Proposed Rule2022-18875
Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes
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Published
September 7, 2022
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This rulemaking proposes changes to simplify the processes for eligible individuals to enroll and retain eligibility in Medicaid, the Children's Health Insurance Program (CHIP), and the Basic Health Program. This proposed rule would remove barriers and facilitate enrollment of new applicants, particularly those dually eligible for Medicare and Medicaid; align enrollment and renewal requirements for most individuals in Medicaid; establish beneficiary protections related to returned mail; create timeliness requirements for redeterminations of eligibility in Medicaid and CHIP; make transitions between programs easier; eliminate access barriers for children enrolled in CHIP by prohibiting premium lock-out periods, waiting periods, and benefit limitations; and modernize recordkeeping requirements to ensure proper documentation of eligibility and enrollment.
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[Federal Register Volume 87, Number 172 (Wednesday, September 7, 2022)]
[Proposed Rules]
[Pages 54760-54855]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-18875]
[[Page 54759]]
Vol. 87
Wednesday,
No. 172
September 7, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 431, 435, 457, et al.
Streamlining the Medicaid, Children's Health Insurance Program, and
Basic Health Program Application, Eligibility Determination,
Enrollment, and Renewal Processes; Proposed Rule
Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 /
Proposed Rules
[[Page 54760]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 431, 435, 457, and 600
[CMS-2421-P]
RIN 0938-AU00
Streamlining the Medicaid, Children's Health Insurance Program,
and Basic Health Program Application, Eligibility Determination,
Enrollment, and Renewal Processes
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This rulemaking proposes changes to simplify the processes for
eligible individuals to enroll and retain eligibility in Medicaid, the
Children's Health Insurance Program (CHIP), and the Basic Health
Program. This proposed rule would remove barriers and facilitate
enrollment of new applicants, particularly those dually eligible for
Medicare and Medicaid; align enrollment and renewal requirements for
most individuals in Medicaid; establish beneficiary protections related
to returned mail; create timeliness requirements for redeterminations
of eligibility in Medicaid and CHIP; make transitions between programs
easier; eliminate access barriers for children enrolled in CHIP by
prohibiting premium lock-out periods, waiting periods, and benefit
limitations; and modernize recordkeeping requirements to ensure proper
documentation of eligibility and enrollment.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on November 7, 2022.
ADDRESSES: In commenting, please refer to file code CMS-2421-P.
Because of staff and resource limitations, we cannot accept
comments by facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-2421-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-2421-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Stephanie Bell, (410) 786-0617,
<a href="/cdn-cgi/l/email-protection#e6b59283968e87888f83c8a4838a8aa6858b95c88e8e95c8818990"><span class="__cf_email__" data-cfemail="c794b3a2b7afa6a9aea2e985a2abab87a4aab4e9afafb4e9a0a8b1">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the search instructions on that website to
view public comments.
I. Background
Since 1965, Medicaid has been a cornerstone of America's health
care system. The program provides free or low-cost health coverage to
low-income individuals and families and helps to meet the diverse
health care needs of children, pregnant individuals, parents and other
caretaker relatives, older adults, and people with disabilities. For 25
years, the Children's Health Insurance Program (CHIP) has served as a
bridge from Medicaid to private insurance for somewhat higher-income
children. As of May 2022, the most recent month for which enrollment
data are available, nearly 89 million individuals were enrolled in
Medicaid and CHIP.\1\
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\1\ May 2022 Medicaid & CHIP Enrollment Data Highlights--<a href="https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaid-chip-application-eligibility-determination-and-enrollment-reports-data/index.html">https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaid-chip-application-eligibility-determination-and-enrollment-reports-data/index.html</a>.
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Access to health coverage expanded significantly in 2010 with
enactment of the Patient Protection and Affordable Care Act (Pub. L.
111-148, enacted on March 23, 2010), as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March
30, 2010), together referred to as the Affordable Care Act (ACA). The
ACA expanded Medicaid eligibility to low-income adults under age 65
without regard to parenting or disability status, simplified Medicaid
and CHIP enrollment processes, and established health insurance
Marketplaces where individuals without access to Medicaid, CHIP, or
other comprehensive coverage could purchase coverage in a Qualified
Health Plan (QHP). Many individuals with household income above the
Medicaid and CHIP income standards became eligible for premium tax
credits and/or cost-sharing reductions to help cover the cost of the
coverage. In addition, the ACA provided States with the option of
establishing a Basic Health Program (BHP), which provides affordable
health coverage to individuals whose household income exceeds 133
percent but does not exceed 200 percent of the Federal Poverty Level
(FPL) (that is, lower income individuals who would otherwise be
eligible to purchase coverage through the Marketplaces with financial
subsidies). BHPs allow States to provide more affordable coverage for
these individuals and to improve the continuity of care for those whose
income fluctuates above and below the Medicaid and CHIP levels. To
date, two States, New York and Minnesota, have established BHPs,
covering over 1 million people.\2\
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\2\ <a href="https://www.cms.gov/files/document/health-insurance-exchanges-2022-open-enrollment-report-final.pdf">https://www.cms.gov/files/document/health-insurance-exchanges-2022-open-enrollment-report-final.pdf</a>.
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In addition to coverage expansion, the ACA also required the
establishment of a seamless system of coverage for all insurance
affordability programs (that is, Medicaid, CHIP, BHP, and the insurance
affordability programs available through the Marketplaces). In
accordance with sections 1943 and 2107(e)(1)(T) of the Social Security
Act (the Act) and sections 1413 and 2201 of the ACA, individuals must
be able to apply for, and enroll in, the program for which they qualify
using a single application submitted to any program. In the March 23,
2012 Federal Register, CMS issued implementing regulations titled
``Medicaid program; Eligibility Changes Under the Affordable Care Act
of 2010'' final rule, (77 FR 17144) (referred to hereafter as the
``2012 eligibility final rule''), and the ``Medicaid and Children's
Health Insurance Programs: Essential Health Benefits in Alternative
Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes,
and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment''
final rule titled in July 2013 (78 FR 42160) (referred to hereafter
[[Page 54761]]
as the ``2013 eligibility final rule''). These regulations focused on
establishing a single streamlined application, aligning financial
methodologies and procedures across insurance affordability programs,
and maximizing electronic verification in order to create a
streamlined, coordinated, and efficient eligibility and enrollment
process for eligibility determinations based on Modified Adjusted Gross
Income (MAGI).
Significant progress has been made in simplifying eligibility,
enrollment, and renewal processes for applicants and enrollees, as well
as reducing administrative burden on State agencies administering
Medicaid, CHIP, and BHP, since the promulgation of these regulations.
The dynamic online applications developed by States and the Federally
Facilitated Marketplaces, which ask only those questions needed to
determine eligibility have reduced burden on applicants. Greater
reliance on electronic verifications has reduced the need for
individuals to find and submit, and for eligibility workers to review,
copies of paper documentation, decreasing burden on both States and
individuals and increasing program integrity. Renewals completed using
electronic information available to States have increased retention of
eligible individuals, while also decreasing the administrative burden
on both States and enrollees.
Following a period of steady growth attributed to the ACA,
enrollment in Medicaid and CHIP declined from 2017 through 2019.
Evidence suggests that the economy was the primary driver of this
decline. However, we also know that more restrictive State enrollment
policies contribute to coverage disruptions and create churning as
people lose their Medicaid or CHIP coverage and then re-enroll within a
short period of time.\3\ The Georgetown University Center for Children
and Families estimated that 4.4 million children were uninsured in
2019, an increase from 2016 of 726,000 uninsured children. Looking at
uninsurance among children by income, those with household income below
138 percent of the FPL (133 percent of the FPL is the minimum income
standard that States may establish for children in Medicaid, plus a 5
percentage point disregard), the percentage of Medicaid-eligible
children who did not have any health insurance coverage increased from
6.8 percent in 2016 to 7.7 percent in 2019.\4\ Based on the most
recently available data from the American Community Survey, children in
poverty continued to experience an increase in uninsurance from 2018
through 2020 as the uninsurance rate increased by 1.6 percentage points
to 9.3 percent.\5\ The raw numbers represented by these percentage
changes correspond to a large number of individual children who were
uninsured despite having a household income low enough to be eligible
for Medicaid and who may have deferred or foregone needed health care
as a result.
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\3\ Medicaid Churning and Continuity of Care: Evidence and
Policy Considerations Before and After the COVID-19 Pandemic;
accessed on 8/30/21 at <a href="https://aspe.hhs.gov/sites/default/files/private/pdf/265366/medicaid-churning-ib.pdf">https://aspe.hhs.gov/sites/default/files/private/pdf/265366/medicaid-churning-ib.pdf</a>.
\4\ Alker, Joan and Corcoran, Alexandra. 2020. ``Children's
Uninsured Rate Rises by Largest Annual Jump in More than a Decade.''
Accessed on 03/16/2022 at <a href="https://ccf.georgetown.edu/wp-content/uploads/2020/10/ACS-Uninsured-Kids-2020_10-06-edit-3.pdf">https://ccf.georgetown.edu/wp-content/uploads/2020/10/ACS-Uninsured-Kids-2020_10-06-edit-3.pdf</a>.
\5\ Katherine Keisler-Starkey and Lisa N. Bunch, U.S. Census
Bureau Current Population Reports, P60-274, Health Insurance
Coverage in the United States: 2020, U.S. Government Publishing
Office, Washington, DC, September 2021.
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Additionally, enrollment in Medicare Savings Programs (MSPs),
through which Medicaid provides coverage of Medicare premiums and/or
cost-sharing for lower income Medicare beneficiaries, has remained
relatively low. The MSPs are essential to the health and economic well-
being of those enrolled, promoting access to care and helping free up
individuals' limited income for food, housing, and other of life's
necessities. Yet a 2017 study conducted for Medicaid and CHIP Payment
and Access Commission (MACPAC) estimated that only about half of
eligible Medicare beneficiaries were enrolled in MSPs.\6\
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\6\ Medicare Savings Program Enrollees and Eligible Non-
Enrollees, Kyle J. Caswell, Timothy A. Waidmann, The Urban
Institute, June 2017: <a href="https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf">https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf</a>.
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The critical role of Medicaid and CHIP providing timely health care
access to the most vulnerable individuals was highlighted as the Novel
Coronavirus 2019 (``COVID-19'') spread across our country beginning in
2020. Medicaid and CHIP helped to provide a lifeline for those who may
have lost their jobs or been exposed to COVID-19, or both, and they
played a critical role in the national pandemic response. The Families
First Coronavirus Response Act (Pub. L. 116-127) (FFCRA) conditioned a
temporary increase in Federal Medicaid funding on State compliance with
several conditions, including maintaining enrollment for beneficiaries
enrolled in Medicaid through the end of the month in which the COVID-19
public health emergency (PHE) ends (``continuous enrollment
condition''). Additionally, the FFCRA, along with the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act; Pub. L. 116-135) and the
American Rescue Plan Act of 2021 (ARP; Pub. L. 117-2), also ensured
Medicaid and CHIP coverage of COVID-19 testing, treatment, and
vaccines, as well as vaccine administration.
The Biden-Harris Administration is committed to protecting and
strengthening Medicaid and CHIP both during and following the COVID-19
PHE. On January 20, 2021, President Biden issued an Executive Order on
advancing racial equity and support for underserved communities. It
charged Federal agencies with identifying potential barriers that
underserved communities may face to enrollment in programs like
Medicaid and CHIP.\7\ This was followed on January 28, 2021, by
Executive Order 14009 with a specific call to strengthen Medicaid and
the ACA and remove barriers to obtaining coverage for the millions of
individuals who are potentially eligible but remain uninsured.\8\ In
April 2022, President Biden issued another Executive Order, building on
progress from the first and reflecting new Medicaid and CHIP
flexibilities established by the ARP. The April 5, 2022 Executive Order
14070, ``Continuing to Strengthen Americans' Access to Affordable,
Quality Health Coverage'' charges Federal agencies with identifying
ways to help more Americans enroll in quality health coverage.\9\ It
calls upon Federal agencies to examine policies and practices that make
it easier for individuals to enroll in and retain coverage. Following
this charge, we reviewed the improvements made to implement the ACA,
examined States' successes and challenges in enrolling eligible
individuals, considered the changes brought about by the COVID-19 PHE,
and looked for gaps in our regulatory framework that continue to impede
access to coverage.
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\7\ E.O. 13985, 86 FR 7009. Accessed online on July 19, 2022 at
<a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
\8\ E.O. 14009, 86 FR 7793. Accessed online on July 19, 2022 at
<a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/</a>.
\9\ E.O. 14070, 87 FR 20689. Accessed online on July 19, 2022 at
<a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/">https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/</a>.
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We have learned through our experiences working with States and
other stakeholders that certain policies continue to result in
unnecessary administrative burden and create barriers to enrollment and
retention of
[[Page 54762]]
coverage for eligible individuals. For example:
<bullet> There are no regulations to facilitate enrollment in the
MSPs. In particular, CMS does not have regulations to link enrollment
in other Federal programs with the MSPs, despite the high likelihood
that individuals in such programs are eligible for the MSPs. This
hinders States' ability to enroll those known to be eligible.
Additionally, stakeholders report that burdensome documentation
requirements substantially impede eligible individuals from enrolling
in the MSPs.\10\
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\10\ In October 2020, CMS engaged with 55 stakeholders across
four States to better understand experiences when applying for the
MSPs. One of the main findings was that burdensome documentation
requirements substantially impede eligible individuals from
enrolling in the MSPs and that easing these requirements is a
critical step to ensuring individuals can obtain and retain these
critical benefits.
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<bullet> Individuals whose eligibility is not based on MAGI (non-
MAGI individuals)--for example, those whose eligibility is based on
being age 65 or older, having blindness, or having a disability--
generally were not included in the enrollment simplifications
established under the ACA or our implementing regulations (the 2012 and
2013 eligibility final rules), leaving such individuals at greater risk
of being denied or losing coverage due to procedural reasons than their
MAGI-based counterparts, even though, we believe, many are more likely
to remain Medicaid eligible due to lower likelihood of changes in their
income or other circumstances.
<bullet> Current regulations do not consistently provide clear
timeframes for applicants and enrollees to return information needed by
the State to make a determination of eligibility or for States to
process and act upon information received. This may lead to unnecessary
delay in processing applications and renewals, some ineligible
individuals retaining coverage, and some individuals being denied
increased assistance for which they have become eligible.
<bullet> Our recordkeeping regulations, which are critical to
ensuring appropriate and effective oversight to identify errors in
State policies and operations, were last updated in 1986 and are both
outdated and lacking in needed specificity. We believe these outdated
requirements have contributed to inconsistent documentation policies
across States, which may have furthered the incidence of Medicaid
improper payments.
<bullet> Barriers to coverage that are not permitted under any
other insurance affordability program--including lock-outs for
individuals terminated due to non-payment of premiums, required periods
of uninsurance prior to enrollment, and annual or lifetime caps on
benefits--remain a State option in separate CHIPs.
In this rulemaking, we seek to close these and other gaps, thereby
streamlining Medicaid and CHIP eligibility and enrollment processes,
reducing administrative burden on States and enrollees, and increasing
enrollment and retention of eligible individuals. We also seek to
improve the integrity of Medicaid and CHIP. Through the PERM program,
the Medicaid Eligibility Quality Control (MEQC) program, and other CMS
eligibility reviews, we have regular opportunities to work with States
in reviewing their eligibility and enrollment processes. As a result of
these reviews, and other internal program integrity efforts, States are
continually making improvements to their eligibility and enrollment
systems both to enhance functionality and to correct any newly
identified issues. We believe the changes proposed in this rule will
further these program integrity efforts, and we will continue to work
closely with States throughout implementation.
Current regulations at 42 CFR 433.112 establish conditions that
State eligibility and enrollment systems must meet in order to qualify
for enhanced Federal matching funds. Among these conditions, Sec.
433.112(b)(14) requires that each State system support accurate and
timely processing and adjudications/eligibility determinations. As
States submit proposed changes to their eligibility and enrollment
systems and implement new and/or enhanced functionality, we will
continue to provide them with technical assistance on the policy
requirements, conduct ongoing reviews of both the State policy and
State systems, and ensure that all proposed changes support more
accurate and timely processing of eligibility determinations.
We will also continue to explore other opportunities for reducing
the incidence of beneficiary eligibility-related improper payments,
including leveraging the enhanced funding available for design,
implementation, and operation of State eligibility and enrollment
systems, as well as mitigation and corrective action plans that address
specific State challenges. Our goal is to ensure that eligible
individuals can enroll and stay enrolled without unnecessary burden and
that ineligible individuals are redirected to the appropriate coverage
programs as quickly as possible.
Finally, we recognize that the COVID-19 PHE and the continuous
enrollment condition have disrupted routine eligibility and enrollment
operations for Medicaid, CHIP, and BHP. As States look ahead toward the
eventual end of the PHE and the resumption of routine operations, they
are faced with providing coverage for a significantly larger pool of
enrollees than they have ever had to manage in the past. From February
2020 through May 2022, enrollment in Medicaid and CHIP increased by
25.9 percent, or 18.3 million individuals, and new applications
continue to be submitted. In May 2022, about 2.1 million new
applications for Medicaid and CHIP were submitted to States. At the
same time, many States report a shortage of eligibility workers.
CMS is actively engaged with States as they plan for initiating
eligibility and enrollment work over the course of a 12-month unwinding
period when the COVID-19 PHE ends (hereinafter referred to as the
``unwinding period''). A March 2022 report by the Urban Institute
projected that as many as 15.8 million people could lose their Medicaid
coverage when the PHE ends and the continuous enrollment requirement is
no longer in effect.\11\ It is a CMS priority to ensure that renewals
of eligibility and transitions between coverage programs occur in an
orderly process that minimizes beneficiary burden and promotes
continuity of coverage.
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\11\ Buettgens, M. and Green, A. 2022. What will Happen to
Medicaid Enrollees' Health Coverage after the Public Health
Emergency. Washington, DC: Urban Institute. Accessed on July 19,
2022 at <a href="https://www.urban.org/research/publication/what-will-happen-medicaid-enrollees-health-coverage-after-public-health-emergency">https://www.urban.org/research/publication/what-will-happen-medicaid-enrollees-health-coverage-after-public-health-emergency</a>.
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As we consider the challenges faced by States during the unwinding
period, we seek comment on reasonable implementation timelines for the
provisions in this proposed rule, which would allow States to move
these important protections forward without negatively impacting the
resumption of routine eligibility and enrollment operations. Certain
provisions designed to improve the retention of eligible individuals,
such as the prospective deduction of medical expenses for medically
needy individuals, agency actions on returned mail, and transitions
between coverage programs, could reduce the likelihood of eligible
individuals losing health coverage during unwinding. However, if
implementing such provisions early would divert needed resources away
[[Page 54763]]
from critical unwinding-related activities, then a compliance date
following the unwinding period may be preferred.
We recognize that each State faces a unique set of challenges
related to the unwinding period, with differing needs and
opportunities. As we contemplate the timing of a final rule, we are
considering adopting an effective date of 30 days following publication
and a separate compliance date, which may vary by requirement, with
full compliance no later than 12 months following the effective date of
the final rule. This approach would provide States with immediate
access to new options, like the option to establish an earlier
effective date for coverage provided to individuals eligible in the QMB
group. This approach also would allow States to immediately extend
temporary options authorized under section 1902(e)(14)(A) of the Act as
they prepare for unwinding, like the option to rely on certain third-
party information to update a beneficiary's mailing address. And it
would permit States with greater capacity to implement new system
changes to immediately adopt simplifications like removal of the
requirement to apply for other benefits as a condition of Medicaid
eligibility.
At the same time, we recognize that certain changes proposed in
this rule may require States to make changes to their own statute and/
or regulations, as well as systems changes prior to implementation, and
this process can take time. For example, if the proposed prohibition on
premium lock-out periods, which delay a child's ability to re-enroll in
a separate CHIP following termination of coverage due to the family's
failure to pay premiums, is finalized, we would provide CHIPs that
currently impose such lockout periods with the time needed to comply
with the new prohibition. At the same time, by making the final rule
effective 30 days following enactment, States could not newly adopt a
premium lock-out period.
We seek comment on whether an effective date of 30 days following
publication would be appropriate when combined with a later date for
compliance for most provisions. We seek comment on the timeframe that
would be most effective for compliance with each provision and whether
the compliance date should vary by provision. We believe compliance
with the proposed provision implementing current statutory requirements
(the requirement to utilize Medicare Part D Low-Income Subsidy
``leads'' data from SSA to initiate an MSP application) should be
required 30 days following publication of the final rule, because we do
not have flexibility to delay what is required under the statute. New
State options established under the final rule would be effective 30
days following publication, but do not require a compliance date, since
States are not required to adopt optional policies. We would encourage
States to come into compliance with all other new requirements as
expeditiously as possible, not only because they would improve access
for new applicants and improve retention of eligible enrollees, but
also because they would streamline eligibility and enrollment processes
and promote the overall integrity of Medicaid and CHIP. However, for
proposed provisions that do not create State options and are not
implementing statutory requirements, we are considering compliance
dates of 90 days, 6 months, and/or 12 months following the effective
date of the final rule. We seek comment on the appropriate compliance
timeframe for each provision, and request that commenters explain why
they believe finalizing a shorter or longer compliance timeframe is
most appropriate.
II. Provisions of the Proposed Regulations
A. Facilitating Medicaid Enrollment
1. Facilitate Enrollment Through Medicare Part D Low-Income Subsidy
``Leads'' Data (Sec. Sec. 435.4, 435.601, 435.911, and 435.952)
The MSPs consist of several mandatory Medicaid eligibility groups
that cover Medicare Part A and/or B premiums and, in some cases, cost-
sharing. State Medicaid agencies receive applications and adjudicate
eligibility for full Medicaid, as well as MSP-only benefits. Currently,
the MSP eligibility groups cover over 10 million low-income
individuals. There are three primary MSP eligibility groups: \12\ the
Qualified Medicare Beneficiary (QMB) group, which pays all of an
individual's Medicare Parts A and B premiums and assumes liability for
most associated Medicare cost-sharing charges for people with income
that does not exceed 100 percent of the FPL; the Specified Low-Income
Medicare Beneficiary (SLMB) group, which pays the Part B premium for
people with income that exceeds 100 percent, but is less than 120
percent, of the FPL; and the Qualifying Individuals (QI) group, which
pays Part B premiums for people with income at least 120 percent but
less than 135 percent of the FPL. Individuals also must meet
corresponding resource criteria in order to be eligible for an MSP. The
income and resource requirements for coverage under the MSPs, and the
benefits to which eligible individuals are entitled, are set forth at
sections 1905(p)(1) and 1902(a)(10)(E) of the Act. Among other things,
section 1905(p) of the Act directs that the income and resource
methodologies applied by the Social Security Administration (SSA) in
determining SSI eligibility per sections 1612 and 1613 of the Act be
used to determine financial eligibility for the MSPs, except that
States may employ less restrictive income and/or resource methodologies
than those applied in determining SSI eligibility under the authority
of section 1902(r)(2) of the Act.
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\12\ There is a separate and fourth MSP eligibility group
generally referred to as the ``Qualified Disabled Working
Individuals (QDWI) group,'' or QDWI group. As described in
1902(a)(10)(E)(ii), eligibility in the QDWI group is limited to
individuals whose incomes do not exceed 200 percent of the FPL;
whose resources do not exceed twice the relevant SSI resource
standard (that is, for a single individual or couple); and who are
eligible to enroll in Part A under section 1818A of the Act. Section
1818A of the Act permits individuals who became entitled to Part A
on the basis of their receipt of Social Security disability
insurance (SSDI) and who subsequently lose SSDI after returning to
work (and, hence, entitlement to Part A) to enroll in Part A
contingent on paying the Part A premiums. The medical assistance
available to QDWIs is the coverage of the Part A premiums. The QDWI
group is not included in this proposal, because the income limits of
the QDWI group are significantly higher than LIS and there does not
exist the flexibility to disregard resources that are available for
the other MSPs.
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The MSPs are essential to the health and economic well-being of
low-income Medicare enrollees, helping to free up limited income for
food, housing, and other life necessities. For example, in 2022, the
Part B premium is $170.10 a month, which is more than 10 percent of the
income of individuals who qualify for the QI group, and an even higher
percentage of income for those who qualify for the QMB or SLMB groups.
Despite the importance of the MSPs, a 2017 study conducted for MACPAC
estimated that only about half of eligible individuals enrolled in
Medicare were also enrolled in the MSPs.\13\ This means that millions
of Medicare enrollees living in poverty are paying over 10 percent of
their income to cover Medicare premiums alone. Complex MSP enrollment
processes contribute to this low participation
[[Page 54764]]
rate.<SUP>14</SUP> <SUP>15</SUP> In order to address the barriers to
accessing MSP coverage, in 2008 Congress enacted the Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA, Pub. L.
110-275). MIPPA included new requirements for States to leverage the
Medicare Part D Low-Income Subsidy (LIS) program to help enroll likely-
eligible individuals in MSPs.
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\13\ Medicare Savings Program Enrollees and Eligible Non-
Enrollees, Kyle J. Caswell, Timothy A. Waidmann, The Urban
Institute, June 2017: <a href="https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf">https://www.macpac.gov/wp-content/uploads/2017/08/MSP-Enrollees-and-Eligible-Non-Enrollees.pdf</a>.
\14\ Loss of Medicare-Medicaid Dual Eligible Status: Frequency,
Contributing Factors, and Implications, Office of the Assistant
Secretary for Planning and Evaluation, 2019. <a href="https://aspe.hhs.gov/basic-report/loss-medicare-medicaid-dual-eligible-status-frequency-contributing-factors-and-implications">https://aspe.hhs.gov/basic-report/loss-medicare-medicaid-dual-eligible-status-frequency-contributing-factors-and-implications</a>.
\15\ Medicare Savings Programs: Implementation of Requirements
Aimed at Increasing Enrollment, Government Accountability Office,
2012. <a href="https://www.gao.gov/assets/gao-12-871.pdf">https://www.gao.gov/assets/gao-12-871.pdf</a>.
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The Medicare Part D LIS program, also sometimes referred to as
``Extra Help,'' is administered by SSA and pays Medicare Part D
prescription drug premiums and cost-sharing for over 13 million
individuals with low income. Full premium subsidy LIS (or ``full LIS'')
generally pays the Part D premiums and deductibles in full and sets co-
payments for drugs at between $0 and $9.85 (in 2022) for people with
incomes below 135 percent of the FPL <SUP>16</SUP> <SUP>17</SUP> who
also meet certain resource criteria. To receive this benefit,
individuals complete an application and submit it to SSA. Once
received, SSA verifies the information provided on the LIS applications
and determines eligibility. Income, resources and other eligibility
criteria for the LIS program are defined at section 1860D-14 of the
Act. Under section 1860D-14(a)(3)(C)(i) of the Act, income shall be
determined in the manner described in section 1905(p)(1)(B) of the Act,
without regard to the application of section 1902(r)(2) of the Act and
except that support and maintenance furnished in kind shall not be
counted as income. Section 1860D-14 of the Act provides that, for
purposes of determining eligibility for the LIS program, applicants'
resources be calculated ``as determined under section 1613 of the Act
for the purposes of the supplemental security income (SSI) program
subject to a life insurance exclusion policy.'' The SSA has also
adopted several other regulatory and sub-regulatory methodological
simplifications for the LIS program that deviate from SSI rules. These
include the exclusion of interest and dividend income and non-liquid
resources and burial funds.
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\16\ Section 1860D-14 of the Act [42 U.S.C. 1395w-114].
\17\ Partial premium subsidy LIS (or ``partial LIS'') generally
pays for premiums on a sliding scale, from 100 percent to 25 percent
paid, and sets deductibles and co-payments for drugs at a reduced
level for people with income below 150 percent of the FPL who meet
certain resource criteria.
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The MSP and LIS programs both assist individuals with incomes below
135 percent of the FPL \18\ in accessing the Medicare benefits to which
they are entitled and, as illustrated above, generally use a common
methodology to determine income and resource eligibility. Current
regulations at 42 CFR 423.773(c) require that individuals enrolled in
MSPs be automatically enrolled in LIS, but the reverse is not true, and
many people enrolled in the LIS program are not enrolled in an MSP,
despite likely being eligible. As mentioned above, MIPPA included
several provisions to promote the enrollment of LIS applicants into the
MSPs. In addition, section 112 of MIPPA amended section 1905(p)(1)(C)
of the Act to increase the resource limit for the QMB, SLMB, and QI MSP
eligibility groups to the same resource limit applied for full LIS
established at section 1860D-14(a)(3) of the Act. The resource standard
for the full LIS program and the QMB, SLMB, and QI eligibility groups
for 2022 is $8,400 for a single individual and $12,600 for a couple.
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\18\ Section 11404 of the Inflation Reduction Act of 2022 (Pub.
L. 117-169, enacted on August 16, 2022) increases the income limit
for the full LIS program to income below 150 percent of the FPL and
increases the resource limit to the same resource limit as applied
for partial LIS program at section 1860D-14(a)(3)(E) of the Act
beginning January 1, 2024.
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Section 113 of MIPPA amended section 1144 of the Act to further
eliminate barriers to enrollment in the MSP and LIS programs. Section
1144(c)(3) of the Act requires SSA to transmit data from LIS
applications (``leads data'') to State Medicaid agencies. Section
1144(c)(3) of the Act also provides that the electronic transmission
from SSA ``shall initiate'' an MSP application. MIPPA section 113 also
added a new paragraph at section 1935(a)(4) of the Act that, beginning
January 1, 2010, required States to accept leads data and ``act upon
such data in the same manner and in accordance with the same deadlines
as if the data constituted'' an MSP application submitted by the
individual. As such, under Sec. 435.912, States have 45 days to make
an MSP eligibility determination based on the LIS data. The date of the
MSP application is defined as the date of the individual's application
for LIS under section 1935(a) of the Act.
Despite these statutory requirements, not all States initiate an
MSP application upon receipt of leads data from SSA. CMS data reflect
that over a million individuals enrolled in full LIS are not enrolled
in an MSP. Given near alignment of MSP and LIS eligibility criteria,
most of these individuals are likely eligible for an MSP eligibility
group (See November 1, 2021 Center for Medicaid and CHIP Services
Informational Bulletin, ``Opportunities to Increase Enrollment in
Medicare Savings Programs'').\19\
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\19\ Available at <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/cib11012021.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/cib11012021.pdf</a>.
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The January 28, 2021 Executive Order on Strengthening Medicaid and
the ACA directs agencies to address policies and practices that may
present unnecessary barriers to individuals and families attempting to
access Medicaid coverage,\20\ the April 5, 2022 Executive Order on
Continuing to Strengthen Americans' Access to Affordable, Quality
Health Coverage charges Federal agencies with identifying ways to help
more Americans enroll in quality health coverage,\21\ and the December
13, 2021 Executive Order on Transforming Federal Customer Experience
and Service Delivery to Rebuild Trust in Government supports
streamlining State enrollment and renewal processes and removing
barriers to ensure eligible individuals are automatically enrolled in
and retain access to critical benefit programs.\22\ As such, we have
evaluated CMS's regulatory authority to reduce barriers to enrollment
of eligible individuals into the MSPs. Under the authority in section
1902(a)(4) of the Act to specify ``methods of administration'' that the
Secretary finds to be ``necessary for the proper administration'' of
State plans, we propose several regulatory changes to promote efficient
enrollment in the MSPs by maximizing State use of LIS leads data. We
believe these proposals will also have a positive impact on health
equity by helping to provide more low-income individuals with access to
additional health coverage consistent with the January 20, 2021
Executive Order.\23\
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\20\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/</a>.
\21\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/">https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/</a>.
\22\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/13/executive-order-on-transforming-federal-customer-experience-and-service-delivery-to-rebuild-trust-in-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/13/executive-order-on-transforming-federal-customer-experience-and-service-delivery-to-rebuild-trust-in-government/</a>.
\23\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
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Accepting LIS leads data as an MSP application. As noted above,
under section 1935(a)(4) of the Act, SSA must
[[Page 54765]]
transmit the LIS leads data to States, and States must use that data to
initiate an application for the MSPs. On February 18, 2010, CMS issued
a State Medicaid Director Letter (SMDL #10-003), ``Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA),''
explaining that, ``starting January 1, 2010, the State is directed to
treat the [leads] data as an application for MSP benefits, as if it had
been submitted directly by the applicant.'' Additionally, the guidance
explained, ``States must act on the data as an application for MSP
benefits, even if the LIS application was denied by SSA.'' \24\ We
reiterated the 2010 guidance in 2020 through updates to the Manual for
the State Payment of Medicare Premiums.\25\
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\24\ State Medicaid Director Letter, #10-003, ``Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA),'' page
2. Available at <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/smd10003.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/smd10003.pdf</a>.
\25\ Chapter 1, section 1.11.
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In this rulemaking, we propose to codify in regulation the
statutory requirements for States to maximize the use of leads data to
establish eligibility for Medicaid and the MSPs. We anticipate that
codifying these requirements will lead to more eligible individuals
enrolling in MSPs because we believe that some States may have been
unaware or unclear of the steps required to meaningfully use the leads
data to streamline eligibility and enrollment in the MSPs.
Currently, all States receive leads data from SSA each business
day. This data includes information on the individual's address,
income, resources and household size that SSA has verified.\26\ Per
section 113 of MIPPA, States must accept, via secure electronic
transfer, the SSA leads data and process that information to initiate
an MSP application. However, we are aware that several States do not
use the leads data to begin the application process. For example, upon
receipt of the leads data, some States simply send the individual a
letter that encloses a blank application or instructions on how to
apply for the MSPs. Such practices fall short of States' statutory
obligation to treat receipt of leads data as an application and to
evaluate individuals' eligibility using the leads data.
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\26\ The leads data also includes information on the LIS subsidy
amount and denial reasons, which States can use to immediately
identify if the individual is ineligible for MSPs.
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We propose to add a definition of LIS leads data at Sec. 435.4 and
a new paragraph (e) to Sec. 435.911 of the regulations to clearly
delineate the steps States must take upon receipt of leads data from
SSA. We propose to define LIS leads data to mean data from an
individual's application for low-income subsidies under section 1860D-
14 of the Act that the SSA electronically transmits to the appropriate
State Medicaid agency as described in section 1144 (c)(1) of the Act.
Proposed Sec. 435.911(e)(1) requires States to accept, via secure
electronic interface, the SSA LIS leads data. Proposed paragraph (e)(2)
requires that States treat receipt of the leads data as an application
for Medicaid and promptly and without undue delay, consistent with the
timeliness standards at Sec. 435.912, determine MSP eligibility
without requiring submission of a separate application.
We recognize that State Medicaid agencies generally will need to
request additional information in order to make a determination of
eligibility, as some differences remain in income and resource counting
methodologies between the LIS and MSPs. In addition, the leads data
transmitted to the State does not include information on an
individual's citizenship or immigration status, and therefore, States
will need to ask individuals for their status, which must be verified
in accordance with sections 1137(d), 1902(ee) or 1903(x) of the Act and
Sec. Sec. 435.956(a) and (b), 435.406 and 435.407, if such information
is not already in the casefile and has been verified in a previous
application. As such, we propose at paragraph (e)(3) of Sec. 435.911
that States must request additional information in order to make a
determination of eligibility for MSPs. We also recommend that when
States request additional information from individuals, they include
information on how to contact the local State Health Insurance
Assistance Program (SHIP) for assistance.
However, consistent with existing regulations at Sec. Sec.
435.907(e) and 435.952(c), we propose at paragraph (e)(4) of Sec.
435.911 that States may only require that individuals provide
information needed to complete an eligibility determination if
information needed for such determination is not available to the
agency or if information available to the agency through an electronic
data match or other means is not reasonably compatible with information
provided by or on behalf of the individual. Thus, under the proposed
rule, States may not request that individuals attest or otherwise
provide documentation to establish information contained in leads data,
which SSA has already verified and confirmed for the LIS eligibility
determination.
Note that a State is not in compliance with the statutory
requirement in section 1935(a)(4) of the Act to initiate an application
based on leads data or with the proposed regulation if it requires the
individual to file a new application for MSP, since the leads data
already provides much of the information that would otherwise be
requested on an application. Further, as discussed in more detail
below, States have the flexibility under section 1902(r)(2) of the Act
to align the methodologies applied in determining MSP eligibility with
the methodologies for determining eligibility for LIS. Additionally, we
highly recommend completely aligning financial methodologies for
determining LIS and MSP eligibility as a program integrity best
practice. If a State chooses such complete alignment in financial
methodologies between the LIS and MSP programs, under the proposed rule
the State may not require additional financial information from an
individual for whom the State has received leads data in order to make
a determination of MSP eligibility.
The LIS leads data that is transferred to State agencies has been
verified by the SSA. Thus, we believe that State verification of this
data prior to adjudicating eligibility is duplicative and inefficient.
Consistent with the Secretary's authority under section 1902(a)(4) of
the Act (relating to establishment of such methods of administration as
the Secretary determines ``necessary for proper and efficient
administration'' of the Medicaid program) and section 1902(a)(19) of
the Act (relating to simplicity of administration and the best
interests of recipients), we also propose at Sec. 435.911(e)(5) that
States accept the information verified by SSA and provided through the
leads data as verified, provided that the information provided through
the LIS leads data supports a determination of eligibility under
section 1902(a)(10)(E) of the Act.
The Computer Matching and Privacy Protection Act at 5 U.S.C.
522a(p)(1) requires States to take actions to independently verify
information that SSA provides before the State may terminate, suspend,
reduce, deny, or take other adverse action against an individual.
Therefore, in instances in which the leads data would not support a
determination of eligibility for MSPs, we propose at Sec.
435.911(e)(7) to require that States use the attested information
provided by the applicant to SSA through the LIS application process
and separately verify the individual's eligibility for Medicaid in
accordance with the State's verification policies.
[[Page 54766]]
Specifically, under proposed Sec. 435.911(e)(7), the State would be
required to (1) determine whether additional information is needed to
make a determination of eligibility for an MSP; (2) if additional
information is needed, notify the individual that they may be eligible
for assistance with their Medicare premium and/or cost sharing charges,
but that additional information is needed for the agency to make a
determination of such eligibility; (3) provide the individual with a
minimum of 30 days to furnish any information needed by the agency to
determine MSP eligibility; and (4) verify the individual's eligibility
for an MSP in accordance with the State's verification plan developed
in accordance with Sec. 435.945(j). We note that, in the case of an
applicant who has attested to income or assets over the applicable
income or resource standard, States can, but are not required to,
request additional information from the individual to confirm
ineligibility for coverage.
We note that, under our proposal, States may continue to request
from the individual information necessary to make an eligibility
determination but that is missing from the leads data or other third-
party sources. Pursuant to Sec. 435.952(c), States may also seek
information from the individual if the State has other information that
is not reasonably compatible \27\ with the leads data; however, we
anticipate such circumstances with respect to financial eligibility
will be extremely rare since SSA generally relies on the same sources
for financial eligibility data also relied upon by States and the data
from SSA will in most instances be the most current.
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\27\ Under 42 CFR 435.952(c)(1), income information obtained
through an electronic data match shall be considered ``reasonably
compatible'' with income information provided by or on behalf of an
individual if both are either above or at or below the applicable
income standard or other relevant income threshold.
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Finally, individuals eligible for the LIS program may be eligible
for full Medicaid benefits, in addition to the assistance with Medicare
premiums and cost-sharing available under the MSPs. Under the current
regulations at Sec. 435.911, for individuals who submit the single
streamlined application used for individuals applying for Medicaid on
the basis of MAGI, but who may be eligible on a basis other than MAGI,
States are required to collect any additional information that is
needed to make a determination on a non-MAGI basis, and to make such
determination if the individual provides the needed information.
Consistent with sections 1902(a)(4) and (a)(19) of the Act, we propose
a similar requirement with respect to individuals whose application was
initiated by receipt of LIS leads data. Specifically, under proposed
Sec. 435.911(e)(6), States would be required to collect such
additional information as may be needed to determine whether such
individuals are eligible for Medicaid in any other eligibility groups
(that is, other than the MSPs), including other non-MAGI groups and
MAGI-based groups as well. We believe this proposal would codify a
pathway for efficient enrollment of LIS enrollees into both the
appropriate MSP eligibility group, as well as into a full-benefit group
if eligible without imposing undue administrative burdens on States. We
believe this would also promote program integrity. We note that
individuals can be eligible for both an MSP and an eligibility group
that confers full Medicaid benefits. Therefore, the requirement under
proposed Sec. 435.911(e)(6) is in addition to the requirement to
determine the individual's eligibility for an MSP.
Streamlining Methodologies. As mentioned previously, the income
standard for the LIS program and the highest income standard for the
MSPs is similar, the resource standard for all MSPs and the LIS is the
same until January 1, 2024, and the methodologies for both programs are
very closely aligned. However, the differences in income and resource
methodologies prevent LIS enrollees from being seamlessly enrolled into
the MSPs unless the State has elected to align the MSP methodologies
with LIS methodologies by adopting certain income and resource
disregards under section 1902(r)(2) of the Act.
As discussed above, the two methodologies differ slightly in that
several types of income and resources that are counted in determining
MSP eligibility are not counted in determining LIS eligibility.\28\
States have the flexibility to achieve full alignment of the MSP and
LIS methodologies. Specifically, under section 1902(r)(2) of the Act,
codified in regulation at Sec. 435.601(d), States have the option to
use less restrictive income and resource methodologies in making
eligibility determinations for most non-MAGI eligibility groups,
including the MSPs. States can use this authority to align MSP
methodologies with LIS methodologies by adopting less restrictive
methodologies to disregard income and resources that are counted in
determining MSP but not LIS eligibility. These include: (1) the
following types of income: in-kind support and maintenance, dividend
income, and interest income; and (2) the value of the following types
of resources: non-liquid resources, burial funds, and life insurance.
We expect that States have not maximized this opportunity due to
competing priorities and the complexity of eligibility policy.
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\28\ For example, section 116 of MIPPA directs SSA not to count
in-kind support and maintenance as income, and not to count the cash
surrender value of life insurance policies as a resource, when
determining eligibility for LIS. These statutory disregards apply
only to LIS eligibility determinations and not to MSP eligibility
groups.
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Under proposed Sec. 435.911(e), States that adopt less restrictive
MSP eligibility methodologies to completely align with the LIS
methodologies would be able to use leads data to make a determination
of MSP financial eligibility without requesting additional information
from the individual (as noted above, information on citizenship and
immigration status would still be needed), thus reducing administrative
burden for the State and relieving LIS recipients of the need to
navigate a complex application process.
States that have not fully aligned methodologies must continue to
request the additional information needed to determine financial
eligibility which is not provided through the leads data. In addition,
as noted above, States must request information relating to U.S.
citizenship and immigration status in order to verify such status in
accordance with the State's usual processes. In accordance with Sec.
435.406(a) and section 1137(d) of the Act, individuals must first make
a declaration of U.S. citizenship or satisfactory immigration status in
accordance with Sec. 435.406(a). After the declaration is made, per
regulations at Sec. 435.956, States must attempt to electronically
verify U.S. citizenship or satisfactory immigration status and, if such
status cannot be promptly verified, the State must provide the
individual with a reasonable opportunity period to provide
documentation or other information needed to verify their status.
During the reasonable opportunity period, the State must furnish
benefits to individuals who otherwise meet all eligibility requirements
and must itself continue efforts to verify the individual's status.
These requirements apply equally to individuals being determined for
eligibility in the MSPs following the State's receipt of leads data
from SSA.
However, in accordance with the authority at section 1902(a)(4) of
the Act to promote the administrative efficiency of the program and
section 1902(a)(19) of the Act relating to simplicity of administration
and the best interests of beneficiaries, we propose to add a new
[[Page 54767]]
paragraph (e) to Sec. 435.952 to require that States adopt a number of
enrollment simplification policies related to the income and resources
that are counted in determining MSP, but not LIS, eligibility that
would enable State agencies to use the leads data more efficiently,
reduce burden on applicants and States, and increase the number of LIS
enrollees successfully enrolled in the MSPs. We also anticipate these
policies would have a positive health equity impact by increasing
access to Medicare coverage for low-income individuals and increasing
the financial security of those who successfully enroll consistent with
the January 20, 2021 Executive Order.\29\
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\29\ <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
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Finally, we anticipate that these enrollment simplifications will
help reduce the high rate of churn that dually eligible individuals
experience, largely due to administrative reasons such as providing
documentation of certain income and assets to demonstrate their
continued eligibility. Analysis by the Assistant Secretary for Planning
and Evaluation (ASPE) for the Department of Health and Human Services
in 2019 examined data from years 2007 through 2009 and found that 29.1
percent of individuals lost Medicaid eligibility for at least 1 month
during the first year of transitioning to full-benefit dual eligibility
and 21.1 percent lost Medicaid eligibility for at least 3 months
following the transition despite dually eligible individuals'
relatively stable income and assets over time.\30\ Experts interviewed
noted that dually eligible beneficiaries most often lost coverage
because of failing to comply with administrative requirements as
opposed to changes in income, assets, or functional status. In 2021,
CMS performed similar analysis on data from years 2015 through 2018 and
found similar results: 29.1 percent of individuals lost Medicaid
eligibility for at least 1 month during the first year of transitioning
to full-benefit dual eligibility and 24.1 percent lost Medicaid
eligibility for at least 3 months following the transition.\31\ The
proposed simplifications for each source of income and resource are
discussed below.
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\30\ Assistant Secretary for Planning and Evaluation (ASPE)
(2019). Loss of Medicare-Medicaid dual eligible status: Frequency,
contributing factors and implications. <a href="https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf">https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf</a>.
\31\ CMS completed an updated internal analysis of ASPE's study
in 2021 using data from 2015-2018 that shows that dually eligible
individuals continue to lose Medicaid at a high rate in their first
year due to administrative reasons.
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We note that our proposals would not change the income and resource
rules for individuals applying for non-MAGI eligibility groups other
than the MSPs. We propose simplifying income and resource policies for
the MSP eligibility groups given the narrow scope of assistance
available under these groups (limited to assistance with Medicare
premiums and/or cost-sharing assistance), their smaller numbers of
eligible and enrolled individuals relative to other non-MAGI
eligibility groups, and MIPPA provisions which closely align them with
the LIS program, which does not count these types of income and
resources. We seek comment on extending the proposals below to all
individuals seeking eligibility on a non-MAGI basis. We also seek
comment on extending the proposal relating to verification of dividend
and interest income to individuals seeking eligibility based on MAGI,
as well as whether there are additional income or resource types to
which the proposals below could be extended for all individuals.
Interest and Dividend Income. Regulations governing LIS eligibility
determinations at 20 CFR 418.3350(d) exclude all interest and dividend
income earned on resources owned by the applicant or their spouse.
However, under the SSI income methodologies applicable to MSP
determinations, States must count interest and dividend income, unless
they have elected to disregard such income using the authority provided
under section 1902(r)(2) of the Act and 42 CFR 435.601(d).
Based on stakeholder reports and program experience, we believe
that the vast majority of individuals likely to qualify for an MSP
eligibility group do not have significant interest or dividend income,
whereas the requirement to timely obtain and furnish acceptable
statements from financial institutions, sometimes extending back over a
lengthy period of time, to document interest and dividend income earned
is unduly burdensome for applicants and provides negligible program
integrity value. Therefore, consistent with section 1902(a)(19) of the
Act, in order to minimize undue administrative burden on applicants, we
are proposing at Sec. 435.952(e)(1)(i) and (ii) to prohibit States
from requesting documentation of dividend and interest income prior to
making a determination of MSP eligibility, except when the agency has
information that is not reasonably compatible with the applicant's
attestation. Under the proposed rule, States would be required to
accept self-attestation of dividend and interest income for MSP
applicants and their spouse, but would retain the option to verify such
income after the individual has been enrolled (a process, currently
available at State option with respect to most eligibility criteria,
which we refer to as ``post-enrollment verification''), including the
option to require the individual to provide documentation of interest
or dividend income if electronic verification is not available.
We seek comment on the utility of post-enrollment verification and
whether it results in unnecessary procedural denials of eligible
individuals. If a State chooses to conduct post-enrollment verification
checks, under proposed Sec. 435.952(e)(1)(iii) it must allow
individuals at least 90 calendar days to respond to requests for
documentation. We seek comment on the proposal to require that States
provide individuals with at least 90 calendar days to respond to
requests for additional information in this situation and whether
States should be required to provide, at a minimum, a shorter period of
time, such as at least 30 or 60 calendar days. If a State found that an
individual has income exceeding the income standard during the post-
enrollment verification process, the State would take appropriate
action consistent with regulations at Sec. 435.916(d) (redesignated
and revised at proposed regulations at Sec. 435.919 in this
rulemaking), including determining eligibility on other potential bases
and, if not eligible on any basis, providing advance notice and fair
hearing rights prior to terminating MSP coverage. Section
435.952(e)(1)(ii) clarifies that States must request documentation
prior to making an initial determination to deny eligibility if they
have information that is not reasonably compatible with the applicant's
attestation in accordance with Sec. 435.952(c)(2).
As discussed above, under section 1902(r)(2) of the Act, States
also have the ability to disregard interest and dividend income
entirely, which would bring treatment of interest and dividend income
in determining eligibility for MSPs into alignment with the LIS
program. We encourage States to consider adoption of such an income
disregard, as it is unlikely that an applicant could have both
investments large enough to generate significant interest or dividend
income and resources and still satisfy the resource test for the LIS or
MSP benefits.
Non-liquid resources. For LIS eligibility determinations, under 20
CFR 418.3405, SSA only counts liquid
[[Page 54768]]
resources, which it defines as cash, financial accounts, and other
financial instruments that can be converted to cash within 20 workdays.
Non-liquid resources, such as an automobile, are not counted for LIS
eligibility.\32\ However, SSI rules in section 1613 of the Act, which
apply to MSP determinations, have a broader definition of countable
resources that includes non-liquid resources; for example, while SSI
excludes one automobile for resource-eligibility purposes, a second
automobile is countable. This can be onerous for MSP applicants because
it can be difficult to timely determine, and furnish acceptable
documentation of, the value of something that cannot easily be sold.
Similar to interest and dividend income, consistent with section
1902(a)(19) of the Act and in order to minimize administrative burdens
on individuals, we are proposing at Sec. 435.952(e)(2)(i) to require
that States accept applicants' attestation of the value of any non-
liquid resources, except, as described at proposed Sec.
435.952(e)(2)(ii), when the State has information that is not
reasonably compatible with the individual's attestation. However, as
with dividend and interest income, as described at proposed Sec.
435.952(e)(2)(iii), States would retain the option to conduct post-
enrollment verification, including the option to require the individual
to provide documentation of non-liquid resources if electronic
verification is not available, and to take appropriate action,
consistent with regulations at Sec. 435.916(d) (redesignated and
revised at proposed regulations at Sec. 435.919 in this rulemaking),
if the State determines the individual greatly undervalued or failed to
disclose resources. If the agency elects to conduct verifications post-
enrollment, and documentation is requested, the agency must provide the
individual with at least 90 calendar days from the date of the request
to respond and provide any necessary information requested. As with
dividend and interest income, Sec. 435.952(e)(2)(ii) clarifies that
States must request documentation prior to making an initial
determination denying eligibility if they have information that is not
reasonably compatible with the applicant's attestation in accordance
with Sec. 435.952(c)(2). Finally, States also may use authority at
section 1902(r)(2) of the Act to disregard the value of all non-liquid
resources.
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\32\ The exception to this rule is that the equity value of any
real property than an individual owns other than the individual's
primary place of residence is counted as a resource.
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Burial funds. Under section 1613(d)(1) of the Act, which applies to
both LIS and MSP determinations, up to $1,500 in burial fund are to be
excluded for the applicant (and an additional $1,500 for their spouse)
so long as the burial fund is ``separately identifiable and has been
set aside.'' The statute does not, however, prescribe how the funds
must be separately identifiable. Current SSA policy allows LIS
applicants to attest to having $1,500 in burial funds, which may be co-
mingled with other funds in a single account (see SSA Program
Operations Manual Systems [POMS] HI 03030.020 Resource Exclusions
Section B.3.). However, consistent with section 1905(p)(1)(C) of the
Act, which directs that SSI's resource methodologies be used to
determine MSP-related resource eligibility, States typically require
applicants to provide documentation that their burial funds are set
aside in a separate account, as provided under SSI's burial fund-
related methodology described in 20 CFR 416.1231(b). This creates a
misalignment between LIS and MSP methodologies and imposes additional
burdens on MSP applicants.
We propose in Sec. 435.952(e)(3)(i) to require that States, when
determining eligibility for the MSPs, allow individuals to self-attest
that up to $1,500 of their resources, and up to $1,500 of their
spouse's resources, are set aside as burial funds in a separate account
and therefore are not countable as resources for MSP determinations.
Proposed Sec. 435.952(e)(3)(ii) clarifies that States must request
documentation prior to making an initial determination of ineligibility
if they have information that is not reasonably compatible with the
applicant's attestation in accordance with Sec. 435.952(c)(2). As in
the proposed provision for interest and dividend income and non-liquid
resources, and described at Sec. 435.952(e)(3)(iii), States would
retain the option to conduct post-enrollment verification, including
obtaining documentation of resources in burial funds, and taking
appropriate action, consistent with regulations at Sec. 435.916(d)
(redesignated and revised at proposed regulations at Sec. 435.919 in
this rulemaking). If the agency elects to conduct verifications post-
enrollment, and documentation is requested, the agency must provide the
individual with at least 90 calendar days from the date of the request
to respond and provide any necessary information requested. Again, we
seek comment on the 90-day response period in this situation and
whether States should be required to provide, at a minimum, a shorter
period of time, such as least 30 or 60 calendar days. Finally, States
may also use authority at section 1902(r)(2) of the Act to disregard
all or a greater amount of burial funds or to not require that the
burial funds be held in a separate set-aside account.
Life Insurance Policies. Section 116 of MIPPA, codified at section
1860D-14(a)(3)(G) of the Act, eliminated the value of life insurance
policies as a countable resource for LIS determinations. However, under
the SSI resource methodologies described in section 1613(a) of the Act,
which, as noted above, apply to MSP-related resource eligibility
determinations per section 1905(p)(1)(C) of the Act, the cash surrender
value of life insurance with a total face value exceeding $1,500 is
countable. Term life insurance policies do not have a cash surrender
value and are not a countable resource under SSI methodologies
described in 20 CFR 416.1230(a). Because term life insurance is not
relevant to the Medicaid eligibility determination, States are not
permitted to request information about the face value of such policies.
We have received reports from advocates that obtaining
documentation of a life insurance policy's cash surrender value is
highly burdensome for applicants. A life insurance policy's cash
surrender value depends on the market, the length of time the
policyholder has paid premiums, and other factors. Further, the cash
surrender value is not knowable solely from the documents a
policyholder is likely to have. To obtain the current cash surrender
value of a policy, an applicant generally must contact the company that
has issued the policy, request a statement of the current cash
surrender value and then submit that statement to the State agency once
obtained. This can pose a significant hurdle to applicants, leading to
denials for otherwise eligible applicants.
To reduce this burden on applicants, we encourage States to use
their authority under section 1902(r)(2) of the Act to disregard a
higher face value of life insurance policies or to disregard the cash
surrender value of life insurance policies altogether. A few States
currently disregard policies with face values of at least up to
$10,000, which eliminates administrative hurdles for most individuals,
while ensuring that those comparatively few applicants who own
substantial policies have the value of those policies counted in their
eligibility determinations.
Under proposed Sec. 435.952(e)(4)(i), if an individual attests to
having a life insurance policy with a face value
[[Page 54769]]
below $1,500, States must accept the attested face value for purposes
of making an initial eligibility determination for MSP coverage, unless
the State has information that is not reasonably compatible with
attested information. If the total face value of all of an individual's
life insurance policies does not exceed $1,500, the cash surrender
value of the individual's policies is not counted in determining MSP
eligibility pursuant to sections 1613(a)(16) and 1905(p)(1)(C) of the
Act. As with attested interest and dividend income, non-liquid assets,
and burial funds, States would be required, as specified at proposed
Sec. 435.952(e)(4)(ii), to request additional information if they have
information not reasonably compatible with the attested value prior to
enrolling the individual in coverage in accordance with Sec.
435.952(c)(2). Per current Sec. 435.952(c)(2), the agency may accept a
reasonable explanation from the applicant or require documentation.
Under proposed Sec. 435.952(e)(4)(i)(A), if an individual attests
to having a life insurance policy with a face value in excess of
$1,500, consistent with current regulations at Sec. 435.948, States
may accept the attested cash surrender value. If the State has
information that is not reasonably compatible with the attested value
of the policy, we propose, at Sec. 435.952(e)(4)(ii), that the State
must seek additional information from the individual in accordance with
Sec. 435.952(c)(2). Per current Sec. 435.952(c)(2), the agency may
accept a reasonable explanation from the applicant or require
documentation.
Per proposed Sec. 435.952(e)(4)(iii), States would have the option
to conduct post-enrollment verification for individuals enrolled based
on an attested value. In conducting post-enrollment verification, if a
State determines that the face value of the policy exceeds $1,500, then
the State must redetermine the cash surrender value, consistent with
regulations relating to changes in circumstances at Sec. 435.916(d)
(redesignated and revised at Sec. 435.919 in this proposed rule), as
described above and seek the cash surrender value on behalf of the
individual consistent with Sec. 435.952(e)(4)(iv)(A). If, in
redetermining eligibility, including the cash surrender value of the
policy, once obtained, the State determines the individual to be
ineligible for an MSP, the State would need to consider eligibility on
other potential bases and provide advance notice and fair hearing
rights in accordance with part 431 subpart E of the regulations prior
to terminating MSP coverage.
We also propose at Sec. 435.952(e)(4)(iv)(A) that when
documentation of the cash surrender value of a life insurance policy is
required, the State must assist the individual with obtaining this
information and documentation by requesting that the individual provide
the name of the insurance company and policy number and authorize the
State to obtain such documentation on the individual's behalf, similar
to the assistance that SSA provides SSI applicants, in which SSA
obtains from the applicant basic information about the policy and
authorization to contact the insurer, and then confirms the cash
surrender value directly with the life insurance company itself.\33\
The agency may also request, but may not require, additional
information from the applicant to assist the agency in obtaining
documentation of the cash surrender value, such as the name of an
agent. If the individual does not provide basic information about the
policy and an authorization, under proposed Sec. 435.952(e)(4)(iv)(B),
the State may require that the individual provide documentation of the
cash surrender value. Under proposed Sec. 435.952(e)(4)(iv)(C), the
State must provide the individual with at least 15 calendar days to
provide such documentation if required pursuant to paragraph (e)(4)(i)
or (ii) of this section (that is, if documentation of the cash
surrender value is needed prior to the agency's making a determination
of eligibility) and at least 90 calendar days if required pursuant to
paragraph (e)(4)(iii) of this section (that is, post-enrollment). We
note that the minimum of 15 calendar days in proposed Sec.
435.952(e)(4)(iv)(C) for applicants to provide documentation of cash
surrender value of a life insurance policy is consistent with the
minimum 15 calendar days that we propose States must generally provide
applicants to provide required documentation under proposed at Sec.
435.907(d), discussed in section II.B.3 of this proposed rule. We seek
comment on whether 15 calendar days or a longer minimum period, such as
20 calendar days or 30 calendar days, appropriately balances the
complexity of determining and obtaining documentation of the cash
surrender value with the 45-day limit for States to complete Medicaid
eligibility determinations for individuals applying on a basis other
than disability status under Sec. 435.912(c)(3). The 90 calendar days
proposed for individuals to obtain documentation of the cash surrender
value of a life insurance policy during a post-enrollment verification
process is consistent with the 90 calendar days in proposed paragraphs
(e)(1)(iii), (e)(2)(iii), and (e)(3)(iii) of Sec. 435.952.
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\33\ See SSA POMS SI 01130.300.D., Developing Life Insurance
Policies at <a href="http://policy.ssa.gov/poms.nsf/lnx/0501.130300">http://policy.ssa.gov/poms.nsf/lnx/0501.130300</a>.
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We recognize this proposal would represent a significant change for
a number of States and could present some administrative challenges to
implement. However, documenting the cash surrender value of life
insurance is a considerable hurdle for many applicants. Because the
cash surrender value of most applicants' policies is likely very
modest, the value of any life insurance policy likely will have a
minimal impact on their financial eligibility for coverage, whereas
obtaining documentation of the cash surrender value may pose a
substantial administrative barrier to access. We believe it is in the
interest of efficient administration of the program, consistent with
section 1902(a)(4) of the Act, to implement a process that places fewer
burdens on applicants. We also believe that States are better able to
navigate obtaining such documentation when needed. We seek comment on
whether the burden shifted to States under the proposed rule is
appropriate, or whether an alternative approach would be preferable.
In-Kind Support and Maintenance. In-kind support and maintenance is
assistance an applicant receives that is paid for by someone else, such
as groceries or utilities paid for by an adult child. Section 1860D-
14(a)(3)(C)(i) of the Act, added by section 116 of MIPPA, excludes in-
kind support and maintenance as countable income for LIS
determinations. Under SSI methodologies at 20 CFR 416.1131, which apply
to MSP determinations, the value of in-kind support and maintenance, if
both food and shelter are received by an applicant, is presumed to be
one-third of the Federal benefit rate (FBR) ($841 per month in 2022 for
a single person), unless the applicant provides documentation
demonstrating a different amount. While documenting the amount of
actual in-kind support and maintenance can be difficult for applicants,
we do not believe it is common for applicants to attempt to rebut the
one-third FBR presumption, and therefore, it is rare that applicants
are faced with providing documentation of this type of income.
Under the proposed rule, States would continue to be permitted to
require documentation from individuals who seek to rebut the one-third
FBR presumption. However, we seek comment on if obtaining documentation
to rebut the one-third presumption
[[Page 54770]]
poses a barrier to eligibility and whether we should require States to
accept self-attestation from individuals who seek to rebut a
presumption of the amount of in-kind support and maintenance they
receive subject to post-enrollment verification as discussed above.
Alternatively, States can, and are encouraged to, further streamline
the MSP eligibility and enrollment process for individuals with in-kind
maintenance and support by disregarding in-kind support and maintenance
entirely under section 1902(r)(2) of the Act.
2. Define ``Family of the Size Involved'' for the Medicare Savings
Program Groups Using the Definition of ``Family Size'' in the Medicare
Part D Low-Income Subsidy Program (Sec. 435.601)
To further facilitate alignment of methodologies used to determine
eligibility for the Medicare Part D LIS and MSP groups and facilitate
enrollment in the MSPs based on LIS data, we propose to amend Sec.
435.601 (``Application of financial eligibility methodologies'') to
create a new paragraph (e), in which we propose to define ``family
size'' for purposes of MSP eligibility.
Each year, the U.S. Department of Health and Human Services (HHS)
issues the Federal poverty guidelines (often referred to as the Federal
poverty level or FPL), a measure of poverty used as an eligibility
criterion by Medicaid and a number of other Federal programs. The FPL
is a dollar amount that increases with the family size of an
individual. For example, in 2022, in terms of annual income, the FPL is
$13,590 for a single person, $18,310 for a couple, and $23,030 for a
family of three.
Under section 1905(p)(2)(A) and (B) of the Act, QMB-eligible
individuals have incomes that do not exceed 100 percent of the FPL
``applicable to a family of the size involved.'' Section 1905(s)(2) of
the Act similarly directs that Qualified Disabled Working Individual
(QDWI)-eligible individuals have incomes that do not exceed 200 percent
of the FPL ``applicable to a family of the size involved.'' Section
1902(a)(10)(E)(iii) and (iv) of the Act also direct that the income
standards for the SLMB and QI eligibility groups be percentages of the
FPL ``applicable to a family of the size involved.'' As described
above, SLMBs have incomes greater than 100 percent of the FPL and less
than 120 percent of the FPL, and QIs have incomes at least equal to 120
percent of the FPL and less than 135 percent of the FPL. The statute
does not define the phrase ``family of the size involved'' and CMS has
historically permitted States to apply their own reasonable definition
of this phrase.\34\
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\34\ Memorandum from Director, Center for Medicaid and State
Operations, to Regional Administrator, Re: Medicaid Eligibility--
Policy Governing Family Size in Determining Eligibility for
Qualified Medicaid Beneficiaries and Specified Low-Income
Beneficiaries. Oct. 2, 1997. Available at <a href="https://www.medicaid.gov/sites/default/files/2019-12/medicaid-eligibilty-memo.pdf">https://www.medicaid.gov/sites/default/files/2019-12/medicaid-eligibilty-memo.pdf</a>.
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However, in light of the various statutory provisions to facilitate
enrollment of LIS recipients into MSPs and vice versa, we believe it is
appropriate to establish Federal standards governing the phrase
``family of the size involved.''
Specifically, we propose for purposes of determining eligibility
for the MSP groups, consistent with our authority under section
1902(a)(4) of the Act to facilitate methods of administration that
promote the proper and efficient administration of the Medicaid
program, that ``family of the size involved'' be defined to include at
least the individuals included in the definition of ``family size'' in
the LIS program. Under Sec. 423.772 (``Definitions'' relating to the
LIS program), ``family size'' is defined to include the applicant, the
applicant's spouse (if the spouse is living in the same household with
the applicant), and all other individuals living in the same household
who are related to the applicant and dependent on the applicant or
applicant's spouse for one-half of their financial support.
By proposing that a State's definition of ``family of the size
involved'' include ``at least'' the individuals described in Sec.
423.772 for purposes of the MSP groups, States would retain flexibility
to include other individuals who are not described in Sec. 423.772.
Additionally, this proposal would not affect the States' ability to
adopt a different reasonable definition of the phrase for purposes of
other eligibility groups. For example, in order to be eligible under
section 1902(a)(10)(A)(ii)(XIII) of the Act (providing coverage for
working individuals with disabilities), an individual must have income
that is less than 250 percent of the FPL for a ``family of the size
involved.'' States would not be required to adopt the definition at
proposed Sec. 435.601(e) for purposes of determining income
eligibility for this eligibility group. We seek comment on this
proposal to define ``family of the size involved'' for purposes of the
MSP groups.
3. Automatically Enroll Certain SSI Recipients Into the Qualified
Medicare Beneficiaries Group (Sec. 435.909)
SSI is a Federal cash assistance program that serves low-income
individuals who are age 65 or older, or have blindness or a disability.
SSI recipients typically qualify for other Federal and State programs.
For example, many SSI recipients are entitled to Medicare under 42 CFR
406.5(a) and (b). Additionally, in most States, the receipt of SSI is a
mandatory basis for Medicaid eligibility pursuant to section
1902(a)(10)(A)(i)(II)(aa) of the Act, implemented at Sec. 435.120
(``Individuals receiving SSI group,'' hereafter the ``mandatory SSI
group''). Thirty-three States and the District of Columbia (DC) that
cover the mandatory SSI group have an agreement with SSA under section
1634(a) of the Act under which SSA completes the determination of
eligibility for the mandatory SSI group, and the Medicaid agency
automatically enrolls the individual in Medicaid following a data
exchange with SSA. These States commonly are referred to as ``1634
States.'' A minority of States that cover the mandatory SSI group apply
the SSI program's income and resource methodologies and disability
criteria but require individuals to submit a separate application to
the State Medicaid agency (``criteria States'').
Eight States do not cover the mandatory SSI group. Instead, these
States have elected the authority provided under section 1902(f) of the
Act to apply financial methodologies and/or disability criteria more
restrictive than the SSI program in determining eligibility for
individuals 65 years old or older or who have blindness or a
disability, subject to certain conditions. These States are referred to
as ``209(b) States,'' after the provision of section 209(b) of the
Social Security Act Amendments of 1972 (Pub. L. 92-603), which enacted
what became codified at section 1902(f) of the Act. The eligibility
group authorized by section 1902(f) of the Act is implemented at Sec.
435.121 (``Individuals in States using more restrictive requirements
for Medicaid than the SSI requirements,'' hereafter ``mandatory 209(b)
State group'').
Most Medicare-eligible SSI recipients also meet the eligibility
requirements for the QMB eligibility group described in sections
1902(a)(10)(E) and 1905(p) of the Act, which provides Medicaid coverage
of Medicare premiums (both Part A, if applicable, and Part B) and cost-
sharing (copayments, coinsurance, and deductibles).
[[Page 54771]]
Section 1905(p)(1) of the Act provides that, to be eligible under
the QMB group, an individual must be entitled to Medicare Part A or
enrolled in Medicare Part B for coverage of immunosuppressive drugs
under section 1836(b) of the Act, have income that does not exceed 100
percent of the FPL for the applicable family size, and have resources
that do not exceed the limits for the full-subsidy LIS program. As
described at section 1860D-14(a)(3)(D) of the Act, the full-subsidy LIS
resource limit is three times the SSI resource limit, adjusted annually
based on changes to the Consumer Price Index.\35\ (See section II.A.1.
of this proposed rule for discussion of the LIS program.) The income
standard for SSI (that is, SSI's maximum Federal benefit rate) is
typically 74 percent of the FPL for an individual and 83 percent of the
FPL for married individuals. Thus, because the income and resource
standards for the QMB group exceed the income and resource standards
for SSI, individuals entitled to Medicare Part A who meet the income
and resource requirements for the mandatory SSI group or mandatory
209(b) group will always meet the income and resource requirements for
the QMB group and be eligible for the QMB group.
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\35\ The resource limit for LIS is three times the SSI limit
with yearly updates since January 1, 2010 to reflect to reflect
Consumer Price Index (CPI). Note that the MSP resource test is
determined without regard to the life insurance policy exclusion for
Part D LIS, in accordance with section 1902(p)(1)(C).
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Most individuals enrolled in Medicare qualify for Part A without
paying a premium (premium-free Part A). SSA automatically enrolls these
individuals in premium-free Part A if they are age 65 or over and
receive Social Security or Railroad Retirement Board (RRB) retirement
benefits under title II of the Act or are under age 65 and have
received Social Security or RRB disability benefits for 24 months under
title II of the Act. See 42 CFR part 406 subpart A. In 2021,
approximately 2.6 million individuals (approximately one third) of SSI
recipients were entitled to premium-free Part A.\36\
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\36\ SSI Monthly Statistics, September 2021, Social Security
Office of Retirement and Disability Policy 2021. <a href="https://www.ssa.gov/policy/docs/statcomps/ssi_monthly/2021-09/table01.html">https://www.ssa.gov/policy/docs/statcomps/ssi_monthly/2021-09/table01.html</a>.
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Under Sec. 406.20, many individuals who are not eligible for
premium-free Part A may still enroll in Part A by applying for benefits
at SSA and paying a premium (``premium Part A''). In 2022, the premium
for Medicare Part A was $499; however, based on prior work history,
some individuals may qualify for a reduced rate of $274. Individuals
who are not eligible for premium-free Part A are not automatically
enrolled in premium Part A and they must enroll in Part B prior to or
at the same time as they enroll in Part A. All Medicare beneficiaries
must pay a monthly premium for enrollment in Part B, which is subject
to an adjustment based on income. In 2022, the minimum Part B premium
was $170.10.
All States currently have a buy-in agreement with the Secretary
under section 1843 of the Act which requires them to pay the Part B
premiums for certain Medicaid beneficiaries, including individuals
enrolled in the QMB group and those receiving SSI (known as ``Part B
buy-in'') as described in the Medicare regulations at Sec. 407.42. A
buy-in agreement permits States to directly enroll eligible individuals
in Medicare Part B at any time of the year (without regard for Medicare
enrollment periods or late enrollment penalties if applicable) and to
pay the Part B premiums on the individual's behalf. In 1634 States,
when SSA determines an individual eligible for both the mandatory SSI
group and Medicare Part B, CMS automatically initiates Part B buy-in
for the individual through a joint data exchange among CMS, the State
Medicaid agency, and SSA (``buy-in data exchange'').\37\ In SSI
criteria and 209(b) States, SSA notifies both the State and CMS that an
individual has been determined eligible for SSI and Medicare Part B;
however, because such individuals must submit a separate Medicaid
application for determinations of eligibility, CMS does not
automatically initiate Part B buy-in. Rather, once the State determines
an individual eligible for the mandatory SSI or 209(b) group, the State
must initiate Part B buy-in for the individual pursuant to its buy-in
agreement through its daily exchange of enrollment data with CMS. See
42 CFR 407.40(c)(4) and 407.42; CMS Manual for the State Payment of
Medicare Premiums, chapter 2, section 2.5.1.
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\37\ States with buy-in agreements must exchange buy-in
enrollment data with CMS on a daily basis under Sec. 407.40(c)(4),
and CMS also exchanges buy-in data with SSA on a daily basis. CMS
collectively refers to these data exchange processes as the ``buy-in
data exchange.'' See Manual for the State Payment of Medicare
Premiums, chapter 2, sections 2.0 and 2.1.
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While individuals enrolled in the mandatory SSI or 209(b) group
receive full Medicaid benefits, enrollment in the QMB group provides
these individuals with additional protection from out-of-pocket health
care costs--specifically Medicare premiums and cost-sharing charges.
Moreover, Federal law prohibits all Medicare providers and suppliers,
not just those participating in Medicaid, from charging QMBs for
Medicare cost-sharing. Since 2018, CMS has notified Medicare providers
and suppliers when an individual is enrolled in the QMB group and
protected from Medicare cost-sharing liability.
Maximizing the number of Medicaid beneficiaries who are also
enrolled in Medicare is not only advantageous to the individual, but it
can also result in cost savings for States. As a third-party payer,
Medicare pays primary to Medicaid for Medicare Part A (inpatient
hospital and skilled nursing facility services) and Medicare Part B
(outpatient medical care). In addition, Medicaid beneficiaries who are
enrolled in both Medicare Parts A and B may join Medicare-Medicaid
integrated care plans, which provide more coordinated care across the
two payers and may generate savings to the State by helping
beneficiaries avoid institutional placement and by providing
supplemental benefits, such as dental, transportation, hearing, or
other benefits that otherwise would have been covered by Medicaid.
Despite the potential benefits for Medicaid beneficiaries and State
agencies, CMS data from 2022 indicates that over 500,000 or 16 percent
of SSI recipients who are eligible to enroll in Medicare are not
enrolled in the QMB eligibility group. We believe a major driver of
eligible but unenrolled QMBs is that many States require SSI recipients
to file a separate application with the State Medicaid agency in order
to be evaluated for eligibility for the QMB group, even though they
have been determined eligible for the mandatory SSI or 209(b) groups,
and all SSI recipients who are entitled or able (with a premium) to
enroll in Part A necessarily meet the requirements for QMB eligibility.
To facilitate the enrollment of SSI recipients into the QMB
eligibility group we propose, consistent with section 1902(a)(4) of the
Act to promote the proper and efficient administration of the Medicaid
program, the January 28, 2021 Executive Order on Strengthening Medicaid
and the Affordable Care Act, the April 5, 2022 Executive Order on
Continuing to Strengthen Americans' Access to Affordable, Quality
Health Coverage, and the December 13, 2021 Executive Order on
Transforming Federal Customer Experience and Service Delivery to
Rebuild Trust in Government, to add a new paragraph (b) at Sec.
435.909 that generally would require States to deem an individual
enrolled in the mandatory SSI or 209(b) group eligible for the QMB
group the
[[Page 54772]]
month the State becomes responsible for paying the individual's Part B
premiums under its buy-in agreement pursuant to Sec. 407.47(b). We
also propose technical changes to remove reserved paragraph (a) at
Sec. 435.909, redesignate Sec. 435.909 paragraph (b) as (a) and add a
new header to new Sec. 435.909(a).
We note that under section 1902(e)(8) of the Act, QMB eligibility
is effective the month following the month in which the determination
of eligibility for the QMB group is made. Thus, under our proposal, QMB
coverage would start the month following the month the State deems
(that is, determines) an individual eligible for the QMB group and
starts paying the individual's Part B premiums under the buy-in
agreement. For example, if an individual is first enrolled in both the
mandatory SSI or 209(b) Medicaid group and entitled to Part A in
January 2025, the State would start paying the individual's Part B
premiums under the buy-in agreement and deem the individual eligible
for the QMB group in January 2025. The individual's QMB coverage would
start February 1, 2025.
SSI Recipients Who Have Premium-Free Medicare Part A
As noted above, SSA automatically enrolls individuals who receive
Social Security or RRB retirement benefits or disability benefits for
24 months into premium-free Part A. SSA data for States (including
those with a 1634 agreement and those without a 1634 agreement)
indicates whether an SSI recipient is entitled to premium-free Part A.
As discussed above, because all SSI recipients meet the financial
eligibility requirements for the QMB group, proposed Sec.
435.909(b)(1)(i) would require all States to deem SSI recipients who
are determined eligible for either the mandatory SSI group at Sec.
435.120 or the mandatory 209(b) group at Sec. 435.121 as eligible for
the QMB group if they are entitled to premium-free Medicare Part A.
Under the proposed rule, when a 1634 State (which has delegated
authority to SSA to make Medicaid eligibility determinations for SSI
recipients) receives from CMS the Part B buy-in enrollment for an SSI
recipient who is entitled to premium-free Medicare Part A, the State
would automatically enroll the individual in both the mandatory SSI
group and the QMB group; such individuals would not be required to
submit a separate application to the Medicaid agency to determine
eligibility for the QMB group.
Criteria States and 209(b) States also obtain from CMS information
that an SSI recipient is Medicare-eligible and entitled to premium-free
Medicare Part A. However, in these States SSI recipients must submit a
separate application to the Medicaid agency which determines
eligibility for either the mandatory SSI or the 209(b) group. Under
proposed Sec. 435.909(b)(1)(i), once the State has determined an SSI
recipient eligible for the mandatory SSI or the 209(b) group, the State
also would start paying the Part B premiums for the individual the
first month they are entitled to Part A and receiving SSI-based
Medicaid and start QMB group coverage the first day of the following
month.
From time to time, individuals enrolled in the mandatory SSI or
209(b) group become retroactively entitled to premium-free Medicare
Part A based on a retroactive award of Social Security Disability
Insurance (SSDI). Under the Medicare regulations at Sec. 407.47(b),
States generally become responsible for retroactive Part B premiums for
such individuals dating back to the first month they were enrolled in
the mandatory SSI or 209(b) group and eligible for Part B.\38\ In an
April 27, 2022 proposed rule entitled, ``Implementing Certain
Provisions of the Consolidated Appropriations Act and other Revisions
to Medicare Enrollment and Eligibility Rules'' (87 FR 25090) (referred
to hereafter as the ``2022 Medicare eligibility and enrollment proposed
rule''), we proposed adding a new paragraph (f) at Sec. 407.47 to
limit State liability for retroactive Part B premiums for full-benefit
Medicaid beneficiaries, including individuals receiving SSI-based
Medicaid, to a period of no greater than 36 months prior to the date of
the Medicare enrollment determination. At 87 FR 25114 through 25115 of
the proposed rule, we noted that this time limit would reduce burden on
providers, help State Medicaid programs and the Medicare program run
more efficiently, be consistent with a legal ruling in favor of States
in at least one Federal court, and not harm Medicaid beneficiaries
since Medicaid would have covered any medical costs the beneficiary
incurred for periods in the past.
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\38\ Individuals who are entitled to premium-free Part A are
eligible to enroll in Medicare Part B under Sec. 407.10(a)(1).
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To align with that change, under Sec. 435.909(b)(3), we propose
that retroactive QMB coverage for individuals in the mandatory SSI or
209(b) group be limited to the same period for retroactive Part B
premium liability proposed at Sec. 407.47(f) in the 2022 Medicare
eligibility and enrollment proposed rule. For example, if SSA
determines an individual enrolled in the mandatory SSI or 209(b) group
eligible for premium-free Part A in January 2025 with an effective date
back to January 2023, the State would deem the individual eligible for
the QMB group retroactive to January 2023. Because coverage under the
QMB group begins the month after the month of the eligibility
determination, QMB coverage in this example would be effective February
1, 2023. Alternatively, if SSA determines an individual enrolled in the
mandatory SSI or 209(b) group eligible for premium-free Part A in
January 2025 with an effective date back to January 2021, the State
would deem the individual eligible for the QMB group retroactive to
January 2022, with QMB coverage effective February 1, 2022. We invite
comment on this limit on retroactive QMB eligibility.
Additionally, we remind States that individuals deemed eligible for
Medicaid are not exempt from regularly-scheduled renewals of Medicaid
eligibility in accordance with Sec. 435.916. However, for an
individual eligible under both the mandatory SSI and QMB groups, the
State need only verify that the individual still receives SSI and is
entitled to Medicare Part A in order to renew their eligibility in both
groups. States can do this verification electronically by confirming
receipt of SSI in the State Verification Exchange System or State
Online Query System, and we encourage them to do so to minimize burden.
When a beneficiary no longer meets the eligibility requirements for the
eligibility group under which they have been receiving coverage, the
State must determine eligibility on all bases before terminating
eligibility.
SSI Recipients Eligible for Premium Part A
As mentioned above, individuals age 65 and over who lack the
sufficient work history for premium-free Part A may qualify to pay, or
have paid on their behalf, a monthly premium to receive Medicare Part A
benefits.\39\ To meet the requirements for premium Part A at Sec.
406.20(b), the individual must be: age 65 or older, a U.S. resident,
not otherwise entitled to Part A, entitled to Part B or in the process
of enrolling in it, and a U.S. citizen or lawful permanent resident who
has resided in the U.S. continuously during the 5 years immediately
preceding the month they enrolled in Medicare.
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\39\ Note that all individuals receiving title II benefits based
on disability who have met the 24-month waiting period to enroll in
Medicare are entitled to premium-free Part A.
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[[Page 54773]]
All States must pay the Part A premium for individuals who are
enrolled in the QMB eligibility group. However, States can choose one
of two methods to pay the Part A premium for QMBs.\40\ First, States
can expand their buy-in agreement with CMS under section 1818(g) of the
Act to include enrollment and payment of Part A premiums for QMBs who
do not have premium-free Part A. Currently, 36 States and the District
of Columbia have chosen this option. States that include payment of
Part A premiums for QMBs in their buy-in agreements are called ``Part A
buy-in States.'' In Part A buy-in States, individuals determined
eligible for the QMB group can enroll in premium Part A at any time of
the year and without regard to late enrollment penalties. Fourteen
States do not include Part A in their buy-in agreements and instead pay
the Part A premiums for QMBs using a group payer arrangement, which
allows certain third parties (for example, States) to pay the Part A
premiums for a class of beneficiaries.\41\ States that use a group
payer arrangement for QMBs are known as Part A ``group payer States.''
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\40\ See chapter 1, section 1.2 of the CMS Manual for the State
Payment of Medicare Premiums.
\41\ See Program Operations Manual System (POMS) HI 01001.230
Group Collection-General at <a href="http://policynet.ba.ssa.gov/poms.nsf/lnx/0601001230">http://policynet.ba.ssa.gov/poms.nsf/lnx/0601001230</a>.
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As previously noted, in order to qualify for the QMB eligibility
group under section 1905(p)(1) of the Act, an individual must be
entitled to hospital insurance benefits under Part A of title XVIII.
Being ``entitled to'' Part A means that if an individual receives Part
A-covered services, the costs of those services will be covered by
Medicare. See 42 CFR 406.3. In general, an individual becomes so
entitled to Part A if--(1) they are eligible for premium-free Part A
based on payment of a payroll tax; or (2) are eligible to enroll in
Premium Part A and do enroll (creating a Part A premium obligation).
The premium payment is due for each month beginning with the first
month of coverage. 42 CFR 406.32(f).
Further, section 1905(a) of the Act specifies that payments of
Medicare cost-sharing for QMBs (including Part A premiums) are
``medical assistance'' for purposes of FFP, if made in the month
following the month in which the individual becomes a QMB. (Per the
introductory paragraph of section 1905(a) of the Act, payments for
Medicare premiums and cost sharing only qualify as medical assistance
in the case of Medicare cost-sharing with respect to a QMB described in
section 1905(p)(1) of the Act, if provided after the month in which the
individual becomes such a beneficiary). Thus, under a literal reading
of the words of the statute, a State cannot claim FFP under the QMB
group until the month after the month in which the individual is
``entitled to Part A,'' which requires first that a Part A premium be
paid. This creates a ``catch 22'' in which low-income individuals can
only be eligible for QMB coverage that makes Part A enrollment
affordable if they first became liable for its premium.
This result would eviscerate the purpose of sections 1843 and
1818(g) of the Act (``buy-in statute''). Under a literal read, States
with a Part A buy-in agreement could theoretically use State-only funds
to pay Part A premiums the first month to allow the individual to
become entitled to Part A and start QMB coverage the next month.
However, in Harris v. McCrae, 448 U.S. 297 (1980), the U.S. Supreme
Court held that States cannot be required to provide Medicaid using
only State funds. Further, while individuals can enroll in Part A at
any time of the year without regard for Medicare enrollment periods or
late enrollment if the State pays their Part A premium under its buy-in
agreement, this is not the case for individuals who are paying the
premium themselves. Individuals who must pay the Part A premium
themselves must wait until a Medicare enrollment period to enroll in
Part A and may be subject to late enrollment penalties. Thus, a literal
read of the statute would defeat the purpose of buy-in statute--to
avoid delays in QMB enrollment by allowing QMB-eligible individuals who
reside in Part A buy-in States to enroll in Part A at any time of the
year, without regard to Medicare enrollment penalties.
Recognizing that a literal read of the statute would produce a
result that essentially nullifies the impact of the QMB and buy-in
statutory provisions, CMS instituted a policy approximately 30 years
ago under which States can receive FFP for paying an individual's Part
A premium the first month of entitlement, thereby triggering both Part
A entitlement and QMB coverage. Under this policy, Part A buy-in States
can determine an individual eligible for QMB status, and thus for their
Part A premiums to be paid, if they are enrolled in Part B but not yet
entitled to Part A.\42\ Group payer States similarly can approve
eligibility for individuals under the QMB eligibility group if SSA has
determined them conditionally eligible for premium Part A, through a
process known as ``conditional enrollment.'' The conditional enrollment
process enables low-income individuals to apply at SSA for premium Part
A on the condition that they will only be enrolled in Part A if the
State determines they are eligible for the QMB group.\43\ Most group
payer States recognize conditional enrollment in Part A for purposes of
determining QMB eligibility, but they are not required to do so.
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\42\ Chapter 1, section 1.10 of the CMS Manual for the State
Payment of Medicare Premiums and SSA Program Operations Manual
System (POMS) HI 00801.140.C Premium Part A Enrollments for
Qualified Medicare Beneficiaries (QMBs)--Part A Buy-In States and
Group Payer States at <a href="http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140">http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140</a>.
\43\ The conditional enrollment process is described in chapter
1, section 1.11 of the CMS Manual for the State Payment of Medicare
Premiums and in SSA Program Operations Manual System (POMS) HI
00801.140 Premium Part A Enrollments for Qualified Medicare
Beneficiaries (QMBs)--Part A Buy-In States and Group Payer States at
<a href="http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140">http://policynet.ba.ssa.gov/poms.nsf/lnx/0600801140</a>.
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Individuals who lack premium-free Part A are more likely to have
worked in the informal economy in low wage jobs.\44\ Internal analysis
by CMS from 2017 found that, as compared to their QMB-eligible
counterparts with premium-free Part A, QMB-eligible individuals who
qualify for premium Part A tend to be poorer and more likely to be non-
native English speakers. For multiple decades, the conditional
enrollment policy has helped hundreds of thousands of individuals
obtain essential assistance with Medicare premiums and cost-sharing by
allowing States to pay the first month's premium needed to trigger
Medicare Part A entitlement. Without this policy, the subsidies
available under the QMB group to make Part A affordable would only be
available to individuals who somehow found a way to pay the initial
Part A premium (including a late enrollment penalty if applicable)
themselves. We estimate that precluding coverage of Part A premium
payments under the QMB group until the month after an individual has
become entitled to Part A would prevent over 78,000 individuals each
year from enrolling in Part A with State payment of Part A
premiums.\45\
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\44\ Streamlining Medicare and QMB Enrollment for New Yorkers:
Medicare Part A Buy-In Analysis and Policy Recommendations, Medicare
Rights Center, February 2011. <a href="https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf">https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf</a>.
\45\ Based on internal CMS data from 2015-2019.
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We believe that we should implement the statute in a manner that
gives full effect to what we believe to be Congress' intended policy in
this rare instance in which implementing the plain meaning of the words
of the statute would produce a result that is at odds with this
statutory purpose. In United States v.
[[Page 54774]]
Ron Pair Enterprises, Inc., 489 U.S. 235 (1989), the U.S. Supreme Court
found, ``The plain meaning of legislation should be conclusive, except
in the `rare cases [in which] the literal application of a statute will
produce a result demonstrably at odds with the intentions of its
drafters.' Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571
(1982). In such cases, the intention of the drafters, rather than the
strict language, controls. Ibid.''
More recently, in Donovan v. First Credit, Inc., 983 F.3d 246, 254
(6th Cir. 2020) the Sixth Circuit reformulated this concept as follows:
``Thus, the absurd-results doctrine sanctions the use of extra-textual
sources to contravene statutory text only if there is no alternative
and reasonable interpretation available that, consistent with
legislative purpose, would avoid the absurd result.'' See id.; In re
Corrin, 849 F.3d 653 at 657 (`When the language is ambiguous or leads
to an absurd result, the court may look at the legislative history of
the statute to help determine the meaning of the language.').''
We note that there is precedent, in the Medicare Part D context,
for not applying the plain meaning of the words of the statute when it
leads to what we believe to be an absurd result contrary to the purpose
of the statute. The following language from the preamble to the January
28, 2005 final rule implementing Medicare part D explains:
Section 1860D-1(b)(1)(C) of the Act requires CMS to auto-enroll
into PDPs an individual ``who is a full benefit dual eligible
individual'' who ``has failed to enroll in a prescription drug plan
or an MA-PD plan.'' Although this statutory provision specifically
references the statutory definition of ``full-benefit dual eligible
individual'' under section 1935(c)(6) of the Act, if interpreted
literally, section 1860D-1(b)(1)(C) of the Act would require CMS to
auto-enroll into Part D plans only individuals receiving full-
benefits under Medicaid who are already enrolled in Part D but who
have ``failed to enroll in'' a Part D plan, a patently absurd
result. We have an obligation to interpret the statute so as to
avoid an absurd result and give full effect to the Congress'
intended policy. We think it is clear that the Congress required CMS
to establish an auto-enrollment process to ensure that individuals
who currently receive coverage for Part D drugs under Medicaid
continue to receive coverage for such drugs through enrollment in
Part D beginning in 2006.\46\
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\46\ 70 FR 4194 at 4370 and 4371 (January 28, 2005). <a href="https://www.govinfo.gov/content/pkg/FR-2005-01-28/pdf/05-1321.pdf">https://www.govinfo.gov/content/pkg/FR-2005-01-28/pdf/05-1321.pdf</a>.
For the reasons set forth above, we believe that in this case also,
reading the statute literally to require an individual to pay their
first month's Part A premium in order to become eligible to receive
coverage of Part A premiums under the QMB group would be contrary to
the fundamental purpose of the QMB statutory provisions: to enable low-
income individuals to gain Medicare benefits they could not otherwise
afford. A literal read of the statute is also at odds with the intent
of the buy-in statute to avoid undue delays in QMB enrollment.
Therefore, we propose to incorporate in the regulations our
longstanding practice of providing FFP for State payments of the first
month of an individual's Part A premium for individuals who are
eligible for the QMB group based on conditional enrollment in Part A.
This also will facilitate enrollment into the QMB group for SSI
recipients who need to pay a premium to enroll in Part A.
According to internal CMS estimates, in 2022 approximately 800,000
SSI recipients were eligible for Part A by paying a premium. When an
individual age 65 or older is determined eligible for SSI and Medicare
Part B but lacks sufficient work history for premium-free Part A, SSA
transmits the individual's record to CMS. In 1634 States, CMS
automatically initiates Part B buy-in (that is, enrollment in Part B
with the State paying the Part B premium); in criteria and 209(b)
States, CMS alerts the State that the individual is eligible for SSI
and Medicare. As described above, States must pay the Part B premiums
for individuals once they are eligible for Part B and have been
determined eligible for the mandatory SSI or 209(b) group under
Sec. Sec. 407.42 and 407.47(b). Once the SSI recipient is enrolled in
Part B buy-in, CMS notifies SSA, which also updates its SSI records to
reflect Part B buy-in for the individual.
As mentioned above, in Part A buy-in States, CMS considers
enrollment in Part B sufficient to treat the individual as meeting the
requirement that the individual be entitled to Part A for the purposes
of the State's QMB eligibility determination. Because the SSI income
and resource standards are below the standards for eligibility under
the QMB group, individuals eligible for the mandatory SSI or 209(b)
group will meet the financial eligibility requirements for the QMB
group. Thus, in Part A buy-in States, when an SSI recipient who lacks
sufficient work history for premium-free Part A has been determined
eligible for the mandatory SSI or 209(b) group and is enrolled in Part
B, the State can determine the individual eligible for the QMB
eligibility group and enroll the individual in Part A buy-in.
To streamline QMB enrollment for SSI recipients who must pay a
premium to enroll in Part A, we propose at Sec. 435.909(b)(1)(ii) to
require Part A buy-in States to deem those individuals who are
determined eligible for the mandatory SSI or 209(b) groups as eligible
for the QMB group and initiate their enrollment into Medicare Part A,
pursuant to their buy-in agreement, the month they are enrolled in Part
B buy-in.
As noted, in States that have a 1634 agreement with SSA, when SSA
determines an individual eligible for the mandatory SSI group, SSA also
notifies CMS that an individual eligible for Medicare Part B has been
determined eligible for the mandatory SSI group. CMS initiates the
individual's enrollment in Medicare Part B buy-in and notifies the
State after doing so. In Part A buy-in States with a 1634 agreement,
once the State receives the automated Part B buy-in enrollment from CMS
for an SSI recipient who lacks a sufficient work history for premium-
free Part A, under proposed Sec. 435.909(b)(1)(ii) the State would
enroll the individual in the mandatory SSI group, deem the individual
eligible for the QMB group, and effectuate enrollment in Medicare Part
A through the buy-in agreement.
As discussed above, in criteria and 209(b) States, when CMS
receives information from SSA that an individual is eligible for SSI
and Medicare Part B, CMS does not automatically initiate Part B
enrollment, which is a prerequisite for entitlement to Part A for
individuals subject to a Part A premium. In a Part A buy-in State
without a 1634 agreement (that is, a criteria or 209(b) State), once
the individual applies to the Medicaid agency, some States currently
only determine eligibility for the mandatory SSI or 209(b) group, as
applicable, and initiate Part B enrollment per their buy-in agreement.
Under proposed Sec. 435.909(b)(1)(ii), these Part A buy-in States also
would be required to deem any individuals determined by the State to be
eligible for the mandatory SSI or 209(b) groups as eligible for the QMB
group and initiate enrollment in both Medicare Part A and Part B buy-
in.
In the 14 group payer States, it is more challenging for SSI
recipients to enroll in Medicare Part A and the QMB eligibility group.
Unlike in Part A buy-in States, individuals determined eligible for the
mandatory SSI or 209(b) group in group payer States who are enrolled in
Part B pursuant to the State's buy-in agreement will not necessarily
satisfy the eligibility requirement for the QMB group that the
individual be entitled to Part A. Even though the State will initiate
enrollment of the
[[Page 54775]]
individual in Part B, pursuant to its buy-in agreement, it will not
cover the individual's Part A premium or initiate Part A enrollment
under the buy-in agreement. Instead, the individual must separately
apply for premium Part A at SSA using the conditional enrollment
process.
Although the conditional enrollment process provides a way for
individuals to enroll in the QMB eligibility group without paying their
own Part A premiums upfront, the process is administratively burdensome
for both individuals and the State, and the vast majority of
individuals fail to complete the process unless an eligibility worker
or other application assistor provides hands on assistance through
every step of the process.\47\ Two other challenges currently make QMB
enrollment harder for SSI recipients without premium-free Part A in
group payer States. First, group payer States can only enroll
individuals in premium Part A during the general Medicare enrollment
period that runs from January through March each year. Second, group
payer States are required to pay late enrollment penalties, if
applicable, for those Medicaid beneficiaries who did not timely enroll
in Medicare Part A when they first became eligible to do so.
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\47\ Streamlining Medicare and QMB Enrollment for New Yorkers:
Medicare Part A Buy-In Analysis and Policy Recommendations, Medicare
Rights Center, February 2011. <a href="https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf">https://www.medicarerights.org/pdf/Part-A-Buy-In-Analysis.pdf</a>.
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To streamline QMB enrollment for SSI recipients without premium-
free Part A in group payer States, we propose to add a State option for
deeming individuals eligible for the QMB group. Specifically, proposed
Sec. 435.909(b)(2) would allow, but not require, group payer States to
directly initiate Medicare Part A enrollment for individuals who are
not entitled to premium-free Part A without first sending them to SSA
to apply for conditional Part A enrollment. Under this proposed option,
once the State has determined the individual eligible for the mandatory
SSI or 209(b) group and become liable for paying their Part B premiums
under the buy-in agreement pursuant to Sec. 407.42, the State would
also deem them eligible for the QMB group.
We are aware that State-specific variables can impact a State's
decision to either enter into a Part A buy-in agreement or to remain a
group payer State. By allowing, but not requiring, group payer States
to adopt the same streamlined QMB enrollment procedures used in Part A
buy-in States, we preserve the current statutory option for group payer
States to operate differently than Part A buy-in States while still
enabling them to modernize their processes and facilitate enrollment of
these very low-income individuals into Medicare Part A and the QMB
group. However, we seek comments on the administrative and fiscal
impacts of our proposal and of other approaches, such as requiring
group payer States to deem individuals determined eligible for the
mandatory SSI or 209(b) groups as eligible for the QMB group once they
have completed the conditional enrollment process at SSA.
4. Clarifying the Qualified Medicare Beneficiary Effective Date for
Certain Individuals (Sec. 406.21)
In the above section, we seek to facilitate enrollment for SSI
recipients into QMB. Here, we propose to clarify the effective date of
coverage under the QMB group for individuals who must pay a premium to
enroll in Part A and reside in a group payer State in order to provide
individuals with protection from Medicare premiums and cost-sharing
costs on the earliest possible date.
The first opportunity individuals have to enroll in premium Part A
is during their initial enrollment period (IEP). For most individuals
who become eligible for Medicare on or after 1966, under section
1837(d) of the Act, the IEP begins on the first day of the third month
before the month the individual turns 65 and ends 7 months later.
Eligible individuals who do not enroll in premium Part A during
their IEP, or who disenroll from premium Part A and wish to re-enroll,
must generally do so during the general enrollment period (GEP). The
GEP is established under section 1837(e) of the Act, and is the period
beginning on January 1 and ending on March 31 of each year. For
individuals who enroll in Medicare under the GEP in a month before
January 1, 2023, Part A entitlement would begin the first of July
following their enrollment, as provided in sections 1838(a)(2)(D)(i)
and (ii) and (a)(3)(B)(i) and (ii) of the Act. Section 120 of the
Consolidated Appropriations Act, 2021 (CAA) revised the Part A
entitlement effective date for individuals who enroll during the GEP in
a month beginning on or after January 1, 2023. Specifically, Part A
entitlement for individuals who enroll in premium Part A during the GEP
would begin with the first day of the month following the month in
which they enroll.
In the 2022 Medicare eligibility and enrollment proposed rule at 87
FR 25094, we proposed to revise Sec. 406.21(c) to implement the GEP
effective dates outlined in section 120 of the CAA. Specifically, Sec.
406.21(c)(3)(i) would require that for individuals who enroll or
reenroll during a GEP prior to January 1, 2023, entitlement would begin
July 1 following their enrollment, while Sec. 406.21(c)(3)(ii) would
require that for individuals who enroll or reenroll during a GEP on or
after January 1, 2023, entitlement would begin on the first day of the
month after the month of enrollment, consistent with section
1838(a)(2)(D)(ii) of the Act (incorporated for premium Part A
beneficiaries by reference in section 1818(c) of the Act).
To align with that change, we propose to clarify the applicable
effective date of QMB coverage for an individual who resides in a group
payer State and enrolls in conditional Part A during the GEP. As
discussed above in section II.A.3 of this preamble, in a Part A buy-in
State, CMS considers enrollment in Part B sufficient to meet the
requirement that an individual be entitled to Part A for the purposes
of the QMB eligibility determination. However, in a group payer State,
enrollment in QMB for individuals who need to pay a premium to enroll
in Part A is always a two-step process. The State cannot determine
individuals eligible for QMB and enroll them in Part A buy-in until SSA
establishes actual or conditional Part A enrollment. With respect to
QMB enrollment under a buy-in agreement under Sec. 406.26, Medicare
Part A coverage begins the first month an individual is entitled to
Part A under Sec. 406.20(b) and has QMB status. We consider a
conditional Part A filing to be sufficient to fulfill the requirement
for entitlement to Part A as applicable for QMB coverage.\48\
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\48\ See CMS Manual for the State Payment of Medicare Premiums,
chapter 1, section 1.11.
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Specifically, in this rule we propose in new Sec. 406.21(c)(5) to
codify existing policy for individuals who enroll in actual or
conditional Part A during the GEP. Beginning on or after January 1,
2023, the effective date of Medicare coverage for individuals who
enroll in Medicare during the GEP is the month following the month of
enrollment under section 1838(a)(2)(D)(1) and (a)(3)(B)(i) of the Act.
For such individuals, QMB coverage starts the month premium Part A
entitlement begins (if the State determines the individual has met the
eligibility requirements for QMB coverage in the same month that Part A
enrollment occurs), or a month later than the month of Part A
entitlement (if the individual is determined eligible for QMB the month
Part A entitlement begins or later).
[[Page 54776]]
This proposal would clarify that individuals who reside in group
payer States and enroll in actual or conditional Part A during the GEP
can obtain QMB as early as the month Part A entitlement begins.
5. Facilitate Enrollment by Allowing Medically Needy Individuals To
Deduct Prospective Medical Expenses (Sec. 435.831)
The current medically needy income eligibility regulation at 42 CFR
435.831 permits institutionalized individuals to deduct their
anticipated medical and remedial care expenses from their income. We
propose to amend the regulation to allow noninstitutionalized
individuals, under certain circumstances, to do the same for purposes
of medically needy eligibility determinations. This proposal is
designed to eliminate the institutional bias inherent in only
permitting projection of the cost of care for institutionalized
individuals.
Section 1902(a)(10)(C) of the Act provides States the option to
extend Medicaid eligibility to ``medically needy'' individuals.
Implementing regulations are codified at 42 CFR part 435, subpart D.
The medically needy are individuals who have incomes too high to
qualify in a categorically needy group described in section
1902(a)(10)(A) of the Act, but who have certain significant and costly
health needs. Consistent with section 1902(a)(10)(C)(i)(III) of the Act
and regulations at Sec. 435.811(a), States establish a separate income
standard to determine the income eligibility of medically needy
individuals (referred to as the ``medically needy income level,'' or
``MNIL''). As directed by section 1903(f)(2) of the Act and Sec.
435.831(d), a State's determination of a prospective medically needy
individual's income eligibility includes the deduction of the uncovered
medical and remedial expenses incurred by the individual, the
individual's family members, or the individual's financially
responsible relatives, from the individual's countable income. This
process of deducting incurred medical and remedial expenses from an
individual's countable income is referred to as a ``spenddown.''
To determine income eligibility for medically needy coverage, a
State first determines an individual's countable income in accordance
with Sec. 435.831(b), including application of any disregards imposed
under the methodology appropriate for the individual (for example, a
$20 monthly income disregard for an individual whose Medicaid is based
on SSI methodologies), or approved under the State's Medicaid plan
under the authority of section 1902(r)(2) of the Act and Sec.
435.601(d).
If the individual's remaining countable income is at or below the
MNIL, they are income-eligible for the medically needy group. If the
remaining countable income exceeds the MNIL, the individual will need
to meet a spenddown; that is, the individual will need to reduce the
amount of their income above the MNIL by the amount of their
outstanding medical and remedial care expense liability, from bills the
individual incurs during their current budget period, and, in some
circumstances, previous to it (for example, under 42 CFR 435.831(f),
bills incurred in previous budget periods that were not used to meet a
spenddown because the individual had other bills that were sufficient
to meet the spenddown in the previous budget periods may be used in the
current budget period). As required by Sec. 435.831(a)(1), States must
choose a budget period of between 1 and 6 months to be used for
medically needy individuals. The State multiplies the amount that an
individual's countable income exceeds the MNIL for a single month by
the number of months in the budget period. The product is the amount of
medical or remedial care expenses for which the individual must
document being liable--the spenddown--to establish eligibility during
the budget period. Once the individual confirms having the necessary
medical expense liability to the State agency, the individual is
eligible for the remainder of the budget period.
For example, if an individual's countable monthly income is $1,200
in a State in which the MNIL is $700, the individual's spenddown
amount, based on monthly income, would be $500 ($1,200-$700 = $500). If
the budget period elected by the State is 3 months, the State
multiplies $500 by 3, and the individual's spenddown is $1,500 for the
budget period. If the individual's budget period begins on January 1st,
and the individual incurs unpaid medical expenses that are equal to or
greater than $1,500 on February 15th, the individual will be eligible
for Medicaid from February 15th through March 31st. To reestablish
Medicaid eligibility in the next budget period, the individual will
have to incur separate medical or remedial care expenses for $1,500.
The individual will not become eligible for Medicaid again until the
expenses have been incurred. This results in the individual
consistently cycling on and off Medicaid, with eligibility starting at
some point after the new budget period begins, causing a gap in
coverage for the individual and additional administrative work for the
State.
Separately, section 1902(f) of the Act and regulations at Sec.
435.121 authorize States to apply criteria more restrictive than the
SSI program criteria in determining eligibility under the mandatory
eligibility group for individuals seeking Medicaid on the basis of
being 65 years old or older or having blindness or disabilities,
provided that they offer Medicaid to any such individual who would have
been eligible under the State's 1972 Medicaid plan. (States electing
this option are referred to as ``209(b) States,'' after the provision
in the Social Security Amendments of 1972, Public Law 92-603, that
enacted section 1902(f) of the Act). In determining whether any such
individual is income-eligible, section 1902(f) of the Act and Sec.
435.121(f)(1)(iii) also require that uncovered medical expenses
incurred by the individual, the individual's family, or individual's
financially responsible relatives, be deducted from countable income,
and that a spenddown be calculated for individuals with income
exceeding the income limit for the mandatory 209(b) State group in
generally the same manner it is calculated for the medically needy.
In 1994, based on the authority granted to the Secretary under
sections 1102 and 1902(a)(4) of the Act to create rules necessary for
the efficient operation of the Medicaid program, and under section
1902(a)(17) of the Act to prescribe the extent to which costs of
medical care may be deducted from income, we established, under Sec.
435.831(g)(1), that States have the option to ``include medical
institutional expenses (other than expenses in acute care facilities)
projected to the end of the budget period at the Medicaid reimbursement
rate'' in calculations \49\ (59 FR 1659, January 12, 1994 referred to
hereafter as the ``1994 rulemaking''). We further confirmed in the
preamble to the 1994 rulemaking that 209(b) States are authorized to
implement the authority established in the rule relating to the
projection of medical institutional expenses.
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\49\ ``Medicaid Program; Deduction of Incurred Medical Expenses
(Spenddown)'' Final Rule with Comment Period; <a href="https://www.govinfo.gov/content/pkg/FR-1994-01-12/html/94-547.htm">https://www.govinfo.gov/content/pkg/FR-1994-01-12/html/94-547.htm</a>.
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``Projecting'' expenses means that a State includes in incurred
medical expenses those costs that it anticipates an individual will
incur during a budget period, which can make eligibility effective on
the first day of an
[[Page 54777]]
individual's budget period, if the anticipated expenses equal or exceed
the individual's spenddown. In promulgating the 1994 regulation, we
reasoned that institutional services are, by their nature, constant and
predictable, which supported a simplified approach for States to
determine that an institutionalized individual will meet their
spenddown amount each budget period. As required by regulations in
Sec. 435.831(i)(2), States must reconcile the projected amounts with
the actual amounts incurred at the end of the budget period in order to
confirm that the individual's incurred expenses were at least equal to
the individual's spenddown.
For example, consider an individual in an institution on the first
day of a month with a spenddown amount of $3,000 in a State in which
the medically needy budget period is 1 month. The Medicaid rate for the
facility is $4,500 ($150 daily), the private rate is $6,000 ($200
daily), and the State does not project institutional expenses. Until
eligibility for Medicaid is established, the individual will be charged
the private daily rate, which would mean that, in a month in which the
individual does not receive any services not included in the daily
rate, the individual will incur $3,000 in expenses as of the 15th of
the month (3,000 / 200 = 15), at which point the individual will be
eligible for Medicaid, for the remainder of the month. If the
individual does, however, receive any uncovered services beyond the
basic services included in the daily rate, the individual would become
eligible earlier in the month, although again only for the remainder of
the month. The result is that the individual is consistently cycling on
and off Medicaid, with an eligibility start date each budget period
that is not predictable to either the institutionalized individual or
State agency.
On the other hand, if the State elects to project the individual's
institutional expenses under the authority of Sec. 435.831(g)--that
is, determine that the individual will incur the Medicaid rate of
$4,500 for the month--the State can establish that the individual is
eligible for Medicaid, and grant eligibility effective the first day of
the month. No further eligibility-related determination is necessary.
Projecting expenses can benefit both parties, by reducing
administrative costs for the State and providing continuity of coverage
for the beneficiary.
We explained that we considered use of the Medicaid reimbursement
rate in the projection of expenses necessary to achieve the highest
level of certainty that an individual will incur the liability that the
regulation was permitting States to anticipate prior to the actual
receipt of the services (see 59 FR 1661). For example, if a State
projects the private rate for the services for an institutionalized
individual, and the private rate for a particular month exceeds the
individual's spenddown and the individual is consequently deemed
Medicaid eligible on the first day of the month, the individual will
not be charged the private rate for any of the services that month, but
instead will be charged the Medicaid rate, as the provider would have
to accept the Medicaid reimbursement rate for the Medicaid-covered
services. If, however, the individual's spenddown amount exceeds the
cost of the Medicaid rate, the individual possibly will not end up
incurring in the month the expenses necessary to meet his or her
spenddown. Therefore, to avoid possible erroneous grants of
eligibility, we determined that the use of the Medicaid reimbursement
rate in the projection of expenses was more appropriate.
The projection of expenses can have the effect of accelerating
eligibility. However, only permitting projection of the cost of care
for institutionalized individuals creates an inherent institutional
bias. Further, we believe that there are noninstitutional services that
may be similarly constant and predictable such that States could
project them for individuals who must meet a spenddown to become
income-eligible. Permitting projection of such noninstitutional
services would reduce some of the complexity that both State agencies
and individuals seeking coverage of home and community-based services
(HCBS) currently experience and reduce institutional bias. Projecting
noninstitutional expenses would reduce administrative costs associated
with disenrolling and reenrolling individuals, as well as lead to
better outcomes for individuals who would no longer cycle on and off
Medicaid and experience disruptions to their continuity of care.
We propose to amend Sec. 435.831(g) to permit States to project
certain additional services that the State can determine with
reasonable certainty will be constant and predictable. Similar to the
explanation provided for institutional expenses in the preamble to the
1994 rule, the projection of expenses for noninstitutional services is
limited to those that are reasonably certain to be received by the
individual, since only the amounts for which the individual is
ultimately liable can be used to reduce income. Like the reconciliation
process required for projected institutional expenses, under the
proposed revisions to Sec. 435.831(g), States will have to reconcile
actual noninstitutional services received with those projected at the
end of budget periods to address erroneous grants of spenddown-related
eligibility. Note that this proposal does not change the requirement
that a State continue to apply any eligible expenses actually incurred
by the individual in determining whether individuals have met the spend
down amount, regardless of whether the expense was projected.
We propose to include in the regulatory language examples of
specific types of expenses that we believe meet this standard, while
providing additional flexibility for States to identify additional
expenses that meet the criteria of being constant and predictable.
Specifically, we propose to allow projection of medical or remedial
expenses for the HCBS that are included in a plan of care (care plan)
for an individual receiving a section 1915(i), 1915(j), or 1915(k)
benefit or participating in a section 1915(c) HCBS waiver. We believe
these medical and remedial expenses are generally constant and
predictable because States are required to develop a care plan that
identifies the services, and the frequency with which they will be
received, for individuals eligible for section 1915(c), (i), (j), and
(k) services, as set forth in section 1915(c)(1), (i)(1)(E) and (G),
(j)(1), (5)(C), and (k)(1)(A)(i) of the Act, and Sec. Sec.
441.301(b)(1)(i), 441.468(a)(1), 441.540(b)(5), 441.720, and 441.725.
States could reasonably calculate, and deduct, the anticipated cost,
based on the Medicaid reimbursement rate, of the services in an
individual's care plan. We believe this proposal would also have the
effect of eliminating the institutional bias that is fostered by the
existing regulation's allowance for the projection of only
institutional expenses.
The same may be true of individuals who have significant expenses
related to high-cost drugs that treat a chronic condition. Pharmacies
routinely keep a patient medication profile (``pharmacy profile'') for
a patient, which could be used to determine which medications are for
chronic conditions and which are for acute treatment. A State could,
for example, use a pharmacy profile to review the 3-, 6-, or 12-month
history of the prescriptions that an individual has been prescribed,
and use that information to project expenses that are reasonably
expected to be incurred in the current budget period.
[[Page 54778]]
We recognize that the projection of institutional expenses is often
a straightforward calculation, as it involves only one provider, with a
fixed and easily identifiable rate. By contrast, the feasibility of
projecting expenses for individuals receiving section 1915(c) or (i)
services or prescriptions for chronic conditions will depend on the
individual's specific circumstances. For example, it is possible that a
section 1915(c) participant will not receive a service that is part of
their care plan during a month, or that the frequency with which the
individual receives one of the services, or multiple services, in the
care plan varies on a periodic basis. For such HCBS beneficiaries who
need a spenddown to qualify, it may take time before a State develops a
reasonable degree of certainty regarding the predictable costs the
individual incurs each month. For HCBS beneficiaries whose use of
services in their care plan varies greatly over the course of multiple
budget periods, a State may be unable to reasonably predict the
individual's service costs in a forthcoming budget period. Therefore,
we propose to expressly permit States to project the expenses of
section 1915(c), (j), (k) and (i) services and prescription drug
services, as well as other expenses in calculating whether an
individual meets their spenddown, where the State has determined that
such services are constant and predictable.
For both the expenses for services expressly permitted under the
examples in the proposed regulation text and for any other expenses for
services that the agency has determined are reasonably constant and
predictable, States would need to develop processes to evaluate the
likelihood of an individual receiving the services in an upcoming
budget period and the anticipated cost of the services. Discrepancies
between a State's projections and the cost of services actually
received inevitably will exist. Under proposed Sec. 435.831(g)(2),
States would be required to project expenses to the end of the budget
period with reasonable certainty. Consistent with current regulations
at Sec. 435.831(i)(2), States would need to reconcile the projected
amounts with the actual amounts incurred at the end of the budget
period. Individuals who the State determines as a result of
reconciliation did not actually meet their spenddown during the budget
period may not have eligibility terminated retroactively. The State
should use the findings made during reconciliation to prospectively
determine whether the individual can be expected to incur reasonably
constant and predictable expenses in the next budget period, and adjust
the projection accordingly.
We invite comment to identify any other types of services that
individuals may receive on a constant and predictable basis, and for
which a State could project, with a degree of relative certainty,
consistent costs for an individual over the course of a prospective
budget period. Such services would be considered for inclusion in the
regulatory text in the final rule as specific examples of services that
a State can determine with reasonable certainty to be constant and
predictable.
We propose to amend Sec. 435.831 to replace the current text in
paragraph (g)(2) with the proposed State option to project
noninstitutional expenses. Current paragraphs (g)(2) and (3) in Sec.
435.831 will be redesignated at paragraphs (g)(3) and (4). Note that
the proposed changes to Sec. 435.831(g) that would enable States to
project reasonably certain noninstitutional expenses for medically
needy individuals would also apply in projecting noninstitutional
expenses in 209(b) States.
6. Application of Primacy of Electronic Verification and Reasonable
Compatibility Standard for Resource Information (Sec. Sec. 435.952 and
435.940)
All 50 States and the District of Columbia are required to
implement an asset verification system (AVS) under section 1940 of the
Act to verify certain financial resources for all individuals applying
for or receiving Medicaid as an aged, blind, or disabled (ABD)
individual. An AVS enables States to verify assets held in virtually
any financial institution in the United States through an electronic
data matching process, although not all information returned through an
AVS occurs in real time; information from smaller financial
institutions may take as long as 30 days or more to be returned to the
Medicaid agency. In our work with States implementing the AVS
requirement, many States have asked whether they are permitted to
request additional documentation from applicants and beneficiaries
related to resources that can be verified through the State's AVS, or
if they can apply a reasonable compatibility standard for resources
when resource information returned from an electronic data source is
comparable to the information provided by the applicant or beneficiary.
The current regulation at Sec. 435.952(b) provides that, if
information provided by or on behalf of an individual is ``reasonably
compatible'' with information obtained by the State in accordance with
Sec. Sec. 435.948, 435.949 or 435.956, that the State must determine
or renew eligibility based on such information. Current Sec.
435.952(c) provides that an individual must not be required to provide
additional information or documentation unless information needed by
the State in accordance with Sec. Sec. 435.948, 435.949 or 435.956
cannot be obtained electronically or the information obtained
electronically is not reasonably compatible with information provided
by or on behalf of the individual. Section 435.952(c)(1) provides that
States must consider income information obtained through an electronic
data match to be reasonably compatible with attested income information
if either both are above or both are at or below the applicable income
standard or other relevant income threshold. Current Sec.
435.952(c)(2) requires the agency to seek additional information, which
may include documentation, if attested information is not reasonably
compatible with information obtained through an electronic data match.
However, documentation from the individual is permitted only to the
extent electronic data are not available and establishing a data match
would not be effective. In determining effectiveness, States must
consider such factors as the administrative costs associated with
establishing and using the data match compared with the administrative
costs associated with relying on paper documentation, and the impact on
program integrity in terms of the potential for ineligible individuals
to be approved, as well as for eligible individuals to be denied
coverage. We seek comment from States on potential implementation
challenges, including any systems integration considerations or
challenges, under this proposal which could impact the effectiveness
and usefulness of such a data match.
The language of Sec. 435.952 is written broadly to encompass all
factors of eligibility, including income and resource criteria, when
applicable. However, at the time Sec. 435.952 was promulgated in the
2012 eligibility final rule, no State had implemented the AVS
requirement and Federal requirements relating to verification of
resources were not included in the regulations. Because Sec.
435.952(b) and (c) apply specifically to information needed by the
State to verify an individual's eligibility in accordance with
Sec. Sec. 435.948 (relating to income), 435.949 (relating to
information received through the
[[Page 54779]]
Federal Data Services Hub), or 435.956 (relating to non-financial
eligibility requirements), some have interpreted this requirement not
to apply to verification of resources. This interpretation is not
consistent with our intent. The language in Sec. 435.952 is not
specific to income. Indeed, the reasonable compatibility policies
described in Sec. 435.952(b) and (c) also apply to verification of
non-financial eligibility criteria, for example, State residency which
can also be verified electronically (for example, through a data match
with the State's department of motor vehicles). Applying Sec. Sec.
435.952(b) and (c) to resources will help streamline enrollment for
individuals applying for Medicaid on a non-MAGI basis, such as on the
basis of age, blindness, or disability, and decrease burden for both
States and beneficiaries. If attested resource information is found to
be reasonably compatible with the resource information returned from
the AVS, then these resources are considered verified and no further
actions from the State or from the beneficiary are needed. Therefore,
we propose to revise paragraphs (b) and (c) of Sec. 435.952 to clarify
that these provisions apply also to verification of resources.
Specifically, we propose to make clear that paragraphs (b) and (c)
apply to any information obtained by the State--not just information
obtained in accordance with Sec. 435.948, 435.949 or 435.956. We also
propose to insert the words ``and resource'' after ``income'' in
paragraph (c)(1) and to delete the word ``income'' where it appears
before ``standard'' and ``threshold'' to require that States consider
resource information obtained through an electronic data match to be
reasonably compatible with attested resource information if both are
either above or at or below the applicable standard or other relevant
threshold.
This proposal is intended to clarify that States are not permitted
to request additional resource information from the beneficiary to
determine eligibility if the resource information provided by an
individual is reasonably compatible with the information received from
an electronic data source, such as the AVS. If information provided by
an individual is not reasonably compatible with the information
received from the electronic data source, States must resolve any
discrepancies per Sec. 435.952(c)(2), which is not revised in this
rulemaking.
Under the proposed regulations, resource information obtained from
an electronic data source, such as an AVS, must be considered
reasonably compatible with resource information provided by the
applicant or beneficiary if both are either above or at or below the
applicable resource standard or other applicable resource threshold.
Further, while not required, States could establish a reasonable
compatibility threshold, such that electronic data would be considered
reasonably compatible with attested resources if the electronic data is
no higher than attested resources plus the State's elected threshold
amount (expressed as either a percentage or dollar amount). Some
States, for example, apply a reasonable compatibility threshold of 5 or
10 percent of attested income in verifying income eligibility. States
would not be required to establish the same reasonable compatibility
threshold for income and resources, and may apply different reasonable
compatibility thresholds for different eligibility groups, provided
that the State has a reasonable rationale for doing so.
We also propose a corresponding technical change to amend Sec.
435.940 to add section 1940 of the Act as a basis for the income and
eligibility verification requirements. The proposed changes to Sec.
435.952 in this rulemaking include resource information obtained from
electronic data sources, such as an asset verification program
described under section 1940 of the Act.
7. Verification of Citizenship and Identity (Sec. 435.407)
In 2016, we revised the Medicaid and CHIP regulations governing the
verification of citizenship and identity to require States to rely
primarily on electronic verification to effectuate the streamlined and
coordinated approach required by the ACA to reduce burden on
individuals and increase administrative efficiency. These regulatory
changes were issued by CMS in a November 2016 final rule titled,
``Medicaid and Children's Health Insurance Programs: Eligibility
Notices, Fair Hearing and Appeal Processes for Medicaid and Other
Provisions Related to Eligibility and Enrollment for Medicaid and
CHIP'' (81 FR 86453, November 30, 2016) (referred to hereafter as the
``2016 eligibility and enrollment final rule''). Under the regulations,
all States must first attempt to verify citizenship electronically
using data from the SSA, and most States rely on a match through the
Federal Data Services Hub (FDSH) for this data. In that final rule, we
also streamlined and simplified the list of documents and other
acceptable means of verification that can be used when citizenship
cannot be verified electronically with SSA. One such alternative source
of citizenship verifications, codified at Sec. 435.407(b), is a data
match with the State's (or another State's) vital statistics system. We
explained in the preamble to the 2016 eligibility and enrollment final
rule that if citizenship verification cannot be completed through an
electronic data match with SSA, the State must attempt to verify
citizenship through an electronic data match with the State's (or
another State's) vital statistics system, before requesting paper
documentation from the individual, if such match is available within
the meaning at Sec. 435.952(c)(2)(ii).
Under current regulation, individuals whose citizenship is verified
based on any of the sources identified in Sec. 435.407(b)--which
includes, under the current regulations, a match with a State's vital
statistics records or with the U.S. Department of Homeland Security
(DHS) Systematic Alien Verification for Entitlements (SAVE) Program--
must also provide proof of identity. The documentary evidence
identified in section 1903(x)(3)(B) of the Act, codified through the
2016 eligibility and enrollment final rule at Sec. 435.407(a), in
contrast, provides ``stand-alone'' proof of citizenship; separate proof
of identity is not required. Section 1903(x)(3)(B)(vi) of the Act
authorizes the Secretary to specify that other documents in addition to
those specified in the statute, must be accepted as stand-alone
satisfactory documentation of citizenship if they determine that such
documents provide both proof of United States citizenship or
nationality, as well as reliable documentation of personal identity. As
explained below, verification with a State's vital statistics records
or SAVE, like the data match with SSA, which provides both proof of
U.S. citizenship or nationality and reliable documentation of personal
identity, meets this standard.
In this rule, we are proposing to further simplify the verification
procedures by moving verification of citizenship with a State vital
statistics agency or SAVE from paragraph (b) to paragraph (a) of Sec.
435.407 for Medicaid, which is incorporated into CHIP regulations
through existing cross-references at Sec. Sec. 457.380(b)(1)(i) and
435.956(a). This change would mean that verification of birth with a
State vital statistics agency or verification of citizenship with SAVE
would be considered stand-alone evidence of citizenship; separate
verification of identity would not be required, similar to the
treatment afforded to verification of citizenship with SSA. This
proposed change would reduce burden on
[[Page 54780]]
individuals and State Medicaid agencies and increase administrative
efficiency.
Turning first to citizens whose status can be verified with DHS'
SAVE Program, SAVE can provide electronic verification of U.S.
citizenship for individuals who have a DHS record of naturalized or
derived citizenship, usually documented with a Certificate of
Naturalization or Certificate of Citizenship. Any SAVE program
requestor (for example, the Medicaid or CHIP agency or other benefit
granting or licensing agency) that requests verification of U.S.
citizenship or immigration status through the SAVE program must provide
the SAVE program with the individual's biographic information (first
name, last name, and date of birth) and a personalized numeric
identifier (such as an Alien Number; Form I-94, Arrival/Departure
Record Number; Student and Exchange Visitor Information System (SEVIS)
ID number; or unexpired foreign passport number) unique to that
individual. DHS verifies identity prior to providing a SAVE program
response verifying citizenship or immigration status, reviewing
multiple records and in some cases requiring additional information
from the requestor. If an individual's immigration status is confirmed
by SAVE, the State's verification of immigration status is complete
under current regulations, whereas separate proof of identity is
required if SAVE confirms the individual's citizenship. Because the
process followed by SAVE is identical, we do not believe that the extra
step required for citizens is justified. Therefore, we propose
revisions to Sec. 435.407 to provide for comparable processes for
individuals whose status is verified by SAVE, regardless of whether
they are a citizen or non-citizen. Specifically, we propose to remove
verification of citizenship with SAVE currently at Sec. 435.407(b)(11)
(which requires separate proof of identify) and to add such
verification at proposed Sec. 435.407(a)(8) (which would not require
separate proof of identity) for Medicaid, which is incorporated into
CHIP regulations through existing cross-references at Sec. Sec.
457.380(b)(1)(i) and 435.956(a).
Verification of U.S. citizenship with a State vital statistics
agency provides a similarly robust data matching process because a
State Medicaid or CHIP agency must provide the State vital statistics
agency with a minimum set of identifiable information including the
name, date of birth, and Social Security Number (SSN). Some States also
use additional identifiers if they are available, such as the
individual's birth county, the parents' names or the mother's maiden
name. Based on State feedback, CMS understands that the process and
data fields used to verify citizenship with a State vital statistics
agency are similar across States. Conducting a data match with specific
identifiers like date of birth and SSN is the same process that could
be used to provide evidence of identity, thereby making a requirement
to separately verify identity redundant. Therefore, we propose
revisions to Sec. 435.407 under which verification of citizenship with
a State vital statistics agency would serve as stand-alone proof of
U.S. citizenship and no separate proof of identify would be required.
Specifically, we propose to remove verification of citizenship with a
State vital statistic's agency currently at Sec. 435.407(b)(2) (which
requires separate proof of identify) and to add such verification at
proposed Sec. 435.407(a)(7) (which would not require separate proof of
identity) for Medicaid, which is incorporated into CHIP regulations
through an existing cross-references at Sec. Sec. 457.380(b)(1)(i) and
435.956(a). However, we recognize that different State Medicaid and
CHIP agencies and vital statistics agencies may employ different
processes and seek comment on what processes Medicaid and CHIP agencies
use to verify citizenship with a State vital statistics agency,
including what information and identifiers are used to complete
verification, whether the data matching process with all State vital
statistics agencies is sufficiently robust to appropriately apply this
proposed change in policy to verification of citizenship in all States,
or limit this change in policy only to States in which the vital
statistic agency's processes are comparable to those of the SAVE
program.
We note that, if citizenship cannot be verified through an
electronic match with SSA, States are required to verify citizenship
using an electronic match prior to requesting other forms of
documentation, if such match is available and effective in accordance
with Sec. 435.952(c)(2)(ii). Inasmuch as State vital statistics
agencies generally can provide electronic data matching, we are also
proposing to delete the words ``at State option,'' which are included
in existing Sec. 435.407(b)(2), from proposed Sec. 435.407(a)(7) for
Medicaid, which is incorporated into CHIP regulations through an
existing cross-reference at Sec. 457.380(b)(1)(i) to Sec. 435.956(a).
Use of such match with a vital statistics agency is not voluntary if it
is available and effective in accordance with Sec. 435.952(c)(2)(ii).
This proposed revision does not necessarily require a State to develop
a match with its vital statistics agency. However, States that do not
currently perform such electronic matches must develop that capacity if
such match is available and would be effective in accordance with the
standard set forth in Sec. 435.952(c)(2)(ii). If a State already has
established a match with a State vital statistics agency or it would be
effective to establish such capability in accordance with the standard
set forth in Sec. 435.952(c)(2)(ii), the State must utilize such match
before requesting paper documentation.
B. Promoting Enrollment and Retention of Eligible Individuals
1. Aligning Non-MAGI Enrollment and Renewal Requirements With MAGI
Policies (Sec. Sec. 435.907 and 435.916)
The 2012 and 2013 eligibility final rules established a number of
eligibility and enrollment simplifications for MAGI-based Medicaid and
CHIP beneficiaries. Among these were streamlined processes that made it
easier for eligible individuals to apply and remain enrolled in
Medicaid and CHIP. However, beneficiary advocates raised concerns that
these simplifications have not been afforded to Medicaid beneficiaries
excepted from use of MAGI-based methodologies, which is particularly
problematic given that individuals over age 65 and those who are
eligible based on blindness or a disability are likely to have more
stable eligibility. Therefore, in this proposed rule, we propose
changes to both the application and renewal requirements for MAGI-
excepted applicants and beneficiaries to align with the requirements
for populations based on MAGI.
Beginning with the application process, individuals must be
permitted to submit the single streamlined application developed by the
Secretary, or an alternative single streamlined application described
at Sec. 435.907(a)(2) of the current regulations, through all
modalities specified at Sec. 435.907(a) (online, by telephone, by
mail, or in person). Although not expressly stated in the regulations,
States also are expected to accept applications and supplemental forms
needed for individuals to apply for coverage on a non-MAGI basis via
all modalities identified in Sec. 435.907(a). In addition, Sec.
435.907(d) prohibits States from requiring an in-person interview as
part of the application process, when determining eligibility based on
MAGI, whereas States are still permitted to
[[Page 54781]]
require an in-person interview for MAGI-excepted applicants.
At renewal, current Sec. 435.916(a) requires States to conduct
renewals of Medicaid eligibility on an annual basis for individuals
whose financial eligibility is determined using MAGI-based
methodologies. However, for individuals excepted from use of the MAGI-
based methodologies, Sec. 435.916(b) of the current regulations
permits States to conduct regularly-scheduled renewals more frequently
(for example, every 6 months). States must renew eligibility for all
Medicaid beneficiaries without requiring information from the
individual if able to do so consistent with regulations at Sec. Sec.
435.916(a)(2) and (b). However, when a beneficiary's eligibility cannot
be renewed based on available information, States must follow a set of
streamlined procedures for MAGI-based beneficiaries, which are not
required for those excepted from MAGI. The procedures for requesting
information from MAGI-based beneficiaries are described at Sec.
435.916(a)(3) of the current regulations and include: (1) using a pre-
populated renewal form; (2) providing the individual a minimum of 30
calendar days to sign and return the form along with any requested
information; and (3) reconsidering eligibility for an individual
terminated for failure to return the renewal form or other needed
information if the form or other information is returned within 90
calendar days after the date of termination. The procedures for
requesting information from MAGI-based beneficiaries are described at
Sec. 435.916(a)(3) of the current regulations and include: (1) using a
pre-populated renewal form; (2) providing the individual a minimum of
30 calendar days to sign and return the form along with any requested
information; and (3) reconsidering eligibility for an individual
terminated for failure to return the renewal form or other needed
information if the form or other information is returned within 90
calendar days after the date of termination. In addition, States may
not require a MAGI beneficiary to complete an in-person interview as
part of the renewal process under Sec. 435.916(a)(3)(iv) of the
current regulations. States may, but are not required to, adopt the
procedures at Sec. 435.916(a)(3) for individuals whose eligibility is
determined on a basis other than MAGI, per Sec. 435.916(b) of the
current regulations.
While almost all States adopt at least one of the optional
processes for renewals of non-MAGI beneficiaries,\50\ the differences
in renewal requirements for MAGI and non-MAGI beneficiaries result in a
less streamlined and more burdensome process for beneficiaries who
qualify for Medicaid on a non-MAGI basis, such as being age 65 or older
or having blindness or a disability. As a result of these differences,
individuals who are Medicaid eligible on one of these bases may be
required to spend more time completing renewal paperwork if their
renewal form is not prepopulated. They may be provided less time to
return their renewal form and requested information, even if the
individual must provide information related to additional factors of
eligibility associated with non-MAGI eligibility groups as compared to
MAGI eligibility groups, such as asset information.
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\50\ Kaiser Family Foundation (2019). Medicaid financial
eligibility for seniors and people with disabilities: Findings from
a 50-State survey, p. 19-20. <a href="https://www.kff.org/report-section/medicaid-financial-eligibility-for-seniors-and-people-with-disabilities-findings-from-a-50-state-survey-issue-brief/">https://www.kff.org/report-section/medicaid-financial-eligibility-for-seniors-and-people-with-disabilities-findings-from-a-50-state-survey-issue-brief/</a>.
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CMS finds this to be problematic for several reasons. First,
individuals who are Medicaid eligible based on being age 65 or older or
having blindness or a disability are more likely to live on a fixed
income and, therefore, are more likely to remain financially eligible
for coverage than the non-disabled beneficiaries under age 65 who
qualify for Medicaid based on MAGI.\51\ We are concerned that, despite
the generally greater stability of their income, and therefore,
eligibility, a larger proportion of non-MAGI beneficiaries who lose
coverage do so for procedural reasons. Indeed, as noted in section
II.A.1. of this proposed rule, dually eligible for Medicaid and
Medicare who lose Medicaid coverage within the first year of enrollment
likely lose such coverage for reasons that are administrative in
nature.\52\ Also, individuals who are Medicaid eligible based on being
age 65 or older or having blindness or disability status may experience
additional barriers related to document retention, communication (for
example, limited English proficiency and low health literacy),
technology (for example, printing costs, access to a computer or
internet) and limited access to transportation, among others. Processes
that provide greater flexibility, such as reduced documentation
requests and more time for returning information, can reduce these
barriers.<SUP>53 54</SUP> As a result, we believe that when States do
not use available streamlined renewal procedures for this population,
there is a greater risk of terminations for procedural reasons.
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\51\ Ku, L. & Steinmetz, E. (2013). Bridging the Gap: Continuity
and Quality of Coverage in Medicaid. <a href="https://ccf.georgetown.edu/wp-content/uploads/2013/09/GW-Continuity-Report-9-10-13.pdf">https://ccf.georgetown.edu/wp-content/uploads/2013/09/GW-Continuity-Report-9-10-13.pdf</a>; Office of
the Assistant Secretary for Planning and Evaluation, U.S. Department
of Health and Human Services (2021). Medicaid Churning and
Continuity of Care: Evidence and Policy Considerations Before and
After the COVID-19 Pandemic. <a href="https://aspe.hhs.gov/sites/default/files/private/pdf/265366/medicaid-churning-ib.pdf">https://aspe.hhs.gov/sites/default/files/private/pdf/265366/medicaid-churning-ib.pdf</a>.
\52\ Assistant Secretary for Planning and Evaluation (2019).
Loss of Medicare-Medicaid dual eligible status: Frequency,
contributing factors and implications. <a href="https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf">https://aspe.hhs.gov/system/files/pdf/261716/DualLoss.pdf</a>. CMS also recently completed an
updated internal analysis of ASPE's study using data from 2015-2018
that shows that dually eligible individuals continue to lose
Medicaid at a high rate in their first year due to administrative
reasons.
\53\ CMS Office of Burden Reduction & Health Informatics (April
2022). Navigating the Medicare Savings Program (MSP) Eligibility
Experience. <a href="https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf">https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf</a>.
\54\ CMS Office of Burden Reduction & Health Informatics (April
2022). Navigating the Medicare Savings Program (MSP) Eligibility
Experience. <a href="https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf">https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf</a>.
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Using the authority provided in sections 1902(a)(4)(A) and (a)(19)
of the Act to ensure the proper and efficient administration of the
program and that eligibility is determined in a manner consistent with
simplicity of administration and best interests of beneficiaries, we
propose to revise current renewal regulations at Sec. 435.916 to
require States to apply the same renewal procedures for MAGI and non-
MAGI beneficiaries. Specifically, we propose, by removing the reference
in Sec. 435.916(a)(1) to MAGI beneficiaries, to require that States
conduct regularly-scheduled renewals of eligibility once, and only
once, every 12 months for all Medicaid beneficiaries, including non-
MAGI beneficiaries with limited exception, discussed below. We believe
aligning the frequency of renewals for non-MAGI beneficiaries with the
current requirement for MAGI beneficiaries is appropriate given that
circumstances related to eligibility are generally more stable for non-
MAGI beneficiaries and will reduce beneficiary burden, consistent with
sections 1902(a)(4) and (a)(19) of the Act. In addition, we believe
this proposal promotes equity across enrolled populations since non-
MAGI beneficiaries, whose income tends to be more stable, would no
longer be subject to more frequent requests to return renewal forms or
provide documentation to verify continued eligibility than other
beneficiaries. We also note that over 40 States currently conduct
renewals only once every 12 months for all Medicaid beneficiaries.
[[Page 54782]]
We seek comment on this proposal at Sec. 435.916(a)(1) to align
the frequency of renewals for all beneficiaries, except as noted below.
We are particularly interested in comments from State agencies on the
administrative impact of conducting eligibility only once every 12
months for non-MAGI beneficiaries and whether or not State agencies
that currently conduct renewals only once every 12 months for all
Medicaid beneficiaries have experienced more stable coverage among non-
MAGI beneficiaries or any program integrity concerns after shifting
from a shorter renewal cycle to a 12-month renewal cycle. We are also
interested in data regarding coverage losses among non-MAGI
beneficiaries due to procedural reasons, such as failure to return
renewal paperwork timely, versus changes to specific factors of
eligibility, such as income or disability status. We are also
interested in hearing from stakeholders and beneficiaries on the impact
of more frequent renewals on maintaining coverage.
Section 1902(e)(8) of the Act provides an option for States to
renew eligibility for QMBs described in section 1905(p)(1) of the Act
more frequently than once every 12 months, but no more frequently than
once every 6 months. Thus, we cannot, propose to limit renewals for
QMBs to once every 12 months, and proposed Sec. 435.916(a)(2)
continues to allow States to conduct more frequent renewals of Medicaid
eligibility for QMBs consistent with section 1902(e)(8) of the Act.
However, States are permitted under current regulations at Sec.
435.916(b) to conduct renewals once every 12 months for QMBs and would
remain able to do so under proposed Sec. 435.916(a)(2). We encourage
States to exercise their flexibility to schedule renewals only once
every 12 months for QMBs to mitigate churn and ease administrative
burden on beneficiaries and States that is associated with more
frequent renewals of eligibility.
Proposed Sec. 435.916(b)(3) also requires States to adopt the
renewal processes at Sec. 435.916(a)(3) of the regulations, as revised
at redesignated Sec. 435.916(b)(2), for non-MAGI beneficiaries when a
State is unable to renew eligibility for an individual based on
information available to the agency. Proposed Sec. 435.916(b)(2) and
(3) would require States to provide all beneficiaries, including non-
MAGI beneficiaries, whose eligibility cannot be renewed in accordance
with proposed Sec. 435.916(b)(1): (1) a renewal form that is pre-
populated with information available to the agency; (2) a minimum of 30
calendar days to return the signed renewal form along with any required
information; and (3) a 90-day reconsideration period for individuals
terminated for failure to return their renewal form but who
subsequently return their form within the reconsideration period. We
believe aligning these renewal procedures would promote continuity of
coverage and simplify the renewal process for non-MAGI beneficiaries in
a manner that is in the best interest of beneficiaries, consistent with
section 1902(a)(19) of the Act, including those in households with
individuals enrolled on both a MAGI and non-MAGI basis who otherwise
may be subject to more burdensome administrative requirements at
renewal. In addition, we believe States will also experience reduced
administrative burden associated with churn if individuals face fewer
administrative barriers to maintaining coverage.
We also propose to eliminate the option States have under current
regulations at Sec. Sec. 435.907(d) and 435.916(b) to require an in-
person interview as part of the application and renewal process for
non-MAGI beneficiaries. Stakeholder feedback on the beneficiary
experience navigating State application and renewal processes indicate
that it can be challenging for individuals who are Medicaid eligible
based on being age 65 or older or having blindness or a disability
status to coordinate, prepare for, and participate in an interview and
missing and/or having to reschedule an interview, particularly when the
process is not flexible for the individual, can result in
determinations of ineligibility and/or terminations based on procedural
reasons.\55\ We believe in-person interview requirements create a
barrier for eligible individuals to obtain and maintain coverage
without yielding any additional information than can be obtained
through other modalities, particularly for individuals without access
to reliable transportation or a consistent schedule.
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\55\ CMS Office of Burden Reduction & Health Informatics (April
2022). Navigating the Medicare Savings Program (MSP) Eligibility
Experience. <a href="https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf">https://www.cms.gov/files/document/navigating-medicare-savings-program-msp-eligibility-experience-journey-map.pdf</a>.
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In addition to eliminating the option to require an in-person
interview, we propose to codify longstanding policy to align enrollment
requirements in the best interest of all applicants. Proposed Sec.
435.907(c)(4) codifies longstanding policy that States accept all MAGI-
exempt applications and supplemental forms provided by applicants
seeking coverage on a non-MAGI basis, through all the modalities listed
in current regulations at Sec. 435.907(a). Eliminating the in-person
interview requirement and codifying the requirements for accepting
MAGI-exempt applications and supplemental forms through all modalities
would further align eligibility and enrollment procedures for MAGI and
non-MAGI applicants and beneficiaries and reduce applicant and
beneficiary burden, consistent with sections 1902(a)(4) and (a)(19) of
the Act.
We propose removing the introductory language at the current Sec.
435.916(b) related to the frequency of and process for renewals of
eligibility for non-MAGI beneficiaries. We propose redesignating
current regulations at Sec. 435.916(b)(1) and (2) (related to the
agency's option to consider blindness and disability as continuing at
renewal) at proposed Sec. 435.916(b)(3)(i) and (ii).
In addition to the policy changes proposed to align application and
renewal processes for MAGI and non-MAGI populations whenever possible,
we propose several additional changes to current Sec. 435.916 to
ensure that the renewal requirements are clear and consistent. We
propose to redesignate current regulations at Sec. 435.916(a)(2)
(related to renewals based on information available to the agency) and
Sec. 435.916(a)(3) (related to renewals that require information from
beneficiaries) to Sec. 435.916(b)(1) and (b)(2), respectively. States
will continue to be required to attempt to renew eligibility for all
Medicaid beneficiaries (MAGI and non-MAGI) based on available
information before requesting information from the individual, as
required at current Sec. 435.916(a)(2) and (b), and to send a renewal
form to, and request information from, beneficiaries for whom the State
does not have sufficient information to redetermine eligibility, and
accept the renewal form through all modalities required at application
at Sec. 435.907(a). (online, by telephone, by mail, or in person). We
propose to modify the header in proposed Sec. 435.916(b)(2) from ``use
of a pre-populated renewal form'' to ``renewals requiring information
from the individual'' since the current regulations describe the steps
States must take when conducting renewals that require information from
the individual, which includes, but is not limited to, the use of pre-
populated renewal forms.
At Sec. 435.916, we also propose to revise current paragraph
(a)(3)(i)(B), redesignated at proposed paragraph (b)(2)(i)(B), to
clarify that the 30 calendar days that States must provide
beneficiaries to return their pre-
[[Page 54783]]
populated renewal form begins on the date the State sends the form.
This would mean that beneficiaries have 30 calendar days from the date
a form is postmarked or, for beneficiaries who elected to receive
electronic notices, the date the electronic is sent. We believe
starting the 30-day period from the date the State sends the form,
instead of the date on the form, will ensure beneficiaries do not lose
time to respond if the form is postmarked or sent after it is dated.
We propose clarifying revisions to current Sec.
435.916(a)(3)(i)(B) (related to renewal form signatures), redesignated
at proposed Sec. 435.916(b)(2)(i)(B), by including a technical change
to explicitly state that beneficiaries must sign their pre-populated
renewal form under penalty of perjury; current regulations at Sec.
435.916(a)(3)(i)(B) includes this requirement only by cross reference
to Sec. 435.907(f).
We propose to revise current Sec. 435.916(a)(3)(iii) (related to
timely processing of renewal forms and information returned during the
reconsideration period), redesignated at proposed Sec.
435.916(b)(2)(iii), to specify explicitly in regulation our current
policy that the returned renewal form and information received during
the reconsideration period serve as an application and require, via
cross reference to Sec. 435.912(c)(3) of the current regulation, that
States determine eligibility within the same timeliness standards
applicable to processing applications, that is, 90 calendar days for
renewals based on disability status and 45 calendar days for all other
renewals. Treatment of renewal forms returned during the 90-day
reconsideration period as an application means that the availability of
retroactive eligibility at Sec. 435.915 can close the gap in coverage
that such beneficiaries otherwise would experience. Adherence to the
timeliness standards applicable to applications will ensure eligible
individuals are furnished coverage with reasonable promptness,
consistent with sections 1902(a)(4) and 1902(a)(8) of the Act and will
minimize the likelihood that individuals will forgo needed care. As
revised, proposed Sec. 435.916(a)(3)(iii) is also consistent with
guidance described in the December 4, 2020, CMCS Informational Bulletin
``Medicaid and Children's Health Insurance Program (CHIP) Renewal
Requirements'' (2020 Renewal CIB) that a renewal form returned within
the reconsideration period serves as an application for the purposes of
adherence to timeliness standards to make determinations of
eligibility.<SUP>56 57</SUP>
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\57\ CMCS Informational Bulletin: Medicaid and Children's Health
Insurance Program (CHIP) Renewal Requirements (2020). Available at
<a href="https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf</a>.
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We propose to redesignate and revise current regulations at Sec.
435.916(c) and (d), related to redeterminations based on changes in
circumstances, at the new proposed Sec. 435.919. Proposed revisions to
these regulations are discussed in section II.B.2. of this proposed
rule.
With the redesignation of current Sec. 435.916(c) and (d) to
proposed Sec. 435.919, we also propose to redesignate current Sec.
435.916(e) (related to requesting only information from beneficiaries
needed to renew eligibility) at proposed Sec. 435.916(b)(2)(v). We
propose to redesignate current Sec. 435.916(f) (related to determining
eligibility on all bases and transmission of data pertaining to
individuals no longer eligible for Medicaid) and Sec. 435.916(g)
(relating to accessibility of renewal forms and notices) to proposed
Sec. 435.916(d) and (e), respectively. Additionally, we modify current
Sec. 435.916(f)(2), redesignated at Sec. 435.916(d)(2) in this
proposed rule, to ensure that, prior to terminating coverage for an
individual determined ineligible for Medicaid, States determine
eligibility for CHIP and potential eligibility for other insurance
affordability programs (that is, BHP and insurance affordability
programs available through the Exchanges) and transfer the individual's
account in compliance with the procedures set forth in Sec.
435.1200(e), including proposed changes described in section II.B.5. of
this proposed rule. We believe requiring that these actions be
completed prior to termination is necessary to limit gaps in coverage
for individuals transitioning between Medicaid and other insurance
affordability programs, consistent with sections 1902(a)(4) and
1902(a)(19) of the Act. We add a paragraph heading at proposed Sec.
435.916(e) to format the provision consistent with other provisions in
Sec. 435.916.
Finally, as discussed in section II.B.3. of this proposed rule, we
propose to establish time standards for States to complete renewals of
eligibility in proposed Sec. 435.912(c)(4) and add a cross reference
to these proposed time standards in proposed Sec. 435.916(c).
2. Acting on Changes in Circumstances Timeframes and Protections
(Sec. Sec. 435.916, 435.919, and 457.344)
Section 1902(a)(10) of the Act authorizes States to make medical
assistance available under the State plan to individuals who meet
certain eligibility criteria. Once an applicant has been determined
eligible for coverage, Federal regulations include two basic
requirements to ensure that individuals receiving medical assistance
continue to be eligible. First, as described in section II.B.1. of this
proposed rule, States are required to conduct regular renewals of
eligibility per Sec. 435.916(a) and (b) of the current regulations.
Second, per Sec. 435.916(c) and (d) of the current regulations, States
must have a process to obtain information about changes in
circumstances that may impact a beneficiary's eligibility and
redetermine eligibility in between regular renewals when appropriate.
Current regulations at Sec. 435.916(c) require that States have
procedures designed to ensure that beneficiaries make timely and
accurate reports of any changes in circumstances that may affect their
eligibility and that such changes may be reported through any of the
modes for submission of applications described in Sec. 435.907(a).
Current regulations at Sec. 435.916(d) specify that the agency must
promptly redetermine eligibility between regular renewals of
eligibility whenever it receives information about a change in
beneficiary circumstances that may affect eligibility, such as a change
in income or the death of a beneficiary. The regulation does not define
``promptly.''
We are concerned that a number of States are not taking appropriate
steps to follow up on reported or detected changes in beneficiaries'
circumstances within a reasonable period of time or in a manner that
promotes continuity of coverage for eligible beneficiaries. There is a
potential risk to beneficiaries if a State delays processing a change
in circumstances that may entitle a beneficiary to additional
assistance or lower premiums or cost-sharing, as well as risk that
beneficiaries may lose coverage for procedural reasons if States do
follow up with a beneficiary to request additional information but do
not provide sufficient time for the beneficiary to respond. Moreover,
recent U.S. Department of Health and Human Services (HHS) Office of
Inspector General (OIG) reports, as well as CMS audits and data
analyses have cited cases in which States continued to provide coverage
for many months after a change impacting eligibility was identified
that should have prompted a redetermination based on a change in
circumstances and other instances in which States continued to make
[[Page 54784]]
capitated payments to managed care plans for deceased
beneficiaries.\58\
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\58\ https://www.lla.la.gov/PublicReports.nsf/
1CDD30D9C8286082862583400065E5F6/$FILE/0001ABC3.pdf and <a href="https://oig.hhs.gov/oas/reports/region7/71604228.pdf">https://oig.hhs.gov/oas/reports/region7/71604228.pdf</a>; <a href="https://oig.hhs.gov/oas/reports/region5/51800026.pdf">https://oig.hhs.gov/oas/reports/region5/51800026.pdf</a>; <a href="https://oig.hhs.gov/oas/reports/region4/41806220.pdf">https://oig.hhs.gov/oas/reports/region4/41806220.pdf</a>; and <a href="https://oig.hhs.gov/oas/reports/region5/51700008.pdf">https://oig.hhs.gov/oas/reports/region5/51700008.pdf</a>.
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.