Title of Regulation: 12VAC30-80. Methods and Standards for Establishing Payment Rates; Other Types of Care (amending 12VAC30-80-95).

Statutory Authority: § 32.1-325 of the Code of Virginia; Title XIX of the Social Security Act (42 USC § 1396).

Public Hearing Information: No public hearings are scheduled.

Public Comments: Public comments may be submitted until 5 p.m. on March 18, 2009.

Effective Date: April 2, 2009.

Agency Contact: Molly Carpenter, Project Manager, Department of Medical Assistance Services, 600 East Broad Street, Richmond, VA 23219, telephone (804) 786-1793, FAX (804) 786-1680, 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 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.

DMAS is permitted by § 1902(a) of the Social Security Act and the enabling regulations at 42 CFR Part 440 to establish limits on its covered services.

Purpose: The purpose of this fast-track action is to incorporate into the Virginia Administrative Code (VAC) specific assurance language that was required by the Centers for Medicare and Medicaid Services (CMS). This action is not expected to have any impact on the health, safety, or welfare of citizens of the Commonwealth or Medicaid recipients. CMS required this specific language to be added to the State Plan during its amendment approval process. In order to maintain consistent language between the State Plan and the VAC, this federally required language must now be added to the VAC.

Rationale for Using Fast-Track Process: This rulemaking action is expected to be noncontroversial because it is making no difference in the reimbursement methodology or limitations on this covered service. The language being added to the State Plan is merely a federally required assurance that DMAS pays both public and private providers via the same methodology.

Substance: Virginia regulations (12VAC30-50-130), consistent with the Omnibus Budget Reconciliation Act of 1989, and federal regulations (42 CFR 440.40) require medical and mental health screenings and services through the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) program for Medicaid eligible individuals under 21 years of age. When a provider recognizes a medical or mental health condition, regulations require that medically necessary measures to correct or ameliorate the condition be provided, whether or not such measures are covered under the Medicaid State Plan. The EPSDT program in Virginia’s Medicaid State Plan has always expressly covered "hearing services," however, prior to the addition of a specific reference to "hearing aids," it did not specifically mention this covered service. Virginia’s coverage for children’s hearing aids is mandated through federal requirements found in § 1905(r)(4)(B) of the Social Security Act, which requires hearing aids to be included in EPSDT hearing services.

When Virginia sought federal approval of the addition of a specific reference to covered hearing aids, CMS required the addition of the language being added by this action. The new language being added by this action merely provides the assurance that DMAS does not differentiate in its reimbursement methodology between public and private providers of this service.

Issues: There are no advantages or disadvantages to either the public or Medicaid recipients in this action. The only advantage to the agency in this action is that it permits the agency to continue to maintain consistency between its VAC language and the State Plan for Medical Assistance.

The Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed changes will clarify that all private and governmental providers of hearing aids are reimbursed according to the same Medicaid reimbursement methodology and also service limitations are published on the Department of Medical Assistance Services website.

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

Estimated Economic Impact. The proposed changes will clarify that all private and governmental providers of hearing aids are reimbursed according to the same Medicaid reimbursement methodology and also service limitations are published on the Department of Medical Assistance Services website.

Pursuant to a request by the Centers for Medicare and Medicaid Services (CMS), the proposed language will specifically state that the private and governmental providers will be reimbursed the same for the same hearing aids and that service limitations are also published. Currently, the Medicaid reimbursement is the same for all providers. Thus, this is a mere clarification of an existing practice and no significant economic effect is expected other than complying with a CMS request.

Businesses and Entities Affected. There are approximately 520 licensed hearing aid specialists in Virginia.

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

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

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

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

Small Businesses: Alternative Method that Minimizes Adverse Impact. No adverse impact on small businesses is 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 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 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 Assurance of Public/Private Reimbursement for Hearing Aids Services (12VAC30-80-95).

Summary:

This regulatory action is intended to promulgate a federally required assurance statement regarding hearing aid services for children under the Medicaid Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) program. Although the Department of Medical Assistance Services (DMAS) pays private and public providers the same for this service, the current regulations do not specifically state that the reimbursement methodology is the same for private providers versus governmental providers. The Centers for Medicare and Medicaid Services (CMS) required that this statement be added to Virginia’s State Plan for Medical Assistance.

12VAC30-80-95. Fee-for-service: hearing aids (under EPSDT).

A. Effective January 1, 2008, payment for hearing aids for individuals younger than 21 years of age shall be the actual cost of the device not to exceed limits set by the single state agency, plus a fixed dispensing and fitting fee not to exceed limits set by the single state agency.

B. All private and governmental providers are reimbursed according to the same methodology. Limitations set by the state agency are effective January 1, 2008, and for services provided on and after that date. The limitations are published at the following address (state agency website): http://www.dmas.virginia.gov/pr-fee_files.htm.