Title of Regulation: 12VAC30-120. Waivered Services (amending 12VAC30-120-360 through 12VAC30-120-420).

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

Effective Date: July 27, 2016.

Agency Contact: Victoria Simmons, Regulatory Coordinator, Division of Policy and Research, Department of Medical Assistance Services, 600 East Broad Street, Suite 1300, Richmond, VA 23219, telephone (804) 371-6043, FAX (804) 786-1680, or email victoria.simmons@dmas.virginia.gov.

Summary:

The amendments (i) require individuals who are enrolled in the Elderly or Disabled with Consumer Direction Waiver and who are excluded from participating in mandatory managed care to be enrolled in Medicaid contracted managed care organizations and to receive all acute care services through the mandatory managed care delivery system and (ii) provide for expedited enrollment for Medicaid individuals into Medicaid contracted managed care organizations, especially for pregnant women.

Summary of Public Comments and Agency's Response: No public comments were received by the promulgating agency.

Part VI
Medallion II Mandatory Managed Care

12VAC30-120-360. Definitions.

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

"Action" means the denial or limited authorization of a requested service, including the type or level of service; the reduction, suspension, or termination of a previously authorized service; the denial, in whole or in part, of payment for a service; the failure to provide services in a timely manner, as defined by the state; or the failure of an MCO to act within the timeframes provided in 42 CFR 438.408(b).

"Appeal" means a request for review of an action, as "action" is defined in this section.

"Area of residence" means the individual's member's address in the Medicaid eligibility file.

"Capitation payment" means a payment the department makes periodically to a contractor on behalf of each individual enrolled under a contract for the provision of medical services under the State Plan, regardless of whether the particular individual receives services during the period covered by the payment.

"Covered services" means Medicaid services as defined in the State Plan for Medical Assistance.

"Disenrollment" means the process of changing enrollment from one Medallion II Managed Care Organization (MCO) plan to another MCO, if applicable.

"DMAS" means the Department of Medical Assistance Services.

"Enrollee" or "enrollees" means people having current Medicaid eligibility who shall be in the process of being authorized by DMAS to be enrolled in Medallion II.

"Early Intervention" means EPSDT Early Intervention services provided pursuant to Part C of the Individuals with Disabilities Education Act (IDEA) of 2004 as set forth in 12VAC30-50-131.

"Eligible person" means any person eligible for Virginia Medicaid in accordance with the State Plan for Medical Assistance under Title XIX of the Social Security Act.

"Emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in the following:

1. Placing the health of the individual (or, with respect to a pregnant woman, the health of the woman or her unborn child) in serious jeopardy,

2. Serious impairment to bodily functions, or

3. Serious dysfunction of any bodily organ or part.

"Emergency services" means covered inpatient and outpatient services that are furnished by a provider that is qualified to furnish these services and that are needed to evaluate or stabilize an emergency medical condition.

"Enrollment broker" means an independent contractor that enrolls individuals in the contractor's plan and is responsible for the operation and documentation of a toll-free individual service helpline. The responsibilities of the enrollment broker include, but shall not be limited to, individual education and MCO enrollment, assistance with and tracking of individuals' complaints resolutions, and may include individual marketing and outreach.

"Exclusion from Medallion II" "Exclude" means the removal of an enrollee a member from the Medallion II mandatory managed care program on a temporary or permanent basis.

"External quality review organization" or "EQRO" means an organization that meets the competence and independence requirements set forth in 42 CFR 438.354 and performs external quality reviews, other external quality review related activities as set forth in 42 CFR 438.358, or both.

"Grievance" means an expression of dissatisfaction about any matter other than an action, as "action" is defined in this section.

"Health care plan" means any arrangement in which any managed care organization undertakes to provide, arrange for, pay for, or reimburse any part of the cost of any health care services.

"Health care professional" means a provider as defined in 42 CFR 438.2.

"Individual" or "individuals" means people a person or persons who are eligible for Medicaid but, who are not yet undergoing enrollment nor for mandatory managed care, and who are not enrolled in a mandatory managed care organization.

"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 contractual agreement with DMAS to provide services covered under the Medallion II mandatory managed care program. Covered services for Medallion II mandatory managed care program individuals must shall be as accessible (in terms of timeliness, amount, duration, and scope) as compared to other Medicaid individuals served within the geographic area.

"Member" or "members" means people who have current Medicaid eligibility who are also enrolled in Medallion II mandatory managed care.

"Network" means doctors, hospitals or other health care providers who participate or contract with an MCO contractor and, as a result, agree to accept a mutually-agreed mutually agreed upon sum or fee schedule as payment in full for covered services that are rendered to eligible participants.

"Newborn enrollment period" means the period from the child's date of birth plus the next two calendar months.

"Nonparticipating provider" means a health care entity or health care professional not in the contractor's participating provider network.

"Participant" or "participants" means an individual or individuals having current Medicaid eligibility who shall be authorized by DMAS to be a member or members of Medallion II.

"PCP of record" means a primary care physician of record with whom the recipient has an established history and such history is documented in the individual's records.

"Post-stabilization care services" means covered services related to an emergency medical condition that are provided after an enrollee is stabilized in order to maintain the stabilized condition or to improve or resolve the enrollee's condition.

"Potential enrollee" means a Medicaid individual who is subject to mandatory enrollment or may voluntarily elect to enroll in a given managed care program, but is not yet an enrollee of a specific MCO.

"Retractions" means the departure of an enrolled managed care organization from any one or more localities as provided for in 12VAC30-120-370.

"Rural exception" means a rural area designated in the § 1915(b) managed care waiver, pursuant to § 1932(a)(3)(B) of the Social Security Act and 42 CFR § 438.52(b) and recognized by the Centers for Medicare and Medicaid Services, wherein qualifying Medallion II mandatory managed care members are mandated to enroll in the one available contracted MCO.

"School health services" means those physical therapy, occupational therapy, speech therapy, nursing, psychiatric and psychological services rendered to children who qualify for these services under the federal Individuals with Disabilities Education Act (20 USC § 1471 et seq.) by (i) employees of the school divisions or (ii) providers that subcontract with school divisions, as described in 12VAC30-50-130.

"Spend-down" means the process of reducing countable income by deducting incurred medical expenses for medically needy individuals, as determined in the State Plan for Medical Assistance.

12VAC30-120-370. Medallion II enrollees Mandatory managed care members.

A. DMAS shall determine enrollment in Medallion II mandatory managed care. Medicaid eligible persons not meeting the exclusion criteria set out in this section must shall participate in the Medallion II mandatory managed care program. Enrollment in Medallion II is mandatory managed care shall not be a guarantee of continuing eligibility for services and benefits under the Virginia Medical Assistance Services Program.

1. DMAS reserves the right to exclude from participation in the Medallion II mandatory managed care program any member who has been consistently noncompliant with the policies and procedures of managed care or who is threatening to providers, MCOs, or DMAS. There must be sufficient documentation from various providers, the MCO, and DMAS of these noncompliance issues and any attempts at resolution. Members excluded from Medallion II mandatory managed care through this provision may appeal the decision to DMAS.

2. Qualifying individuals enrolled in the Elderly or Disabled with Consumer Direction (EDCD) Waiver pursuant to Part IX (12VAC30-120-900 et seq.) of this chapter who do not meet any exclusions in subsection B of this section shall be required to enroll in managed care and shall receive all acute care services through the mandatory managed care delivery system. For these individuals, services provided under 12VAC30-120-380 A 2 shall continue to be provided through the DMAS fee-for-service system.

B. The following individuals shall be excluded (as defined in 12VAC30-120-360) from participating in Medallion II mandatory managed care as defined in the § 1915(b) managed care waiver. Individuals excluded from Medallion II mandatory managed care shall include the following:

1. Individuals who are inpatients in state mental hospitals;

2. Individuals who are approved by DMAS as inpatients in long-stay hospitals, nursing facilities, or intermediate care facilities for individuals with intellectual disabilities;

3. Individuals who are placed on spend-down;

4. Individuals who are participating in the family planning waiver, or in federal waiver programs for home-based and community-based Medicaid coverage prior to managed care enrollment (except eligible EDCD members);

5. Individuals under age 21 who are approved for DMAS residential facility Level C programs as defined in 12VAC30-130-860;

6. Newly eligible individuals who are in the third trimester of pregnancy and who request exclusion within a department-specified timeframe of the effective date of their MCO enrollment. Exclusion may be granted only if the member's obstetrical provider (e.g. (i.e., physician, hospital, or midwife) does not participate with the enrollee's member's assigned MCO. Exclusion requests made during the third trimester may be made by the member, MCO, or provider. DMAS shall determine if the request meets the criteria for exclusion. Following the end of the pregnancy, these individuals shall be required to enroll to the extent they remain eligible for Medicaid;

7. Individuals, other than students, who permanently live outside their area of residence for greater than 60 consecutive days except those individuals placed there for medically necessary services funded by the MCO;

8. Individuals who receive hospice services in accordance with DMAS criteria;

9. Individuals with other comprehensive group or individual health insurance coverage, including Medicare, insurance provided to military dependents, and any other insurance purchased through the Health Insurance Premium Payment Program (HIPP);

10. Individuals requesting exclusion who are inpatients in hospitals, other than those listed in subdivisions 1 and 2 of this subsection, at the scheduled time of MCO enrollment or who are scheduled for inpatient hospital stay or surgery within 30 calendar days of the MCO enrollment effective date. The exclusion shall remain effective until the first day of the month following discharge. This exclusion reason shall not apply to members admitted to the hospital while already enrolled in a department-contracted MCO;

11. Individuals who request exclusion during preassignment assignment to an MCO or within a time set by DMAS from the effective date of their MCO enrollment, who have been diagnosed with a terminal condition and who have a life expectancy of six months or less. The client's individual's physician must certify the life expectancy;

12. Certain individuals between birth and age three certified by the Department of Behavioral Health and Developmental Services as eligible for services pursuant to Part C of the Individuals with Disabilities Education Act (20 USC § 1471 et seq.) who are granted an exception by DMAS to the mandatory Medallion II managed care enrollment;

13. Individuals who have an eligibility period that is less than three months;

14. Individuals who are enrolled in the Commonwealth's Title XXI SCHIP program;

15. Individuals who have an eligibility period that is only retroactive; and

16. Children 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.

C. Members enrolled with a MCO who subsequently meet one or more of the criteria of subsections A and subsection B of this section during MCO enrollment shall be excluded from MCO participation as determined by DMAS, with the exception of those who subsequently become participants in the federal long-term care waiver programs, as otherwise defined elsewhere in this chapter, for home-based and community-based Medicaid coverage (AIDS, (IFDDS, MR/ID ID, EDCD, Day Support, or Alzheimer's, or as may be amended from time to time). These individuals members shall receive acute and primary medical services via the MCO and shall receive waiver services and related transportation to waiver services via the fee-for-service program.

Individuals excluded from mandatory managed care enrollment shall receive Medicaid services under the current fee-for-service system. When individuals no longer meet the criteria for exclusion, they shall be required to enroll in the appropriate managed care program.

D. Individuals who are enrolled in localities that qualify for the rural exception may meet exclusion criteria if their PCP of record, as defined in 12VAC30-120-360, cannot or will not participate with the one MCO in the locality. Individual requests to be excluded from MCO participation in localities meeting the qualification for the rural exception must be made to DMAS for consideration on a case-by-case basis. Recipients Members enrolled in MCO rural exception areas shall not have open enrollment periods and shall not be afforded the 90-day window after initial enrollment during which they may make a health plan or program change.

Individuals excluded from mandatory managed care enrollment shall receive Medicaid services under the current fee-for-service system. When individuals no longer meet the criteria for exclusion, they shall be required to enroll in the appropriate managed care program.

E. Medallion II Mandatory managed care plans shall be offered to individuals, and individuals shall be enrolled in those plans, exclusively through an independent enrollment broker under contract to DMAS.

F. Clients Members shall be enrolled as follows:

1. All eligible individuals, except those meeting one of the exclusions of subsection B of this section, shall be enrolled in Medallion II mandatory managed care.

2. Individuals shall receive a Medicaid card from DMAS, and shall be provided authorized medical care in accordance with DMAS' procedures after Medicaid eligibility has been determined to exist.

3. Once individuals are enrolled in Medicaid, they will receive a letter indicating that they may select one of the contracted MCOs. These letters shall indicate a preassigned an assigned MCO, determined as provided in subsection F of this section, in which the individual member will be enrolled if he does not make a selection within a period specified by DMAS of not less than 30 days. Members who are enrolled in one mandatory MCO program who immediately become eligible for another mandatory MCO program are able to maintain consistent enrollment with their currently assigned MCO, if available. These members will receive a notification letter including information regarding their ability to change health plans under the new program.

4. Any newborn whose mother is enrolled with an MCO at the time of birth shall be considered a member of that same MCO for the newborn enrollment period.

a. This requirement does not preclude the member, once he is assigned a Medicaid identification number, from disenrolling from one MCO to enrolling with another in accordance with subdivision H 1 of this section.

b. The newborn's continued enrollment with the MCO is not contingent upon the mother's enrollment. Additionally, if the MCO's contract is terminated in whole or in part, the MCO shall continue newborn coverage if the child is born while the contract is active, until the newborn receives a Medicaid number or for the newborn enrollment period, whichever timeframe is earlier. Children who do not receive a Medicaid identification number prior to the end of the newborn enrollment period will be disenrolled. Newborns who remain eligible for participation in Medallion II mandatory managed care will be reenrolled in an MCO through the preassignment assignment process upon receiving a Medicaid identification number.

c. Any newborn whose mother is enrolled in an MCO at the time of birth shall receive a Medicaid identification number prior to the end of the newborn enrollment period in order to maintain the newborn's enrollment in an MCO.

5. Individuals who lose then regain eligibility for Medallion II mandatory managed care within 60 days will be reenrolled into their previous MCO without going through preassignment assignment and selection.

G. Individuals who do not select an MCO as described in subdivision F 3 of this section shall be assigned to an MCO as follows:

1. Individuals are assigned through a system algorithm based upon the client's member's history with a contracted MCO.

2. Individuals not assigned pursuant to subdivision 1 of this subsection shall be assigned to the MCO of another family member, if applicable.

3. Individuals who live in rural exception areas as defined in 12VAC30-120-360 must shall enroll with the one available MCO. These persons individuals shall receive a preassignment an assignment notification for enrollment into the MCO. Individuals in rural exception areas who are assigned to the one MCO may request exclusion from MCO participation if their PCP of record, as defined in 12VAC30-120-360, cannot or will not participate with the one MCO in the locality. Individual requests to be excluded from MCO participation in rural exception localities must be made to DMAS for consideration on a case-by-case basis. 

4. All other individuals shall be assigned to an MCO on a basis of approximately equal number by MCO in each locality.

5. All eligible members are automatically assigned to a contracted MCO in their localities. Members are allowed 90 days after the effective date of new or initial enrollment to change to another MCO that participates in the geographic area where the member lives. Recipients Members residing in localities qualifying for a rural exception shall not be afforded the 90-day window after initial enrollment during which they may make a health plan or program change.

6. DMAS shall have the discretion to utilize an alternate strategy for enrollment or transition of enrollment from the method described in this section for expansions, retractions, or changes to client member populations, geographical areas, procurements, or any or all of these; such alternate strategy shall comply with federal waiver requirements.

H. Following their initial enrollment into an MCO, members shall be restricted to the MCO until the next open enrollment period, unless appropriately disenrolled or excluded by the department (as defined in 12VAC30-120-360).

1. During the first 90 calendar days of enrollment in a new or initial MCO, a member may disenroll from that MCO to enroll into another MCO for any reason. Such disenrollment shall be effective no later than the first day of the second month after the month in which the member requests disenrollment.

2. During the remainder of the enrollment period, the member may only disenroll from one MCO into another MCO upon determination by DMAS that good cause exists as determined under subsection I J of this section.

I. The department shall conduct an annual open enrollment for all Medallion II mandatory managed care members with the exception of those clients members who live in a designated rural exception area. The open enrollment period shall be the 60 calendar days before the end of the enrollment period. Prior to the open enrollment period, DMAS will inform the member of the opportunity to remain with the current MCO or change to another MCO, without cause, for the following year. Enrollment selections will be effective on the first day of the next month following the open enrollment period. Members who do not make a choice during the open enrollment period will remain with their current MCO selection.

J. Disenrollment for cause may be requested at any time.

1. After the first 90 days of enrollment in an MCO, members must may request disenrollment from DMAS based on cause. The request may be made orally or in writing to DMAS and must shall cite the reason or reasons why the member wishes to disenroll. Cause for disenrollment shall include the following:

a. A member's desire to seek services from a federally qualified health center that is not under contract with the member's current MCO, and the member requests a change to another MCO that subcontracts with the desired federally qualified health center;

b. Performance or nonperformance of service to the member by an MCO or one or more of its providers that is deemed by the department's external quality review organizations to be below the generally accepted community practice of health care. This may include poor quality care;

c. Lack of access to a PCP or necessary specialty services covered under the State Plan or lack of access to providers experienced in dealing with the member's health care needs;

d. A member has a combination of complex medical factors that, in the sole discretion of DMAS, would be better served under another contracted MCO;

e. The member moves out of the MCO's service area;

f. The MCO does not, because of moral or religious objections, cover the service the member seeks;

g. The member needs related services to be performed at the same time; not all related services are available within the network, and the member's primary care provider or another provider determines that receiving the services separately would subject the member to unnecessary risk; or

h. Other reasons as determined by DMAS through written policy directives.

2. DMAS shall determine whether cause exists for disenrollment. Written responses shall be provided within a timeframe set by department policy; however, the effective date of an approved disenrollment shall be no later than the first day of the second month following the month in which the member files the request, in compliance with 42 CFR 438.56.

3. Cause for disenrollment shall be deemed to exist and the disenrollment shall be granted if DMAS fails to take final action on a valid request prior to the first day of the second month after the request.

4. The DMAS determination concerning cause for disenrollment may be appealed by the member in accordance with the department's client appeals process at 12VAC30-110-10 through 12VAC30-110-380 12VAC30-110-370.

5. The current MCO shall provide, within two working days of a request from DMAS, information necessary to determine cause.

6. Members enrolled with a MCO who subsequently meet one or more of the exclusions in subsection B of this section during MCO enrollment shall be excluded as appropriate by DMAS, with the exception of those who subsequently become individuals participating in the IFDDS, ID, [ EDCD ], Day Support, or Alzheimer's federal waiver programs for home-based and community-based Medicaid coverage. These members shall receive acute and primary medical services via the MCO and shall receive waiver services and related transportation to waiver services via the fee-for-service program.

12VAC30-120-380. Medallion II MCO responsibilities.

A. The MCO shall provide, at a minimum, all medically necessary covered services provided under the State Plan for Medical Assistance and further defined by written DMAS regulations, policies and instructions, except as otherwise modified or excluded in this part.

1. Nonemergency services provided by hospital emergency departments shall be covered by MCOs in accordance with rates negotiated between the MCOs and the hospital emergency departments.

2. Services that shall be provided outside the MCO network shall include, but are not limited to, those services identified and defined by the contract between DMAS and the MCO. Services reimbursed by DMAS include, but shall not be limited to, dental and orthodontic services for children up to age 21; for all others, dental services (as described in 12VAC30-50-190), school health services (as defined in 12VAC30-120-360), community mental health services (rehabilitative, targeted case management and the following substance abuse treatment services: emergency services (crisis); intensive outpatient services; day treatment services; substance abuse case management services; and opioid treatment services), as defined in 12VAC30-50-228 and 12VAC30-50-491, EPSDT Early Intervention services provided pursuant to Part C of the Individuals with Disabilities Education Act (IDEA) of 2004 (as defined in 12VAC30-50-131 and 12VAC30-50-415), and long-term care services provided under the § 1915(c) home-based and community-based waivers including related transportation to such authorized waiver services.

3. The MCOs shall pay for emergency services and family planning services and supplies whether they such services are provided inside or outside the MCO network.

B. EPSDT services shall be covered by the MCO and defined by the contract between DMAS and the MCO. The MCO shall have the authority to determine the provider of service for EPSDT screenings.

C. The MCOs shall report data to DMAS under the contract requirements, which may include data reports, report cards for clients members, and ad hoc quality studies performed by the MCO or third parties.

D. Documentation requirements.

1. The MCO shall maintain records as required by federal and state law and regulation and by DMAS policy. The MCO shall furnish such required information to DMAS, the Attorney General of Virginia or his authorized representatives, or the State Medicaid Fraud Control Unit on request and in the form requested.

2. Each MCO shall have written policies regarding enrollee member rights and shall comply with any applicable federal and state laws that pertain to enrollee member rights and shall ensure that its staff and affiliated providers take those rights into account when furnishing services to enrollees members in accordance with 42 CFR 438.100.

E. The MCO shall ensure that the health care provided to its clients members meets all applicable federal and state mandates, community standards for quality, and standards developed pursuant to the DMAS managed care quality program.

F. The MCOs shall promptly provide or arrange for the provision of all required services as specified in the contract between the state Commonwealth and the contractor MCO. Medical evaluations shall be available within 48 hours for urgent care and within 30 calendar days for routine care. On-call clinicians shall be available 24 hours per day, seven days per week.

G. The MCOs must shall meet standards specified by DMAS for sufficiency of provider networks as specified in the contract between the state Commonwealth and the contractor MCO.

H. Each MCO and its subcontractors shall have in place, and follow, written policies and procedures for processing requests for initial and continuing authorizations of service. Each MCO and its subcontractors shall ensure that any decision to deny a service authorization request or to authorize a service in an amount, duration, or scope that is less than requested, be made by a health care professional who has appropriate clinical expertise in treating the enrollee's member's condition or disease. Each MCO and its subcontractors shall have in effect mechanisms to ensure consistent application of review criteria for authorization decisions and shall consult with the requesting provider when appropriate.

I. In accordance with 42 CFR 447.50 through 42 CFR 447.60, MCOs shall not impose any cost sharing obligations on enrollees members except as set forth in 12VAC30-20-150 and 12VAC30-20-160.

J. An MCO may not prohibit, or otherwise restrict, a health care professional acting within the lawful scope of practice, from advising or advocating on behalf of an enrollee a member who is his patient in accordance with 42 CFR 438.102.

K. An MCO that would otherwise be required to reimburse for or provide coverage of a counseling or referral service is not required to do so if the MCO objects to the service on moral or religious grounds and furnishes information about the service it does not cover in accordance with 42 CFR 438.102.

12VAC30-120-390. Payment rate for Medallion II MCOs.

The payment rate to MCOs that participate in the mandatory managed care program shall be set by negotiated contracts and in accordance with 42 CFR 438.6 and other pertinent federal regulations.

12VAC30-120-395. Payment rate for preauthorized or emergency care provided by out-of-network providers.

The MCOs shall pay for preauthorized or emergency services when provided outside the MCO network. Preauthorized or emergency services provided to a Medallion II client managed care member by a provider or facility not participating in the MCO's network will be reimbursed according to the current Medicaid fee schedule. This reimbursement shall be considered payment in full to the provider or facility of emergency services.

12VAC30-120-400. Quality control and utilization review.

A. DMAS shall rigorously monitor the quality of care provided by the MCOs. DMAS may contract with one or more external quality review organizations to perform focused studies on the quality of care provided by the MCOs. The external organizations may utilize data or other tools to ensure contract compliance and quality improvement activities. Specifically, DMAS shall monitor to determine if the MCO:

1. Fails substantially to provide the medically necessary items and services required under law or under the contract to be provided to an enrolled recipient and the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual.

2. Engages in any practice that discriminates against individuals on the basis of their health status or requirements for health care services, including expulsion or refusal to reenroll an individual, or any practice that could reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by § 1903(m) of the Social Security Act (42 USC § 1396b(m))) by eligible individuals whose medical conditions or histories indicate a need for substantial future medical services.

3. Misrepresents or falsifies information that it furnishes, under § 1903(m) of the Social Security Act (42 USC § 1396b(m)) to CMS, DMAS, an individual, or any other entity.

4. Fails to comply with the requirements of 42 CFR 417.479(d) through (g) relating to physician incentive plans, or fails to submit to DMAS its physician incentive plans as required or requested in 42 CFR 434.70.

5. Imposes on enrollees members premiums or charges that are in excess of the premiums or charges permitted under the Medicaid program.

B. DMAS shall ensure that data on performance and patient results are collected.

C. DMAS shall ensure that quality outcomes information is provided to MCOs. DMAS shall ensure that changes which are determined to be needed as a result of quality control or utilization review are made.

12VAC30-120-410. Sanctions.

A. If DMAS determines that an MCO is not in compliance with applicable state or federal laws, regulations (including but not limited to the requirements of or pursuant to 12VAC30-120-380 E, or 42 CFR 438, Subpart I), or their Medallion II the MCO contract, DMAS may impose sanctions on the MCO. The sanctions may include, but are not limited to:

1. Limiting enrollments in the MCO by freezing voluntary recipient member enrollments;

2. Freezing DMAS assignment of recipients members to the MCO;

3. Limiting MCO enrollment to specific areas;

4. Denying, withholding, or retracting payments to the MCO;

5. Terminating the MCO's Medallion II contract;

6. Intermediate sanctions including, but not limited to, the maximum civil money penalties specified in 42 CFR Part 438, Subpart I, for the violations set forth therein, or in accordance therewith; and

7. Civil monetary penalties as specified in 42 CFR 438.704.

B. In the case of an MCO that has repeatedly failed to meet the requirements of §§ 1903(m) and 1932 of the Social Security Act, DMAS shall, regardless of what other sanctions are imposed, impose the following sanctions:

1. Appoint a temporary manager to:

a. Oversee the operation of the Medicaid managed care organization upon a finding by DMAS that there is continued egregious behavior by the organization or there is a substantial risk to the health of enrollees members; or

b. Assure the health of the organization's enrollees members if there is a need for temporary management while (i) there is an orderly termination or reorganization of the organization or (ii) improvements are made to remedy the violations found under subsection A of this section. Temporary management under this subdivision may not be terminated until DMAS has determined that the MCO has the capability to ensure that the violations shall not recur.

2. Permit individuals members who are enrolled with the MCO to disenroll without cause. If this sanction is imposed, DMAS shall be responsible for notifying such individuals members of the right to disenroll.

C. Prior to terminating a contract as permitted under subdivision A 5 of this section, DMAS shall provide the MCO with a hearing. DMAS may shall not provide an MCO with a pretermination hearing before the appointment of a temporary manager under subdivision B 1 of this section.

D. Prior to imposing any sanction other than termination of the MCO's contract, DMAS shall provide the MCO with notice, develop procedures with which the MCO must comply to eliminate specific sanctions, and provide such other due process protections as the Commonwealth may provide.

E. In accordance with the terms of the contract, MCOs shall have the right to appeal any adverse action taken by DMAS. For appeal procedures not addressed by the contract, the MCO shall proceed in accordance with the appeals provisions of the Virginia Public Procurement Act (§ 2.2-4300 et seq. of the Code of Virginia). Pursuant to §§ 2.2-4364 and 2.2-4365 of the Code of Virginia, DMAS shall establish an administrative appeals procedure through which the MCO may elect to appeal decisions on disputes arising during the performance of its contract. Pursuant to § 2.2-4365 of the Code of Virginia, such appeal shall be heard by a hearing officer; however, in no event shall the hearing officer be an employee of DMAS. In conducting the administrative appeal, the hearing officer shall follow the hearing procedure used in § 2.2-4020 of the Code of Virginia.

F. When DMAS determines that an MCO committed one of the violations specified in 12VAC30-120-400 A, DMAS shall implement the provisions of 42 CFR 434.67.

1. Any sanction imposed pursuant to this subsection shall be binding upon the MCO.

2. The MCO shall have the appeals rights for any sanction imposed pursuant to this subsection as specified in 42 CFR 434.67.

12VAC30-120-420. Client Member grievances and appeals.

A. The MCOs shall, whenever an enrolled client's a member's request for covered services is reduced, denied or terminated, or payment for services is denied, provide a written notice in accordance with the notice provisions specified in 42 CFR 438.404 and 42 CFR 438.210(c), as defined by the contract between DMAS and the MCO, and any other statutory or regulatory requirements.

B. MCOs shall, at the initiation of either new client member enrollment or new provider/subcontractor contracts, or at the request of the enrollee member, provide to every enrollee member the information described in 42 CFR 438.10(g) concerning grievance/appeal rights and procedures.

C. Disputes between the MCO and the client member concerning any aspect of service delivery, including medical necessity and specialist referral, shall be resolved through a verbal or written grievance/appeals process operated by the MCO or through the DMAS appeals process. A provider who has the enrollee's member's written consent may act on behalf of an enrollee a member in the MCO grievance/appeals or the DMAS appeals process.

1. The enrollee member, provider, or representative acting on behalf of the enrollee member with the enrollee's member's written consent may file an oral or written grievance or appeal with the MCO. The MCO must accept grievances or appeals submitted within 30 days from the date of the notice of adverse action. Oral requests for appeals must be followed up in writing within 10 business days by the enrollee member, provider, or the representative acting on behalf of the enrollee member with the enrollee's member's consent, unless the request is for an expedited appeal. The enrollee member may also file a written request for a standard or expedited appeal with the DMAS Appeals Division within 30 days of the client's member's receipt of the notice of adverse action, in accordance with 42 CFR 431, Subpart E,; 42 CFR Part 438, Subpart F,; and 12VAC30-110 12VAC30-110-10 through 12VAC30-110-370.

2. As specified in 12VAC30-110-100, pending the resolution of a grievance or appeal filed by a client member or his representative (including a provider acting on behalf of the client) member), coverage shall not be terminated or reduced for the client member for any reason which is the subject of the grievance or appeal.

3. The MCO shall ensure that the individuals employees or agents who make decisions on MCO grievances and appeals were not involved in any previous level of review or decision making, and where the reason for the grievance or appeal involves clinical issues, relates to a denial or a request for an expedited appeal, or where the appeal is based on a lack of medical necessity, shall ensure that the decision makers are health care professionals with the appropriate clinical expertise in treating the enrollee's member's condition or disease.

D. The MCO shall develop written materials describing the grievance/appeals system and its procedures and operation.

E. The MCO shall maintain a recordkeeping and tracking system for complaints, grievances, and appeals that includes a copy of the original complaint, grievance, or appeal; the decision; and the nature of the decision. This system shall distinguish Medicaid from commercial enrollees members, if the MCO does not have a separate system for Medicaid enrollees members.

F. At the time of enrollment and at the time of any adverse actions, the MCO shall notify the client member, in writing, that:

1. Medical necessity, specialist referral or other service delivery issues may be resolved through a system of grievances and appeals, within the MCO or through the DMAS client appeals process;

2. Clients Members have the right to appeal directly to DMAS; and

3. The MCO shall promptly provide grievance or appeal forms, reasonable assistance and written procedures to clients members who wish to register written grievances or appeals.

G. The MCO shall issue grievance/appeal decisions as defined by the contract between DMAS and the MCO. Oral grievance decisions are not required to be in writing.

H. The MCO shall issue standard appeal decisions within 30 days from the date of initial receipt of the appeal in accordance with 42 CFR 438.408 and as defined by the contract between DMAS and the MCO. The appeal decision shall be in writing and shall include, but shall not be limited to, the following:

1. The decision reached, the results and the date of the decision reached by the MCO;

2. The reasons for the decision;

3. The policies or procedures that provide the basis for the decision;

4. A clear explanation of further appeal rights and a timeframe for filing an appeal; and

5. For appeals that involve the termination, suspension, or reduction of a previously authorized course of treatment, the right to continue to receive benefits in accordance with 42 CFR 438.420 pending a hearing, and how to request continuation of benefits.

I. An expedited appeal decision shall be issued as expeditiously as the enrollee's member's condition requires and within three business days in cases of medical emergencies in which delay could result in death or serious injury to a client member. Extensions to these timeframes shall be allowed in accordance with 42 CFR 438.408 and as defined by the contract between DMAS and the MCO. Written confirmation of the decision shall promptly follow the verbal notice of the expedited decision.

J. Any appeal decision issued by the MCO may be appealed by the client member to DMAS in accordance with the department's Client Appeals regulations at 12VAC30-110-10 through 12VAC30-110-380 12VAC30-110-370. DMAS shall conduct an evidentiary hearing in accordance with the Client Appeals regulations at 12VAC30-110-10 through 12VAC30-110-380 12VAC30-110-370 and shall not base any appealed decision on the record established by any appeal decision of the MCO. The MCO shall comply with the DMAS appeal decision. The DMAS decision in these matters shall be final and shall not be subject to appeal by the MCO.

K. The MCO shall provide information necessary for any DMAS appeal within timeframes established by DMAS.