Title of Regulation: 12VAC30-50. Amount, Duration, and Scope of Medical and Remedial Care Services (adding 12VAC30-50-610).

Statutory Authority: § 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: February 2, 2022.

Effective Date: February 17, 2022.

Agency Contact: Emily McClellan, Regulatory Supervisor, Policy Division, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 371-4300, FAX (804) 786-1680, or email emily.mcclellan@dmas.virginia.gov.

Basis: Section 32.1-325 of the Code of Virginia authorizes the Board of Medical Assistance Services to administer and amend the State Plan for Medical Assistance and to promulgate regulations. 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 State Plan for Medical Assistance and to promulgate regulations 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: The purpose of this regulation is to incorporate the Medicaid expansion Alternative Benefit Plan (ABP) approved by the Centers for Medicare and Medicaid Services (CMS) into the Virginia Administrative Code. This regulation is essential to protect the health, safety, and welfare of citizens in that it implements the General Assembly mandate to expand Medicaid coverage to new populations.

Rationale for Using Fast-Track Rulemaking Process: This regulatory action is expected to be noncontroversial because it describes an alternative benefit plan that was approved by CMS and went into effect on January 1, 2019. As of October 18, 2019, over 331,000 individuals have enrolled in Medicaid expansion, and no formal or informal complaints or comments had been received about the alternative benefit plan from any Medicaid member, Medicaid provider, or member of the public.

Substance: The changes describe how the ABP was developed, the essential health benefits that were reviewed, how the ABP will use both managed care and fee-for-service delivery systems, and how the ABP interacts with the Health Insurance Premium Payment Program and cost sharing.

Issues: The primary advantage of this regulatory action for the public and the Commonwealth is that additional individuals will have access to comprehensive health insurance, which should help improve health measures and outcomes across the Commonwealth. There are no disadvantages to the agency or the public.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The director of the Department of Medical Assistance Services (DMAS), on behalf of the Board of Medical Assistance Services, proposes to promulgate a permanent regulation to replace an emergency regulation that went into effect on September 19, 2019. As with the emergency regulation, the permanent regulation would incorporate alternative benefit plan language that was included in the Virginia State Plan as a part of the Medicaid expansion implementation that became effective on January 1, 2019.

Background. The proposed regulation is part of the overall implementation process for Medicaid expansion in accordance with several legislative mandates: the 2018 Acts of Assembly, Chapter 2, Item 303.SS.4(a)(1); the 2019 Acts of Assembly, Chapter 854, Item 303.SS.4(a)(1); the 2020 Acts of Assembly, Chapter 1289, Item 313.QQ.3(a)(1); and the 2021 Special Session 1 Acts of Assembly, Chapter 552, Item 313.QQ.3(a)(1). These mandates direct DMAS to "amend the State Plan for Medical Assistance under Title XIX of the Social Security Act, and any waivers thereof, to implement coverage for newly eligible individuals pursuant to 42 USC § 1396d(y)(1)[2010] of the Patient Protection and Affordable Care Act."

The State Plan Amendments have already been made and approved by the federal Centers for Medicare and Medicaid Services, and emergency regulations were subsequently adopted. This action permanently replaces a key element of the regulation that helped effectuate the expansion. More specifically, the regulatory provision being permanently adopted by this action involves the alternative benefit plan (ABP) that is available to individuals who are covered by Medicaid expansion. The Centers for Medicare and Medicaid Services (CMS) requires state Medicaid agencies to create an ABP for expansion populations. The main purpose of the requirement is to assure that Virginia's expansion population has access to comprehensive health insurance.

The proposed changes describe how the plan was developed; the essential health benefits that were reviewed; the benefits-related assurances Virginia makes to CMS; how the ABP will use both managed care and fee-for-service delivery systems; how the ABP interacts with the Health Insurance Premium Payment program and cost sharing; and the general assurances that Virginia makes to CMS.

Estimated Benefits and Costs. According to DMAS, the primary effect of the proposed changes would be consistency between the Medicaid State Plan and the Virginia Administrative Code (VAC). It has long been a practice to amend the regulation to mirror the changes that were previously made to the Medicaid State Plan. In that sense, this regulatory action is a housekeeping measure. Under the General Assembly's multiple directives stated, the expansion of Medicaid coverage to indigent adults that meets the federal ABP requirements addressed in this regulation has already been in effect for more than two years.

Although permanently amending the VAC to reflect what has already been implemented will not create any immediate economic impact, the practice still has value. The legislation has addressed important aspects of expansion in a piecemeal fashion. And though the State Plan stitched these directives together, its purpose is to provide a basis for federal authority. In contrast, the VAC is the basis for the state authority. To the extent that the proposed ABP amendments help serve as a source for information regarding the ABP, the proposal should benefit Medicaid providers, recipients, and the public in general.

Businesses and Other Entities Affected. The proposed amendments should benefit Medicaid providers, recipients, and the public in general in terms of providing a permanent source for the rules governing the ABP for the expansion population. No adverse economic impact¹ on any entity is indicated.

Small Businesses² Affected. The proposed amendments do not adversely affect small businesses.

Localities³ Affected.⁴ The proposed amendments do not introduce costs for local governments.

Projected Impact on Employment. The proposed amendments do not affect total employment.

Effects on the Use and Value of Private Property. No effects on the use and value of private property or real estate development costs is expected.

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¹Adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined.

²Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

³"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁴§ 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The Department of Medical Assistance Services has reviewed the economic impact analysis prepared by the Department of Planning and Budget and raises no issues with this analysis.

Summary:

This regulatory action adds the alternative benefit plan (ABP), which is available to individuals who are covered by Medicaid expansion, to the Virginia State Plan for Medical Assistance in order to implement Medicaid expansion. The Centers for Medicare and Medicaid Services (CMS) requires state Medicaid agencies to create an ABP for expansion populations. The changes included in this regulatory action have already been reviewed and approved by CMS.

Part X

Alternative Benefit Plan

12VAC30-50-610. Alternative benefit plan: Medicaid expansion.

A. The Commonwealth provides alternative benefits to the adult group (defined in § 1902(a)(10)(A)(i)(VIII) of the Social Security Act) under the coverage option under § 1937 of the Social Security Act (42 USC § 301 et seq.) approved by the Secretary of Health and Human Services. Enrollment is mandatory for individuals in the adult group, and the alternative benefit package shall be available statewide.

B. In developing the benefit package for the alternative benefit plan, the Commonwealth reviewed:

1. Benefits in its approved State Plan as a "benchmark benefit package";

2. The largest plan by enrollment of the three largest small-group insurance products in the small-group market as the "base benchmark plan"; and

3. Essential health benefits.

C. Alternative benefit plan services.

1. The alternative benefit plan includes all Medicaid State Plan services, including essential health benefits.

2. The essential health benefits included in the alternative benefit plan are ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services; and chronic disease management. Pediatric services, including oral and vision care, are essential health benefits that are not covered for adults.

D. The Commonwealth will use both managed care and fee-for-service delivery systems for the alternative benefit plan.

1. The managed care delivery system is the same as the CMS-approved § 1915(b) managed care waivers. The fee-for-service delivery system is the traditional, state-managed system.

2. For each benefit provided under an alternative benefit plan that is not provided through managed care, the Commonwealth will use the payment methodology in its approved State Plan (i.e., 12VAC30-70, 12VAC30-80, and 12VAC30-90).

E. Individuals who have cost-effective group health plans described in § 1906 of the Social Security Act or qualified employer-sponsored plans described in § 1906A of the Social Security Act may request to receive coverage through the Health Insurance Premium Payment program.

F. Any cost sharing described in Attachment 4.18-A of the State Plan (12VAC30-20-150) applies to the alternative benefit plan.