny riversnail (Io fluvialis) in the Tennessee drainage in Virginia (Clinch, Powell and the North, South and Middle Forks of the Holston Rivers and tributaries). It shall be unlawful to take mussels ~~in the James River and tributaries west of U.S. Route 29, in the entire North Fork of the Shenandoah River, and in the entire Nottoway River~~ from any inland waters of the Commonwealth.

D. Areas restricted from taking salamanders. Except as provided for in §§ 29.1-418 and 29.1-568 of the Code of Virginia, it shall be unlawful to take salamanders in Grayson Highlands State Park and on National Forest lands in the Jefferson National Forest in those portions of Grayson, Smyth and Washington Counties bounded on the east by State Route 16, on the north by State Route 603 and on the south and west by U.S. Route 58.

VA.R. Doc. No. R11-2595; Filed December 30, 2010, 10:56 a.m.

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REGISTRAR'S NOTICE: The Board of Game and Inland Fisheries is claiming an exemption from the Administrative Process Act pursuant to § 29.1-701 E of the Code of Virginia, which provides that the board shall promulgate regulations to supplement Chapter 7 (§ 29.1-700 et seq.) of Title 29.1 (Boating Laws) of the Code of Virginia as prescribed in Article 1 (§ 29.1-500 et seq.) of Chapter 5 of Title 29.1 of the Code of Virginia. Regulations promulgated pursuant to Article 1 of Chapter 5 of Title 29.1 (Wildlife Management Regulations) are exempt from the Administrative Process Act pursuant to § 2.2-4002 A 3 of the Code of Virginia.

Final Regulation

Title of Regulation: 4VAC15-370. Watercraft: in General (amending 4VAC15-370-50).

Statutory Authority: §§ 29.1-103, 29.1-501, 29.1-502, and 29.1-701 of the Code of Virginia.

Effective Date: January 1, 2011.

Summary:

The amendment changes the minimum width, from three inches to two inches, required for each of two horizontal bands of international orange that are required around the circumference of buoys that are used as regulatory markers on public waters. The amendment makes this requirement under state regulation consistent with United States Coast Guard standard specifications for aids to navigation and regulatory markers.

4VAC15-370-50. Regulatory markers and aids to navigation.

A. Under the provisions of Chapter 7 of Title 29.1 of the Code of Virginia a system of regulatory markers and a lateral buoyage marking system of aids to navigation are hereby adopted on all public waters of the Commonwealth not marked by an agency of the United States. Regulatory markers will be white with international orange bands. A vertical open-faced diamond shape with a white center shall denote danger. A vertical open-faced diamond shape with an inside cross shall denote a prohibition of all vessels. A circular shape with a white center shall denote a control or restriction. A rectangular shape shall denote information other than a danger, control or restriction. No regulatory marker, aid to navigation or other waterway marker affecting the safety, health or well-being of a boat operator, excepting those placed by an agency of the United States or a political subdivision of this Commonwealth as authorized in § 29.1-744 D of the Code of Virginia, shall be placed in, on or near the water unless authorized by the department.

B. When buoys are used as regulatory markers, they shall be white with horizontal bands of international orange, having a minimum width of ~~three~~ two inches, placed completely around the buoy circumference. One band shall be at the top of the buoy, with a second band placed just above the waterline so that both bands are clearly visible to approaching watercraft. The area of the buoy body visible between the two bands shall be white and not less than 12 inches in height. No buoy shall be less than 24 inches in overall height from the waterline.

C. Where a regulatory marker consists of a sign displayed from a marine structure, post or piling, the sign shall be white, with an international orange border having a minimum width of three inches. The geometric shape associated with the meaning of the marker shall be centered on the signboard.

D. The size of the display area shall be as required by circumstances, except that no display area shall be smaller than one foot in height. The outside width of the diamond, the inner diameter of the circle, and the average of the inside and outside widths of a square shall be two-thirds of the display area. The side of the diamond shall slope at a 35° angle from the vertical on the plane surface. Approximate adjustments for curvature may be made when applied to a cylindrical surface.

E. Explanatory words may be added outside the diamond with a center cross, the open diamond and the no wake circle on fixed markers only, and shall be added to the inside of the circle, square and rectangle. The letters of such words shall be black, in block characters of good proportion, spaced in a manner that will provide maximum legibility, and of a size that will provide the necessary degree of visibility. Applicable words include, but are not limited to:

1. Open faced diamond: rock, snag, cable, dam, dredge, shoal, reef, wreck.

2. Diamond with cross: dam, swim area, rapids, no boats.

3. Circle: no skiing, no wake, no anchoring, no fishing, no scuba, no boats, ski only, fishing only, for wording inside the circle; and entering no wake zone, leaving no wake zone, for wording outside the circle.

4. Square or rectangle: information other than a danger, control or restriction, which may contribute to health, safety, or well-being of boaters, such as place names, arrows indicating availability of gas, oil, groceries, marine repairs, limits of controlled areas, or approaching controlled area.

F. Waterway markers shall be made of materials that will retain the characteristics essential to their basic significance, such as color, shape, legibility and position, despite weather or other exposures.

G. Regulatory markers shall be placed where they are reasonably visible from boats approaching the marker and the visibility of the marker shall be maintained.

H. Written approval of the department must be obtained before relocation of any marker.

I. The person responsible for the marker shall immediately notify the department when any approved marker is removed or destroyed. Such marker shall be replaced without unnecessary delay.

J. After notification to the person responsible for the marker, the department may cancel for reasonable cause any marker authorization. Such marker shall be removed by the person responsible for the marker without unnecessary delay. Should the marker not be removed within a reasonable amount of time, the department may remove the marker or have it removed at the expense of the person responsible for the marker.

K. The political subdivision or agency making application shall certify that the markers to be installed conform to the above provisions.

L. It shall be unlawful to enter, use, or occupy public waters for a purpose contrary to the use indicated on markers authorized by the department, or placed by an agency of the Unites States or a political subdivision of this Commonwealth.

M. It shall be unlawful to moor or attach a vessel to a marker other than an approved mooring buoy, or move, remove, displace, tamper with, damage or destroy a marker authorized by the department, placed by an agency of the United States or placed by a political subdivision of this Commonwealth.

VA.R. Doc. No. R11-2597; Filed December 30, 2010, 10:55 a.m.

Final Regulation

Title of Regulation: 4VAC15-390. Watercraft: Safe and Reasonable Operation of Vessels (amending 4VAC15-390-130).

Statutory Authority: §§ 29.1-103, 29.1-501, 29.1-502, and 29.1-701 of the Code of Virginia.

Effective Date: January 1, 2011.

Summary:

The amendment repeals the requirement for vessels of less than 65.4 feet in length to have a bell on board.

4VAC15-390-130. Standard whistle and horn signals.

A. Whenever vessels are approaching in a meeting, crossing, or overtaking situation, and it appears desirable to the operator of one of the vessels to communicate his intentions to the operator of the other, the following standard whistle or horn signals will be used, and none other:

1. One short blast; meaning: "I am altering my course to the right"; except that in a crossing situation when this signal is initiated by the vessel to the right of the other it means, "I am holding my course and speed."

2. Two short blasts; meaning: "I am altering my course to the left."

3. Three short blasts; meaning: "I am stopping, or backing, by applying power astern."

4. Five or more short blasts in rapid succession; meaning: "DANGER"; or "I do not understand your intentions"; or "I do not concur in the maneuver indicated by your signal."

B. Whenever a motorboat less than 65.6 feet long receives one of the above signals from an approaching vessel, and if the operator understands the signal and concurs in the maneuver, he will answer with a similar signal. Whenever the intention of the approaching vessel is unclear, or if the proposed maneuver appears to involve risk of collision or other danger, the operator of the motorboat receiving the signal will answer with five or more short blasts in rapid succession, whereupon the operators of both vessels will slow, stop, or change course as necessary to avoid collision.

C. Signals in or near an area of restricted visibility or when the operator's vision is obscured by fog or other weather conditions shall be one prolonged blast of intervals of not more than two minutes for motorboats, and one prolonged plus two short blasts of intervals of not more than two minutes by sailboats under sail alone.

D. A vessel of 39.4 feet (12 meters) or more in length shall be provided with a whistle ~~and a bell~~ that meets U.S. Coast Guard requirements. ~~The bell may be replaced by other equipment having the same respective sound characteristics, provided that manual sounding of the prescribed signals shall always be possible.~~ A motorboat of less than 39.4 feet (12 meters) shall not be obligated to carry a whistle or bell as required above, but the operator shall have a whistle or other device intended to make audible signals capable of being heard 0.5 mile.

E. The operators of vessels not required to have sound-producing devices on board are not required to give or answer horn to whistle signals, but if they have sound-producing devices on board and elect to give or answer signals, the standard signals prescribed above shall be used, and none other.

VA.R. Doc. No. R11-2599; Filed December 30, 2010, 10:55 a.m.

Final Regulation

Title of Regulation: 4VAC15-410. Watercraft: Boating Safety Education (amending 4VAC15-410-40).

Statutory Authority: §§ 29.1-103, 29.1-501, 29.1-502, and 29.1-701 of the Code of Virginia.

Effective Date: January 1, 2011.

Summary:

The amendments (i) establish that a license to operate a vessel issued to maritime personnel by the United States Coast Guard, a marine certificate issued by the Canadian government, or a Canadian Pleasure Craft Operator's Card, is considered valid regardless of whether the license is current; and (ii) clarify that "a nonresident temporarily using the waters of Virginia" for 90 days or less means operating a boat not registered in Virginia.

4VAC15-410-40. Provisions for compliance and minimum standards for boating safety education course competency.

A. A person shall be considered in compliance with the requirements for boating safety education if he meets one or more of the following provisions pursuant to § 29.1-735.2 B 1 through 9 of the Code of Virginia:

1. Completes and passes a boating safety education course;

2. Passes an equivalency exam;

3. Possesses a valid license to operate a vessel issued to maritime personnel by the United States Coast Guard or a marine certificate issued by the Canadian government or possesses a Canadian Pleasure Craft Operator's Card. For the purposes of this subsection a license is considered valid regardless of whether the license is current;

4. Possesses a temporary operator's certificate;

5. Possesses a rental or lease agreement from a motorboat or personal watercraft rental or leasing business that lists the person as the authorized operator of the motorboat;

6. Operates the motorboat under onboard direct supervision of a person who meets the requirements of this section;

7. Is a nonresident~~, is~~ temporarily using the waters of Virginia for a period not to exceed 90 days (which means operating a boat not registered in Virginia), and meets any applicable boating safety education requirements of the state of residency, or possesses a Canadian Pleasure Craft Operator's Card;

8. Has assumed operation of the motorboat or personal watercraft due to the illness or physical impairment of the initial operator, and is returning the motorboat or personal watercraft to shore in order to provide assistance or care for the operator; or

9. Is registered as a commercial fisherman pursuant to § 28.2-241 of the Code of Virginia or is under the onboard direct supervision of the commercial fisherman while operating the commercial fisherman's boat.

B. The minimum standards for boating safety education course competency required by the department are:

1. Successful completion of a classroom boating safety education course in person and a passing score of at least 70% on a written test administered closed-book at the conclusion of the course by the designated course instructor(s) or other designated course assistant;

2. Successful completion of a classroom boating safety education course in person and a passing score of at least 90% on a written test administered open-book at the conclusion of the course by the designated course instructor(s) or other designated course assistant;

3. Successful completion of a boating safety education course offered through the Internet or through an electronic format such as CD-ROM and a passing score of at least 90% on a self-test administered in conjunction with the course material; or

4. A score of at least 70% on a proctored equivalency exam.

VA.R. Doc. No. R11-2600; Filed December 30, 2010, 10:55 a.m.

MARINE RESOURCES COMMISSION

Emergency Regulation

Title of Regulation: 4VAC20-1230. Pertaining to Restrictions on Shellfish (amending 4VAC20-1230-10).

Statutory Authority: §§ 28.2-201 and 28.2-210 of the Code of Virginia.

Effective Dates: January 1, 2011, through January 30, 2011.

Agency Contact: Jane Warren, Regulatory Coordinator, Marine Resources Commission, 2600 Washington Avenue, 3rd Floor, Newport News, VA 23607, telephone (757) 247-2248, FAX (757) 247-2002, or email betty.warren@mrc.virginia.gov.

Preamble:

This emergency chapter establishes, for the public health, harvest restrictions for shellfish taken from Virginia waters during the months of May through September. In addition, this emergency chapter describes a method of identifying, with the use of tags, where any shellfish were originally harvested from Virginia waters at any time. This emergency chapter is promulgated pursuant to the authority contained in §§ 28.2-201, 28.2-210 and 28.2-801 of the Code of Virginia. This emergency chapter amends and readopts, as amended, previous 4VAC 20-1230, which was adopted September 28, 2010, and made effective January 1, 2011. The effective date of this emergency chapter is January 1, 2011.

Summary:

This amendment clarifies that identification of the original harvest area of any shellfish, through use of tags, pertains to any time during the year.

4VAC20-1230-10. Purpose.

The purpose of this emergency chapter is to establish a method of identifying the original Virginia harvest area of any shellfish, at any time of the year. In addition, harvest times, and handling procedures for shellfish harvested during the months of May through September, in order to protect the health of the public, are described herein.

VA.R. Doc. No. R11-2695; Filed December 22, 2010, 9:02 a.m.

VIRGINIA GAS AND OIL BOARD

Emergency Regulation

Title of Regulation: 4VAC25-165. Regulations Governing the Use of Arbitration to Resolve Coalbed Methane Gas Ownership Disputes (adding 4VAC25-165-10 through 4VAC25-165-140).

Statutory Authority: §§ 45.1-361.15 and 45.1-361.22:1 of the Code of Virginia.

Effective Dates: December 20, 2010, through December 19, 2011.

Agency Contact: Michael Skiffington, Regulatory Coordinator, Department of Mines, Minerals and Energy, 1100 Bank Street, 8th Floor, Richmond, VA 23219-3402, telephone (804) 692-3212, FAX (804) 692-3237, TTY (800) 828-1120, or email michael.skiffington@dmme.virginia.gov.

Preamble:

Chapter 442 of the 2010 Acts of Assembly directs the Virginia Gas and Oil Board (VGOB) to adopt regulations to implement the arbitration process created in that act within 280 days of its enactment. VGOB adopts its regulations through the Department of Mines, Minerals and Energy (DMME). This regulation establishes the guidelines for the arbitration process. Some of the key provisions include how arbitrations are funded, the qualifications of the arbitrator, and procedures associated with the arbitration itself.

The act creates a voluntary arbitration process for parties with conflicting claims of ownership of coalbed methane gas. Currently, there is approximately $26 million in royalties held in escrow because conflicting claims of ownership have not yet been resolved. Creating an arbitration system that is an effective alternative to litigation can help reduce the amount of funds in escrow.

CHAPTER 165
REGULATIONS GOVERNING THE USE OF ARBITRATION TO RESOLVE COALBED METHANE GAS OWNERSHIP DISPUTES

4VAC25-165-10. Definitions.

The following words and terms when used in this regulation shall have the following meanings unless the context clearly indicates otherwise.

"Accrued interest" means funds accrued during the preceding 36 months on total proceeds held in the general escrow account. Accrued interest does not include escrow account fees or administrative costs of the Board related to the general escrow account.

"Act" means the Virginia Gas and Oil Act of 1990, Chapter 22.1 (§ 45.1-361.1 et seq.) of Title 45.1 of the Code of Virginia.

"Arbitrator" means a qualified individual appointed by a court to render a determination in an ownership dispute concerning coalbed methane gas.

"Board" means the Virginia Gas and Oil Board.

"Claimant" means person or entity in a dispute over ownership of coalbed methane has who has agreed to arbitration to resolve the dispute.

"Code" means Code of Virginia.

"Court" means a circuit court in the Commonwealth of Virginia wherein the majority of the subject tract of land is located.

"Department" means the Department of Mines, Minerals and Energy.

"Escrow account" means the account established by the board pursuant to §§ 45.1-361.21 and 45.1-361.22 (2) of the Code.

"Ex parte communication" means any form of communication between an arbitrator and a claimant without the presence of the opposing claimant.

"Operator" means the gas or oil owner designated by the board to operate in or on a pooled unit.

4VAC25-165-20. Authority and applicability.

This chapter implements the Virginia Gas and Oil Act, Chapter 22.1 (§ 45.1-361.1 et seq.) of Title 45.1 of the Code. The board is authorized to promulgate this chapter pursuant to §§ 45.1-361.15 and 45.1-361.22:1 of the Code.

4VAC25-165-30. Costs of arbitration.

Arbitrations shall be funded from accrued interest. The department shall determine on a case-by-case basis if sufficient funds exist to conduct an arbitration. Sufficiency of funds shall be determined by the amount of accrued interest available at the time arbitration is requested, less estimated costs of pending arbitrations. If sufficient funds are not available, the department shall maintain a waiting list of parties willing to arbitrate.

4VAC25-165-40. Qualification of arbitrators.

The department shall review all applications from potential arbitrators pursuant to § 45.1-361.22:1 C of the Code. Applications shall be submitted on a form prescribed by the department. In order to qualify, applicants must demonstrate substantial expertise in mineral title examination. Substantial expertise shall be determined on an individual basis. The department shall notify applicants deemed to be qualified.

The department shall maintain a list of qualified arbitrators and update it annually. The list shall be supplied to the court when the board issues an order for arbitration. Pursuant to § 45.1-361.22:1 C of the Code, the court has the discretion to appoint an individual not on the list of qualified arbitrators.

In order to maintain a current, accurate list, qualified arbitrators shall at least annually update their disclosures to the department.

4VAC25-165-50. Agreement to arbitrate.

Claimants shall submit their request of arbitration to the board on a form prescribed by the department. Claimants shall also provide an affidavit pursuant to § 45.1-361.22:1 A of the Code.

4VAC25-165-60. Conflicts of interest.

In addition to the limitations set forth in § 45.1-361.22:1 A of the Code, an arbitrator may not hear an arbitration if the arbitrator is related to one of the claimants, has a personal interest in the subject of the arbitration, has a present or former personal or business relationship with one of the claimants or other circumstances exist that might affect the arbitrator's ability to render a fair determination. If evidence of a conflict exists under this section, a claimant may petition the court to appoint a different arbitrator.

4VAC25-165-70. Location.

The arbitrator shall determine an appropriate time and place for the arbitration. The arbitration shall take place in the jurisdiction where the majority of the subject tract is located, unless all claimants agree to an alternate location. Notice to claimants shall be given pursuant to the requirements of § 45.1-361.22:1 D of the Code.

4VAC25-165-80. Postponement of arbitration.

Any request for postponement may be granted by the arbitrator if all claimants consent, or if good cause for a postponement is shown to the satisfaction of the arbitrator. Requests for postponement for cause should be made to the arbitrator at least 15 days before the hearing, unless the circumstances requiring the postponement do not allow 15 days' notice. Whenever a postponement is granted, the arbitrator will promptly reschedule the hearing and notify the board and the claimants.

4VAC25-165-90. Discovery.

Pursuant to §§ 8.01-581.06 and 45.1-361.22:1 D of the Code, the arbitrator may issue subpoenas, administer oaths, and take depositions. Additionally, any documents a claimant intends to introduce at the arbitration must be shared with the opposing claimant and the arbitrator not less than five days prior to the arbitration. If this provision is found not to be met, the arbitrator may elect to continue the arbitration.

4VAC25-165-100. Extension of arbitration.

If, pursuant to § 45.1-361.22:1 E of the Code, the claimants agree that the arbitrator may take longer than six months from the date the board ordered the arbitration to render a determination, the arbitrator shall notify the board of this extension.

4VAC25-165-110. Determination of arbitrator.

Pursuant to § 45.1-361.22:1 E of the Code, the determination of the arbitrator shall be in writing and sent to the board and each party to whom notice is required to be given. The determination shall include, at a minimum, a finding of facts and an explanation for the basis of the determination. A copy of the determination shall be placed on the department's website. The arbitrator shall record the determination with the Clerk's Office of the court.

4VAC25-165-120. Ex parte communications.

There shall be no direct communication between the claimants and the arbitrator concerning the merits of the dispute other than at the arbitration hearing. If an ex parte communication occurs between a party and the arbitrator outside of the arbitration hearing, the arbitrator shall notify the other parties of the date, time, place, and content of the communication.

4VAC25-165-130. Fees.

Arbitrators shall be paid at the rate of no more than $250 per hour. Expenses of the arbitrator incurred during the course of the arbitration shall be reimbursed in accordance with the State Travel Regulations prescribed by the Department of Accounts. Arbitrators shall submit a complete W-9 form to the department before payment is made.

Pursuant to § 45.1-361.22:1 F of the Code, payment of fees and expenses of the arbitration may be delayed if there are intervening disbursements from the general escrow account under § 45.1-361.22(5)(i) or (iii) of the Code that reduce the interest balance below the amount of fees and expenses requested.

4VAC25-165-140. Disbursement of proceeds.

Within 30 days of receipt of an affidavit from the claimants affirming the determination, the operator shall petition the board for disbursement pursuant to § 45.1-361.22 (5) of the Code.

NOTICE: The following forms used in administering the regulation have been filed by the Department of Mines, Minerals and Energy. The forms are not being published; however, the names of the forms are listed below. Online users of this issue of the Virginia Register of Regulations may access the form by clicking on the name of the form. The form is also available for public inspection at the Department of Mines, Minerals and Energy, 1100 Bank Street, Richmond, Virginia 23219, or at the Office of the Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond, Virginia 23219.

FORMS (4VAC25-165)

Arbitrator Qualification Form, DGO-ARB (rev. 5/10).

Agreement to Arbitrate Form, DGO-ARB2 (rev. 7/10).

VA.R. Doc. No. R11-2556; Filed December 20, 2010, 2:37 p.m.

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TITLE 6. CRIMINAL JUSTICE AND CORRECTIONS

CRIMINAL JUSTICE SERVICES BOARD

Proposed Regulation

Title of Regulation: 6VAC20-60. Rules Relating to Compulsory Minimum Training Standards for Dispatchers (amending 6VAC20-60-10, 6VAC20-60-20, 6VAC20-60-25; repealing 6VAC20-60-100).

Statutory Authority: § 9.1-102 of the Code of Virginia.

Public Hearing Information:

May 5, 2011 – 9 a.m. – General Assembly Building, 910 Capitol Street, House Room D, Richmond, VA

Public Comment Deadline: March 18, 2011.

Agency Contact: Judith Kirkendall, Regulatory Coordinator, Department of Criminal Justice Services, 1100 Bank Street, 12th Floor, Richmond, VA 23219, telephone (804) 786-8003, FAX (804) 225-3853, or email judith.kirkendall@dcjs.virginia.gov.

Basis: Section 9.1-102 of the Code of Virginia authorizes the Criminal Justice Services Board to adopt regulations for the administration of Chapter 1 (§ 9.1-100 et seq.) of Title 9.1 of the Code of Virginia. Subdivision 10 of § 9.1-102 authorizes the establishment of compulsory minimum training standards for all dispatchers employed by or in any local or state government agency, whose duties include the dispatching of law-enforcement personnel.

Purpose: The purpose of the amendments is to enable standing committees to function more smoothly to achieve the goals and objectives for which they were created. Conducting annual reviews and adopting updates to training standards for dispatchers directly impacts the safety and welfare of citizens who call 9-1-1.

Substance: The amended regulation reconstitutes the Dispatcher Curriculum Review Committee from 13 to nine members due to the difficulties in getting a quorum for an annual meeting, transfers approval authority from the Criminal Justice Services Board to the Committee on Training to have the Committee on Training responsible for changes to all parts of the training standards, and incorporates the suggestions for change to the on-the-job training requirements proposed by the Dispatcher Curriculum Review Committee. Over 10 years of experience in working in the current manner strongly suggests all parties would be better served by having the Committee on Training handle all suggested changes to the training standards using the process set up in the rules. The same change in approval authority was recently approved through the fast-track process for the rules governing both entry-level law-enforcement training and entry-level jail/court security/civil process service training.

Issues: The advantages to the public and to the Commonwealth include a simpler, less costly, and less time consuming method for changing the performance outcome statement that is part of the training standards. This enables annual updates to be completed more efficiently and provides greater clarity to instructors and recruits involved in 9-1-1 dispatcher training. The safety and welfare of the public is paramount in setting forth training requirements while providing protection from incompetent or unqualified persons from performing dispatcher duties. There are no disadvantages.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed regulations will 1) reduce the number of the Dispatcher Curriculum Review Committee from 13 to 9, 2) transfer the approval authority of the performance outcomes from the Criminal Justice Services Board to its standing committee on training, and 3) remove the performance outcomes from the regulations.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Criminal Justice Services Board proposes to reduce the number of the Dispatcher Curriculum Review Committee from 13 to 9. According to the Department of Criminal Justice Services, it has been somewhat challenging to make sure that at least seven committee members are present at annual meetings so that decisions could be made. With the proposed reduction, only five members will be needed to approve decisions. In addition to the improved efficiency in decision making, approximately $1,000 is expected to be saved in terms of reduced reimbursable costs such as travel, lodging, and meal expenses as the number of members whose expenses are reimbursed is reduced.

Also, the board proposes to transfer the approval authority of the performance outcomes from the Criminal Justice Services Board to its standing committee on training. The proposed change will streamline the process by removing a redundant step in how the performance outcomes are approved.

Finally, the board proposes to remove the performance outcomes from the regulations. This change will allow the standing committee on training to update the standards as needed without having to go through the regulatory process. To ensure accessibility of these standards to regulated entities and public, the board will continue to publish them on its website.

Businesses and Entities Affected. There are approximately 3,300 dispatchers in Virginia.

Localities Particularly Affected. The proposed regulations apply throughout the Commonwealth.

Projected Impact on Employment. No significant effect on employment is expected.

Effects on the Use and Value of Private Property. No significant effect on the use and value of private property is expected.

Small Businesses: Costs and Other Effects. No significant direct costs or other effects on small businesses are expected.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed regulations do not have a direct adverse impact on small businesses.

Real Estate Development Costs. No significant effect on real estate development costs is expected.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 36 (06). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPBs best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis: The Department of Criminal Justice Services Standards and Training Section concurs with the economic impact analysis as reviewed by the Department of Planning and Budget.

Summary:

The proposed amendments (i) reduce the number of members serving on the Curriculum Review Committee from 13 to nine; (ii) transfer the approval authority of the performance outcomes from the Criminal Justice Services Board to the board's Committee on Training; and (iii) remove the performance outcomes from the regulations.

6VAC20-60-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise:

"Academy director" means the chief administrative officer of a certified training academy.

"Agency administrator" means any chief of police, sheriff, or agency head of a state or local law-enforcement agency or nonlaw-enforcement head of a communications center.

"Board" means the Criminal Justice Services Board.

"Certified training academy" means a training facility in compliance with academy certification standards and operated by the state or local unit(s) of government for the purpose of providing instruction of compulsory minimum training standards.

"Compulsory minimum training standards" means the performance outcomes and minimum hours approved by the Criminal Justice Services Board.

"Curriculum Review Committee" means the committee consisting of the following 13 nine individuals: ~~four~~ two members of the committee shall represent regional criminal justice academies, ~~four~~ two members of the committee shall represent independent criminal justice academies, one member shall represent the Department of State Police Training Academy, and four experienced communications personnel shall represent emergency communication functions. The Committee on Training shall appoint members of the Curriculum Review Committee.

"Department" means the Department of Criminal Justice Services.

"Director" means the chief administrative officer of the Department of Criminal Justice Services.

"Dispatcher" means any person employed by or in any local or state government agency either full or part-time whose duties include the dispatching of law-enforcement personnel.

"Emergency medical dispatcher training" means training which meets or exceeds the training objectives as provided in Performance Outcome 1.6, which is set out in 6VAC20-60-100.

"Standard" means Performance Outcome, Training Objective, Criteria for Testing, and Lesson Plan Guide relating to compulsory minimum training for dispatchers and is found on the department's website.

"VCIN/NCIC training" means approved training as specified by the Virginia Department of State Police for dispatchers accessing Virginia Crime Information Network/National Crime Information Center information.

6VAC20-60-20. Compulsory minimum training standards.

Pursuant to the provisions of § ~~9.1-102(8)~~ 9.1-102 (10) of the Code of Virginia, the board establishes the ~~following~~ categories of training as listed below as the compulsory minimum training standards for dispatchers:

~~1. The performance outcomes are specified in 6VAC20-60-100. Performance outcomes may not be changed except as noted in 6VAC20-60-25 through the Administrative Process Act.~~

~~2. Categories of training are listed below:~~

a. 1. Category 1 - Communications.

b. 2. Category 2 - Judgment.

c. 3. Category 3 - Legal Issues.

d. 4. Category 4 - Professionalism.

e. 5. Category 5 - On-the-Job Training.

6VAC20-60-25. Approval authority.

A. The Criminal Justice Services Board shall be the approval authority for the training categories ~~and performance outcomes~~ of the compulsory minimum training standards. Amendments to training categories ~~and performance outcomes~~ shall be made in accordance with the provisions of the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia).

B. The Committee on Training of the Criminal Justice Services Board shall be the approval authority for the performance outcomes, training objectives, criteria, and lesson plan guides that support the performance outcomes. ~~Training~~ Performance outcomes, training objectives, criteria, and lesson plan guides supporting the compulsory minimum training standards ~~and performance outcomes~~ may be added, deleted, or amended by the Committee on Training based upon written recommendation of a chief of police, sheriff, agency administrator, academy director, nonlaw-enforcement head of a communications center, or the Curriculum Review Committee.

Prior to approving changes to the performance outcomes, training objectives, criteria, or lesson plan guides, the Committee on Training shall conduct a public hearing. Sixty days prior to the public hearing, the proposed changes shall be distributed to all affected parties for the opportunity to comment. Notice of change of the performance outcomes, training objectives, criteria, and lesson plan guides shall be filed for publication in the Virginia Register of Regulations upon adoption, change, or deletion. The department shall notify each certified academy in writing of any new, revised, or deleted objectives. Such adoptions, changes, or deletions shall become effective 30 days after notice of publication in the Virginia Register.

6VAC20-60-100. ~~Performance outcomes for compulsory minimum training standards for dispatchers.~~ (Repealed.)

~~Category 1 - Communication~~

In conjunction with responding to calls for public safety services, the dispatcher faces challenges every day that require knowledge, judgment, skill, and ability from multiple and varied sources. To meet these challenges successfully, the dispatcher must develop good communication skills in the performance of relevant duties. Expected performance outcomes in this category include the following:

~~1.1 Obtain information related to complaints and/or requests for service from the public, field units, and other agencies.~~

~~1.2 Perform multiple tasks related to receiving information and dispatching appropriate response units.~~

~~1.3 Apply standard communication techniques in receiving and transmitting information via radio and telephone.~~

~~1.4 Disseminate information to the public, field units, and other agencies using standard communication and dispatching techniques.~~

~~1.5 Apply standard communication techniques when handling specialized situations via radio, telephone, and in person.~~

~~1.6 Assist callers by providing initial emergency medical care information to victims of accidents, illness and/or crimes, if applicable.~~

~~1.7 Respond to a report of a disaster.~~

~~Category 2 - Judgment~~

In conjunction with responding to calls for public safety services, the dispatcher faces challenges every day that require knowledge, judgment, skill, and ability from multiple and varied sources. To meet these challenges successfully, the dispatcher must develop good judgment in the performance of relevant duties. Expected performance outcomes in this category include the following:

~~2.1 Receive, prioritize, and handle multiple tasks related to emergency call taking and dispatching using judgment based on policies and procedures.~~

~~2.2 Receive and handle various types of nonemergency complaints and requests from the public or other agencies by using judgment based on policies and procedures.~~

~~Category 3 - Legal Issues~~

In conjunction with responding to calls for public safety services, the dispatcher must identify legal requirements based on the Constitution of the United States, the Code of Virginia, and/or local ordinances where applicable. Expected performance outcomes in this category include the following:

~~3.1 Apply federal/state laws, local ordinances, and rules and regulations established for dispatch operations.~~

~~3.2 Perform the duties of a dispatcher with awareness of general liability applicable to this job.~~

~~3.3 Testify in court.~~

~~Category 4 - Professionalism~~

In conjunction with responding to calls for public safety services, the dispatcher must demonstrate professionalism in every aspect of performance of these services. The dispatcher faces challenges every day that require knowledge, judgment, skill, and ability from multiple and varied sources. To meet those challenges successfully, the dispatcher must attain and maintain professionalism in the performance of all duties. Expected performance outcomes include the following:

~~4.1 Respond to stressful situations professionally.~~

~~4.2 Respond to abusive callers or difficult people professionally.~~

~~Category 5 - On-the-Job Training~~

In conjunction with responding to calls for service, the dispatcher must identify requirements related to the employing law-enforcement agency. These requirements may be general in nature, but serve to enhance the ability of both the dispatcher and the agency to provide needed public safety services. Expected performance outcomes in this category include the following:

~~5.1 Demonstrate ability to utilize agency equipment to handle 911 call taking and dispatching duties.~~

~~5.2 Quickly and accurately recording information into CAD and/or on cards.~~

~~5.3 Use of maps and street files to identify locations and proper codes.~~

~~5.4 Accurately type information received verbally.~~

~~5.5 Transmit the complaint to radio dispatch by computer/telephone, or personally dispatch appropriate response unit(s).~~

~~5.6 Use written information or computer-aided dispatch to assign law-enforcement, fire, and rescue units.~~

~~5.7 Monitor and update status of incidents and status of field units.~~

~~5.8 Update the field units regarding incident and status information.~~

~~5.9 Use written information or computer-aided dispatch to redirect incidents to another dispatcher.~~

~~5.10 Monitor, respond, and dispatch by radio, computer transmission, or written information to and from field units.~~

~~5.11. Basic concepts and differences between basic and enhanced 9-1-1 telecommunications systems.~~

~~5.12 Conference phone lines or patch radio frequencies to enable communications.~~

~~5.13 Monitor transferred call until connection is established.~~

~~5.14 Receive and handle TTY calls.~~

~~5.15 Hold phone line to complete a telephone trace.~~

5.16 Use ANI/ALI to locate and identify caller, if applicable.*

5.17 Complete ANI/ALI forms to update entries, if applicable.*

5.18 Use call check system to replay "difficult" calls, if applicable.*

5.19 Use "emergency ring down" phones, if applicable.*

~~(*These criteria must be tested if the agency utilizes this telecommunications equipment.)~~

~~5.20 Conduct/monitor civil defense test.~~

~~5.21 Enter data into a record system.~~

~~5.22 Generate reports.~~

~~5.23 Restart the computer system, if applicable.~~

~~5.24 Transcribe and/or copy a tape recording.~~

~~5.25 Operate radio equipment.~~

~~5.26 Operate paging equipment.~~

~~5.27 Patch radio frequencies.~~

~~5.28 Perform radio frequency tests.~~

~~5.29 Dispatch by radio transmission.~~

~~5.30 Use of alternative communication methods if regular radio is down.~~

~~5.31 Using NCIC or other manuals for assistance.~~

~~5.32 Transmitting emergency bulletins by TTY (if applicable).~~

~~5.33 Query vehicle.~~

~~5.34 Query Computerized Criminal History (CCH).~~

~~5.35 Query stored vehicles.~~

~~5.36 Query driver's license.~~

~~5.37 Enter administrative license suspension (if applicable).~~

~~5.38 Query stolen articles.~~

~~5.39 Query gun.~~

~~5.40 Query wanted/missing persons.~~

~~5.41 Clearing entries (if applicable).~~

~~5.42 Enter/query protective orders.~~

~~5.43 Modify information in computer database (if applicable).~~

~~5.44 Hit confirmation process (to include placing locate).~~

~~5.45 Informal and formal messages.~~

~~NOTE: TRAINEE MUST COMPLETE VCIN/NCIC TRAINING PRIOR TO BEING TESTED ON THE JOB BY CRITERIA NUMBERS 5.31 THROUGH 5.45.~~

~~5.46 Answer, refer, and route calls/messages to proper departmental unit.~~

~~5.47 Prepare a general broadcast bulletin.~~

~~5.48 Complete data entry forms.~~

~~5.48.1 Wanted or missing person.~~

~~5.48.2 Stolen vehicle.~~

~~5.49 Prepare an activity log.~~

~~5.50 Prepare a summary report.~~

~~5.51 Prepare an intra-departmental memo.~~

~~5.52 Monitor alarm/security systems, if applicable.~~

~~5.53 Receive opening/closing calls, if applicable.~~

~~5.54 Maintain equipment within the communications center.~~

~~5.55 Troubleshoot equipment problems.~~

~~5.56 Document equipment problems.~~

~~5.57 Identify local ordinances affecting dispatch operations.~~

~~5.58 Use and maintain maps and cross street directories.~~

~~5.59 Demonstrate map reading skills to include street directions.~~

~~5.60 Use and maintain log shift rosters of assigned field units.~~

~~5.61 Use and maintain department files for warrants and/or other citations.~~

~~5.62 Use and maintain complaint history files.~~

~~5.63 Use and maintain specialized logs or data bases, e.g. medical incidents, problem addresses, restraining orders, etc.~~

~~5.64 Use and maintain towing agency rotation logs.~~

~~5.65 Use and maintain business directories.~~

~~5.66 Use and maintain a directory of services provided by other agencies.~~

~~5.67 Answer an anonymous witness line, e.g., Crime Stoppers.~~

~~5.68 Provide information, refer and/or transfer calls to appropriate departments or agencies as a general service to the public.~~

~~5.69 Provide requested information to authorized departments or agencies.~~

~~5.70 Maintain general resource material in the Communications Center.~~

~~5.71 Maintain order and cleanliness in the Communications Center.~~

VA.R. Doc. No. R09-1887; Filed December 15, 2010, 12:53 p.m.

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TITLE 10. FINANCE AND FINANCIAL INSTITUTIONS

STATE CORPORATION COMMISSION

Final Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is exempt from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Title of Regulation: 10VAC5-200. Payday Lending (amending 10VAC5-200-100).

Statutory Authority: §§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Effective Date: January 1, 2011.

Agency Contact: E.J. Face, Jr., Bureau of Financial Institutions Commissioner, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone (804) 371-9659, FAX (804) 371-9416, or email joe.face@scc.virginia.gov.

Summary:

Based on Chapter 477 of the 2010 Acts of Assembly, the State Corporation Commission is amending 10VAC5-200-100, which governs the conduct of other business in payday lending offices. The amendments to 10VAC5-200-100 A 2 prohibit the business of making loans under an open-end credit plan from a licensee's payday lending office. However, amendments to 10VAC5-200-100 F retain certain conditions for open-end auto title lending because Chapter 477 permits lenders to continue collecting payments on their outstanding open-end auto title loans. Amendments to 10VAC5-200-100 B clarify the standards for approving the conduct of other business in payday lending offices, and the amendments to 10VAC5-200-100 G prescribe the uniform conditions that would be applicable to conduct a motor vehicle title lending business from a licensee's payday lending office. An additional disclosure requirement is added at the end of 10VAC5-200-100 J and K. Lastly, based on Chapter 794 of the 2010 Acts of Assembly, which recodified Title 6.1 of the Code of Virginia as Title 6.2 of the Code of Virginia, the amendments update Code of Virginia citations.

AT RICHMOND, DECEMBER 27, 2010

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. BFI-2010-00253

Ex Parte: In re: other business
in payday lending offices

ORDER ADOPTING A REGULATION

On November 2, 2010, the State Corporation Commission ("Commission") entered an Order to Take Notice of a proposal by the Bureau of Financial Institutions ("Bureau") to amend 10 VAC 5-200-100 of the Virginia Administrative Code, which governs the conduct of other business in payday lending offices. The Order and proposed regulation were published in the Virginia Register of Regulations on November 22, 2010, posted on the Commission's website, and mailed to all licensed payday lenders and other interested parties. Licensed payday lenders and other interested parties were afforded the opportunity to file written comments or request a hearing on or before December 10, 2010. No comments or requests for a hearing were filed.

NOW THE COMMISSION, upon consideration of the proposed regulation, the record herein, and applicable law, concludes that the proposed regulation should be adopted with an effective date of January 1, 2011.

Accordingly, IT IS ORDERED THAT:

(1) The proposed regulation, 10 VAC 5-200-100 of the Virginia Administrative Code, as attached hereto, is adopted effective January 1, 2011.

(2) This Order and the attached regulation shall be posted on the Commission's website at http://www.scc.virginia.gov/case.

(3) The Commission's Division of Information Resources shall send a copy of this Order, including a copy of the attached regulation, to the Virginia Registrar of Regulations for publication in the Virginia Register of Regulations.

(4) This case is dismissed from the Commission's docket of active cases.

AN ATTESTED COPY hereof, together with a copy of the attached regulation, shall be sent by the Clerk of the Commission to the Commission's Office of General Counsel and the Commissioner of Financial Institutions, who shall send a copy of this Order, together with a copy of the attached regulation, to all licensed payday lenders and other interested parties designated by the Bureau.

10VAC5-200-100. Other business in payday lending offices.

A. This section governs the conduct of any business other than payday lending where a licensed payday lending business is conducted. As used in this section, the term "other business operator" refers to a licensed payday lender or third party, including an affiliate of the licensed payday lender, who conducts or wants to conduct other business from one or more payday lending offices.

1. Pursuant to § ~~6.1-463~~ 6.2-1820 of the Code of Virginia, a licensee shall not conduct the business of making payday loans at any office, suite, room, or place of business where any other business is solicited or conducted, except a registered check cashing business or such other business as the commission determines should be permitted, and subject to such conditions as the commission deems necessary and in the public interest.

2. Notwithstanding any provision of this section or order entered by the commission prior to ~~February~~ October 1, 2010, the following other businesses shall not be conducted from any office, suite, room, or place of business where a licensed payday lending business is conducted:

a. Selling insurance or enrolling borrowers under group insurance policies.

b. Making loans under an open-end credit ~~or similar~~ plan as described in § ~~6.1-330.78~~ 6.2-312 of the Code of Virginia ~~unless the loans are secured by a security interest in a motor vehicle as this term is defined in § 46.2-100 of the Code of Virginia~~. However, if prior to October 1, 2010, a licensee received commission authority for an other business operator to conduct open-end credit business or open-end auto title lending business from the licensee's payday lending offices, the other business operator may continue collecting payments on any outstanding open-end loans (i) in accordance with the terms of its existing open-end credit agreements and (ii) subject to the conditions imposed by this section.

3. Pursuant to § ~~6.1-439~~ 6.2-2107 of the Code of Virginia, no person registered or required to be registered as a check casher under Chapter 17 21 (§ ~~6.1-432~~ 6.2-2100 et seq.) of Title ~~6.1~~ 6.2 of the Code of Virginia shall make loans from any location, including an office, suite, room, or place of business where a licensed payday lending business is conducted, unless the person is licensed under the Act and the loans are made in accordance with the Act.

B. ~~Upon the filing of a written application, provision of any information relating to the application as the Commissioner of Financial Institutions may require, and payment of the fee required by law,~~ No other business ~~may~~ shall be conducted in a location where a ~~licensed~~ licensee conducts a payday lending business ~~is conducted if the commission finds that (i)~~ unless the proposed other business is financial in nature~~; (ii) the proposed other business is in the public interest; (iii)~~ and the licensee obtains prior approval from the commission. Applications for approval shall be made in writing on a form provided by the Commissioner of Financial Institutions, and shall be accompanied by payment of the fee required by law and any information relating to the application that the Commissioner of Financial Institutions may require. In acting upon an application, the commission shall consider (i) whether the other business operator has the general fitness to warrant belief that the business will be operated in accordance with law; ~~and (iv)~~ (ii) whether the applicant has been operating its payday lending business in accordance with the Act and this chapter; and (iii) any other factors that the commission deems relevant. The commission shall in its discretion determine whether a proposed other business is "financial in nature," and shall not be obliged to consider the meaning of this term under federal law. A business is financial in nature if it primarily deals with the offering of debt, money or credit, or services directly related thereto.

C. Nonfinancial other business may be conducted pursuant to any order of the commission entered on or before June 15, 2004. However, this subsection shall not be construed to authorize any person to begin engaging in such other business at payday lending locations where such other business was not conducted as of June 15, 2004.

D. Written evidence of commission approval of each other business conducted by an other business operator should be maintained at each location where such other business is conducted.

E. Except as otherwise provided in subsection N O of this section, all approved other businesses in payday lending offices shall be conducted in accordance with the following conditions:

1. The licensee shall not make a payday loan to a borrower to enable the borrower to purchase or pay any amount owed in connection with the (i) goods or services sold, or (ii) loans offered, facilitated, or made, by the other business operator at the licensee's payday lending offices.

2. The other business operator shall comply with all federal and state laws and regulations applicable to its other business, including any applicable licensing requirements.

3. The other business operator shall not use or cause to be published any advertisement or other information that contains any false, misleading, or deceptive statement or representation concerning its other business, including the rates, terms, or conditions of the products, services, or loans that it offers. The other business operator shall not make or cause to be made any misrepresentation as to (i) its being licensed to conduct the other business, or (ii) the extent to which it is subject to supervision or regulation.

4. The licensee shall not make a payday loan or vary the terms of a payday loan on the condition or requirement that a person also (i) purchase a good or service from, or (ii) obtain a loan from or through, the other business operator. The other business operator shall not (a) sell its goods or services, (b) offer, facilitate, or make loans, or (c) vary the terms of its goods, services, or loans, on the condition or requirement that a person also obtain a payday loan from the licensee.

5. The other business operator shall maintain books and records for its other business separate and apart from the licensee's payday lending business and in a different location within the licensee's payday lending offices. The bureau shall be given access to all such books and records and be furnished with any information and records that it may require in order to determine compliance with all applicable conditions, laws, and regulations.

F. If a licensee ~~(i)~~ received commission authority for an other business operator to conduct open-end credit business or open-end auto title lending business from the licensee's payday lending offices, ~~or (ii) receives commission authority for an other business operator to conduct open-end auto title lending business from the licensee's payday lending offices,~~ the following additional conditions shall be applicable:

1. ~~Any loan made by the other business operator pursuant to an open-end credit agreement shall be secured by a security interest in a motor vehicle, as defined in § 46.2-100 of the Code of Virginia~~ The other business operator shall not (i) enter into any new open-end credit agreements or (ii) make any new loans pursuant to its existing open-end credit agreements.

2. The licensee shall not make a payday loan to a person if (i) the person has an outstanding open-end loan from the other business operator, or (ii) on the same day the person repaid or satisfied in full an open-end loan from the other business operator.

3. The other business operator shall not make an open-end loan to a person pursuant to an open-end credit agreement if (i) the person has an outstanding payday loan from the licensee, or (ii) on the same day the person repaid or satisfied in full a payday loan from the licensee.

~~4. The other business operator and the licensee shall not make an open-end loan and a payday loan contemporaneously or in response to a single request for a loan or credit.~~

5. The licensee and other business operator shall provide each applicant for a payday loan or open-end credit plan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's payday lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product.

6. Upon entering into an open-end credit plan secured by a borrower's motor vehicle, the other business operator shall record its security interest with the Department of Motor Vehicles and maintain adequate supporting documentation thereof in its loan file.

7. The other business operator shall not enter into an open-end credit plan secured by a prospective borrower's motor vehicle if the motor vehicle is already subject to a purchase money security interest or other outstanding lien. The other business operator shall maintain adequate supporting documentation in its loan file that a borrower's motor vehicle was not subject to a purchase money security interest or other outstanding lien at the time the borrower entered into the open-end credit plan.

G. If a licensee received or receives commission authority for an other business operator to conduct a motor vehicle title lending business from the licensee's payday lending offices, the following additional conditions shall be applicable:

1. The other business operator shall be licensed or exempt from licensing under Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia.

2. The licensee shall not make a payday loan to a person if (i) the person has an outstanding motor vehicle title loan from the other business operator, or (ii) on the same day the person repaid or satisfied in full a motor vehicle title loan from the other business operator.

3. The other business operator shall not make a motor vehicle title loan to a person if (i) the person has an outstanding payday loan from the licensee, or (ii) on the same day the person repaid or satisfied in full a payday loan from the licensee.

4. The other business operator and the licensee shall not make a motor vehicle title loan and a payday loan contemporaneously or in response to a single request for a loan or credit.

5. The licensee and other business operator shall provide each applicant for a payday loan or motor vehicle title loan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's payday lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product. The disclosure shall also identify the collateral, if any, that will be used to secure repayment of each loan product.

H. If a licensee received or receives commission authority for an other business operator to conduct business as an authorized delegate or agent of a money order seller or money transmitter from the licensee's payday lending offices, the other business operator shall be and remain a party to a written agreement to act as an authorized delegate or agent of a person licensed or exempt from licensing as a money order seller or money transmitter under Chapter 12 19 (§ ~~6.1-370~~ 6.2-1900 et seq.) of Title ~~6.1~~ 6.2 of the Code of Virginia. The other business operator shall not engage in money order sales or money transmission services on its own behalf or on behalf of any person other than a licensed or exempt money order seller or money transmitter with whom it has a written agreement.

H. I. If a licensee received or receives commission authority for an other business operator to conduct the business of (i) tax preparation and electronic tax filing services, or (ii) facilitating third party tax preparation and electronic tax filing services, from the licensee's payday lending offices, the following additional conditions shall be applicable:

1. The licensee shall not make, arrange, or broker a payday loan that is secured by an interest in a borrower's tax refund, or in whole or in part by (i) any other assignment of income payable to a borrower, or (ii) any assignment of an interest in a borrower's account at a depository institution. This condition shall not be construed to prohibit the licensee from making a payday loan that is secured solely by a check payable to the licensee drawn on a borrower's account at a depository institution.

2. The other business operator shall not engage in the business of (i) accepting funds for transmission to the Internal Revenue Service or other government instrumentalities, or (ii) receiving tax refunds for delivery to individuals, unless licensed or exempt from licensing under Chapter 12 19 (§ ~~6.1-370~~ 6.2-1900 et seq.) of Title ~~6.1~~ 6.2 of the Code of Virginia.

I. J. If a licensee received or receives commission authority for an other business operator to conduct the business of facilitating or arranging tax refund anticipation loans or tax refund payments from the licensee's payday lending offices, the following additional conditions shall be applicable:

1. The other business operator shall not facilitate or arrange a tax refund anticipation loan or tax refund payment to enable a person to pay any amount owed to the licensee as a result of a payday loan transaction.

2. The other business operator and the licensee shall not facilitate or arrange a tax refund anticipation loan or tax refund payment and make a payday loan contemporaneously or in response to a single request for a loan or credit.

3. The licensee shall not make, arrange, or broker a payday loan that is secured by an interest in a borrower's tax refund, or in whole or in part by (i) any other assignment of income payable to a borrower, or (ii) any assignment of an interest in a borrower's account at a depository institution. This condition shall not be construed to prohibit the licensee from making a payday loan that is secured solely by a check payable to the licensee drawn on a borrower's account at a depository institution.

4. The other business operator shall not engage in the business of receiving tax refunds or tax refund payments for delivery to individuals unless licensed or exempt from licensing under Chapter 12 19 (§ ~~6.1-370~~ 6.2-1900 et seq.) of Title ~~6.1~~ 6.2 of the Code of Virginia.

5. The licensee and other business operator shall provide each applicant for a payday loan or tax refund anticipation loan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's payday lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product. The disclosure shall also identify the collateral, if any, that will be used to secure repayment of each loan product.

J. K. If a licensee received or receives commission authority for an other business operator to conduct a consumer finance business from the licensee's payday lending offices, the following additional conditions shall be applicable:

1. The licensee shall not make a payday loan to a person if (i) the person has an outstanding consumer finance loan from the other business operator, or (ii) on the same day the person repaid or satisfied in full a consumer finance loan from the other business operator.

2. The other business operator shall not make a consumer finance loan to a person if (i) the person has an outstanding payday loan from the licensee, or (ii) on the same day the person repaid or satisfied in full a payday loan from the licensee.

3. The licensee and other business operator shall not make a payday loan and a consumer finance loan contemporaneously or in response to a single request for a loan or credit.

4. The licensee and other business operator shall provide each applicant for a payday loan or consumer finance loan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's payday lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product. The disclosure shall also identify the collateral, if any, that will be used to secure repayment of each loan product.

K. L. If a licensee received or receives commission authority for an other business operator to conduct the business of operating an automated teller machine from the licensee's payday lending offices, the other business operator shall not charge a fee or receive other compensation in connection with the use of its automated teller machine by a person when the person is withdrawing funds in order to make a payment on a payday loan from the licensee.

L. M. The commission may impose any additional conditions upon the conduct of other business in payday lending offices that it deems necessary and in the public interest.

M. N. Except as otherwise provided in subsection N O of this section, the conditions set forth or referred to in subsections E through L M of this section shall supersede the conditions set forth in the commission's approval orders entered prior to ~~February 1, 2010~~ January 1, 2011.

N. O. If prior to ~~February 1, 2010~~ January 1, 2011, a licensee received commission authority for an other business operator to conduct a business not identified in subsections F through K L of this section, the conditions that were imposed by the commission at the time of the approval shall remain in full force and effect.

O. P. Failure by a licensee or other business operator to comply with any provision of this section or any condition imposed by the commission, or failure by a licensee to comply with the Act, this chapter, or any other law or regulation applicable to the conduct of the licensee's business, may result in ~~the~~ revocation of the authority to conduct other business~~, fines, license suspension, license revocation, or other appropriate~~ or any form of enforcement action specified in 10VAC5-200-120.

VA.R. Doc. No. R11-2641; Filed December 28, 2010, 12:59 p.m.

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TITLE 12. HEALTH

DEPARTMENT OF MEDICAL ASSISTANCE SERVICES

Proposed Regulation

Title of Regulation: 12VAC30-20. Administration of Medical Assistance Services (amending 12VAC30-20-210).

Statutory Authority: §§ 32.1-324 and 32.1-325 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: March 18, 2011.

Agency Contact: Patricia Taylor, Program Operations Division, Department of Medical Assistance Services, 600 East Broad Street, Richmond, VA 23219, telephone (804) 371-6333, FAX (804) 786-1680, or email patricia.taylor@dmas.virginia.gov.

Basis: Section 32.1-325 of the Code of Virginia grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance. Section 32.1-324 of the Code of Virginia authorizes the Director of DMAS to administer and amend the Plan for Medical Assistance according to the board's requirements. The Medicaid authority as established by § 1902 (a) of the Social Security Act (42 USC § 1396a) provides governing authority for payments for services.

Purpose: This regulatory action is intended to clarify that the Health Insurance Premium Payment Program (HIPP) eligibility evaluation includes whether family healthcare coverage exists at the time that HIPP participation is evaluated, regardless of whether the eligibility evaluation is at the time of initial application or during a reevaluation. Upon implementation of this change, having existing family health care coverage will be considered in the HIPP eligibility determination. This change will require the amendment of regulations addressing HIPP eligibility, family healthcare coverage, and a clarification of the cost-effectiveness methodology. These changes are needed to ensure that HIPP payments made for the participants enrolled in the HIPP program are overall cost effective for the Commonwealth.

Substance: When the HIPP program was enacted in 1991 by the federal government it was envisioned as a means to reduce the cost of the Medicaid program by shifting the cost of medical expenses onto the employer health plan if one was available. The HIPP regulations require a cost-effectiveness determination of the employer health plan for enrollment. Cost effectiveness is defined as meaning that it is likely to cost the state less to pay the employee's share of the health insurance premium and any cost sharing items for the Medicaid eligible household members than it would cost otherwise under Medicaid. As a result of Medicaid eligibility rules, circumstances exist that allow a family member to be evaluated for Medicaid without evaluating family income. Eligibility is based on the individual's income only. These Medicaid enrollees whose eligibility is not determined based on family household income are likely to be covered under a family health insurance policy that includes family members not enrolled in Medicaid. Under the current changes being made in this regulation, a family that would have family health coverage for three or more members not enrolled in Medicaid would not be eligible for the HIPP program. The family would have the family coverage regardless if a family member was enrolled in Medicaid; therefore, the Commonwealth will no longer enroll Medicaid recipients in HIPP who would otherwise remain enrolled in the family health insurance if HIPP were not available.

High deductible health plans (HDHPs) are not cost effective for the HIPP program. In recent years as a result of increased insurance costs, many health care plans have adopted "high deductible" plans. An HDHP is defined in § 232(c)(2) of the Internal Revenue Code of 1986. The Department of Treasury updates the deductible amounts on an annual basis. These plans were nonexistent at the inception of the HIPP program; however, they have become more prevalent in recent years as health insurance premiums have increased. Medicaid would be paying all medical expenses until the deductible is met as well as the monthly premium. Because Medicaid eligibility only exists on a month-to-month basis, HDHPs are not cost effective for the HIPP program. Inclusion of this language provides clarity to the process that is currently followed today and is consistent with current federal regulations. The Child Health Insurance Program Reauthorization Action of 2009 included additional options for Premium Assistance Program under § 1906A of the Social Security Act and specifically excludes HDHP coverage for consideration.

Program participation requirements have been defined to ensure participants initially found eligible continue to meet the cost-effectiveness requirements. Additionally, program termination reasons have been included in the regulations. Current regulations provided reasons for terminating payments; however, nothing was defined regarding termination from the program. Including termination reasons provides clear authority to terminate participation in the program when participation requirements are not met. These regulations respond to the General Assembly's mandate clarifying several aspects of the HIPP cost effectiveness methodology, including promulgating several new definitions and addressing family healthcare issues with regard to HIPP.

Current regulations provided a clause for consideration for extraordinary circumstances of some recipients who are not eligible for HIPP. This language was removed because these eligibles are not cost effective for the HIPP program as they have limited eligibility, reside in a nursing home, or are Medicare eligible. Revisions were made to clarify that premium assistance subsidies begin the month after a completed application is received rather than at the time the cost effectiveness determination is made. This change reflects the current methodology used.

Language was revised regarding the submission of documentation required for premium assistance subsidy reimbursement. The HIPP program became an optional program effective July 23, 2009; participation in HIPP is no longer a condition for Medicaid eligibility. Language regarding the Department of Social Services receiving the required premium documentation has been removed from the regulation as the information is to be submitted directly to DMAS.

Note: At the time of the emergency regulation promulgated as a precursor to this proposed regulation, 12VAC30-20-210 was also the subject of a fast-track regulatory action. Due to the difficulties of effecting changes in this section at the time another action is taking effect in the same regulatory subsection, DMAS elected to make the emergency changes both in 12VAC30-20-210 and in a new mirror image subsection, 12VAC30-20-211. The changes of the text in 12VAC30-20-210 made in the fast-track regulation are now final, and there is no further need to have two separate regulatory sections to address the current changes in 12VAC30-20-210. DMAS is therefore inserting all the emergency changes from 12VAC30-20-211 into 12VAC20-30-210 in this proposed regulation. This will leave 12VAC30-20-210 as the only regulatory subsection in this action going forward to the proposed and final stages.

Note: DMAS noted in the published emergency regulation background document that the agency intended to address several other issues in this proposed and later final regulations that follow the prior emergency action. Therefore, DMAS is modifying 12VAC30-20-210 to address several issues pertinent to the HIPP program, but which are not part of Item 306 AAA of Chapter 781 of the 2009 Appropriation Act. These issues include, but are not limited to, requirements regarding consent forms in the HIPP program, termination from the program, and program eligibility and participation requirements.

Issues: The primary disadvantage of this regulatory action for the public is that the families that were enrolled in HIPP with family coverage have been canceled and new applications with existing family health insurance are being denied. The families were accustomed to receiving reimbursement for the cost of the health insurance plan and these funds have now been discontinued. However, these participants incurred the cost of the insurance prior to applying to the HIPP program. The intent of the HIPP program is to provide for premium assistance for an employer group health insurance plan when the Medicaid recipient otherwise would not be enrolled in the group health plan. The families impacted by this regulatory change are already enrolled in their employer group health plan and most likely will continue to be enrolled in their employer group health plan for the family members who are not enrolled in Medicaid regardless of whether they participated in HIPP. Although through this program there has been a cost savings for individual policy holders and their families, the purpose of the program is a cost savings measure for the Commonwealth. Removing these families from the HIPP program does not mean that an enrollee's Medicaid eligibility is lost. Recipients who remain otherwise eligible for Medicaid continue their Medicaid coverage.

The primary advantage to the Commonwealth is cost savings by ensuring that the HIPP program provides for premium assistance as appropriate by not enrolling participants who would otherwise be covered under private insurance. The HIPP program is intended to be an overall cost savings program for the Commonwealth. Medicaid enrollment has changed over the years with the inclusion of additional covered groups in which family income is not evaluated only the individual's income is taken into consideration, while the HIPP program regulations have not been revised to reflect these eligibility changes. The HIPP program was intended to provide premium assistance for Medicaid eligibles enrollment in their employer group health when they would otherwise not be enrolled without being in the HIPP program. The HIPP program was not intended to provide premium assistance for families who would have family coverage for the household members who are not enrolled in Medicaid. Participants being denied HIPP participation under this regulatory change are dissatisfied with this change; however, in most instances they were in HIPP when only one family member was enrolled in Medicaid. These current regulatory changes do not permit HIPP enrollment with family employer policies where three or more insured family members are non-Medicaid recipients.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed regulations make Medicaid recipients with a family health care coverage for three or more non-Medicaid family members ineligible for participation in Health Insurance Premium Payment program, update the regulations to conform to the practice of handling high deductible health plans, and clarify some of the current requirements.

Result of Analysis. There is insufficient data to accurately compare the magnitude of the benefits versus the costs. Detailed analysis of the benefits and costs can be found in the next section. A different design would likely yield greater benefits for at least one proposed change.

Estimated Economic Impact. The proposed regulations make Medicaid recipients with family health care coverage for three or more non-Medicaid family members ineligible for participation in the Health Insurance Premium Payment program (HIPP). Under HIPP, Medicaid pays for the employee's share of the health insurance premium and any other cost sharing fees if participation is found to be cost effective for Medicaid. Participation is considered cost effective if the premium assistance subsidy is likely to be less than the expected total expenditures that will be spent on that persons Medicaid coverage.

Prior to the proposed changes, a Medicaid recipient who is covered under a family health insurance program was eligible to receive a premium assistance subsidy for the entire cost of the plan. Chapter 781, Item 306 AAA of the 2009 Appropriation Act directed the Department of Medical Assistance Services (DMAS) to promulgate regulations making existing family healthcare coverage a factor in the determination of cost effectiveness. In response, the proposed regulations make participation in HIPP ineligible for those with a family health insurance plan for three or more non-Medicaid family members. Emergency regulations have been in effect and DMAS has been denying premium assistance to those with family health coverage with three or more non-Medicaid family members since October 5, 2009.

The main economic impact of these regulations falls on the families whose HIPP eligibility will now be denied. These families will no longer receive the subsidy they used to receive. Prior to the emergency regulations, Medicaid was paying 100 percent of the employees share of the family health plan which may have covered Medicaid ineligible parents or other children. Under the proposed changes, individuals with a family health plan for three or more non-Medicaid family members are ineligible to participate in HIPP. In response to the proposed changes, these families may or may not keep the Medicaid eligible family member in the family health plan.

If the families keep the Medicaid eligible member in their family health plan, then the Commonwealth enjoys expected savings in terms of the reduced subsidy payments without an increase in total Medicaid expenditures. This scenario is more likely in cases where dropping Medicaid eligible family member from the family health plan does not reduce the plan premiums or the family plan coverage is superior for the Medicaid eligible family member.

However, if families drop the Medicaid eligible family member from the family health plan, the medical expenses of that Medicaid eligible family member would be paid 100% by Medicaid. In this scenario, the Commonwealth would realize savings by not paying the subsidy, but would incur additional costs by paying for all healthcare expenses. Families may be inclined to use this option if dropping the Medicaid eligible family member from the family health plan reduces the plan premiums or Medicaid coverage is better than the family plan coverage for the Medicaid eligible individual.

DMAS estimates that this change produces $1.3 million savings annually in premium assistance subsidy to approximately 362 recipients. One half of these funds represents savings to the Commonwealth and the remaining half represents savings to the federal government. However, the additional expenditures the Medicaid program may incur because families drop the Medicaid eligible family member from the family health plan is not known. If the additional expenditures to the Medicaid exceed $1.3 million, the proposed changes may result in net costs to Virginia Medicaid.

It is important to note that the net economic effect of the proposed regulations on Virginia Medicaid depend on whether families keep the Medicaid eligible member in the family insurance plan. The proposed regulations do not contain any incentives for the families to keep the Medicaid eligible member in the family insurance plan. If there are enough cases where the Medicaid eligible family member is dropped from the family health plan, the additional health expenditures Medicaid would have to pay may exceed $1.3 million. Thus, there is chance that the proposed regulations may actually produce net costs rather than net benefits.

If incentives are provided to families to keep the Medicaid eligible member in the family insurance plan, the proposed changes would be more likely to produce net savings. For example, a subsidy may be given for the incremental cost of covering the Medicaid eligible member in the family insurance plan. If it is impossible to determine this incremental cost of coverage, the subsidy may be determined by prorating the number of children on the plan or the number of individuals on the plan. In short, instead of counting on families to keep their Medicaid eligible member in the family insurance plan, the proposed regulations could be designed to actually provide them with incentives to do so to ensure that the proposed changes actually provide net savings to Virginia Medicaid. It also appears that providing a subsidy for the Medicaid eligible members share of the family insurance premium would be more consistent with the intent of the HIPP program.

The proposed changes also update the regulations to conform to the practice of handling high deductible health plans. According to DMAS, since 2008 high deductible health plans have been considered ineligible to participate in HIPP. The proposed changes will reflect this change in practice. Although no immediate economic impact is expected upon promulgation of this particular change, DMAS estimates that from June 2008 through March 2010, 66 cases have been cancelled for high deductible plans representing $277,719 savings in premium assistance subsidy.

All of the remaining proposed changes are clarifications of the current requirements. None of these clarifications are expected to have any significant economic impact other than improving the clarity of the regulations and preventing potentially costly misunderstandings.

Businesses and Entities Affected. The proposed family health care related changes are estimated to affect 362 participants and the changes related to high deductible health plans are estimated to affect 66 participants in the HIPP program.

Localities Particularly Affected. The proposed regulations do not affect any locality more than others.

Projected Impact on Employment. The proposed changes are not expected to have a significant direct impact on employment.

Effects on the Use and Value of Private Property. The proposed changes are not expected to have a significant direct impact on the use and value of private property.

Small Businesses: Costs and Other Effects. The proposed regulations do not introduce any direct costs or other effects on small businesses.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed regulations do not introduce an adverse impact on small businesses.

Real Estate Development Costs. No effect on real estate development costs is expected.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 107 (09). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPBs best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis:

The Department of Medical Assistance Services has reviewed the economic impact analysis prepared by the Department of Planning and Budget regarding the regulations concerning the HIPP program, 12VAC30-20-210. The department concurs with the greater part of the analysis, but wishes to clarify one major point from the agency's standpoint.

The HIPP regulations require a cost-effectiveness determination of the employer health plan for enrollment. Cost effectiveness here means that it costs the state less to pay the employee's share of the family health insurance premium and cost sharing than pay the full medical costs for the enrollee. As a result of Medicaid eligibility rules, there are circumstances that allow a Medicaid applicant to be Medicaid eligible without regard for the income of the applicant's family. Such enrollees are likely to be covered under a family health insurance policy that includes family members who are not enrolled in Medicaid. Under the current changes being made in this regulation, a family that has family health coverage for three or more non-Medicaid family members would not be eligible for the HIPP program. Most families in these circumstances would have the family health coverage even if Medicaid were not paying their family premiums. Because the HIPP program is intended for families that cannot afford health insurance premiums, DMAS determined that it will no longer enroll Medicaid recipients in HIPP who would otherwise retain family coverage. These enrollees do not lose their Medicaid coverage. This regulatory change means, however, that DMAS will no longer make premium payments for both Medicaid and non-Medicaid family members.

DPB suggests an alternative approach in which the agency makes prorated premium payments based upon the number of non-Medicaid members in the family. This approach, however, creates an untenable administrative burden on the agency that would likely outweigh its fiscal benefits. In response to DPB's concerns, DMAS intends to revise the final HIPP regulations to create two exceptions for families with financial need who would be ineligible for the HIPP under the new rule. The first exception is for families who have a family health plan with three or family members not enrolled in Medicaid but have family income below the family income limit for eligibility. Some families have children who have aged out of Medicaid eligibility but are still covered under the family's insurance. With Health Care Reform, children can remain enrolled in a parent's health plan until age 26, so this change should address this issue in part.

The second exception is for families where at least one child is enrolled in Medicaid and the family would meet the income eligibility criteria for the Family Access to Medicaid Insurance Security (FAMIS) program, but because they have health insurance they are not eligible for FAMIS. In both types of these cases described here, where the family income is below the Medicaid or FAMIS income limits, the families will be considered for HIPP participation.

In addition, effective October 1, 2010, DMAS expanded the HIPP program by adopting the optional premium assistance program available under § 1906(A) of the Social Security Act. While this program is targeted toward Medicaid eligible children under the age of 19, it does not exclude existing family health plans. Therefore, some cases denied or canceled under the current HIPP regulations may meet the criteria under the 1906(A) premium assistance program. 1906A utilizes a more simplistic cost effective evaluation that only requires that the employer contribute at least 40% of the health insurance cost. DMAS intends to contact policy holders canceled from HIPP or denied participation under the current regulations to inform them of the expanded program available under 1906(A) for which they may be eligible.

DMAS acknowledges that a family may elect to drop a Medicaid-enrolled family member from their health plan if they are excluded from the HIPP program. However, from a review of cases affected by the new policy DMAS has concluded that families continue their private insurance regardless of whether HIPP premium assistance is available. If, in light of this regulatory change, a family drops the Medicaid eligible individual from the family plan, their estimated private premium costs will not decrease. It is far more likely that such families will keep the Medicaid eligible on their private health plan where it makes no difference in the amount of their premium.

DMAS continues to monitor the impact of the cases that have been canceled or denied premium assistance to determine those situations in which the Medicaid eligible has been removed from the family health plan. The agency will analyze these findings to determine if further modification to the regulations is warranted.

Summary:

Item 306 AAA of Chapter 781 of the 2009 Appropriation Act directed the Department of Medical Assistance Services to amend the State Plan for Medical Assistance to clarify that existing family healthcare coverage is a factor in the determination of eligibility under the Health Insurance Premium Payment program. More specifically, cases resulting in a determination that participation is denied based upon the existence of family health care coverage will be denied premium assistance.

The proposed amendments make Medicaid recipients with a family health care coverage for three or more non-Medicaid family members ineligible for participation in the Health Insurance Premium Payment program, update the regulations to conform to the practice of handling high deductible health plans, and clarify some of the current requirements.

12VAC30-20-210. State method on cost effectiveness of employer-based group health plans.

A. Definitions. The following words and terms when used in these regulations shall have the following meanings unless the context clearly indicates otherwise:

"Average monthly Medicaid cost" means average monthly medical expenditures based upon age, gender, Medicaid enrollment covered group, and geographic region of the state.

"Average monthly wraparound cost" means the average monthly aggregate costs for services not covered by private health insurance but covered under the State Plan for Medical Assistance, also includes copayments, coinsurance, and deductibles.

"Case" means all family members who are eligible for coverage under the group health plan and who are eligible for Medicaid.

"Code" means the Code of Virginia.

"Cost effective" and "cost effectiveness" mean the reduction in Title XIX expenditures, which are likely to be greater than the additional expenditures for premiums and cost-sharing items required under § 1906 of the Social Security Act (the Act), with respect to such enrollment.

"DMAS" means the Department of Medical Assistance Services consistent with Chapter 10 (§ 32.1-323 et seq.) of Title 32.1 of the Code of Virginia.

"DSS" means the Department of Social Services consistent with Chapter 1 (§ 63.2-100 et seq.) of Title 63.2 of the Code of Virginia.

"Family member" means individuals who are related by blood, marriage, or adoption, or legal custody.

"Family health plan" and "family care coverage" means a group health plan that covers three or more individuals. Family health plans that cover three or more non-Medicaid eligible individuals are not eligible for the HIPP premium assistance subsidy.

"Group health plan" means a plan which meets § 5000(b)(1) of the Internal Revenue Code of 1986, and includes continuation coverage pursuant to Title XXII of the Public Health Service Act, § 4980B of the Internal Revenue Code of 1986, or Title VI of the Employee Retirement Income Security Act of 1974. Section 5000(b)(1) of the Internal Revenue Code provides that a group health plan is a plan, including a self-insured plan, of, or contributed to by, an employer (including a self-insured person) or employee association to provide health care (directly or otherwise) to the employees, former employees, or the families of such employees or former employees, or the employer.

"High deductible health plan" means a plan as defined in § 223(c)(2) of Internal Revenue Code of 1986, without regard to whether the plan is purchased in conjunction with a health savings account (as defined under § 223(d) of such Code).

"HIPP" means the Health Insurance Premium Payment Program administered by DMAS consistent with § 1906 of the Act.

"Premium" means ~~that portion of the cost for the group health plan which is the responsibility of the person carrying the group health plan policy~~ the fixed cost of participation in the group health plan; such cost may be shared by the employer and employee or paid in full by either party.

"Premium assistance subsidy" means the portion that DMAS will pay of the ~~family's~~ employee's cost of participating in an employer's health plan to cover the Medicaid eligible members under the employer-sponsored plan if DMAS determines it is cost effective to do so.

"Recipient" means a person who is eligible for Medicaid as determined by the Department of Social Services.

B. Program purpose. The purpose of the HIPP Program shall be to:

1. ~~Enroll~~ To enroll recipients who have an available group health plan that is likely to be cost effective;

2. ~~Provide~~ To provide premium assistance subsidy for payment of the employee share of the premiums and other cost-sharing obligations for items and services otherwise covered under the State Plan for Medical Assistance (the Plan); and

3. ~~Treat~~ To treat coverage under such employer group health plan as a third party liability consistent with § 1906 of the Social Security Act.

C. Application required. A completed HIPP application must be submitted to DMAS to be evaluated for HIPP program eligibility; if HIPP program eligibility is established, DMAS shall then evaluate the group health plan for cost effectiveness. The HIPP application consists of the forms prescribed by DMAS and any necessary information as required by the program to evaluate eligibility and perform a cost-effectiveness evaluation.

D. Recipient eligibility. DMAS shall obtain specific information on all group health plans available to the recipients in the case including, but not limited to, the effective date of coverage, the services covered by the plan, the deductibles and copayments required by the plan, the exclusions to the plan, and the amount of the premium. Coverage that is not comprehensive shall be denied premium assistance. Cases that result in a determination that the applicant is not eligible for the HIPP program shall be denied premium assistance and shall not undergo further review as described in subsection E of this section. All family members who are eligible for coverage under the group health plan and who are eligible for Medicaid shall be eligible for consideration for HIPP, except ~~those~~ any one or more of the factors identified in subdivisions 1 through 7 of this subsection. ~~below. The agency will consider recipients in this subsection for consideration for HIPP when extraordinary circumstances indicate the group health plan might be cost effective.~~

1. The recipient is Medicaid eligible due to "spend-down"; .

2. The recipient is currently enrolled in the employer sponsored health plan and is only retroactively eligible for Medicaid; .

3. The recipient is in a nursing home or has a deduction from patient pay responsibility to cover the insurance premium~~; or~~ .

4. The recipient is eligible for Medicare ~~Part B, but is not enrolled in Part B~~ .

5. The recipient's family has, or would have, family healthcare coverage for three or more members who are not Medicaid eligible.

6. Medicare eligibility. Medicaid recipients eligible for, or enrolled in, Medicare Part A and/or Part B who are also covered by an employer group health plan are not eligible for HIPP.

7. High Deductible Health Plans (HDHPs) are defined in § 223(c)(2) of the Internal Revenue Code of 1986. HDHPs are not cost effective for the HIPP program and shall be denied premium assistance and shall not undergo further review as described in subsection E of this section. The annual deductible amount for a HDHP is defined by the Department of Treasury and is updated annually.

D. Application required. A completed HIPP application must be submitted to DMAS to be evaluated for eligibility and cost effectiveness. The HIPP application consists of the forms prescribed by DMAS and any necessary information as required by the program to evaluate eligibility and perform a cost-effectiveness evaluation.

E. Cost-effectiveness evaluation. If the Medicaid eligible(s) is enrolled in the health plan and is not excluded from HIPP program participation under the criteria described in subsection D of this section, DMAS shall conduct the premium cost-effectiveness evaluation based upon the following methodology:

1. Recipient information. DMAS shall obtain demographic information on each recipient in each case including, but not limited to, Medicaid enrollment covered group, age, gender, and geographic region of residence in the state.

2. DMAS shall compute the average monthly Medicaid cost for each Medicaid enrollee on the group health insurance plan and compare the total cost to the employee's responsibility for the health insurance cost.

3. Wraparound cost. DMAS shall total the average monthly wraparound cost for each Medicaid enrollee on the HIPP case and subtract the amount from the average monthly Medicaid cost for the cost-effectiveness evaluation.

4. Administrative cost. DMAS shall total the administrative costs of the HIPP program and estimate an average administrative cost. DMAS shall subtract the administrative cost from the average monthly Medicaid cost for the cost-effectiveness evaluation.

5. Determination of premium cost effectiveness. DMAS shall determine that a group health plan is likely to be cost effective if subdivision a is less than subdivision b below:

a. The employee's responsibility for the group health plan premium.

b. The total of the average monthly Medicaid costs less the wraparound costs for each Medicaid enrollee covered by the group health plan and the administrative cost.

6. DMAS may reimburse up to the amount determined in subdivision 5 b of this subsection, if subdivision 5 a of this subsection is not less than subdivision 5 b of this subsection.

F. Payments. When DMAS determines that a group health plan is likely to be cost effective based on the DMAS established methodology, DMAS shall provide for the payment of ~~premiums~~ premium assistance subsidy and other cost-sharing obligations for items and services otherwise covered under the Plan, except for the nominal cost sharing amounts permitted under § 1916.

1. Effective date of ~~premiums~~ premium assistance subsidy. Payment of ~~premiums~~ premium assistance subsidy shall become effective on the first day of the month following the month in which DMAS ~~makes the cost effectiveness determination~~ receives a complete HIPP application or the first day of the month in which the group health plan coverage becomes effective, whichever is later. Payments shall be made to either the employer, the insurance company or to the individual who is carrying the group health plan coverage.

~~2. Termination date of premiums. Payment of premiums shall end:~~

~~a. On the last day of the month in which eligibility for Medicaid ends;~~

~~b. The last day of the month in which the recipient loses eligibility for coverage in the group health plan; or~~

c. The last day of the month in which adequate notice has been given (consistent with federal requirements) that DMAS has redetermined that the group health plan is no longer cost effective, whichever comes later.

3. Non-Medicaid eligible family members. Payment of premiums for non-Medicaid eligible family members may be made when their enrollment in the group health plan is required in order for the recipient to obtain the group health plan coverage. Such payments shall be treated as payments for Medicaid benefits for the recipient. 2. No payments for deductibles, coinsurances, and other cost-sharing obligations for non-Medicaid eligible family members shall be made by DMAS.

4. Evidence of enrollment required. A person to whom DMAS is paying the group health plan premium shall, as a condition of receiving such payment, provide to DSS or DMAS, upon request, written evidence of the payment of the group health plan premium for the group health plan which DMAS determined to be cost effective 3. Documentation required for premium assistance subsidy reimbursement. A person to whom DMAS is paying an employer group health plan premium assistance subsidy shall, as a condition of receiving such payment, provide documentation as prescribed by DMAS of the payment of the employer group health plan premium for the group health plan that DMAS determined to be cost effective.

~~F. Guidelines for determining cost effectiveness.~~

1. Enrollment limitations. DMAS shall take into account that a recipient may only be eligible to enroll in the group health plan at limited times and only if other non-Medicaid eligible family members are also enrolled in the plan simultaneously.

~~2. Plans provided at no cost. Group health plans for which there is no premium to the person carrying the policy shall be considered to be cost effective.~~

3. Non-Medicaid eligible family members. When non-Medicaid eligible family members must enroll in a group health plan in order for the recipient to be enrolled, DMAS shall consider only the premiums of non-Medicaid eligible family members in determining the cost effectiveness of the group health plan.

~~4. DMAS shall make the cost effectiveness determination based on the following methodology:~~

a. Recipient and group health plan information. DMAS shall obtain demographic information on each recipient in the case, including, but not limited to: federal program designation, age, sex, geographic location. DMAS [or DSS] shall obtain specific information on all group health plans available to the recipients in the case, including, but not limited to, the effective date of coverage, the services covered by the plan, the exclusions to the plan, and the amount of the premium.

b. Average estimated Medicaid expenditures. DMAS shall estimate the average Medicaid expenditures for a 12-month period for each recipient in the case based on the expenditures for persons similar to the recipient in demographic and eligibility characteristics. Expenditures shall be adjusted accordingly for inflation and scheduled provider reimbursement rate increases. Average estimated Medicaid expenditures shall be updated periodically.

c. Medicaid expenditures covered by the group health plan. DMAS shall compute the percentage of expenditures for group health plan services against the expenditures for the same Medicaid services and then adjust the average estimated Medicaid expenditures by this percentage for each recipient in the case. These adjusted expenditures shall be added to obtain a total for the case.

d. Group health plan allowance. DMAS shall multiply an allowance factor by the Medicaid expenditures covered by the group health plan to produce the estimated group health plan allowance. The allowance factor shall be based on a state specific factor, a national factor or a group health plan specific factor.

e. Covered expense amount. DMAS shall multiply an average group health plan payment rate by the group health plan allowance to produce an estimated covered expense amount. The average group health plan payment rate shall be based on a state specific rate, national rate or group health plan specific rate.

f. Administrative cost. DMAS shall total the administrative costs of the HIPP program and estimate an average administrative cost per recipient. DMAS shall add to the administrative cost any pre-enrollment costs required in order for the recipient to enroll in the group health plan.

~~G. Determination of cost effectiveness. DMAS shall determine that a group health plan is likely to be cost effective if subdivision 1 of this subsection is less than subdivision 2 of this subsection:~~

~~1. The difference between the group health plan allowance and the covered expense amount, added to the premium and the administrative cost; and~~

~~2. The Medicaid expenditures covered by the group health plan.~~

If subdivision 1 of this subsection is not less than subdivision 2 of this subsection, DMAS shall adjust the amount in subdivision 2 of this subsection using past medical utilization data on the recipient, provided by the Medicaid claims system or by the recipient, to account for any higher than average expected Medicaid expenditures. DMAS shall determine that a group health plan is likely to be cost effective if subdivision 1 of this subsection is less than subdivision 2 of this subsection once this adjustment has been made.

3. Redetermination. DMAS shall redetermine the cost effectiveness of the group health plan periodically, not to exceed every 12 months. DMAS shall also redetermine the cost effectiveness of the group health plan whenever there is a change to the recipient and group health plan information that was used in determining the cost effectiveness of the group health plan. When only part of the household loses Medicaid eligibility, DMAS shall redetermine the cost effectiveness to ascertain whether payment of the group health plan premiums continue to be cost effective.

4. Multiple group health plans. When a recipient is eligible for more than one group health plan, DMAS shall perform the cost effectiveness determination on the group health plan in which the recipient is enrolled. If the recipient is not enrolled in a group health plan, DMAS shall perform the cost effectiveness determination on each group health plan available to the recipient.

G. Program participation requirements. Participants must comply with program requirements as prescribed by DMAS for continued enrollment in HIPP. Failure to comply shall result in termination from the program.

1. Submission of documentation of premium expense within specified time frame in accordance with DMAS established policy.

2. Changes that impact the cost-effectiveness evaluation must be reported within 10 days.

3. Completion of annual redetermination.

4. Completion of consent forms. Participants may be required to complete a consent form to release information necessary for HIPP participation and program requirements as required by DMAS.

H. HIPP redetermination. DMAS shall redetermine the cost effectiveness of the group health plan periodically, at least every 12 months. DMAS shall also redetermine cost effectiveness when changes occur with the recipient average Medicaid cost and/or with the group health plan information that was used in determining the cost effectiveness. When only part of the household loses Medicaid eligibility, DMAS shall redetermine the cost effectiveness to ascertain whether payment of the premium assistance subsidy of the group health plan continues to be cost effective.

I. Program termination. Participation in the HIPP program shall be terminated for failure to comply with or meet program requirements. Termination will be effective the last day of the month in which advance notice has been given (consistent with federal regulations).

1. Participation shall be terminated for:

a. Failure to submit documentation of payment of premiums (noncompliance);

b. Failure to provide information required for reevaluation of cost effectiveness (noncompliance);

c. Loss of Medicaid eligibility for all household members;

d. Medicaid household member no longer covered by employer health plan; or

e. Employer group health plan is determined to be not cost effective.

2. Participants terminated for noncompliance under subdivisions 1 a and 1 b of this subsection, shall be barred from reapplying to the HIPP program for three months from the date of cancellation.

3. Termination date of premiums. Payment of premium assistance subsidy shall end on whichever of the following occurs the earliest:

a. On the last day of the month in which eligibility for Medicaid ends;

b. The last day of the month in which the recipient loses eligibility for coverage in the group health plan;

c. The last day of the month in which adequate notice has been given (consistent with federal requirements) that DMAS has determined that the group health plan is no longer cost effective; or

d. The last day of the month in which adequate notice has been given (consistent with federal requirements) that HIPP participation requirements have not been met.

H. J. Third party liability. When recipients are enrolled in group health plans, these plans shall become the first sources of health care benefits, up to the limits of such plans, prior to the availability of Title XIX benefits.

I. K. Appeal rights. Recipients shall be given the opportunity to appeal adverse agency decisions consistent with agency regulations for client appeals (12VAC30-110).

J. L. Provider requirements. Providers shall be required to accept the greater of the group health plan's reimbursement rate or the Medicaid rate as payment in full and shall be prohibited from charging the recipient or Medicaid amounts that would result in aggregate payments greater than the Medicaid rate as required by 42 CFR 447.20.

NOTICE: The following forms used in administering the regulation have been filed by the Department of Medical Assistance Services. The forms are not being published; however, the names of the forms are listed below. Online users of this issue of the Virginia Register of Regulations may access the forms by clicking on the names of the forms. The forms are also available for public inspection at the Department of Medical Assistance Services, 600 East Broad Street Richmond, Virginia 23219, or at the Office of the Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond, Virginia 23219.

FORMS (12VAC30-20)

Health Insurance Premium Payment (HIPP)/HIPP For Kids Program Application and Instructions (rev. 9/10).

Employer Insurance Verification (rev. 10/10).

Re-evaluation Employer Insurance Verification (rev. 10/10).

VA.R. Doc. No. R10-2021; Filed December 28, 2010, 10:40 a.m.

Proposed Regulation

Titles of Regulations: 12VAC30-50. Amount, Duration, and Scope of Medical and Remedial Care Services (adding 12VAC30-50-131).

12VAC30-80. Methods and Standards for Establishing Payment Rates; Other Types of Care (amending 12VAC30-80-20, 12VAC30-80-200; adding 12VAC30-80-96).

12VAC30-120. Waivered Services (amending 12VAC30-120-360, 12VAC30-120-380).

Statutory Authority: §§ 32.1-324 and 32.1-325 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: March 18, 2011.

Agency Contact: Molly Carpenter, Child and Maternal Health Division, Department of Medical Assistance Services, 600 East Broad Street, Richmond, VA 23219, telephone (804) 786-1493, FAX (804) 225-3961, or email molly.carpenter@dmas.virginia.gov.

Basis: Section 32.1-325 of the Code of Virginia grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance. Section 32.1-324 of the Code of Virginia authorizes the Director of the Department of Medical Assistance Services (DMAS) to administer and amend the Plan for Medical Assistance according to the board's requirements. The Medicaid authority as established by § 1902 (a) of the Social Security Act (42 USC § 1396a) provides governing authority for payments for services.

Specifically, Item 306 TTT of the 2009 Appropriation Act states that the Department of Medical Assistance Services, in consultation with the Department of Behavioral Health and Developmental Services (DBHDS), shall amend the State Plan for Medical Assistance Services in order to comply with the payor of last resort requirements of Part C of the Individuals with Disabilities Education Act (IDEA) of 2004.

Purpose: The proposed regulatory action creates a new model for Medicaid coverage of Early Intervention (EI) services for children less than three years of age who are eligible for services under Chapter 53 (§ 2.2-5300 et seq.) of Title 2.2 of the Code of Virginia in accordance with Part C of the Individuals with Disabilities Education Act (IDEA) (20 USC § 1431 et seq.). This new methodology fulfills the General Assembly mandate by establishing a framework for ensuring that providers of EI services for Medicaid children through the Part C program bill Medicaid first before using federal or state-only Part C program funds to comply with the federal Part C payor of last resort requirement set out in 34 CFR 303.527. In order to ensure compliance with federal Part C requirements DMAS, through these proposed regulations, is establishing a newly recognized provider type and specialty to provide services specifically oriented to the requirements of individuals eligible for Part C services. This specialized provider group will support the service delivery system the state adopted to provide EI services -- the Virginia Infant and Toddler Connection of Virginia (I&TC). The I&TC is administered through local lead agencies. All local efforts are overseen by the Department of Behavioral Health and Developmental Services (DBHDS), which receives Virginia's Part C allotment and administers the overall program. DBHDS contracts with local lead agencies to facilitate implementation of EI services statewide. The majority of local lead agencies are under the auspices of community services boards, along with several universities, public health districts, local governments, and local education agencies.

These new regulations establish a broader range of specialized Part C providers to meet the individual child's needs and assure that providers have the specific expertise to effectively address developmental problems in young children as provided for in Part C. Routing Medicaid-covered individuals through Medicaid Part C providers ensures that the Commonwealth will draw down the maximum available federal Medicaid match for those Part C services currently paid with state-only funds.

The proposed regulatory action is one component of an administrative initiative to revise the system of financing for Part C EI services in Virginia and ensure compliance with the payor of last resort requirements of Part C of IDEA. DBHDS is proposing new regulations for certification of EI providers in tandem with this initiative.

Substance: The sections of the State Plan-related Virginia Administrative Code chapters that are affected by this action are Amount, Duration and Scope of Medical and Remedial Services (12VAC30-50); Methods and Standards for Establishing Payment Rates; Other Types of Care (12VAC30-80), and Waivered Services (12VAC30-120).

Most of the services needed by the children enrolled in I&TC are habilitative in nature. In other words, they are designed to help a child with an identified developmental concern to achieve a given function for the first time, such as walking or talking. Traditional rehabilitation therapists are not always the most appropriate providers of EI services. Some children are better served by other practitioners with specialized knowledge and experience regarding child development and EI methods, together with consultation from licensed rehabilitation therapists as needed.

Currently, local IT&C systems have two choices for serving preschool children enrolled in Medicaid: (i) provide all EI services to Medicaid enrollees with the regular licensed rehabilitation therapists, who may lack the specialized knowledge and experience for EI, or (ii) provide some EI services without Medicaid reimbursement, but pay for them with limited federal Part C, state, or local funds. EI type services may currently be obtained by a variety of agencies participating with Medicaid; however, there is no uniform reimbursement for Part C services. This disparity has made it difficult to support a uniform fee schedule for Part C services across all payment sources. Resolving this disparity is a necessary step to bring Virginia into compliance with the payor of last resort requirement.

These proposed regulations define a new approach to payment for EI services under Medicaid that supports the IT&C model. The proposed EI services would be provided in the child's natural environment, engage the family in the intervention, and engage the expertise of a multidisciplinary team to support the direct service provider. The new approach supports Medicaid payment for a broad base of qualified providers with demonstrated knowledge and skills in EI principles and practices. This regulatory action requires Part C practitioners to be certified by DBHDS as a condition of participation with DMAS as designated EI service providers in the Medicaid program.

Medicaid payment for defined EI services would provide a framework for ensuring that providers of EI services through the IT&C model bill Medicaid first, if appropriate, before using Part C program funds to comply with the payor of last resort requirement contained in Part C of IDEA. Certified individuals and agencies who currently participate with the DMAS shall obtain Part C designation from DMAS and bill for services as EI providers rather than as a rehabilitation agency provider or another designation. New providers shall enroll to participate with DMAS with a Part C specialty designation in order to bill for EI services. DMAS and DBHDS shall be able to identify services paid for by Medicaid that are provided under the purview of the IT&C model. EI services shall be reimbursed on a fee-for-service basis for non-MCO providers. All private and governmental fee-for-service providers shall be paid according to the same methodology, with separate fees for certified EI providers who are licensed as physical therapists, physical therapy assistants, occupational therapists, occupational therapy assistants, speech pathologists, or registered nurses to ensure access to EI services.

It is important to note that there is a distinct difference between EI services, which are medically appropriate only for children under the age of three years, and similar habilitative services available to children aged three years up to age 21. DMAS is making this distinction clear in 12VAC30-50-131 (Definitions), with the following language:

EI services are available to qualified individuals through Early and Periodic Screening, Diagnosis and Treatment (EPSDT). EI services are distinguished from similar rehabilitative services available through EPSDT to individuals aged three and older in that EI services are specifically directed towards children from birth to age three. EI services are not medically indicated for individuals aged three and above.

Issues: The primary advantage to private citizens of implementing the proposed provisions is that payment for services from a broader range of trained early intervention providers will be available to disabled children covered by Medicaid.

The primary advantage to the Commonwealth is the ability to draw down additional federal Medicaid funds to support Part C early intervention services.

There are no disadvantages to the public or the Commonwealth associated with the proposed regulatory action.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed regulations make permanent the Medicaid coverage for early intervention services for children less than three years of age and who are eligible for these services. These changes have been in effect under emergency regulations since October 29, 2009.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. The proposed regulations provide Medicaid coverage for early intervention services for children less than three years of age and who are eligible for these services. Part C of the Individuals with Disabilities Education Act of 2004 as set out in 34 CFR 303.527 established payor of last resort provisions. Payor of last resort provisions mandated that Part C program funds may not be used for services that would otherwise have been paid from other sources. Also, Item 306 TTT of the 2009 Appropriations Act directed the Department of Medical Assistance Services (DMAS) to comply with these payor of last resort provisions and implement the changes under emergency regulations. Emergency regulations became effective on October 29, 2009.

The delivery system to provide early intervention services in Virginia is the Infant and Toddler Connection of Virginia (I&TC). The I&TC is administered through local lead agencies. All local efforts are overseen by the Department of Behavior Health and Developmental Services (DBHDS), which receives Virginia's Part C allotment and administers the overall program. DBHDS contracts with local agencies to facilitate implementation of early intervention services statewide. The majority of local agencies are under the auspices of community services boards, along with several universities, public health districts, local governments, and local education agencies.

Prior to the emergency regulations, local IT&C systems had two choices for serving preschool children enrolled in Medicaid: 1) provide all early intervention services to Medicaid enrollees with the regular licensed rehabilitation therapists, who may lack the specialized knowledge and experience for early intervention, or 2) provide some early intervention services without Medicaid reimbursement, but pay for them with limited federal Part C, state, or local funds.

The proposed regulations establish that providers of early intervention services for Medicaid children through the Part C program bill Medicaid first before using federal, local, or state-only Part C program funds.

The proposed regulations also create a new model for service delivery. According to DMAS, most of the services needed by the children enrolled are habilitative in nature. In other words, they are designed to help a child with an identified developmental concern to achieve a given function for the first time, such as walking or talking. Traditional rehabilitation therapists are not always the most appropriate providers of early intervention services. Some children are better served by other practitioners with specialized knowledge and experience regarding child development and early intervention methods, together with consultation from licensed rehabilitation therapists as needed.

The proposed early intervention services would be provided in the childs natural environment, engage the family in the intervention, and engage the expertise of a multidisciplinary team to support the direct service provider. The new approach supports Medicaid payment for a broad base of qualified providers with demonstrated knowledge and skills in early intervention principles and practices. This regulatory action requires Part C practitioners to be certified by DBHDS as a condition of participation with DMAS as designated early intervention service providers in the Medicaid program. Under the new model, providers would obtain Part C designation from DMAS and bill for services as early intervention providers rather than as rehabilitation providers or other designations.

The main economic effect of the proposed regulations is the additional influx of federal funds coming into the Commonwealth. The proposed changes enable the Commonwealth to draw down the maximum available federal Medicaid match for Part C services currently being paid with federal, local, or state only program funds. DMAS estimates that approximately $4.6 million in total funds will be needed to pay for early intervention services to Medicaid eligible children provided by qualified practitioners who previously were not eligible to enroll as Medicaid provider. Of this amount, one half, or $2.3 million, is paid by the state and the remaining half is paid by the federal matching funds. DMAS will obtain the $2.3 million state portion by transfer from DBHDS. Because these services are currently being paid without federal matching funds, the proposed Medicaid coverage of early intervention services will result in a net increase of approximately $2.3 million to the Commonwealth.

Another major benefit of the proposed regulations is the expected improvement in service delivery and outcomes. DMAS believes that children may be better served by practitioners with specialized knowledge and experience regarding child development and early intervention methods, together with consultation from licensed rehabilitation therapists as needed.

The proposed regulations are also expected to create additional administrative costs in terms of staff time needed to process claims, ongoing training and technical support, and programmatic changes to the computerized claims processing system.

It is worth noting that these regulations have already been in effect and their economic effects have already been materialized. Thus, no additional economic effects are expected upon promulgation of these proposed changes.

Businesses and Entities Affected. As of January 2010, 2942 infants and toddlers were eligible to receive early intervention services from Medicaid and there were approximately 100 providers enrolled.

Localities Particularly Affected. The proposed regulations apply throughout the Commonwealth.

Projected Impact on Employment. The proposed regulations are not expected to create a direct significant effect on employment. However, the demand for labor by the new types of early intervention services providers may increase. Also, if the additional federal matching funds expected to come to Virginia are spent in other areas, we may see an indirect increase in demand for labor in those areas.

Effects on the Use and Value of Private Property. The proposed regulations are not expected to significantly affect the use and value of private property.

Small Businesses: Costs and Other Effects. Approximately half of the 100 early intervention services providers enrolled in Medicaid are believed to be small businesses. The proposed regulations may increase revenues of new types of early intervention services providers. However, no direct costs are imposed on them.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No direct adverse effects on small businesses are expected.

Real Estate Development Costs. No real estate development costs are expected.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 107 (09). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis: The agency concurs with the economic impact analysis prepared by the Department of Planning and Budget regarding the regulations concerning Coverage and Reimbursement of Early Intervention (EI) Services under Part C of IDEA (12VAC30-50-131, 12VAC30-80-20, 12VAC30-80-96, 12VAC30-80-200, 12VAC30-120-360, and 12VAC30-120-380).

Summary:

These regulations define a new approach to payment for Early Intervention services under Medicaid that supports the Infant and Toddler Connection (IT&C) model. The proposed Early Intervention services would be provided in the child's natural environment, engage the family in the intervention, and engage the expertise of a multidisciplinary team to support the direct service provider. The new approach supports Medicaid payment for a broad base of qualified providers with demonstrated knowledge and skills in Early Intervention principles and practices. This regulatory action requires Part C practitioners to be certified by Department of Behavioral Health and Developmental Services as a condition of participation with Department of Medical Assistance Services as designated Early Intervention service providers in the Medicaid program.

12VAC30-50-131. Early Intervention services.

A. Definitions. The following words and terms when used in these regulations shall have the following meanings unless the context clearly indicates otherwise:

"DBHDS" means the Department of Behavioral Health and Developmental Services, the lead state agency for Early Intervention services appointed by the Governor in accordance with Chapter 53 (§ 2.2-5300 et seq.) of Title 2.2 of the Code of Virginia.

"Early Intervention services" or "EI" means services provided through Part C of the Individuals with Disabilities Education Act (20 USC § 1431 et seq.), as amended, and in accordance with 42 CFR 440.130(d), which are designed to meet the developmental needs of each child and the needs of the family related to enhancing the child's development, and are provided to children from birth to age three who have (i) a 25% developmental delay in one or more areas of development, (ii) atypical development, or (iii) a diagnosed physical or mental condition that has a high probability of resulting in a developmental delay. EI services are available to qualified individuals through Early and Periodic Screening, Diagnosis, and Treatment (EPSDT). EI services are distinguished from similar rehabilitative services available through EPSDT to individuals aged three and older in that EI services are specifically directed towards children from birth to age three. EI services are not medically indicated for individuals aged three and above.

"Individualized family service plan" or "IFSP" means a comprehensive and regularly updated statement specific to the child being treated containing, but not necessarily limited to, treatment or training needs, measurable outcomes expected to be achieved, services to be provided with the recommended frequency to achieve the outcomes, and estimated timetable for achieving the outcomes. The IFSP is developed by a multidisciplinary team that includes the family, under the auspices of the local lead agency.

"Local lead agency" means an agency under contract with the Department of Behavioral Health and Developmental Services to facilitate implementation of a local Early Intervention system as described in Chapter 53 (§ 2.2-5300 et seq.) of Title 2.2 of the Code of Virginia.

"Primary care provider" means a practitioner who provides preventive and primary health care and is responsible for providing routine Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) screening and referral and coordination of other medical services needed by the child.

B. Coverage for Early Intervention services.

1. Early Intervention services shall be reimbursed for individuals who meet criteria for Early Intervention services established by DBHDS in accordance with Chapter 53 (§ 2.2-5300 et seq.) of Title 2.2 of the Code of Virginia.

2. Early Intervention services shall be recommended by the child's primary care provider or other qualified EPSDT screening provider as necessary to correct or ameliorate a physical or mental condition.

3. Early Intervention services shall be provided in settings that are natural or normal for an infant or toddler without a disability, such as the home, unless there is justification for an atypical location.

4. Except for the initial and periodic assessments, Early Intervention services shall be described in an IFSP developed by the local lead agency and designed to prevent or ameliorate developmental delay within the context of the Early Intervention services system defined by Chapter 53 (§ 2.2-5300 et seq.) of Title 2.2 of the Code of Virginia.

5. Medical necessity for Early Intervention services shall be defined by the IFSP. The IFSP shall describe service needs in terms of amount, duration, and scope. The IFSP shall be approved by the child's primary care provider.

6. Covered Early Intervention services include the following functions provided with the infant or toddler and the child's parent or other authorized caregiver by a certified Early Intervention professional:

a. Assessment, including consultation with the child's family and other service providers, to evaluate:

(1) The child's level of functioning in the following developmental areas: cognitive development; physical development, including vision and hearing; communication development; social or emotional development; and adaptive development;

(2) The family's capacity to meet the developmental needs of the child; and

(3) Services needed to correct or ameliorate developmental conditions during the infant and toddler years.

b. Participation in a multidisciplinary team review of assessments to develop integrated, measurable outcomes for the IFSP.

c. The planning and design of activities, environments, and experiences to promote the normal development of an infant or toddler with a disability, consistent with the outcomes in the IFSP.

7. Covered Early Intervention services include the following functions when included in the IFSP and provided with an infant or toddler with a disability and the child's parent or other authorized caregiver by a certified Early Intervention professional or by a certified Early Intervention specialist under the supervision of a certified Early Intervention professional:

a. Providing families with information and training to enhance the development of the child.

b. Working with the child with a disability to promote normal development in one or more developmental domains.

c. Consulting with the child's family and other service providers to assess service needs; and plan, coordinate, and evaluate services to ensure that services reflect the unique needs of the child in all developmental domains.

C. The following functions shall not be covered under this section:

1. Screening to determine if the child is suspected of having a disability. Screening is covered as an EPSDT service provided by the primary care provider and is not covered as an Early Intervention service under this section.

2. Administration and coordination activities related to the development, review, and evaluation of the IFSP and procedural safeguards required by Part C of the Individuals with Disabilities Education Act (20 USC § 1431 et seq.).

3. Services other than the initial and periodic assessments that are provided but are not documented in the child’s IFSP or linked to a service in the IFSP.

4. Sessions that are conducted for family support, education, recreational, or custodial purposes, including respite or child care.

5. Services provided by a relative who is legally responsible for the child's care.

6. Services rendered in a clinic or provider's office without justification for the location.

7. Services provided in the absence of the child and a parent or other authorized caregiver identified in the IFSP with the exception of multidisciplinary team meetings, that need not include the child.

D. Qualifications of providers:

1. Individual practitioners of Early Intervention services must be certified by DBHDS as a qualified Early Intervention professional or Early Intervention specialist.

2. Certified individuals and service agencies or groups who employ or contract with certified individuals may enroll with DMAS as Early Intervention providers. In accordance with 42 CFR 431.51, recipients may obtain Early Intervention services from any willing and qualified Medicaid provider who participates in this service, or for individuals enrolled with a Managed Care Organization (MCO), from such providers available in their MCO network.

12VAC30-80-20. Services that are reimbursed on a cost basis.

A. Payments for services listed below shall be on the basis of reasonable cost following the standards and principles applicable to the Title XVIII Program with the exception provided for in subdivision D 2 d. The upper limit for reimbursement shall be no higher than payments for Medicare patients on a facility by facility basis in accordance with 42 CFR 447.321 and 42 CFR 447.325. In no instance, however, shall charges for beneficiaries of the program be in excess of charges for private patients receiving services from the provider. The professional component for emergency room physicians shall continue to be uncovered as a component of the payment to the facility.

B. Reasonable costs will be determined from the filing of a uniform cost report by participating providers. The cost reports are due not later than 90 days after the provider's fiscal year end. If a complete cost report is not received within 90 days after the end of the provider's fiscal year, the Program shall take action in accordance with its policies to assure that an overpayment is not being made. The cost report will be judged complete when DMAS has all of the following:

1. Completed cost reporting form(s) provided by DMAS, with signed certification(s);

2. The provider's trial balance showing adjusting journal entries;

3. The provider's financial statements including, but not limited to, a balance sheet, a statement of income and expenses, a statement of retained earnings (or fund balance), and a statement of changes in financial position;

4. Schedules that reconcile financial statements and trial balance to expenses claimed in the cost report;

5. Depreciation schedule or summary;

6. Home office cost report, if applicable; and

7. Such other analytical information or supporting documents requested by DMAS when the cost reporting forms are sent to the provider.

C. Item 398 D of the 1987 Appropriation Act (as amended), effective April 8, 1987, eliminated reimbursement of return on equity capital to proprietary providers.

D. The services that are cost reimbursed are:

1. Inpatient hospital services to persons over 65 years of age in tuberculosis and mental disease hospitals.

2. Outpatient hospital services excluding laboratory.

a. Definitions. The following words and terms when used in this regulation shall have the following meanings when applied to emergency services unless the context clearly indicates otherwise:

"All-inclusive" means all emergency department and ancillary service charges claimed in association with the emergency room visit, with the exception of laboratory services.

"DMAS" means the Department of Medical Assistance Services consistent with Chapter 10 (§et seq.) of Title 32.1 of the Code of Virginia.

"Emergency hospital services" means services that are necessary to prevent the death or serious impairment of the health of the recipient. The threat to the life or health of the recipient necessitates the use of the most accessible hospital available that is equipped to furnish the services.

"Recent injury" means an injury that has occurred less than 72 hours prior to the emergency department visit.

b. Scope. DMAS shall differentiate, as determined by the attending physician's diagnosis, the kinds of care routinely rendered in emergency departments and reimburse for nonemergency care rendered in emergency departments at a reduced rate.

(1) With the exception of laboratory services, DMAS shall reimburse at a reduced and all-inclusive reimbursement rate for all services, including those obstetric and pediatric procedures contained in 12VAC30-80-160, rendered in emergency departments that DMAS determines were nonemergency care.

(2) Services determined by the attending physician to be emergencies shall be reimbursed under the existing methodologies and at the existing rates.

(3) Services performed by the attending physician that may be emergencies shall be manually reviewed. If such services meet certain criteria, they shall be paid under the methodology for subdivision 2 b (2) of this subsection. Services not meeting certain criteria shall be paid under the methodology of subdivision 2 b (1) of this subsection. Such criteria shall include, but not be limited to:

(a) The initial treatment following a recent obvious injury.

(b) Treatment related to an injury sustained more than 72 hours prior to the visit with the deterioration of the symptoms to the point of requiring medical treatment for stabilization.

(c) The initial treatment for medical emergencies including indications of severe chest pain, dyspnea, gastrointestinal hemorrhage, spontaneous abortion, loss of consciousness, status epilepticus, or other conditions considered life threatening.

(d) A visit in which the recipient's condition requires immediate hospital admission or the transfer to another facility for further treatment or a visit in which the recipient dies.

(e) Services provided for acute vital sign changes as specified in the provider manual.

(f) Services provided for severe pain when combined with one or more of the other guidelines.

(4) Payment shall be determined based on ICD-9-CM diagnosis codes and necessary supporting documentation.

(5) DMAS shall review on an ongoing basis the effectiveness of this program in achieving its objectives and for its effect on recipients, physicians, and hospitals. Program components may be revised subject to achieving program intent, the accuracy and effectiveness of the ICD-9-CM code designations, and the impact on recipients and providers.

c. Limitation to 80% of allowable cost. Effective for services on and after July 1, 2003, reimbursement of Type Two hospitals for outpatient services shall be at 80% of allowable cost, with cost to be determined as provided in subsections A, B, and C of this section. For hospitals with fiscal years that do not begin on July 1, 2003, outpatient costs, both operating and capital, for the fiscal year in progress on that date shall be apportioned between the time period before and the time period after that date, based on the number of calendar months in the cost reporting period, falling before and after that date. Operating costs apportioned before that date shall be settled according to the principles in effect before that date, and those after at 80% of allowable cost. Capital costs apportioned before that date shall be settled according to the principles in effect before that date, and those after at 80% of allowable cost. Operating and capital costs of Type One hospitals shall continue to be reimbursed at 94.2% and 90% of cost respectively.

d. Outpatient reimbursement methodology prior to July 1, 2003. DMAS shall continue to reimburse for outpatient hospital services, with the exception of direct graduate medical education for interns and residents, at 100% of reasonable costs less a 10% reduction for allowable capital costs and a 5.8% reduction for allowable operating costs. This methodology shall continue to be in effect after July 1, 2003, for Type One hospitals.

e. Payment for direct medical education costs of nursing schools, paramedical programs and graduate medical education for interns and residents.

(1) Direct medical education costs of nursing schools and paramedical programs shall continue to be paid on an allowable cost basis.

(2) Effective with cost reporting periods beginning on or after July 1, 2002, direct graduate medical education (GME) costs for interns and residents shall be reimbursed on a per-resident prospective basis. See 12VAC30-70-281 for prospective payment methodology for graduate medical education for interns and residents.

3. Rehabilitation agencies ~~operated by community services boards~~ or comprehensive outpatient rehabilitation facilities. For reimbursement methodology applicable to other rehabilitation agencies, see 12VAC30-80-200. Reimbursement for physical therapy, occupational therapy, and speech-language therapy services shall not be provided for any sums that the rehabilitation provider collects, or is entitled to collect, from the NF or any other available source, and provided further, that this amendment shall in no way diminish any obligation of the NF to DMAS to provide its residents such services, as set forth in any applicable provider agreement.

a. Reserved.

b. Effective October 1, 2009, rehabilitation agencies or comprehensive outpatient rehabilitation facilities operated by state agencies shall be reimbursed their costs. For reimbursement methodology applicable to all other rehabilitation agencies, see 12VAC30-80-200.

4. Rehabilitation hospital outpatient services.

12VAC30-80-96. Fee-for-service: Early Intervention (under EPSDT).

A. Payment for Early Intervention services pursuant to Part C of the Individuals with Disabilities Education Act (IDEA) of 2004, as set forth in 12VAC30-50-131, shall be the lower of the state agency fee schedule or actual charge (charge to the general public). All private and governmental fee-for-service providers are reimbursed according to the same methodology. The agency's rates were set as of October 1, 2009, and are effective for services on or after that date. Rates are published on the agency's website at www.dmas.virginia.gov.

B. There shall be separate fees for:

1. Certified Early Intervention professionals who are also licensed as either a physical therapist, occupational therapist, speech pathologist, or registered nurse and certified Early Intervention specialists who are also licensed as either a physical therapy assistant or occupational therapy assistant; and

2. All other certified Early Intervention professionals and certified Early Intervention specialists.

C. Provider travel time shall not be included in billable time for reimbursement.

12VAC30-80-200. Prospective reimbursement for rehabilitation agencies or comprehensive outpatient rehabilitation facilities.

A. Effective for dates of service on and after July 1, 2009, rehabilitation agencies, excluding those operated by community services boards and state agencies, shall be reimbursed a prospective rate equal to the lesser of the agency's fee schedule amount or billed charges per procedure. The agency shall develop a statewide fee schedule based on CPT codes to reimburse providers what the agency estimates they would have been paid in FY 2010 minus $371,800. Rehabilitation agencies or comprehensive outpatient rehabilitation facilities.

1. Reserved.

2. Effective for dates of service on or after October 1, 2009, rehabilitation agencies or comprehensive outpatient rehabilitation facilities excluding those operated by state agencies, shall be reimbursed a prospective rate equal to the lesser of the agency's fee schedule amount or billed charges per procedure. The agency shall develop a statewide fee schedule based on CPT codes to reimburse providers what the agency estimates they would have paid in FY 2010 minus $371,800.

B. Reimbursement for rehabilitation agencies subject to the new fee schedule methodology.

1. Reserved.

~~For providers with~~ 2. Payments for the fiscal ~~years that do not begin on July 1, 2009, services on or before June 30, 2009, for the fiscal year in progress on that date~~ year ending or in progress on September 30, 2009, shall be settled for community services boards based on the previous prospective rate methodology and the ceilings in effect for that fiscal year as of ~~June~~ September 30, 2009.

~~C. Rehabilitation services furnished by community service boards or state agencies shall be reimbursed costs based on annual cost reporting methodology and procedures.~~

D. C. Beginning with state fiscal years beginning on or after July 1, 2010, rates shall be adjusted annually for inflation using the Virginia-specific nursing home input price index contracted for by the agency. The agency shall use the percent moving average for the quarter ending at the midpoint of the rate year from the most recently available index prior to the beginning of the rate year.

D. Reimbursement for physical therapy, occupational therapy, and speech-language therapy services shall not be provided for any sums that the rehabilitation provider collects, or is entitled to collect, from the nursing facility or any other available source, and provided further, that this amendment shall in no way diminish any obligation of the nursing facility to DMAS to provide its residents such services, as set forth in any applicable provider agreement.

E. Effective July 1, 2010, there will be no inflation adjustment for outpatient rehabilitation facilities through June 30, 2012.

Part VI
Medallion II

12VAC30-120-360. Definitions.

The following words and terms when used in this part shall have the following meanings unless the context clearly indicates otherwise:

"Action" means the denial or limited authorization of a requested service, including the type or level of service; the reduction, suspension, or termination of a previously authorized service; the denial, in whole or in part, of payment for a service; the failure to provide services in a timely manner, as defined by the state; or the failure of an MCO to act within the timeframes provided in 42 CFR 438.408(b).

"Appeal" means a request for review of an action, as "action" is defined in this section.

"Area of residence" means the recipient's address in the Medicaid eligibility file.

"Capitation payment" means a payment the department makes periodically to a contractor on behalf of each recipient enrolled under a contract for the provision of medical services under the State Plan, regardless of whether the particular recipient receives services during the period covered by the payment.

"Client," "clients," "recipient," "enrollee," or "participant" means an individual or individuals having current Medicaid eligibility who shall be authorized by DMAS to be a member or members of Medallion II.

"Covered services" means Medicaid services as defined in the State Plan for Medical Assistance.

"Disenrollment" means the process of changing enrollment from one Medallion II Managed Care Organization (MCO) plan to another MCO or to the Primary Care Case Management (PCCM) program, if applicable.

"DMAS" means the Department of Medical Assistance Services.

"Early Intervention" means EPSDT Early Intervention services provided pursuant to Part C of the Individuals with Disabilities Education Act (IDEA) of 2004 as set forth in 12VAC30-50-131.

"Eligible person" means any person eligible for Virginia Medicaid in accordance with the State Plan for Medical Assistance under Title XIX of the Social Security Act.

"Emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in the following:

1. Placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,

2. Serious impairment to bodily functions, or

3. Serious dysfunction of any bodily organ or part.

"Emergency services" means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish these services and that are needed to evaluate or stabilize an emergency medical condition.

"Enrollment broker" means an independent contractor that enrolls recipients in the contractor's plan and is responsible for the operation and documentation of a toll-free recipient service helpline. The responsibilities of the enrollment broker include, but shall not be limited to, recipient education and MCO enrollment, assistance with and tracking of recipients' complaints resolutions, and may include recipient marketing and outreach.

"Exclusion from Medallion II" means the removal of an enrollee from the Medallion II program on a temporary or permanent basis.

"External Quality Review Organization" (EQRO) is an organization that meets the competence and independence requirements set forth in 42 CFR 438.354 and performs external quality reviews, other EQR related activities as set forth in 42 CFR 438.358, or both.

"Foster care" is a program in which a child receives either foster care assistance under Title IV-E of the Social Security Act or state and local foster care assistance.

"Grievance" means an expression of dissatisfaction about any matter other than an action, as "action" is defined in this section.

"Health care plan" means any arrangement in which any managed care organization undertakes to provide, arrange for, pay for, or reimburse any part of the cost of any health care services.

"Health care professional" means a provider as defined in 42 CFR 438.2.

"Managed care organization" or "MCO" means an entity that meets the participation and solvency criteria defined in 42 CFR Part 438 and has an executed contractual agreement with DMAS to provide services covered under the Medallion II program. Covered services for Medallion II individuals must be as accessible (in terms of timeliness, amount, duration, and scope) as compared to other Medicaid recipients served within the area.

"Network" means doctors, hospitals or other health care providers who participate or contract with an MCO and, as a result, agree to accept a mutually-agreed upon sum or fee schedule as payment in full for covered services that are rendered to eligible participants.

"Newborn enrollment period" means the period from the child's date of birth plus the next two calendar months.

"Nonparticipating provider" means a health care entity or health care professional not in the contractor's participating provider network.

"Post-stabilization care services" means covered services related to an emergency medical condition that are provided after an enrollee is stabilized in order to maintain the stabilized condition or to improve or resolve the enrollee's condition.

"Potential enrollee" means a Medicaid recipient who is subject to mandatory enrollment or may voluntarily elect to enroll in a given managed care program, but is not yet an enrollee of a specific MCO or PCCM.

"Primary care case management" or "PCCM" means a system under which a primary care case manager contracts with the Commonwealth to furnish case management services (which include the location, coordination, and monitoring of primary health care services) to Medicaid recipients.

"School health services" means those physical therapy, occupational therapy, speech therapy, nursing, psychiatric and psychological services rendered to children who qualify for these services under the federal Individuals with Disabilities Education Act (20 USC § 1471 et seq.) by (i) employees of the school divisions or (ii) providers that subcontract with school divisions, as described in 12VAC30-50-229.1.

"Spend-down" means the process of reducing countable income by deducting incurred medical expenses for medically needy individuals, as determined in the State Plan for Medical Assistance.

12VAC30-120-380. Medallion II MCO responsibilities.

A. The MCO shall provide, at a minimum, all medically necessary covered services provided under the State Plan for Medical Assistance and further defined by written DMAS regulations, policies and instructions, except as otherwise modified or excluded in this part.

1. Nonemergency services provided by hospital emergency departments shall be covered by MCOs in accordance with rates negotiated between the MCOs and the emergency departments.

2. Services that shall be provided outside the MCO network shall include, but are not limited to, those services identified and defined by the contract between DMAS and the MCO. Services reimbursed by DMAS include dental and orthodontic services for children up to age 21; for all others, dental services (as described in 12VAC30-50-190), school health services (as defined in 12VAC30-120-360), community mental health services (rehabilitative, targeted case management and the following substance abuse treatment services; emergency services (crisis); intensive outpatient services; day treatment services; substance abuse case management services; and opioid treatment services), as defined in 12VAC30-50-228 and 12VAC30-50-491, and long-term care services provided under the § 1915(c) home-based and community-based waivers including related transportation to such authorized waiver services.

3. The MCOs shall pay for emergency services and family planning services and supplies whether they are provided inside or outside the MCO network.

B. Except for those services specifically carved out in subsection A of this section, EPSDT services shall be covered by the MCO. These services shall include EPSDT Early Intervention services provided pursuant to Part C of the Individuals with Disabilities Education Act (IDEA) of 2004, as set forth in 12VAC30-50-131, as identified and defined by the contracts between DMAS and the MCOs. The MCO shall have the authority to determine the provider of service for EPSDT screenings.

C. The MCOs shall report data to DMAS under the contract requirements, which may include data reports, report cards for clients, and ad hoc quality studies performed by the MCO or third parties.

D. Documentation requirements.

1. The MCO shall maintain records as required by federal and state law and regulation and by DMAS policy. The MCO shall furnish such required information to DMAS, the Attorney General of Virginia or his authorized representatives, or the State Medicaid Fraud Control Unit on request and in the form requested.

2. Each MCO shall have written policies regarding enrollee rights and shall comply with any applicable federal and state laws that pertain to enrollee rights and shall ensure that its staff and affiliated providers take those rights into account when furnishing services to enrollees in accordance with 42 CFR 438.100.

E. The MCO shall ensure that the health care provided to its clients meets all applicable federal and state mandates, community standards for quality, and standards developed pursuant to the DMAS managed care quality program.

F. The MCOs shall promptly provide or arrange for the provision of all required services as specified in the contract between the state and the contractor. Medical evaluations shall be available within 48 hours for urgent care and within 30 calendar days for routine care. On-call clinicians shall be available 24 hours per day, seven days per week.

G. The MCOs must meet standards specified by DMAS for sufficiency of provider networks as specified in the contract between the state and the contractor.

H. Each MCO and its subcontractors shall have in place, and follow, written policies and procedures for processing requests for initial and continuing authorizations of service. Each MCO and its subcontractors shall ensure that any decision to deny a service authorization request or to authorize a service in an amount, duration, or scope that is less than requested, be made by a health care professional who has appropriate clinical expertise in treating the enrollee's condition or disease. Each MCO and its subcontractors shall have in effect mechanisms to ensure consistent application of review criteria for authorization decisions and shall consult with the requesting provider when appropriate.

I. In accordance with 42 CFR 447.50 through 42 CFR 447.60, MCOs shall not impose any cost sharing obligations on enrollees except as set forth in 12VAC30-20-150 and 12VAC30-20-160.

J. An MCO may not prohibit, or otherwise restrict, a health care professional acting within the lawful scope of practice, from advising or advocating on behalf of an enrollee who is his patient in accordance with 42 CFR 438.102.

K. An MCO that would otherwise be required to reimburse for or provide coverage of a counseling or referral service is not required to do so if the MCO objects to the service on moral or religious grounds and furnishes information about the service it does not cover in accordance with 42 CFR 438.102.

VA.R. Doc. No. R10-2080; Filed December 27, 2010, 2:24 p.m.

Final Regulation

Title of Regulation: 12VAC30-50. Amount, Duration, and Scope of Medical and Remedial Care Services (amending 12VAC30-50-226, 12VAC30-50-420, 12VAC30-50-430).

Statutory Authority: § 32.1-325 of the Code of Virginia.

Effective Date: February 16, 2011.

Agency Contact: Catherine Hancock, Policy Division, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (904) 225-4272, FAX (804) 786-1650, or email catherine.hancock@dmas.virginia.gov.

Summary:

Pursuant to Item 306 OO of Chapter 781 of the 2009 Acts of Assembly, the amendments implement a prior authorization review program for (i) case management services for seriously ill adults and emotionally disturbed children; (ii) youth at risk of serious emotional disturbance; and (iii) day treatment/partial hospitalization services, psychological rehabilitation, intensive community treatment, and mental health support services.

Summary of Public Comments and Agency's Response: No public comments were received by the promulgating agency.

12VAC30-50-226. Community mental health services.

A. Definitions. The following words and terms when used in these regulations shall have the following meanings unless the context clearly indicates otherwise:

"Certified prescreener" means an employee of the local community services board or its designee who is skilled in the assessment and treatment of mental illness and who has completed a certification program approved by ~~DMHMRSAS~~ DBHDS.

"Clinical experience" means practical experience in providing direct services to individuals with mental illness or mental retardation or the provision of direct geriatric services or special education services. Experience may include supervised internships, practicums, and field experience.

"Code" means the Code of Virginia.

"DBHDS" means the Department of Behavioral Health and Developmental Services consistent with Chapter 3 (§ 37.2-300 et seq.) of Title 37.2 of the Code of Virginia.

"DMAS" means the Department of Medical Assistance Services consistent with Chapter 10 (§ 32.1-323 et seq.) of Title 32.1 of the Code of Virginia.

~~"DMHMRSAS" means Department of Mental Health, Mental Retardation and Substance Abuse Services consistent with Chapter 1 (§ 37.1-39 et seq.) of Title 37.1 of the Code of Virginia.~~

"Human services field" means social work, gerontology, psychology, psychiatric rehabilitation, special education, sociology, counseling, vocational rehabilitation, and human services counseling or other degrees deemed equivalent by DMAS.

"Individual" means the patient, client, or recipient of services set out herein.

"Individual service plan" or "ISP" means a comprehensive and regularly updated statement specific to the individual being treated containing, but not necessarily limited to, his treatment or training needs, his goals and measurable objectives to meet the identified needs, services to be provided with the recommended frequency to accomplish the measurable goals and objectives, and estimated timetable for achieving the goals and objectives. The provider shall include the individual in the development of the ISP. To the extent that the individual's condition requires assistance for participation, assistance shall be provided. The ISP shall be updated as the needs and progress of the individual changes.

"Licensed Mental Health Professional" or "LMHP" means an individual licensed in Virginia as a physician, a clinical psychologist, a professional counselor, a clinical social worker, or a psychiatric clinical nurse specialist.

"Qualified mental health professional" or "QMHP" means a clinician in the human services field who is trained and experienced in providing psychiatric or mental health services to individuals who have a psychiatric diagnosis. If the QMHP is also one of the defined licensed mental health professionals, the QMHP may perform the services designated for the Licensed Mental Health Professionals unless it is specifically prohibited by their licenses. These QMHPs may be either a:

1. Physician who is a doctor of medicine or osteopathy and is licensed in Virginia;

2. Psychiatrist who is a doctor of medicine or osteopathy, specializing in psychiatry and is licensed in Virginia;

3. Psychologist who has a master's degree in psychology from an accredited college or university with at least one year of clinical experience;

4. Social worker who has a master's or bachelor's degree from a school of social work accredited or approved by the Council on Social Work Education and has at least one year of clinical experience;

5. Registered nurse who is licensed as a registered nurse in the Commonwealth and has at least one year of clinical experience; or

6. Mental health worker who has at least:

a. A bachelor's degree in human services or a related field from an accredited college and who has at least one year of clinical experience;

b. Registered Psychiatric Rehabilitation Provider (RPRP) registered with the International Association of Psychosocial Rehabilitation Services (IAPSRS) as of January 1, 2001;

c. A bachelor's degree from an accredited college in an unrelated field with an associate's degree in a human services field. The individual must also have three years clinical experience;

d. A bachelor's degree from an accredited college and certification by the International Association of Psychosocial Rehabilitation Services (IAPSRS) as a Certified Psychiatric Rehabilitation Practitioner (CPRP);

e. A bachelor's degree from an accredited college in an unrelated field that includes at least 15 semester credits (or equivalent) in a human services field. The individual must also have three years clinical experience; or

f. Four years clinical experience.

"Qualified paraprofessional in mental health" or "QPPMH" means an individual who meets at least one of the following criteria:

1. Registered with the International Association of Psychosocial Rehabilitation Services (IAPSRS) as an Associate Psychiatric Rehabilitation Provider (APRP), as of January 1, 2001; .

2. Has an associate's degree in one of the following related fields (social work, psychology, psychiatric rehabilitation, sociology, counseling, vocational rehabilitation, human services counseling) and has at least one year of experience providing direct services to persons with a diagnosis of mental illness; .

3. An associate's or higher degree, in an unrelated field and at least three years experience providing direct services to persons with a diagnosis of mental illness, gerontology clients, or special education clients. The experience may include supervised internships, practicums and field experience.

4. A minimum of 90 hours classroom training in behavioral health and 12 weeks of experience under the direct personal supervision of a QMHP providing services to persons with mental illness and at least one year of clinical experience (including the 12 weeks of supervised experience).

5. College credits (from an accredited college) earned toward a bachelor's degree in a human service field that is equivalent to an associate's degree and one year's clinical experience.

6. Licensure by the Commonwealth as a practical nurse with at least one year of clinical experience.

B. Mental health services. The following services, with their definitions, shall be covered: day treatment/partial hospitalization, psychosocial rehabilitation, crisis services, intensive community treatment (ICT), and mental health supports. Staff travel time shall not be included in billable time for reimbursement.

1. Day treatment/partial hospitalization services shall be provided in sessions of two or more consecutive hours per day, which may be scheduled multiple times per week, to groups of individuals in a nonresidential setting. These services, limited annually to 780 units, include the major diagnostic, medical, psychiatric, psychosocial and psychoeducational treatment modalities designed for individuals who require coordinated, intensive, comprehensive, and multidisciplinary treatment but who do not require inpatient treatment. One unit of service shall be defined as a minimum of two but less than four hours on a given day. Two units of service shall be defined as at least four but less than seven hours in a given day. Three units of service shall be defined as seven or more hours in a given day. Authorization is required for Medicaid reimbursement.

a. Day treatment/partial hospitalization services shall be time limited interventions that are more intensive than outpatient services and are required to stabilize an individual's psychiatric condition. The services are delivered when the individual is at risk of psychiatric hospitalization or is transitioning from a psychiatric hospitalization to the community.

b. Individuals qualifying for this service must demonstrate a clinical necessity for the service arising from mental, behavioral, or emotional illness that results in significant functional impairments in major life activities. Individuals must meet at least two of the following criteria on a continuing or intermittent basis:

(1) Experience difficulty in establishing or maintaining normal interpersonal relationships to such a degree that they are at risk of hospitalization or homelessness or isolation from social supports;

(2) Experience difficulty in activities of daily living such as maintaining personal hygiene, preparing food and maintaining adequate nutrition, or managing finances to such a degree that health or safety is jeopardized;

(3) Exhibit behavior that requires repeated interventions or monitoring by the mental health, social services, or judicial system; or

(4) Exhibit difficulty in cognitive ability such that they are unable to recognize personal danger or recognize significantly inappropriate social behavior.

c. Individuals shall be discharged from this service when they are no longer in an acute psychiatric state and other less intensive services may achieve psychiatric stabilization.

d. Admission and services for time periods longer than 90 calendar days must be authorized based upon a face-to-face evaluation by a physician, psychiatrist, licensed clinical psychologist, licensed professional counselor, licensed clinical social worker, or psychiatric clinical nurse specialist.

2. Psychosocial rehabilitation shall be provided at least two or more hours per day to groups of individuals in a nonresidential setting. These services, limited annually to 936 units, include assessment, education to teach the patient about the diagnosed mental illness and appropriate medications to avoid complication and relapse, opportunities to learn and use independent living skills and to enhance social and interpersonal skills within a supportive and normalizing program structure and environment. One unit of service is defined as a minimum of two but less than four hours on a given day. Two units are defined as at least four but less than seven hours in a given day. Three units of service shall be defined as seven or more hours in a given day. Authorization is required for Medicaid reimbursement.

Individuals qualifying for this service must demonstrate a clinical necessity for the service arising from mental, behavioral, or emotional illness that results in significant functional impairments in major life activities. Services are provided to individuals: (i) who without these services would be unable to remain in the community or (ii) who meet at least two of the following criteria on a continuing or intermittent basis:

a. Experience difficulty in establishing or maintaining normal interpersonal relationships to such a degree that they are at risk of psychiatric hospitalization, homelessness, or isolation from social supports;

b. Experience difficulty in activities of daily living such as maintaining personal hygiene, preparing food and maintaining adequate nutrition, or managing finances to such a degree that health or safety is jeopardized;

c. Exhibit such inappropriate behavior that repeated interventions by the mental health, social services, or judicial system are necessary; or

d. Exhibit difficulty in cognitive ability such that they are unable to recognize personal danger or significantly inappropriate social behavior.

3. Crisis intervention shall provide immediate mental health care, available 24 hours a day, seven days per week, to assist individuals who are experiencing acute psychiatric dysfunction requiring immediate clinical attention. This service's objectives shall be to prevent exacerbation of a condition, to prevent injury to the client or others, and to provide treatment in the context of the least restrictive setting. Crisis intervention activities shall include assessing the crisis situation, providing short-term counseling designed to stabilize the individual, providing access to further immediate assessment and follow-up, and linking the individual and family with ongoing care to prevent future crises. Crisis intervention services may include office visits, home visits, preadmission screenings, telephone contacts, and other client-related activities for the prevention of institutionalization.

a. Individuals qualifying for this service must demonstrate a clinical necessity for the service arising from an acute crisis of a psychiatric nature that puts the individual at risk of psychiatric hospitalization. Individuals must meet at least two of the following criteria at the time of admission to the service:

(1) Experience difficulty in establishing or maintaining normal interpersonal relationships to such a degree that they are at risk of psychiatric hospitalization, homelessness, or isolation from social supports;

(3) Exhibit such inappropriate behavior that immediate interventions by mental health, social services, or the judicial system are necessary; or

(4) Exhibit difficulty in cognitive ability such that they are unable to recognize personal danger or significantly inappropriate social behavior.

b. The annual limit for crisis intervention is 720 units per year. A unit shall equal 15 minutes.

4. Intensive community treatment (ICT), initially covered for a maximum of 26 weeks based on an initial assessment with continuation reauthorized for an additional 26 weeks annually based on written assessment and certification of need by a qualified mental health provider (QMHP), shall be defined as medical psychotherapy, psychiatric assessment, medication management, and case management activities offered to outpatients outside the clinic, hospital, or office setting for individuals who are best served in the community. The annual unit limit shall be 130 units with a unit equaling one hour. Authorization is required for Medicaid reimbursement. To qualify for ICT, the individual must meet at least one of the following criteria:

a. The individual must be at high risk for psychiatric hospitalization or becoming or remaining homeless due to mental illness or require intervention by the mental health or criminal justice system due to inappropriate social behavior.

b. The individual has a history (three months or more) of a need for intensive mental health treatment or treatment for co-occurring serious mental illness and substance use disorder and demonstrates a resistance to seek out and utilize appropriate treatment options.

(1) An assessment that documents eligibility and the need for this service must be completed prior to the initiation of services. This assessment must be maintained in the individual's records.

(2) A service plan must be initiated at the time of admission and must be fully developed within 30 days of the initiation of services.

5. Crisis stabilization services for nonhospitalized individuals shall provide direct mental health care to individuals experiencing an acute psychiatric crisis which may jeopardize their current community living situation. Authorization may be for up to a 15-day period per crisis episode following a documented face-to-face assessment by a QMHP which is reviewed and approved by an LMHP within 72 hours. The maximum limit on this service is up to eight hours (with a unit being one hour) per day up to 60 days annually. The goals of crisis stabilization programs shall be to avert hospitalization or rehospitalization, provide normative environments with a high assurance of safety and security for crisis intervention, stabilize individuals in psychiatric crisis, and mobilize the resources of the community support system and family members and others for on-going maintenance and rehabilitation. The services must be documented in the individual's records as having been provided consistent with the ISP in order to receive Medicaid reimbursement. The crisis stabilization program shall provide to recipients, as appropriate, psychiatric assessment including medication evaluation, treatment planning, symptom and behavior management, and individual and group counseling. This service may be provided in any of the following settings, but shall not be limited to: (i) the home of a recipient who lives with family or other primary caregiver; (ii) the home of a recipient who lives independently; or (iii) community-based programs licensed by ~~DMHMRSAS~~ DBHDS to provide residential services but which are not institutions for mental disease (IMDs). This service shall not be reimbursed for (i) recipients with medical conditions that require hospital care; (ii) recipients with primary diagnosis of substance abuse; or (iii) recipients with psychiatric conditions that cannot be managed in the community (i.e., recipients who are of imminent danger to themselves or others). Services must be documented through daily notes and a daily log of times spent in the delivery of services. Individuals qualifying for this service must demonstrate a clinical necessity for the service arising from an acute crisis of a psychiatric nature that puts the individual at risk of psychiatric hospitalization. Individuals must meet at least two of the following criteria at the time of admission to the service:

a. Experience difficulty in establishing and maintaining normal interpersonal relationships to such a degree that the individual is at risk of psychiatric hospitalization, homelessness, or isolation from social supports;

c. Exhibit such inappropriate behavior that immediate interventions by the mental health, social services, or judicial system are necessary; or

d. Exhibit difficulty in cognitive ability such that the individual is unable to recognize personal danger or significantly inappropriate social behavior.

6. Mental health support services shall be defined as training and supports to enable individuals to achieve and maintain community stability and independence in the most appropriate, least restrictive environment. Authorization is required for Medicaid reimbursement. These services may be authorized for six consecutive months. This program shall provide the following services in order to be reimbursed by Medicaid: training in or reinforcement of functional skills and appropriate behavior related to the individual's health and safety, activities of daily living, and use of community resources; assistance with medication management; and monitoring health, nutrition, and physical condition.

a. Individuals qualifying for this service must demonstrate a clinical necessity for the service arising from a condition due to mental, behavioral, or emotional illness that results in significant functional impairments in major life activities. Services are provided to individuals who without these services would be unable to remain in the community. The individual must have two of the following criteria on a continuing or intermittent basis:

(1) Have difficulty in establishing or maintaining normal interpersonal relationships to such a degree that the individual is at risk of psychiatric hospitalization or homelessness or isolation from social supports;

(2) Require help in basic living skills such as maintaining personal hygiene, preparing food and maintaining adequate nutrition or managing finances to such a degree that health or safety is jeopardized;

(3) Exhibit such inappropriate behavior that repeated interventions by the mental health, social services, or judicial system are necessary; or

(4) Exhibit difficulty in cognitive ability such that they are unable to recognize personal danger or recognize significantly inappropriate social behavior.

b. The individual must demonstrate functional impairments in major life activities. This may include individuals with a dual diagnosis of either mental illness and mental retardation, or mental illness and substance abuse disorder.

c. The yearly limit for mental health support services is 372 units. One unit is one hour but less than three hours.

12VAC30-50-420. Case management services for seriously mentally ill adults and emotionally disturbed children.

A. Target Group: The Medicaid eligible individual shall meet the ~~DMHMRSAS~~ DBHDS definition for "serious mental illness," or "serious emotional disturbance in children and adolescents."

1. An active client for case management shall mean an individual for whom there is a plan of care in effect which requires regular direct or client-related contacts or communication or activity with the client, family, service providers, significant others and others including at least one face-to-face contact every 90 days. Billing can be submitted for an active client only for months in which direct or client-related contacts, activity or communications occur. Authorization is required for Medicaid reimbursement.

2. There shall be no maximum service limits for case management services. Case management shall not be billed for individuals who are in institutions for mental disease.

B. Services will be provided to the entire state.

C. Comparability of Services: Services are not comparable in amount, duration, and scope. Authority of § 1915(g)(1) of the Act is invoked to provide services without regard to the requirements of § 1902(a)(10)(B) of the Act.

D. Definition of Services: Mental health services. Case management services assist individual children and adults, in accessing needed medical, psychiatric, social, educational, vocational, and other supports essential to meeting basic needs. Services to be provided include:

1. Assessment and planning services, to include developing an Individual Service Plan (does not include performing medical and psychiatric assessment but does include referral for such assessment);

2. Linking the individual to services and supports specified in the individualized service plan;

3. Assisting the individual directly for the purpose of locating, developing or obtaining needed services and resources;

4. Coordinating services and service planning with other agencies and providers involved with the individual. ;

5. Enhancing community integration by contacting other entities to arrange community access and involvement, including opportunities to learn community living skills, and use vocational, civic, and recreational services;

6. Making collateral contacts with the individuals' significant others to promote implementation of the service plan and community adjustment;

7. Follow-up and monitoring to assess ongoing progress and to ensure services are delivered; and

8. Education and counseling which guides the client and develops a supportive relationship that promotes the service plan.

E. Qualifications of Providers:

1. Services are not comparable in amount, duration, and scope. Authority of § 1915(g)(1) of the Act is invoked to limit case management providers for individuals with mental retardation and individuals with serious/chronic mental illness to the Community Services Boards only to enable them to provide services to serious/chronically mentally ill or mentally retarded individuals without regard to the requirements of § 1902(a)(10)(B) of the Act.

2. To qualify as a provider of services through DMAS for rehabilitative mental health case management, the provider of the services must meet certain criteria. These criteria shall be:

a. The provider must have the administrative and financial management capacity to meet state and federal requirements;

b. The provider must have the ability to document and maintain individual case records in accordance with state and federal requirements;

c. The services shall be in accordance with the Virginia Comprehensive State Plan for Mental Health, Mental Retardation and Substance Abuse Services;

d. The provider must be licensed as a provider of case management services by the ~~DMHMRSAS~~ DBHDS; and

e. Persons providing case management services must have knowledge of:

(1) Services, systems, and programs available in the community including primary health care, support services, eligibility criteria and intake processes, generic community resources, and mental health, mental retardation, and substance abuse treatment programs;

(2) The nature of serious mental illness, mental retardation, and substance abuse depending on the population served, including clinical and developmental issues;

(3) Different types of assessments, including functional assessments, and their uses in service planning;

(4) Treatment modalities and intervention techniques, such as behavior management, independent living skills training, supportive counseling, family education, crisis intervention, discharge planning, and service coordination;

(5) The service planning process and major components of a service plan;

(6) The use of medications in the care or treatment of the population served; and

(7) All applicable federal and state laws, state regulations, and local ordinances.

f. Persons providing case management services must have skills in:

(1) Identifying and documenting an individual's needs for resources, services, and other supports;

(2) Using information from assessments, evaluations, observation, and interviews to develop individual service plans;

(3) Identifying services and resources within the community and established service system to meet the individual's needs; and documenting how resources, services, and natural supports, such as family, can be utilized to achieve an individual's personal habilitative/rehabilitative and life goals; and

(4) Coordinating the provision of services by public and private providers.

g. Persons providing case management services must have abilities to:

(1) Work as team members, maintaining effective inter- and intra-agency working relationships;

(2) Work independently, performing position duties under general supervision; and

(3) Engage and sustain ongoing relationships with individuals receiving services.

3. Providers may bill Medicaid for mental health case management only when the services are provided by qualified mental health case managers.

F. The state assures that the provision of case management services will not restrict an individual's free choice of providers in violation of § 1902(a)(23) of the Act.

1. Eligible recipients will have free choice of the providers of case management services.

2. Eligible recipients will have free choice of the providers of other medical care under the plan.

G. Payment for case management services under the plan shall not duplicate payments made to public agencies or private entities under other program authorities for this same purpose.

H. Case management services may not be billed concurrently with intensive community treatment services, treatment foster care case management services or intensive in-home services for children and adolescents.

12VAC30-50-430. Case management services for youth at risk of serious emotional disturbance.

A. Target group: Medicaid eligible individuals who meet the ~~DMHMRSAS~~ DBHDS definition of youth at risk of serious emotional disturbance.

1. An active client shall mean an individual for whom there is a plan of care in effect which requires regular direct or client-related contacts or communication or activity with the client, family, service providers, significant others and others including at least one face-to-face contact every 90-days. Billing can be submitted for an active client only for months in which direct or client-related contacts, activity or communications occur. Authorization is required for Medicaid reimbursement.

2. There shall be no maximum service limits for case management services. Case management services must not be billed for individuals who are in institutions for mental disease.

B. Services will be provided in the entire state.

C. Comparability of services: Services are not comparable in amount, duration, and scope. Authority of § 1915(g)(1) of the Act is invoked to provide services without regard to the requirements of § 1902(a)(10)(B) of the Act.

D. Definition of services: Mental health services. Case management services assist youth at risk of serious emotional disturbance in accessing needed medical, psychiatric, social, educational, vocational, and other supports essential to meeting basic needs. Services to be provided include:

1. Assessment and planning services, to include developing an Individual Service Plan;

2. Linking the individual directly to services and supports specified in the treatment/services plan;

3. Assisting the individual directly for the purpose of locating, developing or obtaining needed service and resources;

4. Coordinating services and service planning with other agencies and providers involved with the individual;

6. Making collateral contacts which are nontherapy contacts with an individual's significant others to promote treatment and/or community adjustment;

7. Following up and monitoring to assess ongoing progress and ensuring services are delivered; and

8. Education and counseling which guides the client and develops a supportive relationship that promotes the service plan.

E. Qualifications of providers.

1. Services are not comparable in amount, duration, and scope. Authority of § 1915(g)(1) of the Act is invoked to limit case management providers, to the community services boards only, to enable them to provide services to serious/chronically mentally ill or mentally retarded individuals without regard to the requirements of § 1902(a)(10)(B) of the Act. To qualify as a provider of case management services to youth at risk of serious emotional disturbance, the provider of the services must meet the following criteria:

a. The provider must meet state and federal requirements regarding its capacity for administrative and financial management;

b. The provider must document and maintain individual case records in accordance with state and federal requirements;

c. The provider must provide services in accordance with the Virginia Comprehensive State Plan for Mental Health, Mental Retardation and Substance Abuse Services;

d. The provider must be licensed as a provider of case management services by the ~~DMHMRSAS~~ DBHDS; and

e. Persons providing case management services must have knowledge of:

(2) The nature of serious mental illness, mental retardation and/or substance abuse depending on the population served, including clinical and developmental issues;

(3) Different types of assessments, including functional assessments, and their uses in service planning;

(5) The service planning process and major components of a service plan;

(6) The use of medications in the care or treatment of the population served; and

(7) All applicable federal and state laws, state regulations, and local ordinances.

f. Persons providing case management services must have skills in:

(1) Identifying and documenting an individual's need for resources, services, and other supports;

(2) Using information from assessments, evaluations, observation, and interviews to develop individual service plans;

(4) Coordinating the provision of services by diverse public and private providers.

g. Persons providing case management services must have abilities to:

(1) Work as team members, maintaining effective inter- and intra-agency working relationships;

(2) Work independently performing position duties under general supervision; and

(3) Engage and sustain ongoing relationships with individuals receiving services.

F. Providers may bill Medicaid for mental health case management to youth at risk of serious emotional disturbance only when the services are provided by qualified mental health case managers.

G. The state assures that the provision of case management services will not restrict an individual's free choice of providers in violation of § 1902(a)(23) of the Act.

1. Eligible recipients will have free choice of the providers of case management services.

2. Eligible recipients will have free choice of the providers of other medical care under the plan.

H. Payment for case management services under the plan must not duplicate payments made to public agencies or private entities under other program authorities for this same purpose.

I. Case management may not be billed concurrently with intensive community treatment services, treatment foster care case management services, or intensive in-home services for children and adolescents.

VA.R. Doc. No. R09-1937; Filed December 27, 2010, 4:19 p.m.

Proposed Regulation

Titles of Regulations: 12VAC30-70. Methods and Standards for Establishing Payment Rates - Inpatient Hospital Services (amending 12VAC30-70-50).

12VAC30-80. Methods and Standards for Establishing Payment Rates; Other Types of Care (amending 12VAC30-80-20, 12VAC30-80-200).

Statutory Authority: § 32.1-325 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: March 18, 2011.

Agency Contact: Carla Russell, Provider Reimbursement Division, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 225-4586, FAX (805) 786-1680, or email carla.russell@dmas.virginia.gov.

Basis: Section 32.1-325 of the Code of Virginia grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance. Section 32.1-324 of the Code of Virginia authorizes the Director of DMAS to administer and amend the Plan for Medical Assistance according to the board's requirements. The Medicaid authority as established by § 1902 (a) of the Social Security Act (42 USC 1396a) provides governing authority for payments for services.

Specifically, Items 306 XX and 306 BBB of Chapter 781 of the 2009 Acts of Assembly required DMAS to convert the current reimbursement methodology for rehabilitation agencies to a statewide prospective rate for individual and group services and reduce reimbursement to long-stay hospitals.

Purpose:

Outpatient Rehabilitation Facility Reimbursement: The purpose of this regulatory action is to incorporate into 12VAC30-80-200 the changes made in the previous emergency regulation, with some modification. The proposed text here is the same as the final text in a separate final regulatory action (Ambulatory Surgery Center and Outpatient Rehabilitation Facility Reimbursement) that also addressed 12VAC30-80-200. This regulatory action provides both the public and the agency the opportunity to further address provider questions and issues with the new methodology. There are no expected environmental benefits from these changes.

Long-Stay Hospital Reimbursement: The purpose of this action is to incorporate changes to 12VAC30-70-50 as adopted by the previous emergency regulation action: reduction of the incentive plan, elimination of an additional 2.0% that has been added annually to the escalator, and modification of the DSH utilization percentage. This proposed regulatory action is not essential to protect the health, safety, or welfare of the citizens of the Commonwealth. It is also not expected to have any environmental benefits. The issues addressed by this action are the reduction of payment amounts being made to two hospitals.

Substance:

Outpatient Rehabilitation Agency Reimbursement: This change implements a prospective statewide fee schedule methodology for outpatient rehabilitation agencies based on Current Procedural Terminology (CPT) codes. Rehabilitation services furnished by community services boards and state agencies will continue to be reimbursed on a cost basis. The fee schedule was developed to achieve savings totaling $185,900 general funds dollars as required in the Governor's budget.

Long-Stay Hospital Reimbursement: Long-stay hospitals currently are reimbursed based on the methodology in effect for all hospitals prior to the implementation of the prospective reimbursement methodology based on diagnosis-related-groups effective July 1, 1996. Several aspects of the methodology are no longer appropriate, but have never been changed since there are only a few hospitals (two currently) being reimbursed using this methodology. The changes to the old methodology include the reduction of the "incentive plan," the elimination of an additional 2.0% annually added to the "escalator," and modification of the disproportionate share hospital (DSH) utilization threshold percentage.

The incentive plan currently pays a hospital up to 25% of the difference between the ceiling and its cost per day. As a result of the incentive plan, hospitals can be reimbursed more than their costs. The regulatory change reduces the maximum incentive plan to up to 10.5% of the difference between the ceiling and its cost per day. The escalator, which is currently inflation plus 2.0%, is used to increase the ceilings and the operating cost per day. The regulation will change the escalator to just inflation. Currently, DSH is calculated by multiplying the difference between the Medicaid utilization percentage and the Medicaid utilization threshold of 8.0% times the prospective cost per day. The regulation will increase the utilization threshold from 8.0% to 10.5%. The regulatory changes are projected to save $1.98 million (total funds) in FY10.

Note: DMAS has been in the process of implementing the Outpatient Rehabilitation Agency Reimbursement changes through a nonemergency regulatory process initiated in 2008. DMAS published a NOIRA (Town Hall 2690/4671 on 9/24/08 (VA.R. 25:3)) and had a proposed regulation (Town Hall 2690/4933) which addressed this element of the Outpatient Rehabilitation package. The final regulation made these changes permanent on March 3, 2010 (Ambulatory Surgery Center and Outpatient Rehabilitation Facility Reimbursement--Town Hall 2690/5345, published VA.R. 26:11). The 2009 budget required DMAS to implement the Outpatient Rehabilitation Agency Reimbursement changes prior to its originally scheduled implementation date via an emergency regulation. While the agency has finalized the outpatient rehabilitation reimbursement in the previously cited action, DMAS has included the same section in this proposed regulation. By doing so the agency has the opportunity to consider provider feedback to the new reimbursement methodology.

Issues:

Outpatient Rehabilitation Facility Reimbursement: Currently, the Virginia Administrative Code contains a cost-based methodology for computing reimbursement for outpatient rehabilitation services that is subject to a ceiling (12VAC30-80-200). For rehabilitation services, Medicare and most commercial insurers use a fee schedule. As a result, outpatient rehabilitation agencies bill differently and submit a cost report only for Medicaid. Providers will no longer have to submit cost reports and DMAS will no longer have to settle the cost reports. Discontinuing both of these activities will result in administrative savings to both rehab providers and the Commonwealth.

There are no disadvantages to the citizens of the Commonwealth for these changes as they are not expected to have an impact on the delivery of these services. The advantage to the citizens of the Commonwealth is the reduction in providers and agency's costs associated with these changes. Some providers objected to the manner in which the agency implemented the new methodology. DMAS has indicated that it will continue to work with the provider community through this current regulatory process.

Long-Stay Hospitals Reimbursement: This regulatory action poses no disadvantages to the public or the Commonwealth. If the proposed change is not implemented, it will mean ongoing expenditures to two hospitals contrary to the General Assembly's directive. The primary advantage to the Commonwealth will be the reduction in payment amounts to these two enrolled Medicaid providers.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed changes will make permanent the reduction in Medicaid reimbursements to long-stay hospitals that has been in effect since July 1, 2009. The proposed changes also include a re-proposal of changes to outpatient rehabilitation facility reimbursement methodology that was finalized in a previous regulatory action in order to afford the public and the regulants additional opportunity to provide comments.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Pursuant to Item 306 BBB, Chapter 781 of the 2009 Acts of the Assembly, the proposed changes make permanent the reduction in Medicaid reimbursement to long-stay hospitals. The proposed reduction is comprised of 1) the reduction of the incentive plan, 2) the elimination of and additional 2.0% annually added to the escalator, and 3) modification of the disproportionate share hospital (DSH) utilization threshold percentage. These changes have already been in effect since July 1, 2009 under emergency regulations.

According to the Department of Medical Assistance Services, the incentive plan used to pay a long-stay hospital up to 25% of the difference between the ceiling and its cost per day. The proposed changes reduce the maximum incentive plan to up to 10.5% of the difference between the ceiling and its cost per day. Also, the escalator, which used to be inflation plus 2.0%, is used to increase the ceilings and the operating cost per day. The proposed regulations change the escalator to just inflation. Finally, the proposed changes modify the DSH payments. DSH payments are calculated by multiplying the difference between the Medicaid utilization percentage and the Medicaid utilization threshold and multiplying the result with the prospective cost per day. The regulation will increase the utilization threshold from 8.0% to 10.5%, effectively reducing the difference.

The proposed changes are estimated to create a $990,000 in general fund savings and a $990,000 reduction in federal matching fund annually starting in Fiscal Year 2010. Currently, there are two long-stay hospitals. The main economic impact of this particular change on providers is the loss of $1.8 million revenue at the aggregate and the contractionary economic effects associated with reduced spending in the Commonwealth.

Another proposed change included in this regulatory action is the re-proposal of changes to outpatient rehabilitation facility reimbursement methodology that was finalized in a previous regulatory action. Exactly the same proposed language was already made permanent and published in Virginia Register of Regulations on February 1, 2010, Volume 26, Issue 11. In order to provide the public and the regulants additional opportunity to provide feedback, the Department of Medical Assistance Services proposes to the same language in this regulatory package.

Since the exact proposed language has already been finalized through a separate regulatory action and will become effective regardless of this action, there is no significant economic impact that can be attributed to this particular change other than the additional opportunity afforded to public and regulants to comment on the proposed language.

Businesses and Entities Affected. There are two long-stay hospitals receiving reimbursement from Virginia Medicaid. There are approximately 100 outpatient rehabilitation agencies receiving reimbursement from Virginia Medicaid.

Localities Particularly Affected. The proposed regulations apply throughout the Commonwealth.

Projected Impact on Employment. The expected reduction in long-stay hospital reimbursement may reduce their demand for labor in long-stay hospital services.

Effects on the Use and Value of Private Property. The expected reduction in long-stay hospital reimbursement may reduce their asset values.

Small Businesses: Costs and Other Effects. None of the two long-stay hospitals receiving reimbursement from Virginia Medicaid are believed to be small businesses. Thus, the proposed changes do not have any costs or other effects on small businesses.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed changes do not have any adverse impact on small businesses.

Real Estate Development Costs. The proposed changes do not have any effect on real estate development costs.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 107 (09). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis: The Department of Medical Assistance Services has reviewed the economic impact analysis prepared by the Department of Planning and Budget regarding the regulations concerning Outpatient Rehabilitation Agency and Long Stay Hospital Reimbursement (12VAC30-70-50, 12VAC30-80-20, and 12VAC30-80-200).

Summary:

The proposed amendments change the reimbursement for outpatient rehabilitation agencies and comprehensive outpatient rehabilitation facilities (CORFs) from a cost-based methodology to the new fee schedule methodology. CORFs are being removed from the list of providers that are reimbursed on a cost basis in 12VAC30-80-200 and DMAS will implement a statewide fee schedule methodology for outpatient rehabilitation agencies.

The proposed amendments also reduce reimbursement to long-stay hospitals (12VAC30-70-50). Currently, these providers are reimbursed based on the methodology in effect for all hospitals prior to the implementation of the diagnosis related groups prospective reimbursement methodology. The changes to the old methodology include the reduction of the "incentive plan," the elimination of an additional 2.0% annually added to the escalator, and modification of the disproportionate share hospital (DSH) utilization threshold percentage.

12VAC30-70-50. Hospital reimbursement system.

The reimbursement system for hospitals includes the following components:

A. Hospitals were grouped by classes according to number of beds and urban versus rural. (Three groupings for rural - 0 to 100 beds, 101 to 170 beds, and over 170 beds; four groupings for urban - 0 to 100, 101 to 400, 401 to 600, and over 600 beds.) Groupings are similar to those used by the Health Care Financing Administration (HCFA) in determining routine cost limitations.

B. Prospective reimbursement ceilings on allowable operating costs were established as of July 1, 1982, for each grouping. Hospitals with a fiscal year end after June 30, 1982, were subject to the new reimbursement ceilings.

1. The calculation of the initial group ceilings as of July 1, 1982, was based on available, allowable cost data for hospitals in calendar year 1981. Individual hospital operating costs were advanced by a reimbursement escalator from the hospital's year end to July 1, 1982. After this advancement, the operating costs were standardized using SMSA wage indices, and a median was determined for each group. These medians were readjusted by the wage index to set an actual cost ceiling for each SMSA. Therefore, each hospital grouping has a series of ceilings representing one of each SMSA area. The wage index is based on those used by HCFA in computing its Market Basket Index for routine cost limitations.

2. Effective July 1, 1986, and until June 30, 1988, providers subject to the prospective payment system of reimbursement had their prospective operating cost rate and prospective operating cost ceiling computed using a new methodology. This method uses an allowance for inflation based on the percent of change in the quarterly average of the Medical Care Index of the Chase Econometrics - Standard Forecast determined in the quarter in which the provider's new fiscal year began.

3. The prospective operating cost rate is based on the provider's allowable cost from the most recent filed cost report, plus the inflation percentage add-on.

4. The prospective operating cost ceiling is determined by using the base that was in effect for the provider's fiscal year that began between July 1, 1985, and June 1, 1986. The allowance for inflation percent of change for the quarter in which the provider's new fiscal year began is added to this base to determine the new operating cost ceiling. This new ceiling was effective for all providers on July 1, 1986. For subsequent cost reporting periods beginning on or after July 1, 1986, the last prospective operating rate ceiling determined under this new methodology will become the base for computing the next prospective year ceiling.

5. Effective on and after July 1, 1988, and until June 30, 1989, for providers subject to the prospective payment system, the allowance for inflation shall be based on the percent of change in the moving average of the Data Resources, Incorporated Health Care Cost HCFA-Type Hospital Market Basket determined in the quarter in which the provider's new fiscal year begins. Such providers shall have their prospective operating cost rate and prospective operating cost ceiling established in accordance with the methodology which became effective July 1, 1986. Rates and ceilings in effect July 1, 1988, for all such hospitals shall be adjusted to reflect this change.

6. Effective on or after July 1, 1989, for providers subject to the prospective payment system, the allowance for inflation shall be based on the percent of change in the moving average of the Health Care Cost HCFA-Type Hospital Market Basket, adjusted for Virginia, as developed by Data Resources, Incorporated, determined in the quarter in which the provider's new fiscal year begins. Such providers shall have their prospective operating cost rate and prospective operating cost ceiling established in accordance with the methodology which became effective July 1, 1986. Rates and ceilings in effect July 1, 1989, for all such hospitals shall be adjusted to reflect this change.

7. Effective on and after July 1, 1992, for providers subject to the prospective payment system, the allowance for inflation, as described above, which became effective on July 1, 1989, shall be converted to an escalation factor by adding two percentage points, (200 basis points) to the then current allowance for inflation. Effective July 1, 2009, the additional two percentage points shall no longer be included in the escalation factor. The escalation factor shall be applied in accordance with the inpatient hospital reimbursement methodology in effect on June 30, 1992. On July 1, 1992, the conversion to the new escalation factor shall be accomplished by a transition methodology which, for non-June 30 year end hospitals, applies the escalation factor to escalate their payment rates for the months between July 1, 1992, and their next fiscal year ending on or before May 31, 1993.

Effective July 1, 2010, through June 30, 2012, the escalation factor shall be zero. In addition, ceilings shall remain at the same level as the ceilings for long stay hospitals with fiscal year's end of June 30, 2010.

8. The new method will still require comparison of the prospective operating cost rate to the prospective operating ceiling. The provider is allowed the lower of the two amounts subject to the lower of cost or charges principles.

C. Subsequent to June 30, 1992, the group ceilings shall not be recalculated on allowable costs, but shall be updated by the escalator factor.

D. Prospective rates for each hospital shall be based upon the hospital's allowable costs plus the escalator factor, or the appropriate ceilings, or charges; whichever is lower. Except to eliminate costs that are found to be unallowable, no retrospective adjustment shall be made to prospective rates.

Depreciation, capital interest, and education costs approved pursuant to PRM-15 (§ 400), shall be considered as pass throughs and not part of the calculation. Capital interest is reimbursed the percentage of allowable cost specified in 12VAC30-70-271.

E. An incentive plan should be established whereby a hospital will be paid on a sliding scale, percentage for percentage, up to ~~25%~~ 10.5% of the difference between allowable operating costs and the appropriate per diem group ceiling when the operating costs are below the ceilings. The incentive should be calculated based on the annual cost report.

~~The table below presents three examples under the new plan:~~

~~Group Ceiling~~	~~Hospital's Allow-able Cost Per Day~~	$	~~Difference % or Ceiling~~	$	~~Sliding Scale Incentive % of Difference~~
~~$230.00~~	~~$230.00~~	0	0	0	0
~~230.00~~	~~207.00~~	~~23.00~~	~~10%~~	~~2.30~~	~~10%~~
~~230.00~~	~~172.00~~	~~57.50~~	~~25%~~	~~14.38~~	~~25%~~
~~230.00~~	~~143.00~~	~~76.00~~	~~33%~~	~~19.00~~	~~25%~~

F. There will be special consideration for exception to the median operating cost limits in those instances where extensive neonatal care is provided.

G. Disproportionate share hospitals defined. The following criteria shall be met before a hospital is determined to be eligible for a disproportionate share payment adjustment.

1. Criteria.

a. A Medicaid inpatient utilization rate in excess of 8% 10.5% for hospitals receiving Medicaid payments in the Commonwealth, or a low-income patient utilization rate exceeding 25% (as defined in the Omnibus Budget Reconciliation Act of 1987 and as amended by the Medicare Catastrophic Coverage Act of 1988); and

b. At least two obstetricians with staff privileges at the hospital who have agreed to provide obstetric services to individuals entitled to such services under a State Medicaid plan. In the case of a hospital located in a rural area (that is, an area outside of a Metropolitan Statistical Area, as defined by the Executive Office of Management and Budget), the term "obstetrician" includes any physician with staff privileges at the hospital to perform nonemergency obstetric procedures.

c. Subdivision 1 b of this subsection does not apply to a hospital:

(1) At which the inpatients are predominantly individuals under 18 years of age; or

(2) Which does not offer nonemergency obstetric services as of December 21, 1987.

2. Payment adjustment.

a. Hospitals which have a disproportionately higher level of Medicaid patients shall be allowed a disproportionate share payment adjustment based on the type of hospital and on the individual hospital's Medicaid utilization. There shall be two types of hospitals: (i) Type One, consisting of state-owned teaching hospitals, and (ii) Type Two, consisting of all other hospitals. The Medicaid utilization shall be determined by dividing the number of utilization Medicaid inpatient days by the total number of inpatient days. Each hospital with a Medicaid utilization of over ~~8.0%~~ 10.5% shall receive a disproportionate share payment adjustment.

b. For Type One hospitals, the disproportionate share payment adjustment shall be equal to the product of (i) the hospital's Medicaid utilization in excess of ~~8.0%~~ 10.5%, times 11, times (ii) the lower of the prospective operating cost rate or ceiling. For Type Two hospitals, the disproportionate share payment adjustment shall be equal to the product of (i) the hospital's Medicaid utilization in excess of ~~8.0%~~ 10.5% times (ii) the lower of the prospective operating cost rate or ceiling.

c. No payments made under subdivision 1 or 2 of this subsection shall exceed any applicable limitations upon such payments established by federal law or regulations.

H. Outlier adjustments.

1. DMAS shall pay to all enrolled hospitals an outlier adjustment in payment amounts for medically necessary inpatient hospital services provided on or after July 1, 1991, involving exceptionally high costs for individuals under one year of age.

2. DMAS shall pay to disproportionate share hospitals (as defined in ~~paragraph~~ subsection G ~~above~~ of this section) an outlier adjustment in payment amounts for medically necessary inpatient hospital services provided on or after July 1, 1991, involving exceptionally high costs for individuals under six years of age.

3. The outlier adjustment calculation.

a. Each eligible hospital which desires to be considered for the adjustment shall submit a log which contains the information necessary to compute the mean of its Medicaid per diem operating cost of treating individuals identified in subdivision H 1 or 2 above. This log shall contain all Medicaid claims for such individuals, including, but not limited to: (i) the patient's name and Medicaid identification number; (ii) dates of service; (iii) the remittance date paid; (iv) the number of covered days; and (v) total charges for the length of stay. Each hospital shall then calculate the per diem operating cost (which excludes capital and education) of treating such patients by multiplying the charge for each patient by the Medicaid operating cost-to-charge ratio determined from its annual cost report.

b. Each eligible hospital shall calculate the mean of its Medicaid per diem operating cost of treating individuals identified in subdivision H 1 or 2 above. Any hospital which qualifies for the extensive neonatal care provision (as governed by paragraph F, above) shall calculate a separate mean for the cost of providing extensive neonatal care to individuals identified in subdivision H 1 or 2 above.

c. Each eligible hospital shall calculate its threshold for payment of the adjustment, at a level equal to two and one-half standard deviations above the mean or means calculated in subdivision H 3 (ii) above.

d. DMAS shall pay as an outlier adjustment to each eligible hospital all per diem operating costs which exceed the applicable threshold or thresholds for that hospital.

4. Pursuant to 12VAC30-50-100, there is no limit on length of time for medically necessary stays for individuals under six years of age. This section provides that consistent with 42 CFR 441.57, payment of medical assistance services shall be made on behalf of individuals under 21 years of age, who are Medicaid eligible, for medically necessary stays in acute care facilities in excess of 21 days per admission when such services are rendered for the purpose of diagnosis and treatment of health conditions identified through a physical examination. Medical documentation justifying admission and the continued length of stay must be attached to or written on the invoice for review by medical staff to determine medical necessity. Medically unjustified days in such admissions will be denied.