TITLE 12. HEALTH

DEPARTMENT OF MEDICAL ASSISTANCE SERVICES

Fast-Track Regulation

Title of Regulation: 12VAC30-10. State Plan under Title XIX of the Social Security Act Medical Assistance Program; General Provisions (amending 12VAC30-10-410).

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

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: July 1, 2026.

Effective Date: July 16, 2026.

Agency Contact: Meredith Lee, Policy, Regulations, and Manuals Supervisor, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 371-0552, fax (804) 786-1680, TDD (800) 343-0634, or email meredith.lee@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 services and to promulgate regulations necessary to carry out the provisions of Chapter 32.1 of the Code of Virginia. Section 32.1-324 of the Code of Virginia grants the Director of the Department of Medical Assistance Services the authority of the board when it is not in session.

Purpose: This action is necessary to protect the public health, safety, and welfare because it clarifies which entity is responsible for fair hearings related to eligibility based on applicable modified adjusted gross income (MAGI) now that Virginia has transitioned from the Federally Facilitated Marketplace to the Virginia state-based exchange (SBE).

Rationale for Using Fast-Track Rulemaking Process: Chapter 916 of the 2020 Acts of Assembly created the Health Benefit Exchange Division within the State Corporation Commission to oversee Virginia's transition to an SBE, also referred to as the Virginia Health Benefit Exchange. The SBE went live in November 2023. Now that the SBE is operational, the Health and Human Services appeals entity within the Federally Facilitated Exchange is no longer involved in conducting Medicaid fair hearings with respect to eligibility based on applicable MAGI. The department conducts all de novo fair hearings, regardless of whether they pertain to eligibility based on MAGI. This rulemaking is expected to be noncontroversial and therefore appropriate for the fast-track rulemaking process because moving to an SBE was legislatively mandated and approved by the Centers for Medicare and Medicaid Services. The department has an established Appeals Division to hear all cases in accordance with state and federal regulations to provide appellants with full due process of law.

Substance: The amendments clarify that the department conducts all de novo fair hearings regardless of whether they pertain to eligibility based on MAGI.

Issues: The primary advantage of this action to the public and the Commonwealth is that the amendments align the regulation with statute. No changes are being made to the DMAS appeal process itself. There are no disadvantages to the public and the Commonwealth.

Department of Planning and Budget 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. The director of the Department of Medical Assistance Services (DMAS) proposes to amend language pertaining to Medicaid fair hearings for applicants and beneficiaries, in part to repeal obsolete language referring to the federally assisted health benefits exchange as it relates to hearings on certain eligibility determinations.

Background. The regulatory language being amended in this action pertains to Medicaid fair hearings, and thereby establishes the appeals authority for Medicaid adverse eligibility determinations. In the current regulation, these appeals include determinations made previously by the federally assisted health insurance exchange. However, Chapter 916 of the 2020 Acts of Assembly² created the Health Benefit Exchange Division within the State Corporation Commission (SCC) to oversee the Virginia transition to a state-based exchange (SBE); this is also referred to as the Virginia Health Benefit Exchange. According to DMAS, the SBE went live in November 2023. Now that the SBE is operational, the health and human services appeals entity within the federally facilitated exchange no longer conducts Medicaid fair hearings with respect to eligibility based on applicable modified adjusted gross income (MAGI). Instead, DMAS has been conducting all de novo fair hearings since November 2023, regardless of whether or not they pertain to eligibility based on MAGI. To comport with current practices, this regulatory action removes obsolete language referring to the federally facilitated exchange regarding hearings related to eligibility based on MAGI. It also references the appeals authority presently used by DMAS, which is found in another DMAS regulation (12VAC30-110 through 12VAC30-110-370).

Estimated Benefits and Costs. Because the proposed action would repeal language rendered obsolete by the Virginia transition to the SBE in 2023, no significant economic impact is expected from this regulatory action other than accurately reflecting the current appeals entity for eligible Medicaid recipients based on MAGI.

Businesses and Other Entities Affected. The proposed regulatory change would affect readers of the regulation as it pertains to appropriate appeals authority for eligibility determinations made by the state-based exchange. According to the marketplace open enrollment metrics published by SCC, the number of consumers determined eligible for Medicaid or Family Access to Medical Insurance Security plan via the Marketplace in 2025 was 39,853.³ The number of exchange-related appeals in 2024 and 2025 was 17 and eight respectively. No Medicaid eligible recipient appears to be disproportionately affected. The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁴ 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.⁵ Since the proposed changes do not create any new costs or reduce benefits, an adverse impact is not indicated.

Small Businesses⁶ Affected.⁷ The proposed amendments do not adversely affect small businesses.

Localities⁸ Affected.⁹ The proposed amendments do not create costs for localities, nor do they disproportionately affect any locality.

Projected Impact on Employment. The proposed amendments should not affect 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.

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¹ Section 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://legacylis.virginia.gov/cgi-bin/legp604.exe?201+ful+CHAP0916.

³ https://www.marketplace.virginia.gov/sites/default/files/2025-12/Virginia's Insurance Marketplace - PY2025 OE Metrics - 20 25.01.23 (26).pdf.

⁴ 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.

⁵ 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.

⁶ 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."

⁷ 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.

⁸ "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.

⁹ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency 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:

The amendments remove reference to the State Corporation Commission's Health and Human Services appeals entity and clarify that the Department of Medical Assistance Services conducts all de novo fair hearings. The department submitted a state plan amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS) that included the fair hearing changes. The SPA was approved on August 7, 2023, and this action incorporates the changes into the regulation.

12VAC30-10-410. Hearings for applicants and recipients.

A. The Medicaid agency has a system of hearings that meets all the requirements of 42 CFR 431, Subpart E.

The Medicaid agency is responsible for all Medicaid fair hearings. Medicaid fair hearings are de novo proceedings and are conducted pursuant to Part I (12VAC30-110-10 et seq.) of Eligibility and Appeals.

B. The entities that conduct fair hearings with respect to eligibility based on applicable modified adjusted gross income (MAGI) are the Department of Medical Assistance Services (DMAS) and the Health and Human Services appeals entity within the Exchange.

C. The Commonwealth assures the following with respect to delegations of authority to conduct fair hearings regarding eligibility based on MAGI:

1. There is a written agreement between DMAS and the Exchange appeals entity that has been delegated authority to conduct Medicaid fair hearings in compliance with 42 CFR 431.10(d).

2. When authority is delegated to the Exchange appeals entity, individuals who have requested a fair hearing are given the option to have their hearing conducted instead by DMAS.

3. DMAS does not delegate authority to conduct fair hearings to entities other than government agencies that maintain personnel standards on a merit basis.

4. The delegated entity is capable of performing the delegated function.

D. All fair hearings not related to an eligibility determination based on MAGI are conducted at DMAS.