Title of Regulation: 12VAC30-130. Amount, Duration and Scope of Selected Services (amending 12VAC30-130-800, 12VAC30-130-810, 12VAC30-130-820).

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

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: November 18, 2015.

Effective Date: December 3, 2015.

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. 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.

42 CFR 431.54(e) permits state Medicaid agencies to have programs that restrict Medicaid individuals who have been found to be over-utilizing either physician or pharmacy services, or both. DMAS' Client Medical Management (CMM) Programs operate under the authority of a § 1915(b) (of the Social Security Act) waiver granted by the Centers for Medicare and Medicaid Services (CMS). The waiver permits DMAS to deny the standard freedom of choice (42 CFR § 431.51) to these identified recipients and restrict them to specified physicians or pharmacies, or both.

Purpose: The purpose of this action is to promulgate permanent regulatory changes for the CMM Programs. Item 301 RR of Chapter 2 of the 2014 Acts of the Assembly, Special Session I, directed DMAS to make programmatic changes to this program to ensure appropriate utilization, prevent abuse, promote improved and cost efficient medical management of essential health care, and assist and educate beneficiaries in appropriately using medical and pharmacy services. These changes will further improve the health, safety, and welfare of individuals who are eligible for Medicaid and who also use higher than typical amounts of services from different physicians and pharmacies by assisting and educating these individuals in the appropriate use of medical and pharmacy services.

These changes will not impact the health and safety of the Commonwealth citizens who do not receive Medicaid services. These changes will not affect Medicaid enrolled providers.

Rationale for Using Fast-Track Process: DMAS believes that the fast-track rulemaking process is appropriate because these proposed changes are more liberal than the current policies. DMAS does not anticipate any objections to these changes. The CMM Programs are still DMAS' utilization control programs for fee-for-service individuals. DMAS did not receive any objections to the emergency regulations or comments during the Notice of Intended Regulatory Action public comment period.

Substance: This action affects the Client Medical Management Programs (12VAC30-130-800, 12VAC30-130-810, and 12VAC30-130-820).

Currently, the regulations that provide for the administration of the CMM programs affect the fee-for-service Medicaid eligible population, which is only potentially 31% of the entire Medicaid population. These regulations do not affect those individuals who participate in the managed care model of service delivery.

Medicaid's managed care program is now statewide and as of April 2014 cared for 69% of all Medicaid eligible individuals. 12VAC30-120-370 sets out the reasons that individuals can be exempted from participating in the managed care program. Some of the reasons are (i) individuals are inpatients in state mental hospitals, nursing facilities, intermediate care facilities for individuals with intellectual disabilities, or hospice; (ii) individuals are affected by Medicaid spend-down policies; (iii) individuals are in either home or community-based waiver programs; (iv) individuals are eligible for Part C services through the Department of Behavioral Health and Developmental Services; (v) individuals have an eligibility period less than three months in duration or have retroactive eligibility; or (vi) children are enrolled in the Virginia Birth-Related Neurological Injury Compensation Program established pursuant to Chapter 50 (§ 38.2-5000 et seq.) of Title 38.2 of the Code of Virginia. Only the individuals who fit any of these exemption reasons receive their medical care via the fee-for-service model and therefore can be affected by CMM.

Pursuant to current CMM regulations and after patterns of inappropriate or excessive service use are identified, individuals are restricted to one pharmacy or physician for a minimum of 36 months. At the end of the restriction period, if the recipient continues to demonstrate inappropriate use of services, he is re-enrolled in the program for another 36 months. DMAS tracks this inappropriate use with computer claim denial codes that result from providers' bills for services that may have been rendered.

Even though the recidivism rate averages about 7.8%, DMAS believes changing the restriction period to 24 months initially and 12 months for re-enrollment to be appropriate. With the managed care statewide expansion, the CMM potential population has substantially decreased. This reduction in CMM restricted members along with the changes to the restrictions periods will allow staff to facilitate resolution of any early enrollment issues and also to be more proactive in assisting and educating Medicaid individuals in appropriately using medical and pharmacy services. DMAS staff will continue to work with members who are over-utilizing services, but also will more closely assess under-utilization that results in abusive practices. These changes may also contribute to cost avoidance.

This action continues to provide for the medical care needs of individuals with multiple diagnoses and complex health care needs that require care from physicians and specialists in addition to their primary care physicians. Provision is also retained for individuals who have legitimate complex medical conditions that require high numbers of prescription medications. Provisions are being retained for such complex care recipients to appeal a restriction status and be exempted from restriction.

Providers must require that Medicaid individuals present their Medicaid identification cards when they present for services. When providers input the unique identification number, they are advised that the individual's access to physician or pharmacy services, or both, is restricted. This action continues to provide that if the individual's restriction pharmacy does not have the required drug, or in emergency situations, the individual may receive the required medication from an alternative pharmacy. Such alternative pharmacies are paid for providing medications in such situations.

Individuals demonstrating the following utilization patterns will be evaluated to determine if they warrant being restricted to designated physician or pharmacy providers, or both:

• An individual receiving narcotic prescriptions from two or more prescribers without supporting diagnoses indicative of use.

• An individual having two occurrences of filling prescriptions for the same drug two or more times on the same or the subsequent day.

• An individual receiving more than 24 prescriptions in a three-month period.

• An individual receiving more than 12 psychotropic prescriptions, more than 12 analgesic prescriptions, or more than 12 prescriptions for controlled drugs that have the potential for abuse, in a three-month period.

• An individual who uses emergency hospital services for three or more emergency room visits for nonemergency care during a three-month period to include cases of self referral, nonacute episodes of care, or solely for nonacute management of chronic diagnoses or symptoms.

• Utilizing services from three or more prescribers and three or more dispensing pharmacies in a three-month period.

• Exceeding the maximum therapeutic dosage of the same drug or multiple drugs in the same therapeutic class, which have been prescribed by two or more practitioners, for a period exceeding four weeks.

• Receiving two or more drugs, duplicative in nature or potentially addictive (even within acceptable therapeutic levels), dispensed by more than one pharmacy or prescribed by more than one practitioner for a period exceeding four weeks.

• Utilizing three or more different physicians of the same type or specialty in a three-month period for treatment of the same or similar condition or conditions.

• Two or more occurrences of seeing two or more physicians of the same type or specialty on the same or subsequent day for the same or similar diagnosis.

• Duplicative, excessive, or contraindicated utilization of medications, medical supplies, or appliances dispensed by or prescribed by more than one provider for the time period specified by DMAS.

• One or more providers recommend restriction for medical management because the recipient has demonstrated inappropriate utilization practices.

• A pattern of noncompliance that is inconsistent with sound fiscal or medical practices. For example, noncompliance may be characterized by (i) failure to disclose to a provider any treatment or services provided by another provider; (ii) failure to follow a drug regimen or other recommended treatment; (iii) requests for medical services or medications that are not medically necessary; (iv) use of hospital emergency services via self-referral for nonacute episodes of care, or solely for nonacute management of the medical condition; or (v) under-use or under-utilization of medically necessary services that result in higher costs for the management of the medical condition.

• Any documented occurrences of use of the eligibility card to obtain drugs under false pretenses, which includes, but is not limited to the purchase or attempt to purchase drugs via a forged or altered prescription.

• Any documented occurrences of card-sharing.

• Any documented occurrences of alteration of the recipient eligibility card.

Controls placed on individuals who may be abusing services will improve cost-efficiency of care and enable better monitoring and improved coordination of the health care needs toward the overall goal of improved health care outcomes. The following are examples of individuals whose use of Medicaid covered services warranted being included in a CMM program.

CASE A: For an individual who receives medical services for multiple diagnoses, a utilization review process documents the use of seven physicians, three pharmacies, and nonemergency services. In some of these instances, DMAS has found such individuals refusing regular therapies and opting instead for treatment in emergency rooms and hospitals. During such an individual's CMM program enrollment, DMAS staff (Recipient Monitoring Unit (RMU) case manager) would make multiple contacts with the individual, providers, other DMAS units and resources in the individual's community to identify and facilitate coordination of care with one treatment center. After enrollment in a CMM program, such an individual would receive scheduled services at one treatment center and pharmaceutical services at one pharmacy, while nonemergency services are denied or paid at reduced rates. In this manner, the individual's health would be stabilized through appropriate use of available services.

CASE B: For an individual, who is receiving medical services for multiple diagnoses (such as diabetes, depression, and chronic pain), a utilization review process documents the use of four physicians and one pharmacy with simultaneous prescriptions for narcotic analgesics and medicine for maintenance treatment of opioid dependence. Since enrollment in a CMM program, the individual's health care is coordinated by a primary care physician who has referred this individual to other health care providers that treat such diagnoses. Pharmaceutical services are received at one pharmacy.

CASE C: For an individual who is receiving medical services for multiple diagnoses (such as back pain, bipolar disorder, diabetes, and asthma), a utilization review process documented the use of five physicians and 10 pharmacies with duplicate prescriptions from the several physicians. The individual also had the same day/subsequent day filling of syringe supplies. RMU staff discussed inappropriate utilization identified during the review process with the individual prior to enrollment in a CMM program. Since enrollment in a CMM program, the individual's pharmaceutical services are coordinated through one pharmacy and one primary care physician who is the primary prescriber of medications. During routine monitoring of services, there have been documented attempts by the individual to use nondesignated pharmacies for services.

Issues: The primary advantage to the general public and private citizens of proposed amendments is the decrease in the duplicative efforts of doctors and pharmacies by allowing them to provide the same level of care for all patients. The amendments also reduce an individual's access to excessive amounts of medications that have therapeutic properties that could cause harm to himself and other individuals in the community if they are re-sold to other persons.

The primary advantage to the Commonwealth is the close monitoring of the fee-for-service Medicaid population's utilization patterns and the identifying of instances of over-utilization and noncompliance that could result in misappropriations of state and federal funding. Restriction of individuals to one pharmacy or physician, or both, has resulted in reductions in Medicaid expenditures for individuals during Client Medical Management restriction periods. There are no disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Department of Medical Assistance Services (DMAS) proposes to 1) reduce the time periods the individuals with excessive utilization patterns may be restricted to a single physician and/or a pharmacy from 36 to 24 months initially and from 36 to 12 months beyond the initial restriction period, and 2) add under-utilization among the factors that may cause an individual to be enrolled in the program.

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

Estimated Economic Impact. The Client Medical Management program restricts access of individuals who have a history of utilizing high numbers of different physicians and/or pharmacies for their primary health care services to a single physician and/or pharmacy. ¹ Restriction in the program is for a defined period of time and the individual is required to establish a medical home with a single primary care physician and/or pharmacy once enrolled in the program. The initial restriction period is currently 36 months. If the high utilization patterns continue, the individual is required to stay in the program for an additional 36 months. The proposed changes will reduce the initial restriction period to 24 months and the subsequent restriction period to 12 months.

Currently, there are approximately 120 individuals enrolled in the program. DMAS estimates that the program provides approximately $800,000 savings in total funds (federal and state funds) per year by controlling over utilization of medical services. DMAS also reports a 7.8% recidivism rate in this program. However, DMAS believes that changing the restriction period to 24-months initially and 12 months for re-enrollment is appropriate. DMAS believes that no significant change in savings will materialize because the proposed less restrictive time periods are not expected to increase the current recidivism rate. In addition, DMAS highlights that as the managed care has expanded over the years, the fee-for-service population and consequently the CMM program enrollment has shrunk, allowing DMAS staff more time to focus on individual cases and improve the program's success by assisting and educating Medicaid individuals in the appropriate use of medical and pharmacy services.

In addition, the proposed changes will allow enrollment of individuals who are underutilizing services in the program. According to DMAS, underutilization of medically necessary services is not medically responsible or fiscally sound and can result in the further deterioration of an otherwise manageable health condition. While this change may add to the savings that may be expected, given the small size of the program, DMAS does not expect such savings to be significant.

This proposed action also includes numerous other changes; however, they reorganize or clarify the current language and therefore are not expected to have a significant economic impact.

Businesses and Entities Affected. The proposed amendments primarily affect individuals enrolled in the Client Medical Management program and DMAS. Currently, there are approximately 120 individuals enrolled in the program.

Localities Particularly Affected. The regulations apply throughout the Commonwealth.

Projected Impact on Employment. The proposed amendments are unlikely to significantly affect employment.

Effects on the Use and Value of Private Property. The proposed amendments are unlikely to significantly affect the use and value of private property.

Small Businesses: Costs and Other Effects. The proposed amendments are unlikely to significantly affect small businesses.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed amendments are unlikely to adversely affect small businesses.

Real Estate Development Costs. The proposed amendments are unlikely to affect real estate development costs.

Legal Mandate.

General: 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 Number 17 (2014). Section 2.2-4007.04 requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the report should include but not be limited to:

• the projected number of businesses or other entities to whom the proposed 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.

Small Businesses: If the proposed regulation will have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include:

• an identification and estimate of the number of small businesses subject to the proposed regulation,

• 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,

• a statement of the probable effect of the proposed regulation on affected small businesses, and

• 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, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules is notified at the time the proposed regulation is submitted to the Virginia Register of Regulations for publication. This analysis shall represent DPB's best estimate for the purposes of public review and comment on the proposed regulation.

_________________________________________________

¹ The individuals with legitimate needs for having multiple physicians/pharmacies are not enrolled in the program.

Agency's Response to Economic Impact Analysis: The agency has reviewed the economic impact analysis prepared by the Department of Planning and Budget and concurs with this analysis.

Summary:

The amendments (i) reduce the time periods that individuals with excessive utilization patterns may be restricted to a single physician or a pharmacy to 24 months initially and 12 months beyond the initial restriction period, (ii) add under-utilization among the factors that may cause an individual to be enrolled in the Client Medical Management Programs and (iii) add an educational component to the programs. The amendments are made pursuant to Item 301 RR of Chapter 2 of the 2014 Acts of Assembly, Special Session I.

Part XIII
Client Medical Management Program Programs

12VAC30-130-800. Definitions.

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

"APA" means the Administrative Process Act established by Chapter 40 (§ 2.2-4000 et seq.) of Title 2.2 of the Code of Virginia.

"Abuse by recipients" means practices by recipients that are inconsistent with sound fiscal or medical practices and result in unnecessary costs to the Virginia Medicaid Program.

"Abuse by providers" means practices that are inconsistent with sound fiscal, business, or medical practices and result in unnecessary costs to the Virginia Medicaid Program or in reimbursement for a level of utilization or pattern of services that is not medically necessary.

"Abuse" or "abusive activities" means practices by individuals or providers that are inconsistent with sound fiscal or medical practices and result in unnecessary costs to the Virginia Medicaid program.

"Card-sharing" means (i) the intentional sharing of a recipient an individual's eligibility card for use by someone other than the recipient individual for whom it was issued, or a pattern of repeated (ii) unauthorized use of a recipient an individual's eligibility card by one or more persons other than the recipient individual for whom it was issued due to the failure of the recipient individual to safeguard the card.

"Client Medical Management Program (CMM) for recipients individuals" or "CMM Program for individuals" means the recipients' individuals' utilization control program designed to prevent abuse and promote improved and cost efficient medical management of essential health care for noninstitutionalized recipients individuals through restriction to one primary care provider, or one pharmacy, and one transportation provider, or any combination of these three designated providers. Referrals may not be made to providers restricted through the Client Medical Management Program, nor may restricted providers serve as covering providers.

"Client Medical Management Program (CMM) for providers" or "CMM Program for providers" means the providers' utilization control program designed to complement the recipient individual abuse and utilization control program in promoting improved and cost efficient medical management of essential health care. Restricted providers may not serve as designated providers for restricted recipients. Restricted providers may not serve as referral or covering providers for restricted recipients.

"Contraindicated medical care" means treatment that is medically improper or undesirable and which results in duplicative or excessive utilization of services.

"Contraindicated use of drugs" means the concomitant use of two or more drugs whose combined pharmacologic action produces an undesirable therapeutic effect or induces an adverse effect by the extended use of a drug with a known potential to produce this effect.

"Controlled substance" means a substance that has a potential for abuse because physical and psychic dependence and tolerance may develop upon repeated administration and that is classified as a Schedules I through V drug.

"Covering provider" means a provider designated by the primary provider to render health care services in the temporary absence of the primary provider.

"DMAS" or "the department" means the Department of Medical Assistance Services.

"Dental services" means covered dental services available to Medicaid or FAMIS eligible children as well as the limited, emergency services available to Medicaid eligible adults.

"Designated provider physician or pharmacy" means the provider who agrees to be the designated primary physician, designated or pharmacy, or designated transportation provider from whom the restricted recipient individual must first attempt to seek health care medical or pharmaceutical services. Other providers may be established as designated physician or pharmacy providers with the approval of DMAS.

"Diagnosis" means (i) the process of determining by examination the nature and circumstances of a diseased condition or injury and (ii) the decision reached from such examination.

"Diagnostic category" means the broad classification of diseases and injuries found in the ICD as defined in 12VAC30-95-5 International Classification of Diseases (ICD), which is commonly used by providers in billing for medical services.

"Drug" means a substance or medication intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease as defined by the Virginia Drug Control Act (§ 54.1-3400 et seq. of the Code of Virginia).

"Duplicative medical care" means two or more practitioners are concurrently treat treating the same or similar medical problems or conditions falling into the same diagnostic category, but excluding confirmation for diagnosis, evaluation, or assessment.

"Duplicative medications" means more than one prescription of the same drug or more than one drug in the same therapeutic class.

"Education" means providing individuals with information regarding DMAS' identification of inappropriate utilization and what is appropriate access to Medicaid covered services according to the policies and procedures of the CMM Program for individuals and the CMM Program for providers. Education shall not include providing a professional opinion regarding a individual's medical or mental health.

"Eligibility card" means the document issued to each Medicaid individual listing the name and Medicaid number, either the identification or billing number, of the eligible individual, which may be in the form of a plastic card magnetically encoded, allowing electronic access to inquiries for eligibility status.

"Emergency hospital services" means those hospital services that are necessary to treat a medical emergency. Hospital treatment of a medical emergency necessitates the use of the most accessible hospital available that is equipped to furnish the required services.

"EPSDT" means the Early and Periodic Screening, Diagnosis, and Treatment Program which that is federally mandated for eligible individuals under younger than 21 years of age.

"Essential medical services" means quality medical services, including but not limited to preventive care, emergency services, maternity care, hospital and physician services, and prescription drug services as set out in the State Plan for Medical Assistance.

"Excessive medical care" means obtaining greater than necessary services such that health risks to the recipient individual or unnecessary costs to the Virginia Medicaid Program may ensue from the accumulation of services or obtaining duplicative services.

"Excessive medications" means obtaining medication in greater than generally acceptable maximum therapeutic dosage regimens or obtaining duplicative medication from one or more than one practitioner practitioners.

"Excessive transportation services" means obtaining or rendering greater than necessary transportation services such that unnecessary costs to the Virginia Medicaid Program may ensue from the accumulation of services.

"FAMIS" means the Family Access to Medical Insurance Security program as created by Title XXI of the Social Security Act.

"Fraud" means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable federal or state laws.

"Health care" means any covered services service, including equipment, or supplies, or transportation services, provided by any individual person, organization, or entity that participates in the Virginia Medical Assistance Program.

"Home and community-based services" means a range of community services approved by the Centers for Medicare and Medicaid Services (CMS) pursuant to § 1915(c) of the Social Security Act to be offered to individuals as an alternative to institutionalization.

"Hospice services" means services, pursuant to § 1905(o) of the Act, that are reasonable and necessary for the palliation or management of a terminal illness if the terminal illness runs its normal course.

"Immunization" means the creation of immunity against a particular disease using a vaccination.

"Individual" means the recipient of Medicaid-covered services that are provided under the authority of Titles XIX and XXI of the Social Security Act.

"Java-Server Utilization Review System" or "JSURS" means a computer subsystem of the Virginia Medicaid Management Information System (VAMMIS) that collects claims data and computes statistical profiles of individual and provider activity and compares such profiles with the appropriate peer group.

"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 agreement with the department to provide services covered under (i) the Medallion II programs, pursuant to 12VAC30-120-360 et seq., or any successor programs and (ii) the FAMIS programs, pursuant to 12VAC30-141, or any successor programs.

"Medical emergency" means the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, that in the absence of immediate medical attention could reasonably be expected to result in (i) placing the client's individual's health in serious jeopardy, (ii) serious impairment of the individual's bodily functions, or (iii) serious dysfunction of any the individual's bodily organ or part organs or parts.

"Medical management of essential health care" means a case management approach to health care in which the designated primary physician has responsibility for assessing the needs of the patient and making referrals to other physicians and clinics as needed. The designated pharmacy has responsibility for monitoring the drug regimen of the patient.

"Medically necessary" means services that are reasonable and necessary for the diagnosis or treatment of an illness, condition, or injury, or to improve the function of a disability, consistent with community standards of medical practice and in accordance with Medicaid or FAMIS policies.

"Noncompliance" means failing to follow Client Medical Management Program policies and procedures, or a pattern of utilization that is inconsistent with sound fiscal or medical practices. Noncompliance includes, but is not limited to, failure to follow a recommended treatment plan or drug regimen; failure to disclose to a provider any treatment or services provided by another provider; or requests for medical services or medications that are not medically necessary; or excessive use of transportation services.

"Not medically necessary" means an item or service that is not consistent with the diagnosis or treatment of the patient's condition or an item or service that is duplicative, contraindicated, or excessive.

"Pattern" means a combination of qualities, acts, or tendencies that result in duplication or frequent occurrence.

"Practitioner" means a health care provider licensed, registered, or otherwise permitted by law to distribute, dispense, prescribe, and administer drugs or otherwise treat medical conditions.

"Primary care provider" or "PCP" means the designated primary physician responsible for medical management of essential health care for the restricted recipient a physician or nurse practitioner practicing in accordance with state law who is responsible for supervising, coordinating, and providing initial and primary medical care to patients; for initiating written referrals for specialist care; and for maintaining the continuity of patient care.

"Provider" means the individual, facility or other entity registered, licensed, or certified, as appropriate, and enrolled by DMAS to render services to Medicaid recipients eligible for services a person, organization, or institution with a current, valid license or certification, as applicable, and participation agreement with DMAS who or that will (i) render service to Medicaid individuals who are eligible for covered services, (ii) submit a claim or claims for the rendered services, and (iii) accept as payment in full the amount paid by the Virginia Medicaid or FAMIS program.

"Psychotropic drugs" means drugs that alter the mental state activity, behavior, or perception. Such Examples of such drugs include, but are not limited to, morphine, barbiturates, hypnotics, antianxiety agents, antidepressants, and antipsychotics.

"Recipient" means the individual who is eligible, under Title XIX of the Social Security Act, to receive Medicaid covered services.

"Recipient eligibility card" means the document issued to each Medicaid enrollee; an individual document issued to each Medicaid recipient listing the name and Medicaid number (either the identification or billing number) of the eligible individual. This document may be in the form of a plastic card magnetically encoded, allowing electronic access to inquiries for eligibility status.

"Renal dialysis services" means services that aid the process of diffusing blood across a semi-permeable membrane to remove substances that a normal kidney would eliminate, including poisons, drugs, urea, uric acid, and creatinine. Renal dialysis services help to restore electrolytes and correct acid-base imbalances.

"Restriction" "Restrict" or "restriction" means an administrative action imposed on a recipient an individual that limits access to specific types of health care services through a designated primary provider or an administrative action imposed on a provider to prohibit participation as a designated primary provider, referral, or covering provider for restricted recipients individuals.

"Social Security Act" or "the Act" means the Act statute, enacted by the 74th Congress on August 14, 1935, and as amended, that provides for the general welfare by establishing a system of federal old age benefits, and by enabling the states to make more adequate provisions for aged persons, blind persons, dependent and crippled children who have disabilities, maternal and child welfare, public health, and the administration of their unemployment compensation laws.

"State Plan for Medical Assistance" or "the Plan" means the document listing the covered groups, covered services and their limitations, and provider reimbursement methodologies as provided for under Title XIX of the Social Security Act comprehensive written statement submitted by the department to the Centers for Medicare and Medicaid Services (CMS) for approval describing the nature and scope of the Virginia Medicaid program and giving assurance that it will be administered in conformity with the requirements, standards, procedures, and conditions for obtaining federal financial participation.

"Surveillance and Utilization Review Subsystem (SURS)" or "Automated Exception Analysis (AEA)" means a computer subsystem of the Medicaid Management Information System (MMIS) that collects claims data and computes statistical profiles of recipient and provider activity and compares them with that of their particular peer group.

"Therapeutic class" means a group of drugs with similar pharmacologic actions and uses.

"Under-use" or "under-utilization" means an occurrence where there is evidence that an individual did not receive a service or procedure whose benefits exceeded the risks.

"Utilization control" means the control of covered health care services to assure the use of cost efficient, medically necessary or appropriate services.

12VAC30-130-810. Client Medical Management Program for recipients individuals.

A. Purpose. The Client Medical Management Program for individuals is a utilization control program designed to prevent abuse and promote improved and cost efficient medical management of essential health care designed to assist and educate Medicaid individuals in appropriately using essential medical and pharmacy services. Individuals who use these services excessively or inappropriately as determined by DMAS may be assigned to a single primary care provider or pharmacy, or both. The CMM Program for individuals also monitors individual compliance with program guidelines.

B. Authority.

1. Federal The Act and federal regulations at 42 CFR 456.3 require the Medicaid agency to implement a statewide surveillance and utilization control program and 42 CFR 455.1 through 455.16 require the Medicaid agency to conduct investigations of abuse by recipients that (i) safeguards against unnecessary or inappropriate use of Medicaid services and against excess payments, (ii) assesses the quality of those services, (iii) provides for the control of the utilization of all services provided under the Plan, and (iv) provides for the control of the utilization of inpatient services.

2. Federal regulations at 42 CFR 431.54(e) allow states to restrict recipients individuals to designated providers when the recipients individuals have utilized services at a frequency or an amount that is not medically necessary in accordance with utilization guidelines established by the state. 42 CFR 455.16(c)(4) provides for imposition of sanctions for instances of abuse identified by the agency.

C. Identification of Client Medical Management participants for inclusion in the CMM Program participants for individuals. DMAS shall identify recipients individuals for review from computerized reports such as but not limited to Recipient SURS or AEA individual Java-Server Utilization Review System (JSURS), VAMMIS, Oracle or by written referrals from agencies, health care professionals, or other individuals persons. Certain individuals who are reviewed may not be restricted when evidence indicates that the prescription or medical service utilization patterns, or both, are for appropriate therapy. Only individuals who are excluded, pursuant to 12VAC30-120-370 B , from receiving care from a managed care organization shall be reviewed and evaluated for restriction under the CCM Program for individuals.

D. Recipient Individual evaluation for restriction.

1. DMAS shall review recipients utilize data as indicated in subsection C of this section to conduct a review of individuals to determine if services are being utilized at a frequency or amount that results in a level of utilization or a pattern of services which is not medically necessary or which exceeds the thresholds are excessive medical services or excessive medications, or both, as established in these regulations by the department. Evaluation of utilization patterns can include but is not limited to review by the department staff of medical records or computerized reports, or both, generated by the department reflecting claims submitted for physician visits, drugs/prescriptions drugs or prescriptions, outpatient and emergency room visits, lab and or diagnostic procedures, or both, and hospital admissions, and referrals.

2. Restricted individuals shall have reasonable access to all essential medical services. These restrictions shall not apply to hospital emergency services.

2. 3. Abusive activities shall be investigated and, if appropriate, the recipient individual shall be reviewed for educational intervention or restriction, or both. Recipients demonstrating questionable patterns of utilization or exceeding reasonable levels of utilization shall be reviewed for restriction.

a. If DMAS' review determines that an individual's data indicates (i) inappropriate use of Medicaid services, (ii) questionable patterns of utilization, or (iii) unreasonable levels of utilization, the department shall initiate the individual's restriction to either a physician or pharmacy, or both.

b. Once an individual is restricted, the restriction period shall last for 24 months from the enrollment date. During this restriction period, the individual shall be required to use the services of the designated physician or designated pharmacy, or both.

c. The individual may visit physicians or specialists other than those who are designated only by a written referral from the designated PCP.

d. The individual may obtain prescriptions from pharmacies other than the designated pharmacy only (i) in an emergency, (ii) when the designated pharmacy is closed, (iii) when the designated pharmacy does not stock the required medication, or (iv) when the designated pharmacy is not able to obtain the required medication in a timely manner.

E. Determination of restriction. DMAS may restrict an individual if any of the following activities or patterns or levels of utilization are identified. These activities, patterns, or levels of utilization include, for example:

3. DMAS may restrict recipients if any of the following activities or patterns or levels of utilization are identified. These activities or patterns or levels of utilization include but shall not be limited to:

a. Exceeding 200% of the maximum therapeutic dosage of the same drug or multiple drugs in the same therapeutic class for a period exceeding four weeks.

b. 1. Two occurrences of having prescriptions for the same drugs filled two or more times on the same or the subsequent day.

c. 2. Utilizing services from three or more prescribers and three or more dispensing pharmacies in a three-month period.

d. 3. Receiving more than 24 prescriptions in a three-month period.

e. 4. Receiving more than 12 psychotropic prescriptions or more than 12 analgesic prescriptions or more than 12 prescriptions for controlled drugs with potential for abuse in a three-month period.

f. 5. Exceeding the maximum therapeutic dosage of the same drug or multiple drugs in the same therapeutic class, which have been prescribed by two or more practitioners, for a period exceeding four weeks. In addition, such drugs must be prescribed by two or more practitioners.

g. 6. Receiving two or more drugs, duplicative in nature or potentially addictive (even within acceptable therapeutic levels), dispensed by more than one pharmacy or prescribed by more than one practitioner for a period exceeding four weeks.

7. Receiving narcotic prescriptions from two or more prescribers without supporting diagnoses indicative of use.

h. 8. Utilizing three or more different physicians of the same type or specialty in a three-month period for treatment of the same or similar condition or conditions.

i. 9. Two or more occurrences of seeing two or more physicians of the same type or specialty on the same or subsequent day for the same or similar diagnosis.

j. 10. Duplicative, excessive, or contraindicated utilization of medications, medical supplies, or appliances dispensed by or prescribed by more than one provider for the time period specified by DMAS.

k. Duplicative, excessive, or contraindicated utilization of medical visits, procedures, or diagnostic tests from more than one provider for the time period specified by DMAS.

l. 11. Use of emergency hospital services for three or more emergency room visits for nonemergency care during a three-month period.

m. 12. One or more providers recommends recommend restriction for medical management because the recipient has demonstrated inappropriate utilization practices.

n. 13. A pattern of noncompliance which that is inconsistent with sound fiscal or medical practices. Noncompliance is For example, noncompliance may be characterized by, but not limited to:

(1) a. Failure to disclose to a provider any treatment or services provided by another provider;

(2) b. Failure to follow a drug regimen or other recommended treatment;

(3) c. Requests for medical services or medications which that are not medically necessary;

(4) Excessive use of transportation services; or

(5) Use of transportation services with no corresponding medical services.

d. Use of hospital emergency services via self-referral for nonacute episodes of care or solely for nonacute management of the medical condition; or

e. Under-use or under-utilization of medically necessary services that results in higher costs for the management of the medical condition.

o. One or more 14. Any documented occurrences of use of the eligibility card to obtain drugs under false pretenses, which includes, but is not limited to the purchase or attempt to purchase drugs via a forged or altered prescription.

p. One or more 15. Any documented occurrences of card-sharing.

q. One or more 16. Any documented occurrences of alteration of the recipient eligibility card.

17. One or more documented occurrences of paying cash for controlled substances, analgesic drugs, or psychotropic drugs in addition to the use of the eligibility card to obtain similar or duplicative controlled substances.

E. Recipient F. Individual restriction procedures.

1. DMAS shall advise affected recipients individuals by written notice of the proposed restriction under the Client Medical Management CMM Program for individuals. Written notice shall include an explanation of restriction procedures and the recipient's individual's right to appeal the proposed action.

2. The recipient individual shall have the opportunity to select a designated providers physician or pharmacy, or both. If a recipient an individual fails to respond by the date specified in the restriction notice, DMAS shall select a designated providers physician or pharmacy, or both.

3. DMAS shall not implement restriction if a valid appeal, consistent with 12VAC30-110-210, is noted. (See subsection K of this section.)

4. DMAS shall restrict recipients individuals to their designated providers physician or pharmacy, or both, for 36 24 months.

F. G. Designated providers.

1. A designated primary physician or pharmacy, or both, must be a physician who provider that is enrolled as an individual practitioner in Virginia Medicaid and who that is unrestricted by DMAS. Providers who are restricted pursuant to 12VAC30-130-820 D and E shall not serve as designated providers for restricted individuals and shall not serve as referral or covering providers for restricted individuals.

2. A designated pharmacy provider must be a pharmacy that is enrolled as a community pharmacy and that is unrestricted by DMAS. Physicians or pharmacy providers, or both, who are under the CMM Program for providers shall not serve as designated providers, shall not provide services through referral, and shall not serve as covering providers for restricted individuals.

3. A designated transportation provider must be enrolled as a taxi, registered driver, or wheelchair van and be unrestricted by DMAS. Recipients shall be assigned to the type of provider who meets the appropriate level of transportation that is medically necessary.

4. Providers restricted through the Client Medical Management Program may not serve as designated providers, may not provide services through referral, and may not serve as covering providers for restricted recipients.

5. 3. Physicians with practices limited to the delivery of emergency room services may not serve as designated primary providers.

6. Restricted recipients shall have reasonable access to all essential medical services. These restrictions shall not apply to emergency services.

7. 4. Other provider types physicians or pharmacies, or both, may be established as designated providers as needed but only with the approval of DMAS.

G. H. Provider reimbursement.

1. DMAS shall reimburse for covered outpatient medical, or pharmaceutical services, or both, and physician services for restricted individuals only when they are provided by the designated providers, or by physicians seen on a written referral from the designated PCP, or in a medical emergency consistent with the methodologies established for such services in the State Plan for Medical Assistance. Prescriptions may be filled by a nondesignated pharmacy only in emergency situations when the designated pharmacy is closed, or when the designated pharmacy does not stock, or is unable to obtain the drug in a timely manner.

2. DMAS shall require a written referral, in accordance with published procedures, from the designated PCP for payment of covered outpatient services by nondesignated practitioners unless there is a medical emergency requiring immediate hospital treatment. Services exempt from these written referral requirements include:

a. Family planning services;

b. Annual or routine vision examinations (under age 21) for individuals under the age of 21 years;

c. Dental services (under age 21) for individuals under the age of 21 years;

d. Emergency services;

e. EPSDT well-child exams/screenings (under age 21) for individuals under the age of 21 years;

f. Immunizations (under age 21) for individuals under the age of 21 years;

g. Home- and community-based care waiver services such as private duty nursing or respite services;

h. Renal dialysis services;

i. Expanded prenatal services, including prenatal group education, nutrition services, and homemaker services for pregnant women and care coordination for high-risk pregnant women and infants up to age two years; and

j. Hospice services.

3. When a transportation restriction is implemented, DMAS shall reimburse for covered transportation services only when they are provided by the designated transportation provider, or on referral from the designated transportation provider, or in a medical emergency.

4. 3. Designated primary care providers (PCPs) shall receive a monthly case management fee for each assigned recipient individual.

H. Client medical management identification material. DMAS shall provide an individual recipient eligibility card listing the recipient's designated primary care providers or a plastic card for each restricted recipient. DMAS shall provide correspondence to the recipient listing the name, address, and telephone number of each designated provider and the effective date of restriction to each provider.

I. Changes in designated providers.

1. DMAS must give prior authorization approval to all changes of designated providers.

2. The recipient individual or the designated provider may initiate requests for change for the following reasons:

a. Relocation of the recipient individual or provider.

b. Inability of the provider to meet the routine health or pharmaceutical needs of the recipient individual.

c. Breakdown of the recipient/provider individual/provider relationship.

3. If the designated provider initiates the request and the recipient individual does not select a new provider physician or pharmacy, or both, by established deadlines, DMAS shall select a provider, subject to concurrence from the provider or providers.

4. If DMAS denies the recipient's individual's request for a particular physician or pharmacy, or both, the recipient individual shall be notified in writing and given the right to appeal the decision. (See subsection K of this section.)

J. Review of recipient individual restriction status.

1. During the restriction period, DMAS shall monitor the recipient's an individual's utilization no less frequently than every 12 months and follow up with the recipient individual to promote appropriate utilization patterns.

2. DMAS shall also review a recipient's an individual's utilization prior to the end of the restriction period to determine restriction termination or continuation. (See subsection D of this section.)

a. DMAS shall extend utilization control restrictions for 36 12 months if any one of the following conditions is identified:

(1) The recipient's individual's utilization patterns include one or more conditions listed in subdivision D 3 subsection E of this section.

(2) The recipient individual has not complied with Client Medical Management Program procedures of the CMM Program for individuals resulting in services or medications received from one or more any nondesignated providers provider, as demonstrated by his submitted claims, without a written referral or in the absence of a medical emergency.

(3) The recipient individual has not complied with Client Medical Management Program procedures of the CMM Program for individuals as demonstrated by a pattern of documented attempts to receive services or medications from one or more any nondesignated providers without a written referral or pharmacy (i) in the absence of a medical emergency, (ii) when the designated pharmacy is closed, (iii) when the designated pharmacy does not stock the required medication, or (iv) when the designated pharmacy is unable to obtain the required medication in a timely manner.

(4) One or more of the designated providers recommends continued restriction status because the recipient individual has demonstrated noncompliant behavior which is being controlled by Client Medical Management restrictions within the CMM Program restrictions for individuals.

(5) Any changes of designated provider have been made due to the breakdown of the recipient/provider individual/provider relationship as a result of the recipient's individual's noncompliance.

b. DMAS shall notify the recipient individual and designated provider physician or pharmacy, or both, in writing of the review decision. If restrictions are continued, written notice shall include the recipient's individual's right to appeal the proposed action. (See subsection K of this section.)

c. DMAS shall not implement the continued recipient individual restriction if a valid appeal is noted pending the completion of the appeal action. Should the outcome of the appeal action support implementation of the restriction, the restriction shall be promptly implemented.

K. Recipient Individual appeals.

1. Recipients Individuals shall have the right to appeal any adverse action, as defined in 42 CFR 431.201, that is taken by DMAS under these regulations this part.

2. Recipient Individual appeals shall be held pursuant to the provisions of Part I (12VAC30-110-10 et seq.) of 12VAC30 Chapter 110 Client 12VAC30-110, Eligibility and Appeals.

12VAC30-130-820. Client Medical Management Program for providers.

A. Purpose. The Client Medical Management CMM Program for providers is a utilization control program designed to promote improved and cost-efficient medical management of essential health care.

B. Authority.

1. Federal regulations at 42 CFR 456.3 require the Medicaid agency to implement a statewide surveillance and utilization control program and at 42 CFR 455.1 through 455.16 require the Medicaid agency to conduct investigations of abuse by providers.

2. Federal regulations at 42 CFR 431.54 (f) 431.54(f) allow states to restrict providers' participation in the Medicaid program if the agency finds that providers of items or services under the State Plan have provided items or services at a frequency or amount not medically necessary in accordance with utilization guidelines established by the state, or have provided items or services of a quality that do not meet professionally recognized standards of health care.

C. Identification of Client Medical Management participants for inclusion in the CMM Program participants for providers. DMAS shall identify providers for review through computerized reports such as but not limited to Provider SURS or AEA JSURS, Oracle, VAMMIS, or by written referrals from agencies, health care professionals, or other individuals.

D. Provider evaluation for restriction.

1. DMAS shall review providers to determine if health care services are being provided at a frequency or amount that is not medically necessary or that are not of a quality to meet professionally recognized standards of health care. Evaluation of utilization patterns can include but is not limited to review by the department staff of medical records or computerized reports generated by the department reflecting claims submitted for physician visits, drugs/prescriptions drugs or prescriptions, outpatient and emergency room visits, lab or diagnostic procedures, hospital admissions, and referrals.

2. DMAS may restrict providers if any one or more of the following conditions is identified in a significant number or proportion of cases. These conditions include but shall not be limited to the following:

a. Visits billed at a frequency or level exceeding that which is medically necessary;

b. Diagnostic tests billed in excess of what is medically necessary;

c. Diagnostic tests billed which are unrelated to the diagnosis;

d. Medications prescribed or prescriptions dispensed in excess of recommended dosages;

e. Medications prescribed or prescriptions dispensed unrelated to the diagnosis.; or

f. The provider's license to practice in any state has been revoked or suspended.

g. Excessive transportation services rendered such that unnecessary costs to the Virginia Medicaid Program ensue from the accumulation of services.

E. Provider restriction procedures.

1. DMAS shall advise affected providers by written notice of the proposed restriction under the Client Medical Management CMM Program for providers. Written notice shall include an explanation of the basis for the decision, request for additional documentation, if any, and notification of the provider's right to appeal the proposed action.

2. DMAS shall restrict providers from being the designated provider, a referral provider, or a covering provider for recipients individuals in the Client Medical Management CMM Program for providers for 24 months.

3. DMAS shall notify the Centers for Medicare and Medicaid Services (CMS) and the general public of the restriction and its duration.

4. DMAS shall not implement provider restriction if a valid appeal is noted.

F. Review of provider restriction status.

1. DMAS shall review a restricted provider's claims history record prior to the end of the restriction period to determine restriction termination or continuation (See subsection D of this section). DMAS shall extend provider restriction for 24 months in one or more of the following situations:

a. Where abuse by the provider is identified.

b. Where the practices which led to restriction continue.

2. In cases where the provider has submitted an insufficient number of claims during the restriction period to enable DMAS to conduct a claims history review, DMAS shall continue restriction until a reviewable six-month claims history is available for evaluation.

3. If DMAS continues restriction following the review, the provider shall be notified of the agency's proposed action, the basis for the action, and appeal rights. (See subsection E of this section).

4. If the provider continues a pattern of inappropriate health care services, DMAS may make a referral to the appropriate peer review group or regulatory agency for recommendation and action as appropriate.

G. Provider appeals.

1. Providers shall have the right to appeal any adverse action taken by the department under these regulations this part pursuant to § 32.1-325.1 of the Code of Virginia.

2. Provider appeals shall be held pursuant to the provisions of Article 3 (§ 2.2-4018 et seq.) of the Administrative Process Act.