Title of Regulation: 12VAC30-120. Waivered Services (amending 12VAC30-120-380).

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

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: April 19, 2017.

Effective Date: May 4, 2017.

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 Viriginia 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.

Chapter 780 of the 2016 Acts of the Assembly, Item 306 MMMM directed as follows:

"1. The Department of Medical Assistance Services, in consultation with the appropriate stakeholders, shall amend the state plan for medical assistance and/or seek federal authority through an 1115 demonstration waiver, as soon as feasible, to provide coverage of inpatient detoxification, inpatient substance abuse treatment, residential detoxification, residential substance abuse treatment, and peer support services to Medicaid individuals in the Fee-for-Service and Managed Care Delivery Systems. The department shall have the authority to implement this change effective upon passage of this Act, and prior to the completion of any regulatory process undertaken in order to effect such change.

2. The Department of Medical Assistance Services shall make programmatic changes in the provision of all Substance Abuse Treatment Outpatient, Community Based and Residential Treatment services (group homes and facilities) for individuals with substance abuse disorders in order to ensure parity between the substance abuse treatment services and the medical and mental health services covered by the department and to ensure comprehensive treatment planning and care coordination for individuals receiving behavioral health and substance use disorder services. The department shall take action to ensure appropriate utilization and cost efficiency, and adjust reimbursement rates within the limits of the funding appropriated for this purpose based on current industry standards. The department shall consider all available options including, but not limited to, service definitions, prior authorization, utilization review, provider qualifications, and reimbursement rates for the following Medicaid services: substance abuse day treatment for pregnant women, substance abuse residential treatment for pregnant women, substance abuse case management, opioid treatment, substance abuse day treatment, and substance abuse intensive outpatient. The department shall have the authority to implement this change effective upon passage of this Act, and prior to the completion of any regulatory process undertaken in order to effect such change.

3. The Department of Medical Assistance Services shall amend the State Plan for Medical Assistance and any waivers thereof to include peer support services to children and adults with mental health conditions and/or substance use disorders. The department shall work with its contractors, the Department of Behavioral Health and Developmental Services, and appropriate stakeholders to develop service definitions, utilization review criteria and provider qualifications. The department shall have the authority to implement this change effective upon passage of this Act, and prior to the completion of any regulatory process undertaken in order to effect such change.

4. The Department of Medical Assistance Services shall, prior to the submission of any state plan amendment or waivers to implement paragraphs MMMM 1, MMMM 2, and MMMM 3, submit a plan detailing the changes in provider rates, new services added and any other programmatic changes to the Chairmen of the House Appropriations and Senate Finance Committees."

Purpose: The purpose of this action is to comport the managed care regulations (12VAC30-120-360 through 12VAC30-120-420) with the Addiction and Recovery Treatment Services (ARTS) regulatory action, posted on the Virginia Regulatory Town Hall (TH 4692/7734) and published in the Virginia Register of Regulations (33:12 VA.R. 1325-1376 February 6, 2017). This regulatory action is not essential to protect the health, safety, or welfare of the Commonwealth's citizens or Medicaid individuals.

Rationale for Using Fast-Track Rulemaking Process: This regulatory action is being promulgated as a fast-track rulemaking action because public comments received about the general concept and features of the original ARTS services specified to date have been positive. The comprehensive ARTS proposal has been such a substantial improvement over the current fragmented approach to substance use treatment that the affected entities are actively participating with DMAS in its redesign and transformation efforts. This action merely comports these managed care regulations with the previously recommended regulations.

Substance:

Current policy: DMAS covers approximately 1.1 million individuals; 80% of members receive care through contracted managed care organizations (MCOs) and 20% of members receive care through fee-for-service (FFS). The majority of members enrolled in Virginia's Medicaid and FAMIS programs include children, pregnant women, and individuals who meet the disability category of being aged, blind, or disabled. The 20% of the individuals receiving care through fee for service do so because they meet one of 16 categories of exception to MCO participation, for example: (i) inpatients in state mental hospitals, long-stay hospitals, nursing facilities, or intermediate care facilities for individuals with intellectual disabilities; (ii) individuals on spend down; (iii) individuals younger than 21 years of age who are in residential treatment facility Level C programs; (iv) newly eligible individuals in their third trimester of pregnancy; (v) individuals who permanently live outside their area of residence; (vi) individuals receiving hospice services; (vii) individuals with other comprehensive group or individual health insurance; (viii) individuals eligible for Individuals with Disabilities Education Act (IDEA) Part C services; (ix) individuals whose eligibility period is less than three months or is retroactive; and (x) individuals enrolled in the Virginia Birth-Related Neurological Injury Compensation Program.

Historically, Virginia funded only limited kinds of substance use treatment services to limited populations of Medicaid eligible individuals, for example, pregnant women and children. Within the current system, nontraditional community-based addiction treatment services are "carved out" (excluded from coverage) of the MCOs and managed by Magellan, the behavioral health service administrator contractor for DMAS. The original ARTS regulatory action changed this approach, and this action comports these remaining regulations to the original action.

Recommendations: To comport these managed care regulations with the ARTS regulatory action, the amendment replaces a description of community mental health services with a reference to 12VAC30-50-130 and 12VAC30-50-226.

Issues: The advantage to DMAS is the consistency between different controlling regulations in support of appeals and legal actions. There are no disadvantages for DMAS. There are no advantages or disadvantages to citizens, Medicaid individuals, or providers as the ARTS regulatory action sets out all of the details and requirements of the new program.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. On behalf of the Board of Medical Assistance Services (Board), the Director of the Department of Medical Assistance (DMAS) proposes to amend this regulation on waivered services to conform it to the Board's fast track addiction recovery treatment (ARTS) regulation, which has been submitted to the Registrar and will be published in the Virginia Register of Regulations (Volume 33, Issue 12) on February 6, 2017.¹ Needed changes to this regulation were inadvertently omitted from that initial regulatory action.

Result of Analysis. Benefits likely outweigh costs for these proposed changes.

Estimated Economic Impact. Chapter 780 (Item 306-MMMM) of the 2016 Acts of the Assembly² directs DMAS "to provide coverage of inpatient detoxification, inpatient substance abuse treatment, residential detoxification, residential substance abuse treatment and peer support services in the Fee-for-Service and Managed Care Delivery Systems." Chapter 780 also directed DMAS to make programmatic changes so that substance abuse treatment services are paid the same as medical and mental health services (within the limits of the funding appropriated for that purpose). Most of these changes were made in a fast track action that has completed executive branch review and is now awaiting publication. Changes that were necessary to conform this regulation (12VAC30-120) to the ARTS regulation were inadvertently left out of that action. Consequently, the Director now proposes to remove language and regulatory references that will soon be obsolete and replace them with references to the regulatory language promulgated with the ARTS regulation. No entities are likely to incur costs on account of these changes. Interested parties will benefit from soon to be obsolete language and references being removed as they may cause confusion.

Businesses and Entities Affected. These proposed regulatory changes will affect locally run Community Services Boards and Behavioral Health Authorities (CSBs/BHAs), inpatient hospitals, some physicians and nurse practitioners, case managers, residential treatment facilities, group homes and outpatient clinics as well as all Medicaid recipients. DMAS reports that there are currently 1.1 million Medicaid recipients in the Commonwealth and that there are 39 CSBs and one BHA run by various localities in the Commonwealth.

Localities Particularly Affected. Locally run CSBs/BHAs and their staff will likely be disproportionately affected by this proposed regulation.

Projected Impact on Employment. These proposed regulatory changes are unlikely to affect employment in the Commonwealth.

Effects on the Use and Value of Private Property. These proposed regulatory changes are unlikely to affect the use or value of private property in the Commonwealth.

Real Estate Development Costs. These proposed regulatory changes are unlikely to affect real estate development costs in the Commonwealth.

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. These proposed regulatory changes are unlikely to affect any small business in the Commonwealth.

Alternative Method that Minimizes Adverse Impact. No small businesses will be adversely affected by these proposed regulatory changes.

Adverse Impacts:

Businesses. Businesses in the Commonwealth are unlikely to experience any adverse impacts on account of this proposed regulation.

Localities. No localities are likely to incur costs on account of these proposed regulatory changes.

Other Entities. These proposed regulatory changes are unlikely to affect other entities in the Commonwealth.

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¹ http://townhall.virginia.gov/L/ViewStage.cfm?stageid=7734

² More information on this mandate can be found at http://townhall.virginia.gov/L/viewmandate.cfm?mandateid=743

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 amendment replaces a description of community mental health services with a reference to 12VAC30-50-130 and 12VAC30-50-226 to align the regulation with the new Addiction and Recovery Treatment Services program.

12VAC30-120-380. 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,; 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, (12VAC30-50-130 and 12VAC30-50-226); 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 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 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 member rights and shall comply with any applicable federal and state laws that pertain to member rights and shall ensure that its staff and affiliated providers take those rights into account when furnishing services to members in accordance with 42 CFR 438.100.

E. The MCO shall ensure that the health care provided to its 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 Commonwealth and the 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 shall meet standards specified by DMAS for sufficiency of provider networks as specified in the contract between the Commonwealth and the 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 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 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 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.