Editor’s note: This post discusses the first half of a January 14 proposed rule addressing Medicaid and premium tax credit eligibility and appeals, as well as other subjects, under the Affordable Care Act. A second post discussing the rest of the rule is forthcoming.
A very long notice of proposed rulemaking (NPRM) issued on January 14, 2012, by the Centers for Medicare and Medicaid Services of the Department of Health and Human Services suggests that we may be nearing the end of a very active post-election rulemaking season, preparing the way for implementation of the 2014 reforms. HHS must still, of course, finalize the rules it has already proposed, presaging a very active February and March. We can also still expect further important rules from Treasury, which must promulgate rules on the individual responsibility (mandate) requirement and the prohibition against employer discrimination in favor of highly-compensated employees in the offer of insurance.
Also, we are likely to see a continuing stream of guidance and of forms and surveys released as paperwork reduction act notices (three of which were issued January 11). But the January 14 NPRM seems like an effort to tie up a lot of disparate loose ends as the final push begins towards 2014.
The proposed rule, which was issued together with a fact sheet, addresses a number of issues presented by the 2014 transition in the Medicaid, CHIP, and exchange premium tax credit programs. One major concern of the NPRM is the coordination of Medicaid and premium tax credit eligibility determinations and appeals. The original dream of a seamless, streamlined, no-wrong-door Medicaid, CHIP, advance premium tax credit, and cost-sharing reduction payment application and eligibility determination process has become a much more difficult reach with the Supreme Court’s still shocking interpretation of the Constitution’s spending clause, permitting the states to decline participation in the Medicaid expansion, and with a majority of the states declining the invitation to operate a state-based exchange as the bitter political division that has attended the implementation of the ACA shows no signs of abating. The proposed rule attempts to make sense of this mess, recognizing that full coordination of eligibility determination and appeal processes may take awhile.
The NPRM also tries to tie up a number of loose ends in the Medicaid program itself. Building on the 2012 Medicaid eligibility rule, the NPRM attempts to streamline the existing Medicaid program, eliminating and combining obsolete eligibility categories and recognizing new categories, such as children aging out of foster care — granted Medicaid eligibility by the Affordable Care Act — or newborn children whose mothers were receiving Medicaid or CHIP — made eligible for CHIP by the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). The proposal completes the move toward basing eligibility determination for most Medicaid and CHIP categories on MAGI (modified adjusted gross household income). It simplifies proof of citizenship, recognizing that the burdensome proof of citizenship rules imposed in 2006 barred many citizens from receiving assistance and imposed administrative costs on the states while identifying few non-citizens improperly applying for assistance.
The proposal also describes how hospitals will be enabled to make presumptive Medicaid eligibility determinations. It updates and clarifies Medicaid cost-sharing and premium-support requirements, while describing further how Medicaid “alternative benefit plans” will be defined and how they will relate to the benchmark benefit plans that will exist in the individual and small-group markets. Overall, it attempts to give the states flexibility and discretion in shaping their Medicaid programs while at the same time simplifying the unnecessary complexity of the program. It also describes the role and qualifications of “application counselors,” who will join the swelling ranks of organizations and persons helping Americans negotiate the confusing landscape of private and public insurance programs that will exist as of 2014.
Finally, the NPRM includes a number of proposals relating to the private insurance market reforms. It includes provisions governing eligibility determinations, notices, and appeals for eligibility for premium tax credits and cost-sharing reduction payments, as well as rules for appeals from determinations regarding exemptions from the individual responsibility requirement and employer and employee SHOP eligibility determinations. It describes how exchanges will verify the availability of employer coverage, which would normally bar premium tax credit eligibility, and how appeals from those determinations will be handled.
This post will analyze this NPRM, but a word of warning at the outset. This NPRM is exceptionally difficult to parse. Many of the proposals amend current rules, thus the printed text consists of snippets of additions or modifications which can only be understood by locating the existing rule and putting the changes in context. At a number of places the preamble references existing guidance that must be located and read to fully understand the proposed changes. And many of the proposals are very technical. This post will offer a roadmap to the NPRM, but cannot begin to capture its full complexity.
The NPRM begins with a proposal to coordinate notices and appeals for eligibility determinations regarding Medicaid and the federal premium tax credit and cost-sharing reduction payment programs. Particularly in states that expand Medicaid — but even in states that do not — there will often be situations in which it will not be immediately obvious whether an applicant is eligible for Medicaid or for federal premium tax credit assistance; thus it is important to coordinate eligibility determinations and appeals from those determinations. The proposal would allow state Medicaid agencies to delegate to the exchange responsibility for handling an appeal from Medicaid eligibility to permit the consolidation of an appeal where eligibility for either program is possible. The applicant, however, must be given the option of choosing to have a separate fair hearing before the Medicaid agency itself if one is necessary.
In a change from previous policy, the state may only delegate responsibility for Medicaid eligibility determinations and appeals to a governmental agency that maintains merit protection for its employees. Consumer advocates had argued that these determinations are an inherently governmental function that cannot be delegated to private entities, including non-governmental exchanges, and the rule change responds to this concern. The proposal also reserves to the Medicaid agency the authority to review determinations with respect to Medicaid-related conclusions of law and policy, and requires the Medicaid agency to maintain oversight over the appeals process. The preamble specifies that neither the federally facilitated exchange nor the HHS entity established to hear appeals of exchange decisions will accept delegated authority to hear Medicaid appeals because of resource constraints.
Where both Medicaid and premium tax credit eligibility determinations are involved, an appeal of the premium tax credit determination will also be treated as an appeal of the Medicaid determination. Where the Medicaid agency hears the Medicaid appeal, however, it can wait until up to 45 days after the exchange appeal decision to determine the Medicaid appeal to avoid duplication of effort and to allow withdrawal of the appeal where the appellant is satisfied with the exchange appeal decision, or where the appellant’s income is substantially above the Medicaid standard. Where an appeal is filed with the exchange, the exchange must notify the Medicaid agency and transfer the individual’s electronic account by a secure interface to the Medicaid agency. The Medicaid agency may not request from the appellant information or documentation already included in the electronic account. The Medicaid agency must also notify the exchange of appeal decisions in circumstances where they might affect exchange eligibility.
The proposal contemplates the creation of an informal resolution process in the HHS appeals entity to consider additional evidence an appellant may want to submit before a full hearing on an appeal, and expects that state exchanges will also have such processes, which may resolve Medicaid appeal issues as well. The NPRM also further elaborates the relationship between exchange and Medicaid eligibility determinations where the exchange assesses rather than determines Medicaid eligibility. It also makes a number of other changes in the current Medicaid appeal process, including an optional provision for filing appeals over the internet and another for expedited appeals where urgent health needs are involved. CHIP appeal regulations are also revised to permit similar coordination with exchange affordability program determinations.
A major focus of the proposed rule is coordinating eligibility notices from affordability programs. Without coordination, an applicant who the exchange assessed to be eligible for Medicaid could get a notice from the exchange denying premium tax credit eligibility, then a notice from the state Medicaid agency denying Medicaid, followed finally by a notice from the exchange approving eligibility for premium tax credits. The goal articulated by the NPRM is to provide a single combined notice of eligibility for all MAGI-based programs for all members of a household provided by the last entity to make a determination, but the proposal recognizes that a combined notice may not be possible until 2015.
In the interim, the proposed rules require both the exchange and the Medicaid agency to include clear notice of specific adverse determinations and of their basis (which must be more than a simple cite to a regulation), as well as information as to alternative bases of eligibility. States must provide written notices of adverse action, but must also give individuals the option of electronic notification. While combined eligibility notices may remain optional for the moment, the exchanges and Medicaid and CHIP agencies must provide “coordinated content” advising of eligibility for other MAGI-based programs and transferring the applicant’s electronic account to the other program.
Changes In Medicaid Eligibility
Contrary to the flat vision of Medicaid articulated by Chief Justice Roberts in his Medicaid opinion, the Medicaid program has been in a constant state of change since its creation almost a half century ago. Working through the current Medicaid statute and regulations is a bit like an archeological dig — one encounters layer upon layer of detritus accumulated over the decades from past Medicaid reforms and expansions. The proposed rule builds on the earlier Medicaid rule in attempting to unify and simplify Medicaid categorical eligibility, but also adds new categories of its own as well.
The first of these new categories is adults under age 26 who are not otherwise eligible for Medicaid and who were foster children receiving Medicaid when they reached age 18 or aged out of foster care. This is a new category added by the ACA, which was not affected by the Supreme Court decision on the adult Medicaid expansion. There is no income or asset test for this group. If an individual is eligible both as a former foster child and as a member of the adult expansion group, foster-child eligibility takes precedence. The regulation also implements an ACA provision allowing states the option of providing family planning services only to adults at the highest income level established for pregnant women under the state’s Medicaid or CHIP plan, considering only the income of the individual using family planning services and not of anyone else in the household. The NPRM implements a provision of CHIPRA permitting states to offer CHIP or Medicaid eligibility to persons “lawfully residing” in the United States (which do not include aliens covered by the Deferred Action for Childhood Arrivals (DACA) program). The proposed regulation also provides coverage for newborn children for the first year when their mother was covered under Medicaid or CHIP for various reasons (including the provision of emergency services to aliens).
In the interest of promoting streamlined eligibility, the NPRM proposes simplification of a number of existing eligibility categories. These categories include certain low-income families with Medicaid eligibility, families with Medicaid eligibility extended because of increased collection of spousal support, pregnant women and hospitalized children with extended eligibility, various optional categories of parents and caretaker relatives, individuals needing treatment for breast or cervical cancer, independent foster care adolescents, individuals under age 21 who are under state adoption assistance agreements, targeted low-income children, and individuals with tuberculosis. The specific rules applying to each of these categories will not be discussed, but in general the proposed rule attempts to replace many small categories with MAGI-based assistance. Several other eligibility categories are eliminated altogether as obsolete. The NPRM would also allow states to use MAGI for calculating eligibility for the medically needy.
The NPRM also revises current regulations regarding presumptive eligibility for children and adds several new categories of presumptive eligibility under Medicaid or CHIP. These rules permit states to allow “qualified entities” (such as health providers) to determine eligibility for children, pregnant women, and several other categories of applicants on a short-term basis while the state is considering their application for assistance. The NPRM also implements the ACA requirement that states allow Medicaid-participating hospitals to make presumptive Medicaid eligibility decisions. This is a very important provision that effectively means that the millions of Americans who are eligible for Medicaid but have not applied will be eligible for assistance immediately if they end up in a hospital, essentially making Medicaid our catastrophic coverage program for the poor.
Assistance To Applicants And Beneficiaries
The proposed rule recognizes a category of “application counselors” to help low-income individuals understand, apply for, and provide necessary documentation for determining eligibility to apply for health care affordability programs, including Medicaid and CHIP. These counselors will be required to understand and comply with privacy and information security rules. The role (and the training and certification) of these application counselors will be similar to that of navigators or consumer assisters, but they will not be funded through the exchange.
The NPRM also continues to recognize “authorized representatives” who can act on behalf of a Medicaid applicant or recipient based either on a court order establishing legal guardianship or on written authorization from the beneficiary. These can be individuals or organizations.
The proposed rule clarifies requirements for Medicaid and CHIP programs serving people with limited English proficiency, including requirements for oral interpretation, written translation, and non-English taglines. These requirements apply to all forms, websites, and systems, including determination and appeals notices. Significantly, the proposal refers to earlier guidance on language issues which would seem to endorse a much broader requirement for language availability than the limited language accessibility requirements found in the federal requirements for appeals and summaries of benefits and coverage.
Eligibility Verification Requirements
The NPRM proposes to excuse Medicaid applicants from having to provide documentation to support eligibility when it does not exist or is not available because of circumstances such as homelessness, domestic violence, or natural disasters. It also attempts to simplify documentation of citizenship. In most instances, citizenship will be verified electronically by the Social Security Administration through the federal data services hub. Where this cannot be done, applicants must be given a “reasonable opportunity period” of 90 days to establish citizenship. Proof of citizenship cannot be required for newborn children where the birth was covered by Medicaid. Finally, requirements for documentary proof of citizenship are simplified and the categories of documents that can be used are expanded (including an affidavit if necessary). States must offer assistance in documenting citizenship to those needing help. Once citizenship is established for Medicaid, it does not need to be reestablished for redeterminations.