TITLE 12. HEALTH

DEPARTMENT OF MEDICAL ASSISTANCE SERVICES

Fast-Track Regulation

Titles of Regulations: 12VAC30-110. Eligibility and Appeals (amending 12VAC30-110-10, 12VAC30-110-220, 12VAC30-110-370; adding 12VAC30-110-185).

12VAC30-120. Waivered Services (amending 12VAC30-120-670).

12VAC30-141. Family Access to Medical Insurance Security Plan (amending 12VAC30-141-40, 12VAC30-141-700).

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: July 17, 2024.

Effective Date: August 1, 2024.

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 grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance and to promulgate regulations, and § 32.1-324 of the Code of Virginia grants the Director of the Department of Medical Assistance Services (DMAS) the authority of the board when it is not in session.

Purpose: These amendments clarify (i) the burden of proof in client appeals, (ii) the scope of review for de novo hearings in client appeals, and (iii) the timeframes for submission of documents and decision deadlines for de novo client hearings. These amendments are essential to protect public health, safety, or welfare in that they ensure that the client appeals regulations are clear to Medicaid applicants. Medicaid applicants who are denied eligibility have a right to appeal that denial, and those appeals ensure that the eligibility rules are applied fairly and uniformly, which helps ensure the integrity of the Medicaid program and that all individuals who qualify for Medicaid services are able to receive them.

Rationale for Using Fast-Track Rulemaking Process: Item 317 GG 2 of the 2021 Appropriations Act mandated that the department make these changes via an emergency regulation. This fast-track rulemaking action follows the emergency and Notice of Intended Regulatory Action. The action is expected to be noncontroversial because the action allows applicants and members to have a full understanding of their appeal rights and what occurs throughout the appeal process. The changes clarify portions of the appeal process that have been at issue in cases in the past, including the scope of the appeal and who is assigned the burden of proof. Furthermore, the changes are noncontroversial because the changes do not place any additional requirements on the appellant. Instead, some of the changes are more favorable to the appellant, including specifying the requirements for the appeal summary, affording the individual a de novo hearing, and assigning the burden of proof to the party who is seeking the change, as opposed to the prior model of placing the burden on the appellant in all appeals.

Substance: Amendments are being made to 12VAC30-110, including the sections on definitions, evidentiary hearings, and final decisions. A new section on client appeals is being created. Additional amendments for consistency are being made to 12VAC30-120 and 12VAC30-141.

Issues: The primary advantage of these amendments is that the amendments clarify the client appeal rules for Medicaid members. There are no disadvantages to the public or the agency.

Department of Planning and Budget's Economic Impact Analysis:

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 Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. Pursuant to Item 317 GG of the 2021 Special Session I Acts of the General Assembly,² the Director of the Department of Medical Assistance Services (DMAS), on behalf of the Board of Medical Assistance Services, proposes to clarify the client appeal rules for Medicaid members.

Background. This regulation governs the client appeals for Medicaid members when an adverse action regarding eligibility or covered services has been taken against them by DMAS or its contractor (e.g., managed care organizations (MCOs),³ local department of social services, or state agencies such as the Department of Behavioral Health and Developmental Services, the Department of Social Services, etc.). According to DMAS, prior to the Fall of 2020, the scope of client appeals was limited to whether the action taken was correct based on the information the agency or contractor had when it initially took the action. However, a legal aid organization in Virginia asserted that the lack of de novo hearings violated federal requirements. In a de novo hearing, the hearing officer considers all relevant evidence submitted during the appeal in order to make a determination on the issues on appeal, even if the evidence was not previously received by the agency or contractor. After consultations with the Office of the Attorney General, DMAS began processing client appeals as de novo hearings in October 2020 to align its appeal process with federal regulations. Also, at the request of the agency, Item 317 GG of the 2021 Appropriation Act was included in the budget, which stated:

1. Out of amounts appropriated in the items for this agency, $34,135 the first year and $598,763 the second year from the general fund and $34,135 the first year and $823,476 the second year from nongeneral funds are provided to align the agency client appeals with federal requirements. Administrative funding (49901) shall be used to create seven new appeals staff positions that will respond to additional appeals and ensure regulatory compliance. The remaining support (appropriated in program 456) shall be used to fund necessary managed care contract changes needed to accommodate workflow adjustments.

2. The Department of Medical Assistance Services shall amend regulations to clarify (i) the burden of proof in client appeals; (ii) the scope of review for de novo hearings in client appeals, and (iii) the timeframes for submission of documents and decision deadlines for de novo client hearings. The department shall have the authority to promulgate emergency regulations to implement these amendments within 280 days or less from the enactment of this Act.

To implement this legislative mandate, an emergency regulation was promulgated effective September 8, 2022.⁴ This regulatory action would permanently replace the emergency regulation.

Estimated Benefits and Costs. The proposed action would make permanent an emergency regulation that clarified (i) the burden of proof in client appeals, (ii) the scope of review for de novo hearings in client appeals, and (iii) the timeframes for submission of documents and decision deadlines for de novo client hearings as required by the budget language. The main impact of the legislation was clarification of the client appeal rules for Medicaid members to be consistent with federal rules and to avoid a potential lawsuit by a legal aid organization. The implementation of the changes required $1.4 million in total funding annually (i.e., $598,763 from state and $823,476 from federal sources). These funds are used by DMAS to pay for seven additional appeals staff and other non-personnel costs. More specifically, the funds address appeal-related customer service inquiries, the processing of appeals, the review of documents submitted with each appeal, producing an appeal summary, costs associated with testifying at the hearing, and producing a transcript of the hearing recording if a case is appealed to the court system. On the other hand, the changes would have likely also benefited the clients who wanted to pursue an appeal and were willing to incur additional litigation costs to reverse an adverse action. However, these impacts result from the legislative mandate itself and not from this regulatory action. Additionally, de novo hearings have been conducted since October 2020. Thus, no new economic impact is expected when these changes become permanent. In this sense, the impact of the proposal is to permanently clarify in the regulation the de novo appeal process as mandated and envisioned by the legislation, and as already implemented by the emergency regulation on a temporary basis.

Businesses and Other Entities Affected. Medicaid members who file a client appeal may be affected by these changes. According to DMAS, in calendar years 2021, 2022, and 2023, there were 4,087, 4,483, and 8,606 client appeals, respectively. The increase in 2023 was due to the end of the federal Medicaid continuous coverage requirements. Additionally, relatively few (i.e., historically fewer than 20 per year) client cases are appealed to the court system. No Medicaid members appear to be disproportionately affected.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁵ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁶ As noted, the primary impact of this regulatory action is to permanently incorporate in the regulation clarifications made to the Medicaid client appeal process as mandated by the legislation. Thus, no adverse impact is indicated.

Small Businesses⁷ Affected.⁸ The proposed amendments do not adversely affect small businesses.

Localities⁹ Affected.¹⁰ The proposed action does not introduce costs or other effects on localities.

Projected Impact on Employment. The budget language provided an additional seven staff positions at DMAS and may have led to some Medicaid members hiring legal help to take advantage of de novo hearings. However, the proposed regulation itself does not affect total employment.

Effects on the Use and Value of Private Property. No impact on the use and value of private property nor on real estate development costs is expected from this regulatory action to replace an emergency regulation permanently.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² https://budget.lis.virginia.gov/item/2021/2/HB1800/Chapter/1/317/.

³ If an action involved a member enrolled in an MCO, the individual must appeal through the MCO first. Therefore, MCO's handle their own internal appeal process.

⁴ https://townhall.virginia.gov/l/ViewStage.cfm?stageid=9321.

⁵ Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁶ Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁷ Pursuant to § 2.2-4007.04, 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."

⁸ If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁹ "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.

¹⁰ Section 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:

Pursuant to Item 317 GG 2 of the 2021 Appropriations Act, the amendments clarify (i) the burden of proof in client appeals, (ii) the scope of review for de novo hearings in client appeals, and (iii) the timeframes for submission of documents and decision deadlines for de novo client hearings by adding a definition of "day"; adding a new section describing what must be included in agency appeal summaries; clarifying requirements for de novo hearings, for which party in a given situation bears the burden of proof, and for the submission of evidence; and stating that all state fair hearings must be conducted de novo.

12VAC30-110-10. Definitions.

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

"Action" means a denial of, termination of, suspension of, or reduction in covered benefits or services; a denial of or termination, suspension, or reduction in Medicaid eligibility; or an increase in beneficiary liability, including a determination that a beneficiary must incur a greater amount of medical expenses in order to establish income eligibility in accordance with 42 CFR 435.121(e)(4) or 42 CFR 435.831 or is subject to an increase in premiums or cost-sharing charges under Subpart A of 42 CFR Part 447. It also means (i) determinations by a skilled nursing facility or nursing facility to transfer or, discharge, or fail to readmit a resident and (ii) an adverse determination made by a state with regard to the preadmission screening and resident review requirements of § 1919(e)(7) of the Social Security Act. It also means the failure to take an application for benefits or to act with reasonable promptness on an application for benefits, on a reported change in circumstances, or on a request for a particular medical service.

"Adverse determination" means a determination made in accordance with § 1919(b)(3)(F) or 1919(e)(7)(B) of the Social Security Act that the individual does not require the level of services provided by a nursing facility or that the individual does or does not require specialized services.

"Agency" means:

1. An agency or contractor that, on the department's behalf, makes determinations regarding benefits or applications for benefits provided by the department; or

2. The department itself.

"Appellant" means (i) an applicant for or recipient of medical assistance benefits from the department who seeks to challenge an action regarding his the applicant's benefits or his the applicant's eligibility for benefits and (ii) a nursing facility resident who seeks to challenge a transfer, or discharge, or failure to readmit. Appellant also means an individual who seeks to challenge an adverse determination regarding services provided by a nursing facility.

"Burden of proof" means the duty placed upon a party to prove or disprove a disputed fact.

"Date of action" means the intended date on which a termination, suspension, reduction, transfer, or discharge becomes effective. It also means the date of the determination made by a state with regard to the preadmission screening and annual resident review requirements of § 1919(e)(7) of the Social Security Act.

"Day" means calendar day unless otherwise specified or required by law.

"De novo" means that, where a hearing is required, the department's hearing officer will consider all relevant evidence submitted during the appeal in order to make a determination on the issues on appeal, even if the evidence was not previously received by the agency.

"Department" means the Department of Medical Assistance Services.

"Division" means the department's Appeals Division.

"Fail to readmit" means when a nursing facility refuses to readmit a resident who meets the criteria for a bed hold under 42 CFR 438.15.

"Final decision" means a written determination by a hearing officer that is binding on the department, unless modified on appeal or review.

"Hearing" means the de novo evidentiary hearing described in this chapter, conducted by a hearing officer employed by the department.

"Preponderance of the evidence" means that the party with the burden of proof has demonstrated to the hearing officer that their position on the issue in the appeal is more likely valid than not.

"Representative" means an attorney or agent who has been authorized to represent an appellant pursuant to these regulations.

"Send" means to deliver by mail or in electronic format consistent with 42 CFR 431.201 and 42 CFR 435.918.

"State fair hearing" means the entire appeal process for applicants and beneficiaries as set forth in 42 CFR Subpart E.

12VAC30-110-185. Appeal summary.

A. The agency proposing the action about which the individual requested the state fair hearing shall complete an appeal summary, which shall include:

1. The appellant's name and case name, if different;

2. The appellant's case number, Medicaid identification number, or other identifying information;

3. The agency or contractor responsible for the appellant's case;

4. A summary of the facts surrounding and the grounds supporting the action, the failure to take an application for benefits or to act with reasonable promptness on an application for benefits, a reported change in circumstances, or a request for a particular medical service. The summary of facts must include:

a. A list of the documents reviewed or relied upon, including those reviewed as part of the appeal.

b. A narrative explanation describing the agency's or contractor's position on the action when considering all documentation submitted until the appeal summary is filed. When the action under appeal is for a reduction of termination of existing coverage, the narrative should include an explanation as to what has changed or how the previous approval was made in error.

5. Citations to the statutes, regulations, and specific provisions of the Virginia Medical Assistance Eligibility manual or other policy that support the agency's action; and

6. The adverse benefit determination or the decision notice and any other documents relating to the appeal upon which the agency relied in making its decision.

B. The summary shall be filed with the department's Appeals Division with a complete copy sent to the appellant and the appellant's authorized representative, if applicable, at least five business days before the hearing date.

12VAC30-110-220. Evidentiary hearings.

A A. General. The hearing officer shall review all agency determinations which that are properly appealed; conduct informal, fact-gathering hearings; evaluate evidence presented; and issue a written final decision sustaining, reversing, or remanding each case to the agency for further proceedings that is based on the evidence, policy, laws, and regulations relevant to the appeal.

B. De novo hearing. All hearings shall be considered "de novo," meaning that the department's hearing officer will consider all relevant evidence submitted during the appeal in order to make a determination on the issues on appeal, even if the evidence was not previously received by the agency. The hearing officer shall consider testimony and evidence that explains, supports, or is probative to the issues on appeal. In the de novo hearing, no deference is given to the agency or contractor who took the action.

C. Burden of proof. The burden of proof shall be assigned to the party that is attempting to make a change. If an individual is seeking initial Medicaid eligibility, the initial approval of Medicaid covered services, or eligibility for a higher level of coverage than has already been approved, the individual has the burden of proof. Conversely, when an already-eligible individual is facing a proposed termination or reduction in Medicaid eligibility or medical services, the burden of proof shall be assigned to the entity that has proposed the change to an individual's coverage. To prevail in the appeal, the party with the assigned burden of proof shall establish its position by a preponderance of the evidence.

D. Submission of evidence. The appellant's appeal request should include all documents the appellant would like considered during the appeal. The appellant can also submit additional documents leading up to and during the appeal hearing. The hearing officer has the discretion to reschedule or delay a hearing in order to allow the hearing officer and agency time to review documents submitted close to or at the scheduled hearing. Post-hearing supplementation of the record is addressed in 12VAC30-110-360. If the appeal request does not identify the action being appealed with reasonable specificity, include documentation to validate authorization for representation, if elected, or the department requests good cause for late filing of the appeal, then delay will be added to the appeal decision due date per 42 CFR 431.244.

E. Previously approved coverage. In an appeal involving a proposed termination or reduction of previously approved coverage, the existence of the prior approval shall create a presumption that the approval was proper when it was previously made if it was consecutive to the current request. The strength of this presumption is directly related to the number and duration of previous approvals. For the entity that has proposed the termination or reduction to satisfy its burden of proof, it must demonstrate that the individual's circumstances have changed or that the previous approval was made in error.

12VAC30-110-370. Final decision and transmission of the hearing record.

A. After conducting the hearing, reviewing the record, and deciding questions of law, the hearing officer shall issue a written final decision which either sustains or reverses the agency action or remands the case to the agency for further action consistent with his written instructions based upon the evidence and testimony presented. The hearing officer's final decision shall be considered as the agency's final administrative action pursuant to 42 CFR, 431.244(f). The final decision shall include:

1. A description of the procedural development of the case;

2. Findings of fact that identify supporting evidence;

3. Conclusions of law that identify supporting regulations and law;

4. Conclusions and reasoning;

5. The specific action to be taken by the agency to implement the decision;

6. The deadline date by which further action must be taken; and

7. A cover letter stating that the hearing officer's decision is final, and stating that the final decision may be appealed directly to circuit court as provided in 12VAC30-110-40.

B. The hearing record shall be forwarded to the appellant and his the appellant's authorized representative with the final decision.

12VAC30-120-670. State fair hearing process and final decision.

A. All state fair hearings shall be conducted de novo per 12VAC30-110-220. As such, no deference will be given to the entity that made the adverse action being appealed.

B. All state fair hearings must be scheduled at a reasonable time, date, and place, and the appellant and the appellant's authorized representative shall be notified in writing prior to the hearing.

1. The state fair hearing location will be determined by the Appeals Division.

2. A state fair hearing shall may be rescheduled at the appellant's request no more than twice unless compelling reasons exist, which shall be determined by the department hearing officer.

3. Rescheduling the state fair hearing at the appellant's request will result in automatic waiver of the 90-day deadline for resolution of the appeal. The delay date for the decision will be calculated as set forth in 12VAC30-120-650 H and I.

B. C. The state fair hearing shall be conducted by a department hearing officer. The hearing officer shall review the complete record for all MCO decisions that are properly appealed; conduct informal, fact-gathering state fair hearings; evaluate evidence presented; research the issues; and render a written final decision.

C. D. Subject to the requirements of all applicable federal and state laws regarding privacy, confidentiality, disclosure, and personally identifiable information, the appeal record shall be made accessible to the appellant and the appellant's authorized representative at a convenient place and time before the date of the state fair hearing, as well as during the state fair hearing. The appellant and the appellant's authorized representative may examine the content of the appellant's case file and all documents and records the department will rely on at the state fair hearing except those records excluded by law.

D. E. Appellants who require the attendance of witnesses or the production of records, memoranda, papers, and other documents at the state fair hearing may request in writing the issuance of a subpoena. The request must be received by the department at least 10 working business days before the scheduled state fair hearing. Such request shall (i) include the witness's or respondent's name, home and work addresses, and county or city of work and residence; and (ii) identify the sheriff's office that will serve the subpoena.

E. F. The hearing officer shall conduct the state fair hearing; decide on questions of evidence, procedure, and law; question witnesses; and assure that the state fair hearing remains relevant to the issue being appealed. The hearing officer shall control the conduct of the state fair hearing and decide who may participate in or observe the state fair hearing.

F. G. State fair hearings shall be conducted in an informal, nonadversarial impartial manner. The appellant or and the appellant's authorized representative shall have the right to bring witnesses, establish all pertinent facts and circumstances, present an argument without undue interference, and question or refute the testimony or evidence, including the opportunity to confront and cross-examine agency representatives.

G. H. The rules of evidence shall not strictly apply. All relevant, nonrepetitive evidence may be admitted, but the probative weight of the evidence will be evaluated by the hearing officer.

H. I. The hearing officer may leave the state fair hearing record open for a specified period of time after the state fair hearing in order to receive additional evidence or argument from the appellant or and the appellant's authorized representative.

1. At the appellant's option, the hearing officer may order an independent medical assessment when the appeal involves medical issues, such as a diagnosis, an examining physician's report, or a medical review team's decision, and the hearing officer determines that it is necessary to have an assessment by someone other than the person or team who made the original decision (e.g., to obtain more detailed medical findings about the impairments, to obtain technical or specialized medical information, or to resolve conflicts or differences in medical findings or assessments in the existing evidence). A medical assessment ordered pursuant to this chapter shall be at the department's expense, shall not extend any of the timeframes specified in this chapter, shall not disrupt the continuation of benefits, and shall become part of the record.

2. The hearing officer may receive evidence that was not presented by either party if the record indicates that such evidence exists, and the appellant or the appellant's authorized representative requests to submit it or requests that the hearing officer secure it.

3. If the hearing officer receives additional evidence from an entity other than the appellant or the appellant's authorized representative, the hearing officer shall send a copy of such evidence to the appellant and the appellant's authorized representative and give the appellant or the appellant's authorized representative the opportunity to comment on such evidence in writing or to have the state fair hearing reconvened to respond to such evidence.

4. Any additional evidence received will become a part of the state fair hearing record, but the hearing officer must determine whether or not it will be used in making the final decision.

I. J. After conducting the state fair hearing, reviewing the record, and deciding questions of law, the hearing officer shall issue a written final decision that sustains or reverses, in whole or in part, the MCO's adverse benefit determination or remands the case to the MCO for further evaluation consistent with the hearing officer's written instructions. Some decisions may be a combination of these dispositions. The hearing officer's final decision shall be considered as the department's final administrative action pursuant to 42 CFR 431.244(f). The final decision shall include:

1. Identification of the issue;

2. Relevant facts, to include a description of the procedural development of the case;

3. Conclusions of law, regulations, and policy that relate to the issue;

4. Discussions, analysis of the accuracy of the MCO's appeal decision, conclusions, and hearing officer's decision;

5. Further action, if any, to be taken by the MCOs to implement the hearing officer's decision;

6. The deadline date by which further action must be taken; and

7. A cover letter informing the appellant and the appellant's authorized representative of the hearing officer's decision. The letter must indicate that the hearing officer's decision is final, and that the final decision may be appealed directly to circuit court.

J. K. A copy of the state fair hearing record shall be forwarded to the appellant and the appellant's authorized representative with the final decision.

K. L. An appellant who disagrees with the hearing officer's final decision described in this section may seek judicial review pursuant to the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) and Rules of the Supreme Court of Virginia, Part Two A. Written instructions for requesting judicial review must be provided to the appellant or the appellant's authorized representative with the hearing officer's decision, and upon request by the appellant or authorized representative.

12VAC30-141-40. Appeal of adverse actions or adverse benefit determinations.

A. Upon written request, all FAMIS applicants and enrollees shall have the right to a state fair hearing of an adverse action made by the local department of social services, CPU, or DMAS and to an internal appeal of an adverse benefit determination made by an MCO.

B. During the appeal of a suspension or termination of enrollment or a reduction, suspension, or termination of services, the enrollee shall have the right to continuation of coverage if the enrollee requests an internal appeal with the MCO or an appeal to DMAS prior to the effective date of the suspension or termination of enrollment or suspension, reduction, or termination of services.

C. An appeal of an adverse action made by the local department of social services, CPU, or DMAS shall be heard and decided by an agent of DMAS who has not been directly involved in the adverse action under appeal.

D. An internal appeal of an adverse benefit determination made by the MCO must be conducted by a person or agent of the MCO who has not been directly involved in the adverse benefit determination under appeal.

E. Pursuant to 42 CFR 438.402(c)(1)(B), after exhausting the MCO's internal appeals process, there shall be opportunity for the enrollee to request an external medical review by an independent external quality review organization. "External quality review organization" means the independent contractor assigned by DMAS to handle quality reviews and to conduct final review of MCHIP adverse actions for FAMIS. The review is optional and shall not be required before proceeding to a state fair hearing. The review shall not extend any of the timeframes for issuing a decision and shall not disrupt any continuation of coverage granted to the enrollee.

F. There will be no opportunity for appeal of an adverse action to the extent that such adverse action is based on a determination by the director that funding for FAMIS has been terminated or exhausted. There will be no opportunity for appeal if the sole basis for the decision is a provision in the State Plan or in a state or federal law requiring an automatic change in eligibility or enrollment or is a change in coverage under the health benefits package that affects all applicants or enrollees or a group of applicants or enrollees without regard to their individual circumstances.

G. The burden of proof shall be upon the applicant or enrollee to show that an adverse action or adverse benefit determination is incorrect assigned to the party who is attempting to make a change per 12VAC30-110-220 C.

H. At no time shall the failure of the local department of social services, MCO, CPU, or DMAS failure to meet the timeframes set in this chapter or set in the MCO or DMAS written appeal procedures constitute a basis for granting the applicant or enrollee the relief sought.

I. Adverse actions related to health benefits covered through the FAMIS Select program shall be resolved between the insurance company or employer's plan and the FAMIS Select enrollee and are not subject to further appeal by DMAS or its contractors.

12VAC30-141-700. Appeal of adverse actions or adverse benefit determinations.

A. Upon request, all FAMIS MOMS program applicants and enrollees shall have the right to a state fair hearing of an adverse action made by the local department of social services, CPU, or DMAS, or an internal appeal of an adverse benefit determination made by the MCO.

B. During the appeal of a suspension or termination of enrollment or a reduction, suspension, or termination of services, the enrollee shall have the right to continuation of coverage if the enrollee requests an internal appeal with the MCO or an appeal to DMAS prior to the effective date of the suspension or termination of enrollment or suspension, reduction, or termination of services.

C. An appeal of an adverse action made by the local department of social services, CPU, or DMAS shall be heard and decided by an agent of DMAS who has not been directly involved in the adverse action under appeal.

D. An internal appeal of an adverse benefit determination made by the MCO must be conducted by a person or agent of the MCO who has not been directly involved in the adverse benefit determination under appeal.

E. Pursuant to 42 CFR 438.402(c)(1)(B), after exhausting the MCO's internal appeals process, there shall be opportunity for the enrollee to request an external medical review by an independent external quality review organization. "External quality review organization" means the independent contractor assigned by DMAS to handle quality reviews and to conduct final review of MCHIP adverse actions for FAMIS MOMS. The review is optional and shall not be required before proceeding to a state fair hearing. The review shall not extend any of the timeframes for issuing a decision and shall not disrupt any continuation of coverage granted to the enrollee.

F. There will be no opportunity for appeal of an adverse action to the extent that such adverse action is based on a determination by the director that funding for FAMIS MOMS has been terminated or exhausted. There will be no opportunity for appeal if the sole basis for the decision is a provision in the State Plan or in a state or federal law requiring an automatic change in eligibility or enrollment or a change in coverage under the health benefits package that affects all applicants or enrollees or a group of applicants or enrollees without regard to their individual circumstances.

G. The burden of proof shall be upon the applicant or enrollee to show that an adverse action or adverse benefit determination is incorrect assigned to the party who is attempting to make a change per 12VAC30-110-220 C.

H. At no time shall the failure of MCO, LDSS, CPU, or DMAS failure to meet the timeframes set in this chapter or set in the MCO or DMAS written appeal procedure constitute a basis for granting the applicant or enrollee the relief sought.