Title of Regulation: 12VAC30-30. Groups Covered and Agencies Responsible for Eligibility Determination (adding 12VAC30-30-70).

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: August 10, 2016.

Effective Date: August 26, 2016.

Agency Contact: Emily McClellan, Regulatory Supervisor, Department of Medical Assistance Services, Policy Division, 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.

The new section, 12VAC30-30-70, is required by 42 CFR 435.1110, a federal regulation stating that DMAS "must provide Medicaid during a presumptive eligibility period to individuals who are determined by a qualified hospital, on the basis of preliminary information, to be presumptively eligible [for Medicaid]". The federal regulation states that the requirements of 42 CFR 435.1102 and 42 CFR 435.1103 apply to these determinations.

Purpose: The purpose of this action is to comply with federal regulations, which require DMAS to permit qualified hospitals to make presumptive eligibility determinations.

The regulations protect the health, safety, and welfare of citizens by promoting enrollment in Medicaid for individuals who may be eligible but who are not enrolled. The changes allow these individuals to receive Medicaid covered services during the presumptive eligibility period. The changes assure individuals timely access to care while a final eligibility determination is made and promote enrollment in Medicaid.

These changes assist both the individual with the cost of the medical care they receive and assist the hospital, which can be assured of payment for services rendered.

Rationale for Using Fast-Track Rulemaking Process: This regulatory change is expected to be noncontroversial because the federal government has required all states to make this change; it is nondiscretionary.

Further, the regulatory change is expected to be noncontroversial because DMAS engaged stakeholder groups in making certain choices that are permitted by the federal regulations. DMAS worked closely with the Virginia Hospital and Healthcare Association on both the content of the changes and on training materials for hospitals. As of August 2014, 57 hospitals across Virginia are qualified to make presumptive eligibility determinations.

Substance: The section of the State Plan for Medical Assistance affected by this action is Groups Covered and Agencies Responsible for Eligibility Determination (12VAC30-30).

Federal regulations require DMAS to implement these regulatory changes and to establish the requirements that hospitals must meet in order to participate. (The hospital must be a Medicaid provider, must notify DMAS of its election to make presumptive eligibility determinations, and must do so in accordance with state policies and procedures. The hospital must not have been disqualified for failing to follow these policies and procedures.) DMAS chose to allow hospitals to use an abbreviated online form to determine presumptive eligibility, rather than using the full Medicaid application for this purpose; individuals are not required to sign this online form. DMAS also chose to require hospitals to assist the individual with completing and submitting a full Medicaid application.

The federal requirements also establish a minimum set of groups that must be considered for possible presumptive eligibility, as follows: (i) pregnant women; (ii) infants and children younger than age 19 years, parents, and other caretaker relatives; (iii) adults if covered by the state; (iv) individuals with an income above 133% of the federal poverty level and younger than age 65 years if covered by the state; (v) individuals eligible for family planning services if covered by the state; (vi) former foster care children; and (vii) individuals needing treatment for breast or cervical cancer if covered by the state. The eligibility determination for selected groups (i), (ii), (v), (vi) and (vii) does not require that hospitals evaluate the resources of these individuals. Thus, these hospital eligibility determinations are more likely to be more accurate.

Virginia currently does not cover groups (iii) and (iv), thus these two groups are not covered under hospital presumptive eligibility. DMAS elected not to provide coverage to other nonmandated groups because the other nonmandated groups require resource tests.

In accordance with federal requirements, presumptive eligibility is determined based on membership in one of the above groups: household income, state residency, and immigration status. State residency and immigration status were options permitted by the Centers for Medicare and Medicaid Services (CMS) and chosen by DMAS because this is consistent with the rest of Virginia Medicaid eligibility. Federal regulations establish when the presumptive eligibility period begins (the date the presumptive eligibility determination is made) and ends, which is the earlier of the (i) day on which a decision is made on a full Medicaid application; or (ii) last day of the month following the month that the hospital presumptive eligibility determination was made and no full Medicaid application was filed.

CMS required the Commonwealth to set performance standards for hospitals performing presumptive eligibility determinations. Virginia opted to set standards related to the percentage of individuals who submit a full Medicaid application and who are subsequently determined to be eligible for Medicaid as a result of that application. In Virginia, the standards are that 85% of individuals who are determined to be presumptively eligible by a hospital must file a full application for Medicaid. Of those individuals, 70% must be determined eligible for Medicaid based on their full application. If hospitals fail to meet these standards after corrective action plans are put into place, their authority to make presumptive eligibility determinations may be terminated.

Issues: The primary advantages of this regulatory action are that it will enable DMAS to comply with federal requirements; will promote Medicaid enrollment among individuals who are eligible for Medicaid but not enrolled; and will permit hospitals to receive Medicaid reimbursement for covered services rendered.

With regard to hospital reimbursement, services covered during a presumptive eligibility period will be considered Medicaid-covered services for year-end hospital cost reporting purposes. For hospitals that receive supplemental reimbursement for indigent care, the amount of indigent care reimbursement will be reduced due to the increased Medicaid reimbursement.

There are no known disadvantages to the public, the department, or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed regulations establish rules for federally required Medicaid presumptive eligibility determinations made by hospitals for their patients seeking treatment.

Result of Analysis. The benefits likely exceed the costs for all proposed changes. An alternative or an additional standard may improve the regulation in measuring a hospital's performance. Additional regulatory language about the length of the disqualification period may improve the regulation. Additional language may be needed to dissuade applicants from being untruthful.

Estimated Economic Impact. Starting in January 2014, the federal Affordable Care Act provided qualified hospitals an opportunity to make Medicaid presumptive eligibility determinations for their patients seeking treatment. States must allow all qualifying hospitals willing to abide by state policies and procedures to perform presumptive eligibility determinations. Federal regulations in 42 CFR 435.1101 and 42 CFR 435.1102 outline the details regarding the implementation of this requirement by the states. Virginia's presumptive eligibility rules were approved by the Centers for Medicare and Medicaid Services (CMS) in July 2015 and have already been implemented under the approved state plan. In fiscal year 2015, approximately $3.5 million in total expenditures was paid for 19,423 claims involving 2,079 unique recipients.

Under the presumptive eligibility rules, Medicaid eligibility determinations are made by trained hospital staff based on an assessment of the individual's status as a member of a group (i.e., pregnant women, infants and children under age 19, parents and other caretaker relatives, individuals eligible for family planning services, former foster care children, individuals needing treatment for breast and cervical cancer), their income, state residency, and citizenship status. The hospital then assists the individual in completing and submitting a full Medicaid application for future Medicaid coverage. If the individual is found presumptively eligible, he or she is temporarily enrolled in Medicaid and health care providers receive payment for services provided during this interim period. A full application for Medicaid coverage may follow, with the determination of eligibility completed by a local department of social services, or the Department of Medical Assistance Services (DMAS). The presumptive eligibility begins on the date the determination is made and ends on the earlier of the day on which a decision is made on a full Medicaid application, or the last day of the month following the month that the hospital's presumptive eligibility determination was made and no full Medicaid application was filed. Payment for services covered is guaranteed during the presumptive eligibility period. There is no recoupment for Medicaid services provided during that period resulting from erroneous determinations made by qualified entities.

Pursuant to a request by CMS, the proposed regulation establishes two performance standards for hospitals performing presumptive eligibility determinations. In order to maintain their participation to make presumptive eligibility determinations, a hospital is required to ensure (i) that a certain percentage of individuals deemed presumptively eligible will file a full Medicaid application before the end of the presumptive eligibility period, and (ii) that a certain percentage of individuals deemed presumptively eligible will be determined eligible based on the full application. The purpose of the proposed performance standards is to ensure that hospitals are making appropriate presumptive eligibility determinations and fulfilling their oversight responsibilities. If a hospital fails to follow these standards it may be disqualified from making such determinations.

DMAS recognizes if not carefully implemented, the proposed performance standards for participating hospitals could have unintended adverse effects on their ability to participate in the program through no fault of their own.

A performance standard must be under the control of the entity whose performance it measures. In this case, a hospital does not have control over whether the individuals deemed presumptively eligible will file a full Medicaid application. The individual may not want to file a full Medicaid application or may even refuse to do so. The individual's failure to follow through with the full application should not be held against the performance of a qualified hospital and put its participation in jeopardy. In order to avoid such unintended consequences, such cases will be excluded in calculating the performance metric when the hospital certifies that an attempt has been made but the individual declined to follow through with the full application.

Similarly, the hospital does not have control over whether the individual is providing accurate or even truthful information when filing the application for the presumptive eligibility. Additionally, comparison of determinations made at two different points in time may lead to erroneous conclusions as the applicant's financial circumstances may have changed between the interim and the full applications. Thus, a participating hospital will not be held liable if the information provided by the applicant results in a denial of eligibility following the full application; such cases will also be excluded from the data in calculating the performance metric. In the alternative, this performance standard may perhaps focus solely on whether the hospital made an error in its presumptive eligibility determination treating the information on the application as true.

DMAS notes that these two performance measures were suggested by CMS and any revision in these measures would necessitate a state plan amendment. It appears that the states have the option to choose different performance standards than those suggested by CMS.¹

The primary advantages of this regulatory action are that it enables DMAS to comply with federal requirements, assures individuals timely but limited access to care, promotes Medicaid enrollment among individuals who are eligible for Medicaid but not enrolled, and permits hospitals to receive Medicaid reimbursement for covered services rendered. Since the presumptive eligibility program has already been implemented since July 2015, no significant economic impact is expected upon promulgation of the proposed changes other than providing the rules in the regulations for the affected entities and the public.

The proposed regulation may be improved by addressing the length of the disqualification period and when and how a reinstatement could occur if a hospital fails to meet the performance standards. It does not make sense to prohibit a hospital from participation in this program indefinitely.

Further, as discussed above, there is no recoupment for payments from hospitals for services provided during the presumptive eligibility period. Without such a guarantee, a hospital could not rely on the presumptive eligibility determination and may be inclined to refrain from participation. However, given the unique nature of this program, the applicant should be held liable when he or she intentionally provides false information. The proposed regulation may be further improved by making it clear that the applicant may be held liable or by requiring disclosure of such a potential liability on the application form. Such language would dissuade applicants from being untruthful and mitigate the Commonwealth's exposure to risk of fraud.

Businesses and Entities Affected. The proposed regulation primarily applies to hospitals wishing to participate in presumptive eligibility determinations and the individuals who may presumptively qualify for Medicaid. As of August 2014, there were 57 hospitals making presumptive eligibility determinations. In fiscal year 2015, there were 2,079 recipients identified as presumptively eligible.

Localities Particularly Affected. The proposed changes apply statewide.

Projected Impact on Employment. A hospital may voluntarily choose to participate in presumptive eligibility determinations. Such participation may increase their demand for labor to assist the individuals in the application process.

Effects on the Use and Value of Private Property. Participation in presumptive eligibility determinations helps hospitals receive payment from Medicaid for eligible individuals. In that sense, the proposed regulation has a positive impact on the asset values of participating hospitals.

Real Estate Development Costs. No impact on real estate development costs is expected.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. Affected hospitals are not considered small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed changes do not affect small businesses.

Adverse Impacts:

Businesses. The proposed changes are not anticipated to have an adverse impact on businesses.

Localities. The proposed amendments should not adversely affect localities.

Other Entities. The proposed changes are not anticipated to have an adverse impact on other entities.

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¹ See Answer #24, "Medicaid and CHIP FAQs: Implementing Hospital Presumptive Eligibility Programs," January 2014, Centers for Medicare & Medicaid Services.

Agency's Response to Economic Impact Analysis: The agency has reviewed the economic impact analysis prepared by the Department of Planning and Budget. The agency raises no issues with this analysis.

Summary:

This action creates a new section, 12VAC30-30-70, Hospital presumptive eligibility, in accordance with federal regulations that require the Department of Medical Assistance Services to allow qualified hospitals to make temporary Medicaid eligibility determinations for individuals who are seeking medical treatment. The Medicaid determinations are made by trained hospital staff based on an assessment of an individual's status as a member of an eligible group and an individual's income, state residency, and citizenship status. The hospital then assists the individual in completing and submitting a full Medicaid application for future Medicaid coverage.

12VAC30-30-70. Hospital presumptive eligibility.

A. Qualified hospitals shall administer presumptive eligibility in accordance with the provisions of this section. A qualified hospital is a hospital that:

1. Has entered into a valid provider agreement with DMAS, participates as a Virginia Medicaid provider, notifies DMAS of its election to make presumptive eligibility determinations, and agrees to make presumptive eligibility determinations consistent with DMAS policies and procedures; and

2. Has not been disqualified by DMAS for failure to make presumptive eligibility determinations in accordance with applicable state policies and procedures or for failure to meet any standards established by the Medicaid agency.

B. The eligibility groups or populations for which hospitals determine eligibility presumptively are: (i) pregnant women; (ii) infants and children younger than age 19 years; (iii) parents and other caretaker relatives; (iv) individuals eligible for family planning services; (v) former foster care children; and (vi) individuals needing treatment for breast and cervical cancer.

C. The presumptive eligibility determination shall be based on:

1. The individual's categorical or nonfinancial eligibility for the group, as listed in subsection B of this section, for which the individual's presumptive eligibility is being determined;

2. Household income shall not exceed the applicable income standard for the group, as the groups are listed in subsection B of this section, for which the individual's presumptive eligibility is being determined if an income standard is applicable for this group;

3. Virginia residency; and

4. Satisfactory immigration status.

D. Qualified hospitals shall ensure that at least 85% of individuals deemed by the hospital to be presumptively eligible will file a full Medicaid application before the end of the presumptive eligibility period.

E. Qualified hospitals shall ensure that at least 70% of individuals deemed by the hospital to be presumptively eligible are determined eligible for Medicaid based on the full application that is submitted before the end of the presumptive eligibility period.

F. The presumptive eligibility period shall begin on the date the presumptive eligibility determination is made. The presumptive eligibility period shall end on the earlier of:

1. The date the eligibility determination for regular Medicaid is made if an application for Medicaid is filed by the last day of the month following the month in which the determination of presumptive eligibility is made; or

2. The last day of the month following the month in which the determination of presumptive eligibility is made if no application for Medicaid is filed by last day of the month following the month in which the determination of presumptive eligibility is made.

G. Periods of presumptive eligibility are limited to one presumptive eligibility period per pregnancy and one per calendar year for all other covered groups.