Titles of Regulations: 12VAC30-60. Standards Established and Methods Used to Assure High Quality Care (amending 12VAC30-60-5).

12VAC30-141. Family Access to Medical Insurance Security Plan (amending 12VAC30-141-570).

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: September 22, 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 Virginia grants to the Board of Medical Assistance Services the authority to administer and amend the Plan for Medical Assistance and to make, adopt, promulgate, and enforce regulations to implement the state plan. 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.

Purpose: The purpose of this action is to implement regulatory changes to more clearly reflect DMAS utilization review procedures. This action will not affect the health, safety, or welfare of Medicaid individuals or citizens of the Commonwealth.

Substance: Currently, DMAS regulations do not establish the steps that are involved in a utilization review. Specifically, the regulations do not include how a utilization review is initiated, what letters or communications are sent, and what the deadlines for document submission are. DMAS is proposing these regulations to provide greater clarity to providers, Medicaid members, and members of the public about this process. The proposed changes reflect current DMAS process and do not include changes in the utilization review process.

Issues: The advantages to these proposed changes are that they will provide more information and clarity to Medicaid and FAMIS providers and members and the general public about the utilization review process. There are no disadvantages to the public, businesses, or the Commonwealth related to these proposed changes.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Director (Director) of the Department of Medical Assistance Services (DMAS) proposes to amend these regulations to outline the process of utilization review for the Medicaid and State Children's Health Insurance Program (SCHIP) programs.

Result of Analysis. Benefits likely outweigh costs for all proposed regulatory changes.

Estimated Economic Impact. Current regulations require service providers to maintain certain records and states that DMAS or its designee will perform reviews of the utilization of all Medicaid-covered services but does not detail how those reviews will take place. The Director proposes to expand the description of a utilization review to include rules for the utilization review that have been set by case law or are part of the provider agreement that all providers must sign in order to receive Medicaid reimbursement. This additional description includes a requirement that providers supply documentation to DMAS or its designee "immediately upon demand or upon a timeframe specified in writing by DMAS or its designee" and requirements for Preliminary Findings Letters and for additional documentation allowed.

As all additional requirements in the proposed regulations are already part of the enforceable contract between DMAS and providers, or are likely enforceable due to prior court decision, no providers are likely to incur costs on account of these proposed regulatory changes. To the extent that these proposed changes add clarity to the requirements for utilization reviews, all interested parties will benefit.

Businesses and Entities Affected. These proposed regulatory changes will affect all Medicaid and SCHIP providers.

Localities Particularly Affected. No locality is likely to be particularly affected by these proposed regulatory changes.

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. No small businesses are likely to incur any additional costs on account of these proposed regulatory changes.

Alternative Method that Minimizes Adverse Impact. No small businesses are likely to incur any additional costs on account of these proposed regulatory changes.

Adverse Impacts:

Businesses. No businesses are likely to incur any additional costs on account of these proposed regulatory changes.

Localities. Localities in the Commonwealth are unlikely to see any adverse impacts on account of these proposed regulatory changes.

Other Entities. No other entities are likely to be adversely affected by these proposed changes.

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

Summary:

The proposed amendments standardize the utilization review process for all provider types, including (i) what letters are sent to providers, (ii) what documentation may be submitted and when it may be submitted, and (iii) what deadlines apply.

12VAC30-60-5. Applicability of utilization Utilization review requirements.

A. These utilization The requirements in this section shall apply to all Medicaid covered services and all Medicaid providers unless otherwise specified.

1. Providers shall be required to maintain documentation detailing all required information about the individuals who are in the provider's care. Such documentation shall fully disclose the extent of services provided in order to support the provider's claims for reimbursement for services rendered. All provider documentation about individuals in the provider's care shall be written, signed, and dated at the time the services are rendered.

2. Medicaid providers shall provide all requested records to DMAS or its designee immediately upon demand or upon a timeframe specified in writing by DMAS or its designee.

3. Notwithstanding any other DMAS regulation, claims selected for utilization review shall not be corrected or re-billed.

B. DMAS or its designee shall perform utilization reviews of all Medicaid services.

1. A utilization review is initiated when DMAS or its designee:

a. Issues a written notice;

b. Requests onsite access to records;

c. Issues a preliminary findings letter; or

d. Commences a claims analysis.

2. After a utilization review is initiated, DMAS or its designee shall issue a preliminary findings letter. The preliminary findings letter shall include a date by which the provider may submit any additional documentation. DMAS or its designee shall only consider documentation identified and submitted by the provider prior to the specified deadline. DMAS or its designee shall only consider documentation that was created contemporaneously with the date of service.

3. Following a review of documentation submitted according to subdivision 2 of this subsection, if any, DMAS or its designee shall issue a final overpayment letter.

4. Providers who are determined not to be in compliance with DMAS requirements shall be subject to §§ 32.1-312 and 32.1-313 of the Code of Virginia, 12VAC30-80-130, and 12VAC30-90-250 through 12VAC30-90-257 for the repayment of any overpayments to DMAS that are identified in the final overpayment letter.

B. C. Some Medicaid covered services require an approved service authorization prior to service delivery in order for reimbursement to occur. 1. To obtain service authorization, all providers' information supplied to the Department of Medical Assistance Services (DMAS), service authorization contractor, or the behavioral health service authorization contractor shall be fully substantiated throughout individuals' medical records. 2. Providers shall be required to maintain documentation detailing all relevant information about the Medicaid individuals who are in providers' care. Such documentation shall fully disclose the extent of services provided in order to support providers' claims for reimbursement for services rendered. This documentation shall be written, signed, and dated at the time the services are rendered unless specified otherwise.

C. DMAS, or its designee, shall perform reviews of the utilization of all Medicaid covered services pursuant to 42 CFR 440.260 and 42 CFR Part 456.

D. DMAS shall recover expenditures made for covered services when providers' documentation does not comport with standards specified in all applicable regulations.

E. Providers who are determined not to be in compliance with DMAS requirements shall be subject to 12VAC30-80-130 for the repayment of those overpayments to DMAS.

F. D. Utilization review requirements specific to the community mental health services, as set out in 12VAC30-50-130 and 12VAC30-50-226, shall be as follows:

1. To apply to be reimbursed as a Medicaid provider, the required Department of Behavioral Health and Developmental Services (DBHDS) license shall be either a full, annual, triennial, or conditional license. Providers must be enrolled with DMAS or the BHSA to be reimbursed. Once a health care entity has been enrolled as a provider, it shall maintain, and update periodically as DMAS requires, a current Provider Enrollment Agreement for each Medicaid service that the provider offers.

2. Health care entities with provisional licenses shall not be reimbursed as Medicaid providers of community mental health services.

3. Payments shall not be permitted to health care entities that either hold provisional licenses or fail to enter into a Medicaid Provider Enrollment Agreement for a service prior to rendering that service.

4. The behavioral health service authorization contractor shall apply a national standardized set of medical necessity criteria in use in the industry, such as McKesson InterQual Criteria, or an equivalent standard authorized in advance by DMAS. Services that fail to meet medical necessity criteria shall be denied service authorization.

12VAC30-141-570. Utilization control - State Children's Health Insurance Program.

A. Each MCHIP managed care health insurance program shall implement a utilization review system as determined by contract with DMAS, or administered by DMAS.

B. For the fee-for-service program, DMAS shall use the utilization controls already established and operational in the State Plan for Medical Assistance, including those specified in 12VAC30-60-5.

C. DMAS may collect and review comprehensive data to monitor utilization after receipt of services.