Rule2023-26640
Medicaid; CMS Enforcement of State Compliance With Reporting and Federal Medicaid Renewal Requirements Under Section 1902(tt) of the Social Security Act
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 6, 2023
Effective
December 6, 2023
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This interim final rule with request for comments (IFC) implements reporting requirements and enforcement authorities in the Social Security Act (the Act) that were added by the Consolidated Appropriations Act, 2023 (CAA, 2023). CMS will use these new enforcement authorities as described in this rule if States fail to comply with the new reporting requirements added by the CAA, 2023 or with Federal Medicaid eligibility redetermination requirements during a timeframe that is generally aligned with the period when States are restoring eligibility and enrollment operations following the end of the Medicaid continuous enrollment condition under the Families First Coronavirus Response Act (FFCRA). The new enforcement authorities include requiring States to submit a corrective action plan, suspending disenrollments from Medicaid for procedural reasons, and imposing civil money penalties (CMPs). They also include applying a reduction to the State-specific Federal Medical Assistance Percentage (FMAP) for failure to meet reporting requirements.
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 233 (Wednesday, December 6, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 233 (Wednesday, December 6, 2023)]
[Rules and Regulations]
[Pages 84713-84737]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-26640]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 430 and 435
Office of the Secretary
45 CFR Part 16
[CMS-2447-IFC]
RIN 0938-AV26
Medicaid; CMS Enforcement of State Compliance With Reporting and
Federal Medicaid Renewal Requirements Under Section 1902(tt) of the
Social Security Act
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Interim final rule with comment period.
-----------------------------------------------------------------------
SUMMARY: This interim final rule with request for comments (IFC)
implements reporting requirements and enforcement authorities in the
Social Security Act (the Act) that were added by the Consolidated
Appropriations Act, 2023 (CAA, 2023). CMS will use these new
enforcement authorities as described in this rule if States fail to
comply with the new reporting requirements added by the CAA, 2023 or
with Federal Medicaid eligibility redetermination requirements during a
timeframe that is generally aligned with the period when States are
restoring eligibility and enrollment operations following the end of
the Medicaid continuous enrollment condition under the Families First
Coronavirus Response Act (FFCRA). The new enforcement authorities
include requiring States to submit a corrective action plan, suspending
disenrollments from Medicaid for procedural reasons, and imposing civil
money penalties (CMPs). They also include applying a reduction to the
State-specific Federal Medical Assistance Percentage (FMAP) for failure
to meet reporting requirements.
DATES: These regulations are effective on December 6, 2023.
Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, by February 2, 2024.
ADDRESSES: In commenting, please refer to file code CMS-2447-IFC.
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-2447-IFC, 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-2447-IFC, 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: Abby Kahn, (410) 786-4321,
<a href="/cdn-cgi/l/email-protection#c485a6ada3a5ada8ea8fa5acaa84a7a9b7eaacacb7eaa3abb2"><span class="__cf_email__" data-cfemail="c180a3a8a6a0a8adef8aa0a9af81a2acb2efa9a9b2efa6aeb7">[email protected]</span></a>, or Anna Bonelli, (443) 615-1268,
<a href="/cdn-cgi/l/email-protection#5d1c33333c731f3233383131341d3e302e7335352e733a322b"><span class="__cf_email__" data-cfemail="6d2c03030c432f0203080101042d0e001e4305051e430a021b">[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. CMS will not post on <a href="http://Regulations.gov">Regulations.gov</a> public
comments that make threats to individuals or institutions or suggest
that the commenter will take actions to harm an individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
[[Page 84714]]
I. Background
A. Enforcement Authorities Under Section 1902(tt) of the Social
Security Act
Section 1902(tt)(2) of the Social Security Act (the Act) (added by
section 5131(b) of Subtitle D of Title V of Division FF of the
Consolidated Appropriations Act, 2023 (CAA, 2023), Public Law 117-328,
enacted December 29, 2022) includes new enforcement authority for CMS
to use if it determines that a State is not in compliance with the
reporting requirements under section 1902(tt)(1) of the Act, Federal
eligibility redetermination requirements,\1\ or both.
---------------------------------------------------------------------------
\1\ Medicaid regulations use both terms ``redetermination'' and
``renewal.'' For purposes of this rule, we interpret the reference
to all Federal requirements applicable to eligibility
redeterminations in section 1902(tt)(2)(B)(i) of the Act to include
Federal renewal requirements outlined in 42 CFR 435.916, as newly
defined at Sec. 430.5 in this rule.
---------------------------------------------------------------------------
First, if CMS determines that a State is not in compliance with the
reporting requirements under section 1902(tt)(1) of the Act for any
fiscal quarter that occurs during the period that begins on July 1,
2023, and ends on June 30, 2024, section 1902(tt)(2)(A) of the Act
requires CMS to reduce the Federal Medical Assistance Percentage (FMAP)
as determined for the State for the quarter under section 1905(b) of
the Act by the number of percentage points (not to exceed 1 percentage
point) equal to the product of 0.25 percentage points and the number of
fiscal quarters during such period for which the State has failed to
satisfy such requirements. Per section 1902(tt)(2)(A) of the Act, the
FMAP reduction is for fiscal quarters occurring in the period beginning
on July 1, 2023, and ending on June 30, 2024. Therefore, CMS will not
apply the FMAP reduction under section 1902(tt)(2)(A) of the Act to the
quarter from April 1, 2023, to June 30, 2023, and CMS will not evaluate
State-reported data reflecting activities during these months for
purposes of the FMAP reduction.
Second, if CMS determines that a State is not in compliance with
Federal eligibility redetermination requirements, the reporting
requirements under section 1902(tt)(1) of the Act, or both, section
1902(tt)(2)(B) of the Act authorizes CMS to require a State to submit a
corrective action plan (CAP) to address the noncompliance. If the State
fails to submit or implement an approved CAP in accordance with section
1902(tt)(2)(B)(ii) of the Act, then, under section 1902(tt)(2)(B)(iii)
of the Act, CMS may require the State to suspend some or all
terminations of Medicaid eligibility that are for procedural reasons
(hereinafter referred to as ``procedural disenrollments'') and may also
impose civil money penalties (CMPs) of up to $100,000 for each day a
State is not in compliance. In this rule, CMS defines procedural
disenrollments in Sec. 430.5 to mean, for the purposes of Sec. 430.49
and 45 CFR part 16, a termination of a beneficiary's Medicaid
eligibility after providing advance notice required under 42 CFR part
431, subpart E for reasons that are unrelated to a State's
determination of whether the individual meets eligibility criteria to
qualify for coverage, including for failure to return a renewal form or
documentation needed by the State to make a determination of
eligibility. This new authority under section 1902(tt)(2)(B) of the Act
is in addition to any FMAP reduction that may also be applicable under
section 1902(tt)(2)(A) of the Act or any other enforcement authority
available to the Secretary. This new enforcement authority under
section 1902(tt)(2)(B) of the Act relates to State conduct occurring
during the period that began on April 1, 2023, and ends on June 30,
2024.
Both the new enforcement authorities in section 1902(tt)(2)(A) of
the Act and in section 1902(tt)(2)(B) of the Act took effect on April
1, 2023. As noted above, the enforcement authority in section
1902(tt)(2)(A) of the Act does not apply to State conduct during the
period from April 1, 2023, to June 30, 2023.
B. New Enforcement Needs and Considerations Given the Ending of the
Medicaid Continuous Enrollment Condition
Section 1902(tt) of the Act applies during a period when States are
conducting an unprecedented volume of Medicaid eligibility
redeterminations. Under section 6008(b)(3) of the FFCRA (Pub. L. 116-
127, originally enacted March 18, 2020), States were able to claim a
temporary 6.2 percentage point increase in their FMAP provided that
they met several conditions, including that they not disenroll most
persons enrolled in Medicaid as of or after March 18, 2020, until the
last day of the month in which the COVID-19 Public Health Emergency
(PHE) ended. This provision is known as the Medicaid continuous
enrollment condition. As of April 1, 2023, 50 States, the District of
Columbia, and the five U.S. Territories (referred to as ``States''
throughout, consistent with section 1101(a) of the Act), were claiming
the FFCRA FMAP increase, so this condition applied to all States.
Section 5131(a) of Subtitle D of Title V of Division FF of the CAA,
2023 made several changes to section 6008 of the FFCRA. As relevant
here, section 5131(a)(2)(C) of Subtitle D of Title V of Division FF of
the CAA, 2023 separated the end of the continuous enrollment condition
from the end of the COVID-19 PHE by amending section 6008(b)(3) of the
FFCRA to end continuous Medicaid enrollment as a condition for claiming
the FFCRA temporary FMAP increase on March 31, 2023.\2\ This means
that, beginning April 1, 2023, all 56 States claiming the temporary
FMAP increase were no longer required to comply with the continuous
enrollment condition. Accordingly, States must conduct a full renewal
of eligibility for each beneficiary (as part of a process referred to
as ``unwinding''), in accordance with 42 CFR 435.916 and as described
in State Health Official (SHO) letter #22-001, ``RE: Promoting
Continuity of Coverage and Distributing Eligibility and Enrollment
Workload in Medicaid, the Children's Health Insurance Program (CHIP),
and Basic Health Program (BHP) Upon Conclusion of the COVID-19 Public
Health Emergency'' (March 2022 SHO letter).\3\
---------------------------------------------------------------------------
\2\ Section 5131(a) of Subtitle D of Title V of Division FF of
the CAA, 2023 also amended section 6008 of the FFCRA to revise the
conditions States must meet to claim the temporary FMAP increase for
each quarter beginning April 1, 2023, to extend the availability of
the temporary FMAP increase until December 31, 2023, and to
gradually phase down the amount of the increase for each quarter
from April 1, 2023, to December 31, 2023.
\3\ <a href="https://www.medicaid.gov/Federal-policy-guidance/downloads/sho22001.pdf">https://www.medicaid.gov/Federal-policy-guidance/downloads/sho22001.pdf</a>.
---------------------------------------------------------------------------
CMS previously released guidance describing specific requirements
and recommendations for States related to unwinding from the continuous
enrollment condition. As a result of the policies described in these
guidance documents, State unwinding periods vary and do not necessarily
overlap with the compliance period for the new enforcement tools
created under section 1902(tt) of the Act. As discussed in SHO letter #
23-002, ``RE: Medicaid Continuous Enrollment Condition Changes,
Conditions for Receiving the FFCRA Temporary FMAP Increase, Reporting
Requirements, and Enforcement Provisions in the Consolidated
Appropriations Act, 2023'' (January 2023 SHO letter),\4\ beginning as
early as February 1, 2023, States have up to 12 months to initiate, and
14 months to complete, a renewal for all individuals enrolled in
Medicaid, a period commonly referred to as a State's
[[Page 84715]]
``unwinding period.'' \5\ Starting on or after April 1, 2023, States
claiming the temporary FFCRA FMAP increase may disenroll persons
determined to be ineligible by a renewal initiated during the State's
unwinding period. Likewise, the March 2022 SHO letter outlines CMS'
expectations for renewals during unwinding. As also discussed in the
January 2023 SHO letter, States had the option to initiate the first
cohort of renewals to begin their unwinding period in February, March,
or April 2023.\6\
---------------------------------------------------------------------------
\4\ <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf</a>.
\5\ While the requirements of section 6008 of the FFCRA do not
apply to separate CHIPs or the Basic Health Program (BHP), CMS
recognizes some States elected to apply certain provisions of
section 6008 to their separate CHIP program or BHP. In those
circumstances, subject to exceptions noted and other Federal
requirements, much of CMS' guidance related to unwinding from the
FFCRA continuous enrollment condition also applies to CHIP and BHP.
However, neither section 1902(tt) of the Act, nor this rule, applies
to separate CHIPs or BHPs.
\6\ For additional guidance about State renewals of eligibility
following the end of the continuous enrollment condition see
<a href="http://www.medicaid.gov/unwinding">www.medicaid.gov/unwinding</a>.
---------------------------------------------------------------------------
Section 1902(tt) of the Act took effect on April 1, 2023, the day
after the continuous enrollment condition expired. It imposes new
reporting requirements on States during a period that generally
overlaps with States' unwinding periods. It also provides CMS with new
authority to take enforcement action if States fail to comply with
Federal requirements related to eligibility redetermination or the new
reporting requirements. Notably, these new reporting requirements and
CMS' authority to enforce redetermination and data reporting
requirements apply to all 56 States, regardless of whether a State is
continuing to claim the FFCRA FMAP increase. This rule implements the
new reporting requirements in section 1902(tt)(1) of the Act and the
enforcement authorities in section 1902(tt)(2) of the Act (which are
further discussed in the section II).
C. Monitoring Eligibility Redetermination Activities
Section 1902(tt) of the Act authorizes CMS to closely monitor and
enforce Federal redetermination requirements during a period that
generally aligns with States' unwinding periods, and thus, these
authorities better position CMS to take actions to prevent unauthorized
disenrollments during this critical period. Section 1902(tt)(1) of the
Act requires that, for each month occurring during the period beginning
on April 1, 2023, and ending on June 30, 2024, States must submit on a
timely basis to CMS, and CMS must make public, certain monthly data
about activities related to eligibility redeterminations conducted
during that same period. The January 2023 SHO letter discussed these
reporting requirements under section 1902(tt)(1) of the Act in further
detail and explained that all the data States must report under these
new reporting requirements are included in existing data sources,
including the Unwinding Data Report and State-based Exchanges (SBE)
priority metrics.\7\
---------------------------------------------------------------------------
\7\ See the January 2023 SHO Letter. See also CMS,
``Consolidated Appropriations Act, 2023: FMAP Reduction for Failure
to Meet Reporting Requirements under Section 1902(tt)(1) of the
Social Security Act, Frequently Asked Questions for State Medicaid
and CHIP Agencies,'' (June 30, 2023) (``June 2023 FAQs'') (Available
at: <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/fmap-rdctn-repot-medcid-chip-agncs-06302023.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/fmap-rdctn-repot-medcid-chip-agncs-06302023.pdf</a>).
---------------------------------------------------------------------------
Based on the timeframe when the reporting requirements under
section 1902(tt)(1) of the Act apply, and the title of section
1902(tt)(1) of the Act, which refers to the ``transition from [the
FFCRA] FMAP increase,'' CMS interprets the statutory data collection
and reporting requirements to be a means to help CMS monitor States'
work unwinding from the Medicaid continuous enrollment condition and
returning to regular eligibility and enrollment operations. Under our
interpretation, the reporting requirements under section 1902(tt)(1) of
the Act will help us monitor whether States are compliant--during a
timeframe that generally aligns with their return to regular
eligibility and enrollment operations--with Federal eligibility
redetermination requirements (including renewal requirements at 42 CFR
435.916, strategies authorized under section 1902(e)(14) of the Act, or
alternative strategies authorized by CMS, including alternative or
mitigation strategies CMS has authorized States to implement under
section 6008(f)(2)(A) of the FFCRA, which was added by section 5131 of
Subtitle D of Title V of Division FF of the CAA, 2023). Additionally,
because section 1902(tt) of the Act also includes the new enforcement
authorities in section 1902(tt)(2)(B) of the Act, CMS interprets the
data collection and reporting requirements under section 1902(tt)(1) to
be a tool CMS can use to monitor State compliance with Federal
eligibility redetermination requirements during a period that generally
aligns with States' unwinding periods.
CMS has also been monitoring States' implementation of other
amendments made by section 5131 of Subtitle D of Title V of Division FF
of the CAA, 2023, which create new conditions for States seeking to
receive the FFCRA temporary FMAP increase through December 31, 2023.
These new conditions for receiving the FFCRA temporary FMAP increase
also give CMS ways to incentivize States to minimize the disruption in
coverage resulting from procedural disenrollments during States'
unwinding periods. Specifically, the CAA, 2023 added to the FFCRA new
section 6008(f)(2)(A), which conditions receipt of the FFCRA FMAP
increase after April 1, 2023, on State compliance with Federal
redetermination requirements, including renewal strategies authorized
under section 1902(e)(14)(A) or other alternative processes and
procedures approved by the Secretary. New FFCRA section 6008(f)(2)(B)
conditions receipt of the FFCRA FMAP increase after April 1, 2023, on
States' maintaining up-to-date contact information for a beneficiary
before redetermining eligibility for such beneficiary, and new section
6008(f)(2)(C) conditions receipt of the FFCRA FMAP increase after April
1, 2023, on States' undertaking a good faith effort to contact an
individual using more than one modality prior to terminating their
enrollment on the basis of returned mail. The January 2023 SHO letter
outlines these new conditions for receiving the FFCRA FMAP increase in
greater detail. Because the same section of the CAA, 2023 that added
new section 1902(tt) to the Act also included both these conditions for
receiving the FFCRA FMAP increase, CMS interprets the entirety of the
changes made in section 5131 of subtitle D of division FF of the CAA,
2023 to give CMS a range of enforcement mechanisms and incentives that,
taken together, can be used to help minimize the disenrollment of
people who otherwise continue to meet the substantive eligibility
criteria and whose enrollment would be retained but for their failure
to meet a procedural requirement during States' unwinding periods. One
key purpose of section 1902(tt) is thus to enhance CMS' ability to take
enforcement action against noncompliant States during this critical
timeframe.
CMS takes seriously its responsibility to hold States accountable
for resuming routine eligibility and enrollment operations and plans to
fully exercise the new authorities at section 1902(tt) of the Act when
appropriate to do so. Since the FFCRA was enacted, CMS has been
preparing for the eventual unwinding of the FFCRA continuous enrollment
condition. CMS has explained to States the conditions of the FFCRA FMAP
increase, gauged States'
[[Page 84716]]
ability to resume redeterminations on an unprecedented scale, and
provided States with technical assistance to address challenges that
might lead to preventable loss of coverage for procedural reasons among
beneficiaries. If CMS identifies a violation of Federal redetermination
requirements, then, consistent with section 6008(f)(2)(A) of the FFCRA,
CMS will communicate to the State that its FFCRA FMAP increase will be
withheld if the State does not ensure the issue is fully resolved or
does not implement appropriate mitigations until full compliance can be
achieved.
The new enforcement tools outlined at section 1902(tt) of the Act,
which allow CMS to enforce existing Federal redetermination
requirements as well as the reporting requirements at section
1902(tt)(1) of the Act, are a key part of the suite of CMS enforcement
mechanisms and incentives added through the CAA, 2023 to minimize the
disenrollment of eligible individuals during States' unwinding periods.
These new enforcement tools are critical to enabling CMS to effectively
monitor for, and take action to protect against, States conducting
renewals that do not adhere to Federal redetermination requirements and
to support continued enrollment for those individuals who remain
eligible. Nothing in this rule affects other authorities that exist
outside of this new enforcement framework or precludes CMS from
pursuing additional enforcement action under section 1904 of the Act,
including withholding Federal financial participation (FFP), or
limiting payments, for States that fail to comply with requirements of
the Medicaid statute.
D. Pre-Compliance Engagement With States
When CMS becomes aware of a potential violation of Federal
requirements, we first attempt to work collaboratively with the State
to understand the nature and scope of the problem and to identify
appropriate alternative processes and procedures that the State can
adopt to avoid or minimize beneficiary harm until the State can fix the
problem and come into full compliance with Federal requirements,
consistent with our authority to enforce compliance with section 1902
under section 1904 of the Act and 42 CFR 430.35. Consistent with this
practice, as discussed in section II.A of this rule, CMS will provide
technical assistance to States facing unusual circumstances that
interfere with their ability to comply fully with section 1902(tt)(1)
of the Act reporting requirements and will consider approving
alternative timelines and processes for meeting those requirements. The
statute does not give CMS the discretion to avoid taking an FMAP
reduction under section 1902(tt)(2)(A) of the Act for a quarter in the
period beginning July 1, 2023, and ending June 30, 2024, if a State
ultimately fails to report each of the metrics required under section
1902(tt)(1) of the Act for that quarter. However, CMS will consider
mitigating circumstances before taking additional enforcement action
under section 1902(tt)(2)(B) of the Act if a State fails to meet the
reporting requirements under section 1902(tt)(1) of the Act during the
period from April 1, 2023, to June 30, 2024.
If CMS' efforts to work collaboratively with States are successful,
and the State takes necessary steps to address beneficiary harm and
prevent future harm (such as reinstating eligibility for affected
beneficiaries and suspending procedural disenrollments, where
appropriate), CMS might not initiate compliance action under section
1902(tt)(2)(B) of the Act. However, if CMS determines that a State
violated the section 1902(tt)(1) of the Act reporting requirements or
Federal redetermination requirements, CMS will consider exercising the
enforcement authorities in section 1902(tt)(2)(B) of the Act, as
implemented in this rule.
II. Provisions of the Interim Final Rule With Comment
This rule adds new 42 CFR 430.49 and 435.927 and 435.928 to the CFR
and amends Sec. Sec. 430.3, 430.5, and 45 CFR part 16. New Sec.
430.49 of this rule interprets and implements section 1902(tt)(2)(B) of
the Act, which authorizes CMS to do the following: (1) require States
to submit and implement a CAP for noncompliance with Federal
requirements applicable to eligibility redeterminations and the
reporting requirements described in section 1902(tt)(1) of the Act; and
(2) if the State fails to submit or implement an approvable CAP in
accordance with section 1902(tt)(2)(B)(ii), require the State to
suspend some or all disenrollments from Medicaid for procedural reasons
until the State takes appropriate corrective action, impose CMPs of not
more than $100,000 for each day the State is not in compliance, or
both. New Sec. 435.927 interprets and implements section 1902(tt)(1)
of the Act, which requires that, for each month occurring during the
period beginning on April 1, 2023, and ending on June 30, 2024, States
must submit on a timely basis to CMS, and CMS must make public, certain
monthly data about activities related to eligibility redeterminations
conducted during that same period.
New Sec. 435.928 specifies how CMS will implement the FMAP
reduction required under section 1902(tt)(2)(A) of the Act. If a State
does not satisfy the reporting requirements described in section
1902(tt)(1) of the Act for any fiscal quarter in the period that begins
on July 1, 2023 and ends on June 30, 2024, section 1902(tt)(2)(A) of
the Act requires CMS to reduce the FMAP determined for the State for
the quarter under section 1905(b) of the Act by the number of
percentage points (not to exceed 1 percentage point) equal to the
product of 0.25 percentage points and the number of fiscal quarters
during such period for which the State has failed to satisfy such
requirements.
The provisions of this rule apply to the States, District of
Columbia, and all 5 territories--Guam, Puerto Rico, the Virgin Islands,
the Northern Mariana Islands, and American Samoa. While the regulations
in part 435 apply only to the States, the District of Columbia, the
Northern Mariana Islands and American Samoa, Sec. 436.901 provides
that with one exception (not relevant here), the requirements of part
435, subchapter J, which includes Sec. Sec. 435.927 and 435.928
through this rulemaking, apply to Guam, Puerto Rico, and the Virgin
Islands.
The new enforcement authority granted to CMS under section
1902(tt)(2)(A) and (B) of the Act will improve State accountability for
complying with Federal renewal requirements while also minimizing
disruptions to coverage for eligible people during a period that
generally aligns with States' unwinding activities. The additional
enforcement activities authorized in section 1902(tt)(2) of the Act
will reinforce and augment the routine monitoring and compliance action
that CMS is already undertaking to promote State compliance with
Federal enrollment and eligibility requirements, described in section
I.C and D of this rule. These authorities will also help ensure that
States remain accountable to CMS by requiring them to submit certain
data to CMS and will increase public transparency about eligibility
redeterminations between April 1, 2023, and June 30, 2024, by requiring
CMS to publicly report the data.
Finally, the rule amends Sec. 430.5 to add new definitions of the
terms Federal redetermination requirements and procedural disenrollment
for purposes of Sec. 430.49, and (with respect to the definition of
procedural disenrollment only) for purposes of 45 CFR part 16. And this
rule creates reconsideration
[[Page 84717]]
and appeal rights for States under new Sec. 430.49(f) and
corresponding amendments to Sec. 430.3 and 45 CFR part 16, to ensure
States have clear avenues for appealing CMS decisions to require
suspension of procedural disenrollments and/or impose CMPs under the
new authorities in section 1902(tt)(2)(B)(iii) of the Act.
We have also included severability clauses at new Sec. Sec.
430.49(g), 435.927(e), and 435.928(c) to emphasize our intent that, to
the extent a reviewing court holds that any provision of these rules is
unlawful, the remaining provisions should take effect and be given the
maximum effect permitted by law. The severability clauses provide that
any provision of these sections that is held to be invalid or
unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further agency action, shall be
severable from the relevant section and shall not affect the remainder
thereof or the application of the provision to persons not similarly
situated or to dissimilar circumstances.
A. Reporting Requirements (Sec. 435.927)
Section 1902(tt)(1) of the Act requires that, for each month
occurring during the period that begins on April 1, 2023, and ends on
June 30, 2024, each State submits to CMS, and that CMS make public, a
report on the activities of the State relating to eligibility
redeterminations conducted during such period.
New Sec. 435.927 implements and interprets the reporting
requirements in section 1902(tt)(1) of the Act. The required reporting
will help CMS and others to monitor State actions during the unwinding
period and beyond because it includes reporting on metrics such as the
number of individuals disenrolled from Medicaid or CHIP and certain
information about transitions from Medicaid or CHIP coverage to
coverage through an Exchange. Reviewing and publishing these monthly
data will give CMS and the public information to help hold States
accountable for following redetermination requirements and will promote
transparency.
CMS interprets section 1902(tt)(1) of the Act to require that
States report data representing the activities conducted during each
month of the designated time period.\8\ However, CMS does not believe
the provision requires that States must submit all the required monthly
reports by June 30, 2024, because it will take States time to assemble,
review, and submit data from the months for which they are reporting.
For example, States must report on activities occurring in June 2024,
but the submission of that monthly report could occur after June 30,
2024, to allow the State time to collect, review, and submit the
data.\9\ This is reflected in new Sec. 435.927(c), which requires
States to report certain data representing activities conducted by a
State during the time period beginning April 1, 2023, and ending June
30, 2024.
---------------------------------------------------------------------------
\8\ See the January 2023 SHO, and the June 2023 FAQs.
\9\ See the June 2023 FAQs.
---------------------------------------------------------------------------
To help ensure that CMS and the public can use and understand the
data, avoid redundancy, and for purposes of practicality, CMS is
interpreting the data elements required under section 1902(tt)(1) of
the Act differently in Sec. 435.927(d) depending on the element.
Section 1902(tt)(1) of the Act directs the Secretary to make public
reports with data ``relating to eligibility redeterminations,'' but CMS
is not interpreting all the reporting elements listed in the subsequent
subparagraphs to be limited to data related to such redeterminations.
Specifically, CMS is interpreting the reporting elements listed in
section 1902(tt)(1)(A), (B) and (D) of the Act to represent only those
individuals who are subject to Medicaid or CHIP redeterminations but is
not interpreting the elements listed in section 1902(tt)(1)(C) or (E)
of the Act to be limited to reporting on such individuals.
Paragraphs (A) and (B) of section 1902(tt)(1) of the Act require
States to report on certain data elements for persons with coverage for
medical assistance, child health assistance, or pregnancy-related
assistance, which CMS interprets to refer to people with Medicaid or
CHIP coverage, including pregnancy-related coverage in both programs.
The data elements required under paragraphs (A) and (B) are as follows:
the number of eligibility renewals initiated, beneficiaries renewed on
a total and ex parte basis (that is, based on available reliable
information without contacting the individual consistent with Sec.
435.916(a)(2)), individuals who were disenrolled for any reason, and
the number of individuals disenrolled for procedural reasons. These
data points are all the direct result of Medicaid or CHIP eligibility
redetermination actions and thus new Sec. 435.927(d)(1) through (5)
require States to report this information only for people undergoing
Medicaid or CHIP redeterminations.
Similarly, paragraph (D) of section 1902(tt)(1) of the Act requires
States to report the number of individuals whom a Federal or State-
based Exchange determined eligible for a qualified health plan or a
Basic Health Program (BHP),\10\ as well as the number of individuals
who selected a qualified health plan or enrolled in a BHP (section
1902(tt)(1)(D)(i) and (ii) of the Act specifically require data related
to BHPs). Paragraph (D) of section 1902(tt)(1) of the Act does not
specify that these data be limited only to numbers of individuals whose
eligibility had been redetermined by the Medicaid program. However,
these data elements are only useful to CMS in understanding ``the
activities of the State relating to eligibility redeterminations,'' as
directed by section 1902(tt)(1) of the Act if the data are limited to
Medicaid and CHIP beneficiaries who have undergone an eligibility
redetermination. These data will help demonstrate if beneficiaries
found ineligible for Medicaid and CHIP during the redetermination
process are able to find other coverage on Exchanges or BHPs and will
also help CMS and other interested parties identify States in which
transitions to Exchange coverage are relatively successful and States
in which such transitions may not be as successful. These data will be
most useful for oversight of States' redetermination processes if they
are limited to the numbers of individuals' accounts that were
transferred to an Exchange or BHP because of a redetermination under
Medicaid or CHIP. To include other transfers (those of consumers who
were not enrolled in Medicaid or CHIP at the time and who newly apply
directly with their State agency and are determined ineligible) would
not help to illuminate ``eligibility redeterminations,'' because new
applicants are not in a position to lose Medicaid or CHIP coverage.
Therefore, in new Sec. 435.927(d)(10) and (11), we require the
reported data described in section 1902(tt)(1)(D) of the Act to reflect
Medicaid/CHIP redeterminations.
---------------------------------------------------------------------------
\10\ The Basic Health Program (BHP) is a program for specified
individuals who do not qualify for Medicaid but whose household
income does not exceed 200 percent of the Federal poverty level
(FPL).
---------------------------------------------------------------------------
In previous guidance,\11\ we listed the reporting elements under
section 1902(tt)(1) of the Act related to Exchanges and the anticipated
data sources for obtaining the data for these elements. Specifically,
in the January 2023 SHO letter, in the first column of ``Table 2:
Reporting Elements Under Section 1902(tt)(1) for the Period from April
1, 2023, through June 30, 2024, and Corresponding Data Sources,'' we
stated that for States with Exchanges
[[Page 84718]]
that use the Federal Exchange eligibility and enrollment platform
(including Federally-facilitated Exchanges (FFEs) and SBEs on the
Federal platform (SBE-FPs)) we anticipated that CMS would report these
data on behalf of States and that we intended to limit the data to
information that is the result of a Medicaid or CHIP redetermination
(which would exclude data resulting from a new Medicaid or CHIP
application). In contrast, for SBEs with their own platforms that use
either a non-integrated or integrated eligibility system, we
inadvertently did not make such a distinction.\12\ Rather, column one
in Table 2 of the January 2023 SHO letter suggests that the reporting
elements would apply to Exchange activity resulting from all Medicaid
or CHIP applications. However, in the ``SBE Priority Metrics: Medicaid/
Children's Health Insurance Program (CHIP) Continuous Enrollment
Condition Unwinding Overview and Template 1.0 User Guide (version 1.0,
5/19/2023),'' which is cited in guidance that we released on June 30,
2023,\13\ we specified that SBEs will report only those required data
elements that result from Medicaid or CHIP redeterminations. As a
result, although the labeling in the first column of the table in the
January 2023 SHO letter is inconsistent, the definitions of the
required State data are consistent across types of Exchanges, and
therefore the data collected and reported will be consistent across
types of Exchanges, and in all cases, including for SBEs not using the
Federal platform, will be limited to information related to Medicaid or
CHIP redeterminations. Section 435.927(d)(10) and (11) reflect this.
---------------------------------------------------------------------------
\11\ See the January 2023 SHO Letter, and the June 2023 FAQs.
\12\ States with SBEs that operate an integrated eligibility
platform have a shared operating system between the SBE and the
Medicaid/CHIP agency that conducts eligibility determinations
related to new and renewal applications for certain Medicaid and
CHIP programs and qualified health plans. In contrast, States with
SBEs that operate a non-integrated eligibility platform have
separate operating systems for the SBE and the Medicaid/CHIP agency.
Accounts are transferred between the separate operating systems
depending on the initial eligibility determination or assessment for
the programs made by either the SBE or the Medicaid/CHIP agency.
\13\ The June 2023 FAQs, in Table 1, cites to CMS, ``State-Based
Exchanges (SBE) Priority Metrics: Medicaid/Children's Health
Insurance Program (CHIP) Continuous Enrollment Condition Unwinding;
Overview and Template 1.0 User Guide,'' released May 5, 2023,
<a href="https://www.medicaid.gov/resources-for-states/downloads/sbe-medicaid-chip-con-unwind-metrics-reprt-guide.pdf">https://www.medicaid.gov/resources-for-states/downloads/sbe-medicaid-chip-con-unwind-metrics-reprt-guide.pdf</a>. ``The priority
metrics include indicators that are specific to Medicaid/CHIP
continuous enrollment unwinding activities. For those metrics, SBEs
should count activities that were initiated through the Medicaid/
CHIP agency's renewal process, in which a consumer was determined
ineligible for limited or full benefit Medicaid or CHIP.''
---------------------------------------------------------------------------
As noted, in the January 2023 SHO letter, CMS identified the
reporting requirements under section 1902(tt)(1) of the Act that relate
to Exchanges. Consistent with CMS' stated expectations in that SHO
letter, CMS will report data on behalf of States with Exchanges that
use the Federal eligibility and enrollment platform (including FFEs and
SBE-FPs) since CMS operates the Federal eligibility and enrollment
platform. Therefore, States do not have to report the data, and we are
not including in this rule any provisions implementing the requirements
under section 1902(tt)(1) of the Act that apply to States with
Exchanges that use the Federal eligibility and enrollment platform.
Section 435.927(d)(10) and (11) describe the reporting requirements
that apply to States with SBEs that do not use the Federal platform.
Section 435.927(d)(10) and (11) also reflect certain practical and
operational differences between SBEs based on whether the Exchange
eligibility system is integrated with the State's Medicaid and/or CHIP
eligibility systems. Specifically, some SBEs have integrated
eligibility systems but others do not. As Congress recognized in
section 1902(tt)(1)(D)(i) and (ii) of the Act, there is no need for an
Exchange with an integrated eligibility system to report account
transfers from the Medicaid and/or CHIP agency to the Exchange, whereas
that data point is relevant for Exchanges without integrated
eligibility systems.
In contrast to how we are interpreting section 1902(tt)(1)(A), (B),
and (D) of the Act, we are not interpreting section 1902(tt)(1)(E) of
the Act to be limited to describing only information about a Medicaid
or CHIP redetermination. States are required under section
1902(tt)(1)(E) of the Act to report data on total call center volume,
average wait times, and average abandonment rate. For these reporting
elements, it is impractical to limit the measures only to data related
to eligibility redeterminations. States do not always identify the
purpose of individual calls to call centers, calls can address multiple
purposes and beneficiaries, and reprogramming call trees and retraining
staff could take months for States to operationalize, if required. As
the period for which States are required to report these data under
section 1902(tt)(1)(E) of the Act has already begun and is time-
limited, it is impractical to limit the collection of the call center
data required under 1902(tt)(1)(E) of the Act to only those calls
related to individuals' eligibility redeterminations. Furthermore,
these call center metrics are useful because they illustrate the extent
to which all beneficiaries, including those whose eligibility is being
redetermined, can access assistance. Accordingly, new Sec.
435.927(d)(7) through (9) are not limited to just call center
information related to redeterminations.
CMS is also not interpreting section 1902(tt)(1)(C) of the Act to
be limited to describing only information about a Medicaid or CHIP
redetermination. Section 1902(tt)(1)(C) of the Act requires States to
report on the number of individuals enrolled in a separate CHIP program
under section 2101(a)(1) of the Act. Broadening the data collected
under paragraph (C) to include the total number of enrollees in a
separate CHIP, not just those enrolling subject to a Medicaid or CHIP
eligibility redetermination, provides useful information. In addition
to being new data that is not publicly reported elsewhere, the data
helps CMS and others identify whether separate CHIP programs' total
enrollment levels are changing during the applicable period, which
might indicate whether individuals are transitioning to CHIP from the
Medicaid program. New Sec. 435.927(d)(6) therefore refers to reporting
on total enrollment in separate CHIPs.
Despite not being limited to information on redeterminations, data
elements reported under section 1902(tt)(1)(C) and (E) of the Act are
still useful for purposes of providing transparency on States'
activities to conduct redeterminations. State Medicaid agency
operational data on call center activity--call volume, average wait
times, and average abandonment rates--help illuminate beneficiaries'
access to information and ability to receive assistance from the State,
as well as the eligibility process generally. Information on the
enrollment levels for separate CHIP programs helps identify trends in
enrollment that could signal whether a State is not performing
redeterminations or transitioning eligible individuals from Medicaid to
CHIP.
All the data States must report under the requirements of section
1902(tt)(1) of the Act are already being reported through existing data
reports collected by CMS. For efficiency and to improve standardization
(and hence, comparability) of the data, and because the applicable
statutes, regulations, and other guidance governing CMS' use of the
data collected through those existing data sources permit this, CMS is
not requiring States to submit separate or
[[Page 84719]]
additional reports to CMS to comply with section 1902(tt)(1) of the
Act.\14\ Rather, CMS believes the requirements of section 1902(tt)(1)
of the Act can be met through compliance with the following existing,
CMS-approved data reporting processes: the Unwinding Eligibility and
Enrollment Data Reporting (also referred to as the Unwinding Data
Report), Medicaid and CHIP Eligibility and Enrollment Performance
Indicator Data (PI data), the Transformed Medicaid Statistical
Information System (T-MSIS), and SBE Priority Metrics.\15\
Additionally, as described previously, the required data under section
1902(tt)(1) of the Act that apply to States with Exchanges that use the
Federal eligibility and enrollment platform will be reported by CMS.
Under section 1902(tt)(1) of the Act, CMS will publish all required
data after a period of time to allow for data quality and validation
reviews.
---------------------------------------------------------------------------
\14\ See sections 1902(a)(4), 1902(a)(6), 1902(a)(75),
1903(r)(1)(F), and 2107(b)(1) of the Act; see also 42 CFR 431.16, 42
CFR 433.112(b)(15), 45 CFR 155.260(a)(1)(ii). See also <a href="https://www.federalregister.gov/documents/2019/02/06/2019-01157/privacy-act-of-1974-system-of-records">https://www.federalregister.gov/documents/2019/02/06/2019-01157/privacy-act-of-1974-system-of-records</a> and <a href="https://www.federalregister.gov/documents/2013/10/23/2013-24861/privacy-act-of-1974-report-of-an-altered-cms-system-of-records-notice">https://www.federalregister.gov/documents/2013/10/23/2013-24861/privacy-act-of-1974-report-of-an-altered-cms-system-of-records-notice</a>.
\15\ See the January 2023 SHO Letter, and the June 2023 FAQs.
---------------------------------------------------------------------------
Section 1902(tt)(1) of the Act requires States to submit the
required monthly data on a timely basis but does not include a
definition of timely or standards for completeness and accuracy. CMS
already collects the required data via existing processes, and the
timeliness, completeness, and quality specifications for data submitted
via those existing processes have generally been defined
previously.\16\ Under this regulation, States will generally submit
data in accordance with these existing timelines and specifications
unless CMS has approved an alternative process or timeline for
reporting, in which case the State must submit the data according to
any alternative specifications CMS approved as part of the alternative
process or timeline.
---------------------------------------------------------------------------
\16\ See the January 2023 SHO Letter, and the June 2023 FAQs.
---------------------------------------------------------------------------
As specified in Sec. 435.927(b)(1), CMS will consider data to be
timely when it is submitted by the deadline outlined in the applicable
existing reporting process specifications, with some variations for T-
MSIS data and to permit States to submit data according to alternative
processes and timelines approved by CMS. CMS will approve these
alternative processes and timelines when, as discussed below, a State
is making a good faith effort to meet the requirements despite facing
significant challenges that interfere with its ability to do so. As an
example of how a deadline outlined under other existing reporting
process specifications might apply here, the specifications for PI data
generally require States to submit data by the 8th of each month; \17\
thus under Sec. 435.927(b)(1), States would report these PI data on a
timely basis under section 1902(tt)(1) of the Act if they reported them
by the 8th of each month. The rule also, however, includes a variation
on how the existing T-MSIS reporting timeline would apply for purposes
of section 1902(tt)(1) of the Act data because, in order for T-MSIS
data to be useful for section 1902(tt)(1) of the Act purposes, these
data must be reported under a different timeline. Specifically, to
publicly report data under section 1902(tt)(1)(D)(i) of the Act, CMS
will use T-MSIS data to match the records of Medicaid and CHIP
beneficiaries to data from the FFEs and SBEs-FPs and identify the
number of accounts that are received at these Exchanges due to a
Medicaid/CHIP redetermination. Using these data, CMS can determine the
other metrics listed under section 1902(tt)(1)(D)(i) of the Act, such
as the total numbers of these individuals who apply for and are
determined eligible for a qualified health plan. CMS will also use T-
MSIS data to publicly report data on the number of separate CHIP
enrollees for each State, as required under section 1902(tt)(1)(C) of
the Act. CMS already requires that States maintain current data
submissions by submitting T-MSIS data monthly before the last day of
the subsequent month, although States are not considered to be out of
compliance for T-MSIS reporting until data submissions are behind by 2
or more months. As reflected in Sec. 435.927(b)(1)(ii), due to the
time-sensitive nature of these calculations and the need for up-to-date
data, States that do not submit T-MSIS data monthly by the last day of
the subsequent month may be subject to the FMAP reduction under section
1902(tt)(2)(A) of the Act or other corrective action under section
1902(tt)(2)(B) of the Act. For example, T-MSIS data reflecting March
2024 activities will be due by the end of April 2024, under Sec.
435.927(b)(1)(ii).
---------------------------------------------------------------------------
\17\ CMS, ``Medicaid and Children's Health Insurance Program
Eligibility and Enrollment Data Specifications for Reporting During
Unwinding,'' updated December 2022. Available at <a href="https://www.medicaid.gov/sites/default/files/2022-12/unwinding-data-specifications-dec-2022.pdf">https://www.medicaid.gov/sites/default/files/2022-12/unwinding-data-specifications-dec-2022.pdf</a>.
---------------------------------------------------------------------------
CMS recognizes that some States might encounter unusual
circumstances that interfere with reporting using existing CMS-approved
processes or that impede a State's ability to meet the deadlines in
Sec. 435.927(b)(1)(i) and (ii). For example, States may experience
unforeseeable or unavoidable challenges such as a natural disaster or
unplanned systems outages, or may be working to resolve significant
foreseeable challenges, such as a known and reported major operational
or systems issue that impacts the State's ability to submit timely and
accurate data and that the State is working to remediate but needs
additional time to fix. As reflected in Sec. 435.927(b)(1)(iii),
(b)(3)(ii), (b)(4), and (c)(2), CMS would consider approving
alternative timelines and processes for reporting required data if a
State is making a good faith effort to submit the required data. For
example, CMS would consider allowing such a State to submit certain
summary data via email. As specified in Sec. 435.927(b)(4), a good-
faith effort means that (1) the State is experiencing significant,
unforeseeable, or unavoidable challenges in complying with the
reporting requirements of Sec. 435.927(c), or is experiencing
significant foreseeable challenges in complying and is working to
remediate these challenges but needs additional time to address them;
(2) the State requested and obtained approval from CMS to submit the
data via an alternative process or timeline, and (3) the approved
alternative process for submitting the data or timeline is sufficient
to ensure CMS can obtain and use the data to meet CMS' obligations to
report the data publicly per section 1902(tt)(1) of the Act. CMS will
work with such a State to ensure that CMS has all the data it needs in
order to meet its requirement to publicly report data under section
1902(tt)(1) of the Act and will only approve alternative timelines or
reporting processes that permit CMS to meet this requirement.
States that are ultimately unable to submit required data or that
submit data via an unapproved process or according to an unapproved
timeline will be subject to the enforcement actions in section
1902(tt)(2) of the Act. Because section 1902(tt)(2)(A) requires CMS to
take an FMAP reduction if States fail to meet the section 1902(tt)(1)
of the Act reporting requirements for a quarter in the period beginning
July 1, 2023, and ending June 30, 2024, CMS does not have the authority
to exempt States from FMAP reductions for failure to meet the section
1902(tt)(1) of the Act reporting requirements during that timeframe.
However, as indicated in Sec. 430.49, CMS will consider certain
mitigating circumstances before taking the various
[[Page 84720]]
additional enforcement actions described in section 1902(tt)(2)(B) of
the Act.
The regulation also provides in Sec. 435.927(b)(2) that in order
to be considered ``complete'' for purposes of public reporting under
section 1902(tt)(1) of the Act, States must submit every data element
(although in some cases, as noted above, certain elements may be
submitted on a different or later timeframe than others, subject to CMS
approval). A State that ultimately fails to report one or more required
data elements would be subject to the FMAP reduction under section
1902(tt)(2)(A) of the Act if the State's noncompliance was for a
quarter during the period from July 1, 2023, through June 30, 2024.
Such a State might also be subject to other enforcement actions under
section 1902(tt)(2)(B) of the Act; these are discussed in section II.
of this rule.
Furthermore, in Sec. 435.927(b)(3), the regulation provides that
to be considered of ``sufficient quality,'' the State must report data
that adheres to specifications outlined in previously existing
regulation or guidance for each of the CMS-approved processes, or data
that adheres to the specifications outlined in an alternative process
approved by CMS. Existing reporting processes are governed by detailed
instructions that outline how and what States should report and help
ensure that States are reporting consistent data that CMS can publicly
report, consistent with requirements under section 1902(tt)(1) of the
Act.
New section Sec. 435.927(c) implements the reporting requirements
in section 1902(tt)(1) of the Act in light of the interpretations that
are discussed above and reflected in the other paragraphs of Sec.
435.927. Section 435.927(c) specifies that States must submit to CMS
the data described in Sec. 435.927(d), and those data must be timely,
complete, and of sufficient quality (as those terms are defined in
Sec. 435.927(b)). It further provides that States must submit the
required data via existing CMS-approved processes or through
alternative processes approved by CMS when a State is making a good
faith effort as defined in Sec. 435.927(b)(4).
B. Application of the FMAP Reduction (Sec. 435.928)
If a State does not satisfy the reporting requirements in section
1902(tt)(1) of the Act for any fiscal quarter that occurs during the
period that begins on July 1, 2023, and ends on June 30, 2024, section
1902(tt)(2)(A) of the Act requires CMS to reduce the FMAP determined
for the State for the quarter under section 1905(b) of the Act by the
number of percentage points (not to exceed 1 percentage point) equal to
the product of 0.25 percentage points and the number of fiscal quarters
during such period for which the State has failed to satisfy such
requirements. We are implementing this FMAP reduction along with our
interpretation of how it is to be applied in new Sec. 435.928.\18\ In
Sec. 435.928(b)(1), CMS interprets the statutory reference to the FMAP
determined for the State under section 1905(b) of the Act to mean the
State-specific FMAP defined in the first sentence of section 1905(b) of
the Act.\19\ In Sec. 435.928(b)(4), CMS interprets the statutory
language regarding the amount of the reduction to mean that when States
are noncompliant in multiple quarters, the FMAP reduction will increase
by 0.25 percentage points for each successive quarter of noncompliance,
regardless of whether the noncompliant quarters are consecutive. For
example, if a State were out of compliance for three quarters, the
reduction would be: a 0.25 percentage point FMAP reduction in the first
quarter of noncompliance; a 0.50 percentage point FMAP reduction in the
second quarter of noncompliance; and a 0.75 percentage point FMAP
reduction in the third quarter of noncompliance. In no case, however,
would the FMAP reduction for any single quarter exceed 1 percentage
point.
---------------------------------------------------------------------------
\18\ For additional discussion about the application of the FMAP
reduction, see the January 2023 SHO Letter, and the June 2023 FAQs.
\19\ In the June 2023 FAQs, CMS explained how such a decrease
would be applied to expenditures that are matched at FMAPs
articulated elsewhere in statute, because they use the 1905(b)
State-specific FMAP as a base.
---------------------------------------------------------------------------
We acknowledge that the language of the statute would allow for an
alternative interpretation that would require CMS to apply the same
percentage point reduction to all of the quarters in which a State
failed to comply with the reporting requirements. For example, if a
State were out of compliance for three quarters, CMS could apply a 0.75
percentage point reduction to the State's FMAP in all three of the
applicable quarters. To come to that conclusion, CMS would have to
interpret the statute as requiring CMS either to apply the reduction to
the relevant quarters multiple times, or to wait until the end of the
period to apply the reduction. Neither of these alternative approaches
supports transparency, as the total amount of the reduction would not
be known until up to three quarters after the State is found to be
noncompliant, making it difficult for States to budget for the amount
of State share they would need for the four-quarter period.
As specified in Sec. 435.928(b)(3), States that fail to report
data according to the requirements in Sec. 435.927 for a single month
within a quarter will be subject to the FMAP reduction for the entire
quarter. Section 1902(tt)(1) of the Act specifies that the FMAP
reduction should be applied for each fiscal quarter. As such, the
statute does not give CMS the authority to reduce a State's FMAP for a
single month.\20\
---------------------------------------------------------------------------
\20\ See, the January 2023 SHO Letter, and the June 2023 FAQs.
---------------------------------------------------------------------------
C. Corrective Action Plans (Sec. 430.49(b))
As noted in section I.A. of this rule, section 1902(tt)(2) of the
Act includes new enforcement authority for CMS to use if it determines
that a State is not in compliance with the reporting requirements in
section 1902(tt)(1) of the Act, Federal eligibility redetermination
requirements, or both. New Sec. 430.49(b) provides guidelines for how
CMS will exercise the CAP authority created by section 1902(tt)(2)(B)
of the Act. Specifically, Sec. 430.49(b)(1) provides that if CMS
determines that, during the period between April 1, 2023, and June 30,
2024, a State has been out of compliance with the reporting
requirements in section 1902(tt)(1) of the Act (as implemented in Sec.
435.927 of this rule) or Federal eligibility redetermination
requirements (as defined at Sec. 430.5, as amended by this rule),
then, after considering whether mitigating circumstances (discussed in
section II.E. and Sec. 430.49(d) of this rule) apply, CMS will
determine whether to require the State to submit and implement a CAP.
New Sec. 430.49(b)(2) specifies that CMS will issue a written
notice to the State informing the State of CMS' finding of
noncompliance and the requirement to submit and implement a CAP, or to
revise and resubmit an existing approved CAP to address newly
identified violations of the Federal reporting and/or redetermination
requirements, unless consideration of certain mitigating circumstances
has led CMS to delay or forgo requiring a CAP. The notice will: (1)
explain the violation of Federal redetermination or reporting
requirements that CMS has identified and the basis for CMS' finding;
(2) inform the State of the requirement to submit and implement a new
CAP or to revise and resubmit an existing CAP, with instructions on the
method and deadline by which the State must submit a CAP to CMS; and
(3) explain the additional enforcement actions that CMS may pursue if
the State fails to
[[Page 84721]]
submit or implement the CAP, including if CMS disapproves the State's
submitted CAP or if the State fails to meet the requirements set forth
in the approved CAP, in accordance with the requirements at section
1902(tt)(2)(B)(ii) of the Act, as interpreted in this rule and
discussed in section II.D. and at Sec. 430.49(b) of this rule.
As set forth in new Sec. 430.49(b)(3), a CAP must include specific
content to be approved by CMS. First, the CAP must identify actions the
State will take immediately, which means as soon as feasible, if needed
to prevent further harm or risk of harm to beneficiaries while it
implements the CAP. Harm to beneficiaries in this context includes
increased burden for beneficiaries in completing the renewal process,
loss of coverage at renewal for individuals who continue to meet the
substantive eligibility criteria and whose eligibility should otherwise
be retained but for failure to meet a procedural requirement, and
delays in access to coverage or care. Actions to prevent harm, or risk
of harm, to beneficiaries could include, if needed and appropriate,
reinstatement of coverage for impacted individuals, suspension of
procedural disenrollments, and adoption of alternative processes or
procedures under section 1902(e)(14)(A) of the Act or other alternative
strategies approved by CMS.
Next, the CAP must detail steps the State will take to ensure
compliance with Federal redetermination and/or reporting requirements,
such as new policies, procedures, operational processes, or systems
changes it will implement. The CAP must also include key milestones and
a detailed timeline for achieving compliance, as well as a plan for
communicating the steps in the CAP to: (1) State staff, including State
Medicaid agency staff and staff of any agency or other entity that is
determining eligibility under a delegation of authority under Sec.
431.10(c)(1)(i), (2) CMS, and (3) beneficiaries, as applicable. CMS
believes that an approvable CAP must include these elements because
they will allow CMS to assess at the outset whether the State's CAP
appears sufficient to resolve the noncompliance and to monitor whether
the State is making sufficient progress in its implementation.
Additionally, these elements are consistent with those that CMS has
historically required when requesting CAPs under section 1904 of the
Act and Sec. 430.35 for failure to administer the State Plan in
compliance with the provisions in section 1902 of the Act, violations
of which may result in withholding of FFP.
New Sec. 430.49(b)(4) of this rule implements section
1902(tt)(2)(B)(ii) of the Act by requiring the following timeline for
submission, approval, and implementation of a CAP after the State
receives notice that CMS is requiring it to implement a CAP:
(1) The State must submit a CAP that includes the minimum elements
described in Sec. 430.49(b)(3) to CMS not later than 14 calendar days
after receiving CMS' written notice.
(2) CMS must approve or disapprove the proposed CAP within 21
calendar days of the date the CAP is submitted by the State. If CMS
does not approve or disapprove the CAP within 21 calendar days of
submission, the CAP will be deemed approved.
(3) The State must begin implementation of the CAP not later than
14 calendar days after receiving CMS approval or after the CAP is
deemed approved.
We interpret the statute to refer to calendar days and to authorize
CMS to provide that CAPs not expressly approved or disapproved within
21 calendar days will be deemed approved. (Henceforth in this rule,
``days'' refers to calendar days unless otherwise noted.) CMS is
providing for deemed approval so that CMS and States can take quick
action to implement any strategies or system changes needed to correct
identified violations of the reporting or redetermination requirements
to promote sustained compliant operations and beneficiary coverage.
Section 430.49(b)(5) provides that CMS will consider the following
in determining whether to approve a CAP submitted by a State: (1)
whether the CAP will promptly eliminate or minimize any harm or risk of
harm to beneficiaries, including increased burden for beneficiaries in
completing the renewal process, loss of coverage at renewal for
individuals who continue to meet the substantive eligibility criteria
and whose eligibility should otherwise be retained but for failure to
meet a procedural requirement, and delays in access to coverage or
care, due to the noncompliance to be addressed by the plan; and (2)
whether the CAP will result in the State achieving compliance in a
reasonable time, taking into account systems challenges and
circumstances faced by the agencies involved. Systems challenges that
could impact the timeframe in which a State can achieve compliance
could include, for example, the timeframe needed to update coding for a
State's eligibility system, the need to create policy manuals to guide
workers on use of new system functionality, training workers on new
system changes, and/or the creation and implementation of new forms or
functions to receive or track information in the renewal process.
As discussed further in section II.E. and Sec. 430.49(d)(1) and
(2), CMS will consider certain mitigating circumstances before issuing
a notice directing a State to submit a CAP in accordance with the
requirements at Sec. 430.49(b).
D. Suspension of Procedural Disenrollments and Civil Money Penalties
(Sec. 430.49(c))
Under section 1902(tt)(2)(B)(iii) of the Act, as implemented at
Sec. 430.49(c) of this rule, if a State fails to submit or implement
an approved CAP, including if CMS disapproves the State's submitted CAP
or if the State fails to meet the requirements set forth in the
approved CAP, in accordance with section 1902(tt)(2)(B)(ii) of the Act,
the Secretary may, after consideration of any mitigating circumstances
described in section II.E. of this rule and at new Sec. 430.49(d)(3),
and in addition to any reduction applied to the FMAP under section
1902(tt)(2)(A) of the Act, take either or both of the following
actions: (1) require the State to suspend making some or all
disenrollments from Medicaid that are for procedural reasons until the
State takes appropriate corrective action; (2) impose CMPs of not more
than $100,000 for each day a State is not in compliance.
Under new Sec. 430.49(c)(2), prior to taking either or both of
these enforcement actions, CMS will issue a notice to the State. Such
notice will include: (1) a description of the enforcement actions CMS
is taking and the basis for such action(s); (2) whether CMS is
requiring suspension of some or all procedural disenrollments, and in
the case of a partial suspension, the affected populations; (3) the
date on which the State must begin suspending procedural
disenrollments, if applicable; (4) the daily amount of any CMPs
imposed, the date that assessment of the CMPs will begin, the timeline
for payment (including information on how the timeline for payment
would be affected by an appeal), and instructions on how to submit
payment; (5) the steps the State must take to cure its noncompliance
and for CMS to lift the enforcement action(s); (6) information on the
State's appeal rights as described in section II.G and at new Sec.
430.49(f) of this rule, including the deadline to submit an appeal
request and the effect of requesting an appeal on the applicability of
any enforcement actions pending the decision in such appeal.
[[Page 84722]]
The notice must also provide that the decision outlined in the notice
is final unless it is timely appealed as described in Sec. 430.49(f).
Section 430.49(c)(2)(ii) also provides that CMS may issue additional
notices to take additional actions (for example, increasing CMPs or
adding or increasing the scope of a suspension of procedural
disenrollments) if CMS identifies additional violations of a CAP's
provisions. Such notices will meet the requirements outlined in Sec.
430.49(c)(2)(i).
Suspension of Procedural Disenrollments. As noted in this rule, if
CMS finds that a State has failed to submit or implement an approved
CAP in accordance with the requirements in section 1902(tt)(2)(B) of
the Act, section 1902(tt)(2)(B)(iii) of the Act provides that CMS may
require the State to suspend either some or all procedural
disenrollments of Medicaid eligibility. We believe it is appropriate to
target any procedural disenrollment suspension to protect those
beneficiaries impacted by the State's noncompliance. If CMS requires
the State to suspend procedural disenrollments, the scope of that
requirement will be based upon the impact of the noncompliance that led
to the requirement for the CAP. Accordingly, under Sec.
430.49(c)(3)(i), if the impact of the noncompliance requiring a CAP
affects a substantial number of (meaning all or nearly all) individuals
in the State who are or should have been found eligible for Medicaid,
CMS may require the State to suspend all procedural disenrollments. If
the impact of the noncompliance is limited, for example to a specific
population or geographic area, CMS may limit the suspension only to the
affected population(s). In cases where CMS initially limits the
requirement to suspend procedural disenrollments to an affected
population or area, CMS may later opt to require the State to suspend
all procedural disenrollments if CMS subsequently determines that the
impact of the noncompliance is greater than was initially determined or
if the State fails to comply with the initial requirement to suspend
procedural disenrollments for a targeted population or area in
accordance with the notice issued under Sec. 430.49(c)(2). In these
circumstances, CMS will issue a subsequent notice under Sec.
430.49(c)(2).
CMS believes that suspension of procedural disenrollments is an
effective and necessary enforcement tool to protect beneficiaries from
harm due to a State's noncompliance and, except in one limited
circumstance discussed in section II.E of this rule, will always
require States that have failed to submit an approvable CAP or to
implement an approved CAP to suspend some or all procedural
disenrollments.
After CMS requires a State to suspend procedural disenrollments,
the State must continue suspending procedural disenrollments until CMS
determines that the State has taken appropriate corrective action. Once
CMS is satisfied that the State has taken appropriate corrective
action, CMS will inform the State of the date on which it may resume
procedural disenrollments. See section II.F of this rule for a
discussion of the circumstances under which CMS will lift enforcement
actions taken pursuant to an enforcement notice issued in accordance
with Sec. 430.49(c).
Civil Money Penalties. If CMS finds that a State has failed to
submit or implement an approved CAP, including if CMS disapproves the
State's submitted CAP or if the State fails to meet the requirements
set forth in the approved CAP, in accordance with the requirements in
1902(tt)(2)(B)(ii) of the Act and as interpreted at Sec. 430.49(b) of
this rule, CMS may also issue notice to the State in accordance with
Sec. 430.49(c)(2) indicating that CMS will impose CMPs.
The CMPs authorized under section 1902(tt)(2)(B)(ii) are a tool to
compel State compliance with corrective action as quickly as possible,
given the urgency of preventing unauthorized loss of coverage for
beneficiaries during a period that generally aligns with States'
unwinding periods. For this reason, CMS is adopting a penalty formula
that will impose a lower penalty for States with a shorter timeframe of
noncompliance and increase the penalty over time for States that do not
return to compliance. CMPs will start accruing 5 days after the date of
the notice and become payable 60 days after the date of the notice, if
not timely appealed, or 60 days after issuance of a final determination
at the conclusion of any appeals pursuant to Sec. 430.49(f). Under
Sec. 430.49(c)(3)(ii)(B) of this rule, CMS will impose CMPs for
failure to submit or implement an approved CAP according to the
following formula: Days 1-30 (after 5-day delay as specified in the
enforcement notice): $25,000/day; Days 31-60: $50,000/day; and Days 61-
until State comes into compliance with CAP requirements: $100,000/day.
All CMP amounts provided in this rule will be adjusted annually in
accordance with 45 CFR part 102.
New Sec. 430.49(c)(2)(ii) provides that CMS may issue additional
notices to take additional actions (including increasing CMPs or
imposing or broadening the scope of a suspension of procedural
disenrollments) if CMS identifies additional violations of CAP
provisions. Such notices will meet the requirements in 430.49(c)(2)(i).
Noncompliant States will be charged CMPs daily until the State
takes appropriate action to cure the noncompliance with the CAP
requirements as outlined in Sec. 430.49(e) and discussed in section
II.F. of this rule. Under Sec. 430.49(e)(2), once CMS is satisfied
that the State has taken appropriate action to cure the noncompliance
with the CAP requirements, CMS will inform the State of the total
amount of CMPs that have accrued, the balance owed if the State has
already begun payment, and the last day CMPs under the enforcement
notice were imposed.
As provided in Sec. 430.49(c)(4), if the State fails to suspend
procedural disenrollments as required pursuant to a notice described in
Sec. 430.49(c)(2) or to pay CMPs as specified in that notice, or both,
CMS may issue a subsequent notice under Sec. 430.49(c)(2) to increase
the CMPs to the maximum allowable daily amount, if not already reached,
or may pursue additional enforcement action under section 1904 of the
Act, including withholding some or all FFP for the period of
noncompliance.
CMS intends to issue additional guidance following the issuance of
this rule providing additional information regarding the process CMS
will use to collect CMPs and any operational requirements for States to
remit payment of CMPs.
E. Mitigating Circumstances (Sec. 430.49(d))
As described previously, section 1902(tt)(2)(B) of the Act, as
implemented in new Sec. 430.49, gives CMS the authority to require
States to submit a CAP for failure to meet reporting or Federal
redetermination requirements and, if the State fails to submit or
implement such CAP, including if CMS disapproves the State's submitted
CAP or if the State fails to meet the requirements set forth in the
approved CAP, in accordance with section 1902(tt)(2)(B)(ii) of the Act,
to suspend procedural disenrollments, impose CMPs of up to $100,000 per
day, or take both actions. While section 1902(tt)(2)(B) of the Act
empowers CMS to require CAPs, suspend procedural disenrollments, and
impose CMPs, the statute also gives the Secretary discretion to use
this authority or not and to determine the amount of CMPs up to the
statutory maximum.\21\
---------------------------------------------------------------------------
\21\ Section 1902(tt)(2)(B)(iii) of the Act provides (emphasis
added): If a State fails to submit or implement an approved
corrective action plan in accordance with clause (ii), the Secretary
may . . . require the State to suspend making all or some
terminations of eligibility for medical assistance from the State
plan under this title (including any waiver of such plan) that are
for procedural reasons until the State takes appropriate corrective
action, as determined by the Secretary, and may impose a civil money
penalty of not more than $100,000 for each day a State is not in
compliance.
---------------------------------------------------------------------------
[[Page 84723]]
CMS interprets the enforcement authorities in section 1902(tt)(2)
of the Act as tools to promote State accountability for compliance with
the reporting requirements in section 1902(tt)(1) of the Act and
Federal redetermination requirements, as defined in Sec. 430.5 of this
rule, and to maximize accurate eligibility redeterminations to promote
retention of coverage for eligible people to the greatest extent
feasible. CMS recognizes that the scope or impact of different
violations of the reporting or redetermination requirements may vary,
and there also may be an emergency or other extraordinary circumstances
preventing a State from complying with a given requirement or
submitting or implementing a CAP. Thus, consistent with the discretion
allowed under section 1902(tt)(2)(B) of the Act, CMS will take into
consideration certain mitigating circumstances related to the State's
noncompliance when determining whether to require the State to submit a
CAP or require suspension of procedural disenrollments or impose CMPs.
These circumstances are set forth at Sec. 430.49(d) of this rule.\22\
---------------------------------------------------------------------------
\22\ CMS has also used its discretion in setting the amount of
the CMPs that will apply in certain circumstances, based on the
duration of the CAP violation involved, as discussed above in
section II.D.
---------------------------------------------------------------------------
Mitigating Circumstances Impacting Decision to Require a CAP. In
the case of State noncompliance with Federal redetermination
requirements, Sec. 430.49(d)(1) provides that CMS may elect to not
require or to delay requiring submission of a CAP if either or both of
the following circumstances exist:
1. No Harm or Substantial Risk of Harm Occurred: The noncompliance
caused neither actual harm nor a substantial risk of harm to
beneficiaries, including increased burden for beneficiaries in
completing the renewal process, loss of coverage at renewal for
individuals who continue to meet the substantive eligibility criteria
and whose eligibility should otherwise be retained but for failure to
meet a procedural requirement, or delays in access to coverage or care.
2. Extraordinary Circumstances Exist: There is an emergency or
there are other extraordinary circumstances preventing the State's
compliance--for example, a natural disaster or catastrophic systems
outage.
In addition, in the case of noncompliance with the reporting
requirements in Sec. 435.927, Sec. 430.49(d)(2) provides that CMS may
delay requiring or elect not to require a State to submit a CAP if CMS
has determined that the State implementing a CAP is not necessary to
ensure that the noncompliance is remedied. For example, CMS might not
require a CAP if a State's noncompliance is due to an error that the
State commits to correcting and does immediately correct. As with
violations relating to Federal redetermination requirements, CMS may
also delay requiring or elect not to require a State to submit a CAP
relating to a violation of reporting requirements if CMS determines
that there is an emergency or other extraordinary circumstances
preventing the State's compliance.
Mitigating Circumstances Impacting Decision to Suspend Procedural
Disenrollments or Impose CMPs. If a State fails to submit an approvable
CAP or to implement an approved CAP, including if CMS disapproves the
State's submitted CAP or if the State fails to meet the requirements
set forth in the approved CAP, new Sec. 430.49(d)(3) provides that CMS
will consider whether any of the following mitigating circumstances
exist when deciding whether to require a suspension of procedural
disenrollments, impose CMPs, or take both actions:
1. Extraordinary Circumstances Exist: Regardless of the type of
violation that gave rise to the requirement of a CAP, CMS will consider
whether there is an emergency or other extraordinary circumstance that
occurred after the violation resulting in the requirement of a CAP that
significantly impeded the State's ability to submit or implement the
CAP. If such circumstances exist, CMS may delay or forgo imposition of
CMPs but will not delay requiring a suspension of procedural
disenrollments (beyond the one-month delay described below in the case
of reporting violations that do not impede CMS' oversight of procedural
disenrollments).
2. Reporting Violation Does Not Impede CMS' Oversight of Procedural
Disenrollments: When a State fails to submit or implement an approved
CAP that was required based on the State's violation of reporting
requirements under section 1902(tt)(1) of the Act, CMS will consider
whether the underlying reporting violation impedes CMS' oversight of
procedural disenrollments. If so, CMS will suspend procedural
disenrollments and impose CMPs. If not, CMS will delay requiring a
suspension of procedural disenrollments for 1 month to allow the State
an opportunity to comply with the data reporting requirements but will
immediately impose CMPs (unless extraordinary circumstances exist, as
discussed above).
Although all data reporting under section 1902(tt)(1) of the Act is
important to support CMS oversight of State redetermination processes
during a period that generally aligns with States' unwinding periods,
we believe that in most cases it would be too punitive to suspend
procedural disenrollments immediately if the State fails to submit or
implement a CAP related to an underlying reporting requirement
violation that does not impede CMS' understanding of the State's
procedural disenrollment rate. In contrast, where a State fails to
submit or implement a CAP related to an underlying reporting violation
that impedes CMS' oversight of procedural disenrollments in that State,
CMS will take immediate action to require suspension of procedural
disenrollments, in addition to imposing CMPs (if not delayed or forgone
by CMS due to the existence of extraordinary circumstances), to
mitigate possible harm to beneficiaries at risk of disenrollment.
For example, if a State fails to submit or implement an approved
CAP that CMS required based upon the State's failure to report data on
the volume of calls it is receiving at a call center, CMS will examine
the circumstances of the underlying reporting violation and may find
that the lack of these data does not impede its oversight of procedural
disenrollments and, if so, will delay requiring the State to suspend
procedural disenrollments for 1 month, pending the submission or
implementation of a CAP or the correction of the underlying reporting
violation, but will impose CMPs according to Sec. 430.49(c)(3)(ii)
without delay (unless there has been an extraordinary circumstance
after the violation occurred that prevented the State from submitting
or implementing the CAP).
F. Lifting of CAP Enforcement Actions (Sec. 430.49(e))
Under Sec. 430.49(e)(1) of this rule, CMS will lift any
requirement to suspend procedural disenrollments and/or stop charging
any CMPs imposed pursuant to Sec. 430.49(c) when the State cures its
noncompliance by submitting an approvable CAP (where the violation was
a failure to submit a CAP) or initiating or resuming implementation
[[Page 84724]]
of an approved CAP (where the violation was a failure to implement
according to the terms of the CAP). In cases where the State had
received a notice imposing CMPs due to failure to submit an approved
CAP, CMS will continue the accrual of CMPs from the date that a State
submits a CAP for CMS review in accordance with Sec.
430.49(e)(1)(i)(A), until CMS determines whether the CAP is approvable.
If CMS determines the CAP is approvable, CMS will retroactively end the
accrual of CMPs on the day the CAP was submitted and cease charging
CMPs prospectively. If CMS determines that the CAP is not approvable,
CMS will continue charging CMPs imposed under the terms of the
enforcement notice without interruption from the date specified in the
original notice provided to the State under Sec. 430.49(c)(2) and will
continue charging such CMPs until an approvable CAP is submitted. Under
Sec. 430.49(e)(2), once CMS is satisfied that the State has taken
appropriate action to cure the noncompliance with the CAP requirements,
CMS will inform the State of the total amount of CMPs that have
accrued, the balance owed, and the last day CMPs were imposed as well
as the date on which the State may resume procedural disenrollments.
CMS may again require suspension of procedural disenrollments and
impose CMPs that have been lifted in accordance with Sec. 430.49(e)(1)
if CMS subsequently determines that the State is not complying with the
terms of the approved CAP. In such a situation, CMS will issue a new
notice pursuant to Sec. 430.49(c)(2).
G. State Reconsideration and Appeal Rights (42 CFR 430.3, 430.49(f),
and 45 CFR Part 16)
Under new Sec. 430.49(f) and amendments to Sec. 430.3 and 45 CFR
part 16, States will be able to appeal CMS' decision to require a State
to suspend procedural disenrollments and/or pay CMPs under section
1902(tt)(2)(B)(iii) of the Act and new Sec. 430.49(c). The rule amends
Sec. 430.3 and 45 CFR part 16, Appendix A, to provide that States can
appeal these CMS decisions to the Departmental Appeals Board (Board) in
accordance with procedures set forth in 45 CFR part 16.
The rule creates a new 42 CFR 430.49(f)(1), providing that a State
dissatisfied with CMS' determination under Sec. 430.49(c) that the
State must suspend procedural disenrollments or pay CMPs will have 30
days (as counted consistent with the protocol for counting days
outlined under 45 CFR 16.19) from receipt of the notice described in
Sec. 430.49(c)(2) to appeal CMS's decision to the Board. The appeal
request must comply with 45 CFR 16.7, and the appeals process will be
governed by 45 CFR part 16. That means that the expedited appeal
procedures outlined in 45 CFR 16.12 might be available, if the
conditions in 45 CFR 16.12 are met. If the State does not submit an
appeal request within that 30-day timeframe, then the decision
described in the notice received by the State under Sec. 430.49(c)(2)
is the final decision of the Secretary and is final agency action
within the meaning of 5 U.S.C. 704.
At new 42 CFR 430.49(f)(2), we give any party to the appeal that is
dissatisfied with the Board's decision under 430.49(f)(1) an
opportunity to request that the CMS Administrator reconsider it, and we
outline the process that will govern the Administrator's
reconsideration. In particular, new Sec. 430.49(f)(2)(i) specifies
that any party to the appeal that is dissatisfied with the Board's
decision on an appeal brought by a State under Sec. 430.49(f)(1) may
request reconsideration of that decision within 15 days of receiving
notice of the decision under 45 CFR 16.21. The process for such
reconsiderations is provided under new Sec. 430.49(f)(2)(i)(A) through
(D). Under new Sec. 430.49(f)(2)(i)(A), we are providing that
reconsideration requests must be filed with the Administrator, and must
include a copy of the Board's decision, a brief statement of why the
party believes it was wrong, and a statement of the amount of any CMPs
in dispute. New Sec. 430.49(f)(2)(i)(B) requires that the party
requesting reconsideration send a copy of the request for
reconsideration to all other parties to the appeal and other
participants in the appeal (as described in 45 CFR 16.16) at the same
time the request is filed. New Sec. 430.49(f)(2)(i)(C) provides that
any other party to the appeal, or other participant in the appeal, may
respond to the request for reconsideration in writing and file such
response with the Administrator within 15 days of the date the request
for reconsideration is filed with the Administrator. Under new Sec.
430.49(f)(2)(i)(D), the Administrator will review the Board's decision
and any additional information submitted by the parties and other
participants, and either affirm the Board's decision or issue a new
decision within 60 days after the Board issues notice of its decision
under 45 CFR 16.21. Under new Sec. 430.49(f)(2)(ii), the Administrator
may, within 60 days after the Board issues notice of its decision under
45 CFR 16.21, also modify or reverse the Board's decision without
receiving a request for reconsideration under Sec. 430.49(f)(2). In
cases where the Administrator opts to review the Board's decision
without a request for reconsideration, such decision must be provided
within 60 days of the Board's issuance of its notice of decision under
45 CFR 16.21.
New Sec. 430.49(f)(2)(iii) states that if there is no request for
reconsideration filed under Sec. 430.49(f)(2)(i) and the Administrator
does not modify or reverse the decision within the 60-day period
described in Sec. 430.49(f)(2)(ii), then the Board's decision will be
the final determination of the Secretary and final agency action, and
the Administrator will provide notice to all parties and other
participants of such decision as described in Sec. 430.49(f)(2)(iv).
New Sec. 430.49(f)(2)(iv) provides that the Administrator will provide
a notice to all parties and other participants of the final decision
that communicates that it is the final determination of the Secretary
and final agency action and Sec. 430.49(f)(2)(v) provides that the
determination of the Administrator pursuant to Sec. Sec.
430.49(f)(2)(i)(D) or 430.49(f)(2)(ii) constitutes final agency action
within the meaning of 5 U.S.C. 704.
Under amendments in the rule to 45 CFR 16.22, any suspensions of
procedural disenrollments under 42 CFR 430.49(c) will continue in
effect and CMPs imposed on a State under 430.49(c) will continue to
accrue pending an appeal to the Board under Sec. 430.49(f).
Appeals of CMS decisions to take the FMAP reduction under section
1902(tt)(2)(A) of the Act will follow a different process that is
governed by already existing regulations. If CMS finds that a State is
noncompliant with reporting requirements under Sec. 435.927, CMS will
calculate the amount of the FMAP reduction under Sec. 435.928 and
request that the State make a voluntary adjustment to the Form CMS-64
to return the funds to CMS. If the State does not do so, CMS will
initiate disallowance proceedings, which will be governed by existing
regulations at Sec. 430.42. States may request reconsideration or
appeal disallowance decisions per these existing CMS regulations at
Sec. 430.42. Under Sec. 430.42, States wishing to request a
reconsideration of the Administrator's decision to impose a
disallowance must request such reconsideration within 60 days of
receiving the notice of disallowance described in Sec. 430.42(a).
We are adding new Sec. 430.49(f) and amending Sec. 430.3 and 45
CFR part 16 as outlined in this section to provide States
[[Page 84725]]
with a fair and reasonable administrative process for appealing CMS'
decisions to suspend procedural disenrollments or impose CMPs and to
ensure that accountability for those decisions is vested in a principal
officer. These changes also will provide States with accurate
information about the availability of administrative review if they are
dissatisfied with a CMS decision under 42 CFR 430.49(c). These
provisions also clarify when agency decisions are final agency action
for purposes of 5 U.S.C. 704.
H. Definitions (Sec. 430.5)
This rule adds two new definitions to Sec. 430.5 that apply to the
provisions at Sec. 430.49. One of the two new definitions will also
apply to related amendments to 45 CFR part 16. First, the rule defines
a ``procedural disenrollment'' for purposes of 42 CFR 430.49 and 45 CFR
part 16 as a termination of eligibility and disenrollment from Medicaid
for reasons that are unrelated to a State's determination of whether
the individual meets eligibility criteria to qualify for coverage,
including for failure to return a renewal form or documentation needed
by the State to make a determination of eligibility. And second, the
rule defines ``Federal redetermination requirements'' for purposes of
42 CFR 430.49 as Federal requirements applicable to eligibility
redeterminations outlined in Sec. 435.916, including renewal
strategies authorized under section 1902(e)(14)(A) or other alternative
processes and procedures approved by CMS under section 1902(e)(14)(A)
of the Act or section 6008(f)(2)(A) of the FFCRA.
III. Good Cause
The Administrative Procedure Act (APA), at 5 U.S.C. 553(b),
requires the agency to publish a notice of the proposed rule in the
Federal Register that includes a reference to the legal authority under
which the rule is proposed and the terms and substance of the proposed
rule or a description of the subjects and issues involved. Section
553(c) further requires the agency to give interested parties the
opportunity to participate in the rulemaking through public comment
before the provisions of the rule take effect. Section 553(b)(B)
provides an exception to notice-and-comment requirements, however, if
the agency for good cause finds that notice-and-comment is
impracticable, unnecessary, or contrary to the public interest and
incorporates a statement of the finding and its reasons in the rule
issued.
Section 553(d) ordinarily requires a 30-day delay in the effective
date of a final rule from the date of its publication in the Federal
Register. However, similar to the good cause exception for notice-and-
comment requirements, section 553(d)(3) excepts a rule from the 30-day
delay requirement if the agency for good cause finds that the delay is
impracticable, unnecessary, or contrary to the public interest.
Similarly, the Congressional Review Act (CRA) also allows an agency to
issue a rule that would otherwise be subject to a 60-day delayed
effective date requirement with an immediate effective date in
circumstances where a delay is impractical, unnecessary, or contrary to
the public interest (5 U.S.C. 808(2)). CMS is forgoing the usual
notice-and-comment procedures and delay in the effective date for this
rule because, for the reasons discussed in this section, following such
requirements would be impracticable and contrary to the public
interest.
Recent data on unwinding-related renewals indicates that of the 7.1
million Medicaid and CHIP beneficiaries whose eligibility was due for
renewal in July 2023, more than 1.6 million had been disenrolled.\23\
The vast majority of these disenrolled individuals (71 percent) were
disenrolled due to a procedural reason such as failure to return
paperwork, not because of a determination that the person no longer
satisfied Medicaid's substantive eligibility criteria. While we are
unable to determine the proportion of individuals who were procedurally
disenrolled but continued to meet substantive eligibility criteria, the
high rate of procedural disenrollments suggests that the options and
strategies that CMS has been working with States to implement through
their mitigation plans may not be sufficient to protect the continued
enrollment of individuals who continue to meet substantive eligibility
criteria. For this reason, the enforcement authorities established
under this rule are needed to protect access to Medicaid coverage. Any
delay in implementing the enforcement tools in this rule would thwart
CMS's ability to take an array of possible enforcement actions against
noncompliant States under section 1902(tt) of the Act and could result
in serious harm to beneficiaries.
---------------------------------------------------------------------------
\23\ Medicaid and CHIP National Summary of Renewal Outcomes--
March Through July 2023 Data; published October 2023; available at
<a href="https://www.medicaid.gov/sites/default/files/2023-10/july-2023-national-summary-renewal-outcomes.pdf">https://www.medicaid.gov/sites/default/files/2023-10/july-2023-national-summary-renewal-outcomes.pdf</a>.
---------------------------------------------------------------------------
In anticipating the likely impact of unwinding, the Assistant
Secretary for Planning and Evaluation (ASPE) in HHS estimated that in
the period between April 1, 2023, and June 1, 2024, 6.8 million people
will lose Medicaid coverage despite still meeting substantive
eligibility criteria.\24\ ASPE estimated that 82.7 percent of enrollees
would be determined eligible, and their eligibility would be renewed,
while 17.5 percent would be disenrolled. Of those disenrolled, ASPE
estimated 54 percent would be disenrolled because they were determined
ineligible, and 45 percent (6.8 million) would be disenrolled for
procedural reasons despite still meeting substantive eligibility
criteria. Early unwinding data from May and June 2023 renewals show a
higher percentage of renewals resulting in disenrollment (nearly 38
percent in May and just over 25 percent in June) and a significantly
higher percentage of disenrollments occurring for procedural reasons
(77 percent in May and 73 percent in June) compared to ASPE's
estimates. While these early data are limited, if disenrollments
continue at the June 2023 rates, the number of individuals who lose
Medicaid coverage for procedural reasons will be much higher than
ASPE's estimates, and many of those individuals may still meet
substantive Medicaid eligibility criteria. If CMS is unable to take all
actions within its authority to enforce Federal redetermination
requirements, the number of individuals negatively impacted may
increase.
---------------------------------------------------------------------------
\24\ ASPE (August 19, 2022). Unwinding the Medicaid Continuous
Enrollment Provision: Projected Enrollment Effects and Policy
Approaches. (Available at <a href="https://aspe.hhs.gov/sites/default/files/documents/404a7572048090ec1259d216f3fd617e/aspe-end-mcaid-continuous-coverage_IB.pdf">https://aspe.hhs.gov/sites/default/files/documents/404a7572048090ec1259d216f3fd617e/aspe-end-mcaid-continuous-coverage_IB.pdf</a>).
---------------------------------------------------------------------------
Analyses indicate that Medicaid coverage loss could have
significant detrimental consequences, resulting in forgone medical
care, including preventive care, that could result in refilling
prescriptions less often, more emergency department visits, and
increased morbidity and mortality.<SUP>25 26</SUP> Preventable coverage
loss could result from States' failure to follow Federal requirements,
which CMS cannot fully enforce without this rulemaking. Loss of
coverage by individuals who still meet substantive eligibility
criteria, which is likely followed by re-enrollment at a later point in
time, is often referred to as ``churning.'' Because churning can lead
to deferred or delayed care, it can result in greater health care
costs; such disruptions in care and medication
[[Page 84726]]
adherence create negative health outcomes that make care more costly
down the road.\27\
---------------------------------------------------------------------------
\25\ ASPE (April 11, 2021). Medicaid Churning and Continuity of
Care. (Available at <a href="https://aspe.hhs.gov/reports/medicaid-churning-continuity-care">https://aspe.hhs.gov/reports/medicaid-churning-continuity-care</a>).
\26\ Abdus, S. (August 2014). Part-year Coverage and Access to
Care for Nonelderly Adults. (Available at <a href="https://journals.lww.com/lww-medicalcare/Fulltext/2014/08000/Part_year_Coverage_and_Access_to_Care_for.6.aspx">https://journals.lww.com/lww-medicalcare/Fulltext/2014/08000/Part_year_Coverage_and_Access_to_Care_for.6.aspx</a>).
\27\ Sommers, B.D., Gourevitch, R., Maylone, B., Blendon, R.J.,
Epstein, A.M. (2016). Insurance churning rates for low-income adults
under health reform: Lower than expected but still harmful for many.
Health Affairs, 35(10), 1816-1824.
---------------------------------------------------------------------------
By contrast, continuous enrollment permits individuals to maintain
a regular source of care, including preventive care and ongoing
treatment of chronic conditions. A review of the research available on
continuous enrollment of children found it is related to reductions in
unmet health care needs, increases in coordination of care, including
monitoring and regular treatment adjustments as conditions change, and
greater patient/provider engagement in treatment planning, which can
lead to better health outcomes.\28\ In fact, a study of health care
outcomes in States that provided continuous eligibility to children
prior to the FFCRA's continuous enrollment condition found reductions
in insurance gaps, lower probability of children being in fair or poor
health, and, for children with serious health care needs, increased
access to preventive and specialty care.\29\ This evidence suggests
that protecting access to coverage leads to better outcomes for
enrollees. The availability of these enforcement tools is critically
important to ensure that CMS can act quickly, if needed, to address
State noncompliance. Delaying CMS' access to the full range of the
enforcement tools it could employ to require States to follow Federal
eligibility redetermination requirements and the new reporting
requirements in section 1902(tt)(1) of the Act, could thus cause actual
harm to beneficiaries.
---------------------------------------------------------------------------
\28\ Guevara, J.P., Moon, J., Hines, E.M., Fremont, E., Wong,
A., Forrest, C.B., Silber, H.H., & Pati, S. (2014). Continuity of
public insurance coverage: A systematic review of the literature.
Medical Care Research and Review, 71(2), 115-137.
\29\ Brantley, E., Ku, L. (2022). Continuous eligibility for
Medicaid associated with improved child health outcomes. Medical
Care Research and Review, 79(3), 404-413.
---------------------------------------------------------------------------
As discussed, State submission of renewal data is critically
important to our ability to monitor State renewal processes and take
action when needed to prevent unauthorized disenrollments. CMS must be
able to use the compliance tools under section 1902(tt) of the Act to
obtain data from States that will help us to continue to quickly
identify problems with the redetermination process during the period
from April 1, 2023, through June 30, 2024, and, if needed, to take
timely action to require States to fix problems including, if
appropriate, requiring States to halt procedural disenrollments from
Medicaid.
This rule provides critical guidance to help States ensure that
they are complying with the data reporting requirements under section
1902(tt)(1) of the Act and that they understand how CAPs and CMPs will
be administered in the event that a State does not take all actions
necessary for compliance. For example, the rule provides States with
certainty regarding how CMS will interpret the requirement to report
certain data under section 1902(tt)(1) of the Act on a timely basis. A
delay in the issuance of guidance resulting from the notice-and-comment
process would forestall States' ability to be compliant with Federal
requirements that protect beneficiaries.
CMS sees the enforcement authorities--CAPs, suspensions of
procedural disenrollments, and CMPs--as tools to promote State
accountability for compliance with the reporting and redetermination
requirements, and we recognize that the scope or impact of different
violations of these requirements may vary. Thus, we believe it is
important to consider certain mitigating circumstances when determining
whether to require a State to submit a CAP or to require a suspension
of procedural disenrollments or impose CMPs. This rule gives States
additional information about the factors that CMS will weigh in
deciding whether to require CAPs, to require States to suspend
procedural disenrollments, or to impose CMPs. CMS needs to be able to
focus its limited enforcement resources on the most serious
noncompliance. Without this flexibility, CMS would be required to tie
up our limited resources on enforcement actions in situations where
mitigating circumstances would weigh against such action. This could
seriously inhibit or even prevent CMS from taking truly needed
enforcement action if a situation were to arise involving serious
noncompliance causing harm or a substantial risk of harm.
Recognizing the importance of the guidance in this rule, CMS has
moved as quickly as possible within existing constraints to complete
rulemaking. Section 1902(tt) of the Act was enacted via the CAA, 2023,
on December 29, 2022, took effect 3 months later, on April 1, 2023, and
applies to a time-limited period, from April 1, 2023, to June 30, 2024,
that began on the day that the statutory language took effect. In other
words, the effective date of section 1902(tt) of the Act is the same
date as the start of the compliance period, and there was only a 3-
month timeframe between the passage of the CAA, 2023 and the effective
date. Given the short timeframe and the evolving landscape of State
needs relating to implementation, it was not feasible for CMS to have
issued a final rule (with or without notice-and-comment) in that 3-
month timeframe, because, as is discussed in more detail below, CMS'
notice-and-comment rulemaking process ordinarily takes at least 18
months.
Moreover, given the evolving landscape of Federal guidance and
State needs before and after the end of the Medicaid continuous
enrollment condition, it would not have been feasible for CMS to begin
the rulemaking process earlier. When the CAA, 2023 was enacted on
December 29, 2022, CMS was immersed in efforts to support States as
they prepared operations for the end of the Medicaid continuous
enrollment condition. This included working with all 56 States
individually on assessing the need for and implementing temporary
strategies or plans to ensure State compliance with Federal Medicaid
redetermination requirements (often referred to as mitigation plans)
and issuing new guidance and flexibilities to enable States to maximize
their capacity to maintain the enrollment of eligible beneficiaries at
renewal during the unwinding of the Medicaid continuous enrollment
condition.
Accelerating the rulemaking process was also not a viable option
for CMS given resource constraints, even if doing so would have been
feasible. Since enactment of the CAA, 2023, CMS has devoted an
extraordinary amount of internal resources to the development of
materials, review of readiness, and availability of technical
assistance for States as they prepared for and began to return to
normal eligibility operations following the end of the FFCRA continuous
enrollment condition. We created a series of new resources designed to
assist States in protecting the enrollment of eligible individuals as
they restarted routine Medicaid renewals, met with every State to
assess its planning for unwinding and compliance with Medicaid renewal
requirements, and developed new options and strategies through which
States could address areas of noncompliance and mitigate negative
impacts on eligible individuals. These efforts did not stop when the
unwinding process began, and they continue to strain Federal agency
resources. During roughly the same timeframe, CMS was also engaged in
an unprecedented amount of work to support States, health care
providers, and Medicare, Medicaid, and CHIP beneficiaries in the
[[Page 84727]]
transition back to regular operations when numerous access-related
policies and flexibilities ended on May 11, 2023, when the COVID-19 PHE
(as declared by the Secretary under section 319 of the Public Health
Service Act) ended. This included waivers under section 1135 of the Act
that were in place for the more than 3 years of that COVID-19 PHE.\30\
Notwithstanding this unusual, extraordinary workload throughout most of
2023, CMS has developed and issued this rule as soon as was practicable
under the circumstances.
---------------------------------------------------------------------------
\30\ See <a href="https://www.cms.gov/files/document/frequently-asked-questions-cms-waivers-flexibilities-and-end-covid-19-public-health-emergency.pdf">https://www.cms.gov/files/document/frequently-asked-questions-cms-waivers-flexibilities-and-end-covid-19-public-health-emergency.pdf</a>, and <a href="https://www.medicaid.gov/sites/default/files/2023-08/cib050823.pdf">https://www.medicaid.gov/sites/default/files/2023-08/cib050823.pdf</a>.
---------------------------------------------------------------------------
Had CMS proceeded through notice-and-comment rulemaking, the
resulting delay would have been significant, thereby increasing the
risk that beneficiaries would be harmed by losing coverage due to
States' violation of Federal redetermination requirements. CMS'
rulemaking cycle from proposed rulemaking to final rule typically takes
at least 18 months. This includes drafting the proposed rule and
engaging in a rigorous clearance process that concludes with CMS, HHS,
and the Office of Information and Regulatory Affairs leadership
approval. A proposed rule is typically published in the Federal
Register with a 60-day public comment period, and then CMS must review,
categorize, and consider the public comments received, which may number
in the thousands. Then the final rule can be drafted and enter the same
rigorous clearance process. If this process began immediately upon
enactment of the CAA, 2023 (December 29, 2022) and extended 18 months,
when combined with the usual 30- or 60-day delay in effective date
following publication in the Federal Register, the rule would not have
taken effect until the beginning of August 2024 at the earliest, 1
month after the compliance period ended. In the meantime, CMS would
have been significantly hampered in its efforts to enforce Federal
redetermination requirements and to enforce the reporting requirements
that help CMS quickly become aware of possible State violations of
those redetermination requirements.
Based on CMS' early and still ongoing work with States and the
information States have already reported, CMS has already observed
renewal issues and has been working with States to develop mitigation
plans to address them. As that work continues and new issues are
uncovered, it is important for CMS to be able to draw upon the full
range of its enforcement tools. Additionally, other issues may arise in
the coming months that could require CMS to take swift action to the
full extent of its enforcement authority under section 1902(tt) of the
Act. For example, States might fail to comply with requirements to
provide appropriate notice informing beneficiaries of the renewal
process and the steps needed to renew eligibility, may fail to use
available and reliable information sources to assess beneficiaries'
eligibility on an ex parte basis, may make a determination of
ineligibility that is inconsistent with eligibility criteria, or may
fail to appropriately notify the individual of the eligibility
determination and the beneficiary's right to a fair hearing. In any of
these circumstances, a major State violation of requirements could lead
to a substantial number of beneficiaries being unlawfully disenrolled
from coverage, creating an immediate need for CMS to require States to
take corrective action to restore lost benefits to prevent further harm
to beneficiaries. Although States and CMS have collaboratively worked
to mitigate these risks in preparing for and implementing the end of
the Medicaid continuous enrollment condition, if a State in the future
is unwilling or unable to comply with Federal renewal or reporting
requirements, CMS will have an urgent need to be able to enforce these
Federal requirements using the enforcement authority implemented by
this rule. And waiting to use that enforcement authority until August
2024 would significantly undermine CMS's ability to prevent more
immediate harm to beneficiaries.
In addition, unless the rule is issued without delay, States would
not have administrative channels to pursue an appeal before any
judicial review of the actions CMS is authorized to take under section
1902(tt)(2)(B)(iii) of the Act. Setting forth a clear administrative
appeals process benefits both States and CMS by providing both parties
an opportunity to resolve disputes administratively and thus
potentially avoid the need for additional judicial review, and to
generate a clear record for any further judicial review in Federal
court, should it be necessary to resolve the dispute.
For all the reasons cited previously in this rule and summarized in
Table 1, which follows, CMS believes good cause exists to exempt this
rule from the notice-and-comment and delay in effective date
requirements and is proceeding with this rulemaking on an expedited
basis, to be effective upon publication.
Table 1--Good Cause
------------------------------------------------------------------------
Title (regulatory citation) Rationale
------------------------------------------------------------------------
Reporting Requirements (Sec. Notice-and-comment rulemaking for
435.927). Sec. 435.927 is impracticable and
contrary to the public interest for
the following reasons:
<bullet> The timeline for such
rulemaking would extend beyond the
time period during which the
reporting requirements implemented
by Sec. 435.927 are in effect.
<bullet> Any delay in issuing clear
reporting guidance will negatively
impact States' ability to comply
with Federal requirements and will
negatively impact CMS's ability to
monitor States' redetermination
processes.
<bullet> These reporting
requirements will help CMS to
determine whether States are
meeting Federal redetermination
requirements. Unless CMS has this
information promptly, during the
applicable period, CMS will be less
able to take swift enforcement
action to prevent unauthorized
coverage loss (or gaps in coverage)
for eligible individuals. Coverage
loss can lead to forgone care and
adverse health outcomes.
FMAP Reduction (Sec. 435.928)... Notice-and-comment rulemaking for
Sec. 435.928 is impracticable and
contrary to the public interest for
the following reasons:
<bullet> The timeline for such
rulemaking would extend beyond the
time period (July 1, 2023, through
June 30, 2024) during which State
noncompliance could trigger the
FMAP reduction described in this
section.
[[Page 84728]]
<bullet> The FMAP reduction
implemented in Sec. 435.928 is an
important component of the tools
available to ensure that States
comply with the reporting
requirements. Without proper
reporting, CMS may be unable to
effectively monitor States'
compliance with redetermination
requirements during the reporting
period and will be less able to
take swift enforcement action to
prevent unauthorized coverage loss.
This may lead to disenrollment of
eligible individuals (and/or gaps
in their coverage) and result in
adverse health outcomes.
Corrective Action Plans (Sec. Notice-and-comment rulemaking for
Sec. 430.5, 430.49(b)). Sec. 430.49(b) (along with the
definitions at Sec. 430.5 that
are applicable to this provision)
is impracticable and contrary to
the public interest for the
following reasons:
<bullet> The timeline for such
rulemaking would extend beyond the
time period (April 1, 2023, to June
30, 2024) during which State
noncompliance with either the
reporting requirements described at
Sec. 435.927 or Federal renewal
requirements could arise and
thereafter be subjected to the CAPs
implemented in 430.49(b).
<bullet> The CAP provisions
implemented at Sec. 430.49(b) are
an important component of the tools
available to ensure that States
comply with both the reporting
requirements and the Federal
redetermination requirements. A
delay in implementing these
provisions would limit CMS'
authority to quickly minimize
preventable loss of coverage or
gaps in coverage for eligible
individuals when they are
identified, which may result in
forgone care and adverse health
outcomes.
Suspension of Procedural Notice-and-comment rulemaking for
Disenrollments and Civil Money Sec. 430.49(c) (along with the
Penalties (Sec. Sec. 430.5, definitions at Sec. 430.5 that
430.49(c)). are applicable to this provision)
is impracticable and contrary to
the public interest for the
following reasons:
<bullet> The timeline for such
rulemaking would extend beyond the
time period (April 1, 2023, to June
30, 2024) during which State
noncompliance could arise and
thereafter be subjected to the
enforcement actions implemented in
430.49(c).
<bullet> A delay in implementing
this statutory authority would
limit CMS' authority to quickly
minimize preventable loss of
coverage for eligible individuals,
which may result in forgone care
and adverse health outcomes.
Mitigating Circumstances (Sec. Notice-and-comment rulemaking for
Sec. 430.5, 430.49(d)). Sec. 430.49(d) (along with the
definitions at Sec. 430.5 that
are applicable to this provision)
is impracticable and contrary to
the public interest, as it would
prevent CMS from exercising
discretion with respect to the
enforcement authority provided by
section 1902(tt) of the Act,
minimizing its usefulness for
enforcing State compliance. CMS
needs to be able to focus its
limited enforcement resources on
the most serious noncompliance.
Tying up CMS's limited enforcement
resources on enforcement actions in
situations where mitigating
circumstances would weigh against
such action could seriously inhibit
or even prevent CMS from taking
truly needed enforcement action in
situations involving serious
noncompliance causing harm or a
substantial risk of harm.
State Reconsideration and Appeal Notice-and-comment rulemaking for
Rights (Sec. 430.3, 430.49(f), State reconsideration and appeal
and corresponding amendments to rights is impracticable and
45 CFR part 16). contrary to the public interest for
the following reasons:
<bullet> The timeline for such
rulemaking would extend beyond the
time period (April 1, 2023, to June
30, 2024) during which State
noncompliance could arise and
thereafter be subjected to the
enforcement actions implemented by
this rule.
<bullet> A delay in establishing
appeal rights would impede States'
ability to seek administrative
resolution to resolve disputes
regarding the enforcement actions
in this rule without necessitating
review in Federal court.
------------------------------------------------------------------------
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et
seq.), we are required to provide 60-day notice in the Federal Register
and solicit public comment before a ``collection of information''
requirement is submitted to OMB for review and approval. For the
purpose of the PRA and this section of the preamble, collection of
information is defined under 5 CFR 1320.3(c) of the PRA's implementing
regulations.
To fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the PRA requires that we
solicit comment on the following issues:
<bullet> The need for the information collection and its usefulness
in carrying out the proper functions of the agency.
<bullet> The accuracy of the estimate of the information collection
burden.
<bullet> The quality, utility, and clarity of the information to be
collected.
<bullet> Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of the section
3506(c)(2)(A)-required issues for the following information collection
requirements.
A. Wage Estimates
To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' May 2021 National Occupational Employment and Wage
Estimates for all salary estimates (<a href="http://www.bls.gov/oes/current/oes_nat.htm">http://www.bls.gov/oes/current/oes_nat.htm</a>). In this regard, the following table presents the BLS'
mean hourly wage, our estimated cost of fringe benefits and overhead
(calculated at 100 percent of salary), and our adjusted hourly wage.
Table 2--National Occupational and Wage Estimates
----------------------------------------------------------------------------------------------------------------
Fringe benefit Adjusted hourly
Occupation title Occupation code Mean hourly wage (at 100%) wage
----------------------------------------------------------------------------------------------------------------
Database Administrators............. 15-1242 $49.29 $49.29 $98.58
General and Operations Manager...... 11-1021 59.07 59.07 118.14
Management Analyst.................. 13-1111 50.32 50.32 100.64
[[Page 84729]]
Project Management Specialists...... 13-1082 48.85 48.85 97.70
----------------------------------------------------------------------------------------------------------------
Wages for State Governments. As indicated, we are adjusting our
employee hourly wage estimates by a factor of 100 percent to estimate
the cost of providing fringe benefits. This is necessarily a rough
adjustment, both because fringe benefits and overhead costs vary
significantly from employer to employer, and because methods of
estimating these costs vary widely from study to study. Nonetheless, we
believe that doubling the hourly wage to estimate the total cost
including fringe benefits is a reasonably accurate estimation method.
Cost to State Governments. To estimate State costs, it was
important to take into account the Federal government's contribution to
the cost of administering the Medicaid program. The Federal government
provides Medicaid matching funds at a rate established in statute. All
State Medicaid programs generally receive a 50 percent Federal matching
rate for qualifying administrative activities. As noted previously,
States also receive higher Federal Medicaid matching rates for certain
activities, such as certain systems design and development, and for
systems maintenance and operations, so the level of Federal Medicaid
funding provided to a State can be significantly higher. As such,
taking into account the Federal contribution to the costs of
administering the Medicaid program for purposes of estimating State
burden with respect to collection of information, we elected to use a
conservative estimate that the States would contribute 50 percent of
the costs, even though the burden will likely be much smaller.
B. Information Collection Requirements (ICRs)
1. ICRs Related to Reporting Requirements (Sec. 435.927)
The following changes will be submitted to OMB for approval under
control number 0938-TBD (CMS-10875). At this time the control number
has yet to be determined, but it will be assigned by OMB upon their
approval of this IFC's collection of information request. The public
can monitor OMB's issuance of the control number (and the control
number's expiration date) at <a href="http://reginfo.gov">reginfo.gov</a>.
Under Sec. 435.927, States are required to submit certain monthly
data to CMS. The data are already collected by States and reported to
CMS under existing requirements that are approved by OMB under control
numbers 0938-1119 (CMS-10371), 0938-0345 (CMS-R-284), 0938-1140 (CMS-
10387), and 0938-1148 (CMS-10398 #64). However, recognizing that some
States might encounter unusual circumstances that interfere with
reporting using existing CMS-approved processes, CMS would consider
approving alternative processes and timelines for States to report
required data if a State is making a good faith effort to submit the
required data, as specified in Sec. 435.927(b)(4). For example, CMS
would consider allowing States experiencing special circumstances to
submit certain summary data via email rather than via T-MSIS, if T-MSIS
is the existing process.
Based on CMS' ongoing work with States to report the required data,
we estimate that eight States will request that CMS approve an
alternative process for submitting data under Sec. 435.927(c)(2)
during the compliance period of April 1, 2023, through June 30, 2024.
We estimate that for each of the eight States that request and receive
approval to use an alternative process to submit required data, it will
take a Project Management Specialist 8 hours at $97.70/hour and a
Database Administrator 15 hours at $98.58/hour to develop an
alternative process, reach agreement with CMS, and submit the required
data, for an aggregate of 184 hours (8 States x 23 hours) and $18,082
[(($97.70 x 8 hours) + ($98.58 x 15 hours)) x 8 States]. Taking into
account the 50 percent Federal contribution to Medicaid program
administration, the estimated State share would be $9,041.
2. ICRs Related to Corrective Action Plans (CAPs) (Sec. 430.49(b))
The following changes will be submitted to OMB for approval under
control number 0938-TBD (CMS-10875). At this time the control number
has yet to be determined, but it will be assigned by OMB upon their
approval of this IFC's collection of information request. The public
can monitor OMB's issuance of the control number (and the control
number's expiration date) at <a href="http://reginfo.gov">reginfo.gov</a>.
This rule authorizes CMS to require States to submit a CAP to CMS
if the State is out of compliance with the reporting requirements in
section 1902(tt)(1) of the Act or Federal eligibility redetermination
requirements (including any alternative processes and procedures
approved by CMS, such as renewal strategies authorized under section
1902(e)(14)(A))) of the Act during the compliance period between April
1, 2023 and June 30, 2024.
Based on CMS' ongoing work with States to unwind from the
continuous enrollment condition, we estimate that 3 States will be out
of compliance with data reporting requirements and 5 States will be out
of compliance with Federal redetermination requirements during the
compliance period of April 1, 2023, to June 30, 2024. Some States may
be out of compliance with both sets of requirements and required to
submit just one CAP addressing both issues, but for purposes of
estimating State burden, we will assume they are mutually exclusive
sets of States for a total of 8 States. We will also assume for
purposes of estimating State burden that CMS will require a CAP from
all of the 8 noncompliant States (and will not exercise its discretion
not to require a CAP from any of them). We recognize that, if our
assumptions are incorrect, the aggregate burden may be less or more
than estimated here.
We estimate that for each of the 8 States required to submit a CAP
to CMS, it will take a Management Analyst 20 hours at $100.64/hour and
a General and Operations Manager 8 hours at $118.14/hour to write,
clear, and submit a CAP that includes the criteria at Sec.
430.49(b)(3) for an aggregate of 224 hours (8 States x 28 hours) and
$23,663 [(($100.64 x 20 hours) + ($118.14 x 8 hours)) x 8 States].
Taking into account the 50 percent Federal contribution to Medicaid
program administration, the estimated State share would be $11,832.
[[Page 84730]]
Table 3--Summary of Proposed Burden Estimates
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total
Number of Time per Total Labor Total Total Total non-
Regulation section(s) OMB control No. (CMS Number of responses Hourly labor response time cost state beneficiary beneficiary labor Frequency
ID No.) respondents per cost ($/hr) (hours) (hours) ($) share burden cost ($) cost
respondent ($) (hours) ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 435.927..................... 0938-TBD (CMS-10875).. 8 1 varies........ 23 184 18,082 9,041 n/a n/a n/a One-Time.
Sec. 430.49(b)................... 0938-TBD (CMS-10875).. 8 1 varies........ 28 224 23,663 11,832 n/a n/a n/a One-Time.
------------------------------------------------------------------------------------------------------------------------------------
Total.......................... 0938-TBD (CMS-10875).. ........... .......... .............. ........ 408 41,745 20,873 n/a n/a n/a One-Time.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
C. Submission of PRA-Related Comments
We have submitted a copy of this rule to OMB for its approval of
the rule's information collection requirements. The requirements are
not effective until they have been approved by OMB.
To obtain copies of the supporting statement and any related forms
for the collections previously discussed in this rule, please visit the
CMS website at <a href="https://www.cms.hhs.gov/PaperworkReductionActof1995">https://www.cms.hhs.gov/PaperworkReductionActof1995</a>, or
call the Reports Clearance Office at (410) 786-1326.
If you comment on these information collection requirements, please
submit your comments electronically as specified in the DATES and
ADDRESSES sections of this interim final rule.
V. Response to Comments
Because of the large number of public comments normally received on
Federal Register documents, the Department is not able to acknowledge
or respond to them individually. We will consider all comments we
receive by the date and time specified in the DATES section of this
preamble, and, if we proceed with a subsequent document, we will
respond to the comments in the preamble to that document.
VI. Regulatory Impact Analysis
A. Statement of Need
We have learned through working with States as they unwind from the
continuous enrollment condition under the FFCRA and return to normal
operations that States face challenges in processing an unprecedented
volume of redeterminations. Through routine monitoring and technical
assistance, CMS is working with States to address and mitigate policy
and operational barriers to meeting all Federal eligibility and
enrollment requirements. Congress has given CMS new tools to hold
States accountable when States fail to meet Federal redetermination
requirements during the period from April 1, 2023, to June 30, 2024.
In this rulemaking, we implement State reporting requirements and
CMS' enforcement authorities under section 1902(tt) of the Act. We
interpret and implement statutory language and specify parameters
related to when States will be required to submit certain data. We also
specify how CMS interprets and will calculate the FMAP reduction
required under section 1902(tt)(2)(A) of the Act for a State's failure
to comply with the reporting requirements in section 1902(tt)(1) of the
Act for a quarter during the period from July 1, 2023, through June 30,
2024. We also specify parameters related to when States that are
noncompliant with reporting requirements in section 1902(tt)(1) of the
Act or with Federal eligibility redetermination requirements must
submit a CAP, and when they will be required to suspend some or all
disenrollments of eligibility for procedural reasons, and/or pay CMPs.
We also specify the conditions under which CMS would lift requirements
to suspend procedural disenrollments and CMPs as States come into
compliance with Federal redetermination and reporting requirements via
submission or implementation of their approved CAPs. Together, the
changes in this rule will give States clear guidance about how to
comply with the new reporting requirements and how CMS will take
enforcement action for failure to comply with these new reporting
requirements and Federal eligibility redetermination requirements. The
new enforcement tools in section 1902(tt) of the Act are expected to
help CMS prevent loss of coverage for eligible beneficiaries.
B. Overall Impact
We have examined the impacts of this rule as required by E.O. 12866
on Regulatory Planning and Review (September 30, 1993), E.O. 13563 on
Improving Regulation and Regulatory Review (January 18, 2011),
Executive Order 14094 entitled ``Modernizing Regulatory Review'' (April
6, 2023), the Regulatory Flexibility Act (RFA) (September 19, 1980,
Pub. L. 96354), section 1102(b) of the Act, section 202 of the Unfunded
Mandates Reform Act (UMRA) of 1995 (March 22, 1995; Pub. L. 104-4),
E.O. 13132 on Federalism (August 4, 1999), and the Congressional Review
Act (CRA) (5 U.S.C. 804(2)). OMB has determined that this rule is non-
major under 5 U.S. Code Sec. 801, and therefore, is not subject to the
CRA and has also determined that this rule is not significant under
3(f)(1) of E.O. 12866.
We have estimated the potential impacts of this rule on Medicaid
enrollment and expenditures. Overall, the rule's impact is expected to
be limited. States are already aware of Federal redetermination
requirements and, as noted in sections I.C. and I.D of this rule, CMS
provides advice and technical assistance to help States comply with
these requirements and the new reporting requirements in section
1902(tt)(1) of the Act. When CMS becomes aware of a potential violation
of Federal requirements, we first attempt to work collaboratively with
the State to understand the nature and scope of the problem and to
identify appropriate alternative processes and procedures that the
State can adopt to avoid or minimize beneficiary harm until the State
can fix the problem and come into full compliance with Federal
requirements, consistent with our authority to enforce compliance with
section 1902 of the Act under section 1904 of the Act and Sec. 430.35.
In addition, the new enforcement authorities in this rule are only
applicable to State activities that occur during a time-limited period,
generally from April 1, 2023, to June 30, 2024.
This rule implements new enforcement tools that CMS can use to
address violations of Federal Medicaid redetermination or reporting
requirements that occur during a period that generally aligns with
States' unwinding periods. Beginning with the analysis of
redetermination requirements, we start with an assumption that in most
cases redeterminations would be accurate and follow required processes
and, thus, that the new enforcement tools implemented
[[Page 84731]]
through this rule will not be widely needed. Even though the Federal
government and States already have processes in place to ensure
redeterminations are done correctly and States are already required to
do so, the new enforcement authorities will give CMS additional tools
to enforce compliance with these requirements. As noted in section I.D.
and above, CMS attempts to work collaboratively with a State first to
understand the nature and scope of any potential violation of Federal
requirements and to identify appropriate alternative processes and
procedures that the State can adopt to avoid or minimize beneficiary
harm until the State can fix the problem and come into full compliance
with Federal requirements. However, notwithstanding those efforts, it
is possible that a few States might still be noncompliant, thus making
it necessary for CMS to use the enforcement tools implemented in this
rule.
It is possible that in the course of States coming into compliance
with the requirements enforceable through section 1902(tt) of the Act
absent this rule, some eligible individuals would remain enrolled who
might have otherwise been disenrolled for procedural reasons due to a
State's failure to comply with redetermination requirements. The
impacts estimated in this section depend on the effectiveness of this
rule at ensuring that eligibility redeterminations are done correctly,
as well as the assumptions about how many unauthorized procedural
disenrollments would have occurred absent this rule.
In the Mid-Session Review of the President's FY 2024 Budget,\31\
CMS projected that Medicaid enrollment would decline by about 18
million enrollees due to the unwinding of the Medicaid continuous
enrollment condition through the end of fiscal year 2024 (or about 19
percent as measured from the peak of Medicaid enrollment in March-April
2023). This does not include individuals who newly enroll over this
period.
---------------------------------------------------------------------------
\31\ <a href="https://www.whitehouse.gov/wp-content/uploads/2023/07/msr_fy2024.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/07/msr_fy2024.pdf</a>.
---------------------------------------------------------------------------
To develop the estimates, we started with the following
assumptions. First, we assumed that a maximum of five States would be
out of compliance with the Federal redetermination requirements under
this rule and be subject to CAPs and suspensions of procedural
disenrollments and/or CMPs if they did not submit or implement an
approvable CAP. We assumed that all States would take the appropriate
steps to submit or implement CAPs and, thus, that CMS would require no
suspensions of procedural disenrollments and impose no CMPs. Second, we
assumed that States out of compliance with Federal redetermination
requirements would have about 5 percent more individuals found
ineligible and that those individuals would still be eligible and would
have remained enrolled if redeterminations were done accurately. Third,
we assumed that about 40 percent of enrollees who would have been
disenrolled would have ultimately re-enrolled within 12 months. We
assumed that this rule would bring all States into compliance and that
individuals wrongly disenrolled would be re-enrolled; in future cases,
this rule would also prevent those incorrect disenrollments from
occurring. We assume that any such effects would start by early 2024.
We estimate that the rule would increase Medicaid enrollment by
about 7,000 individuals in fiscal year 2024 and 13,000 individuals in
fiscal year 2025 (average annual enrollment). We estimate that total
Medicaid spending due to increased enrollment would be about $50
million higher in fiscal year 2024 ($36 million Federal) and about $93
million higher annually in fiscal year 2025 and subsequent years ($66
million Federal).
Actual impacts could be greater than or less than estimated here.
Future spending and enrollment could grow faster or slower than
projected. More or fewer States could be out of compliance than we have
assumed, and the number of unauthorized procedural disenrollments could
also be higher or lower than we have assumed. This rule could also be
more or less effective than we expect. Moreover, if one or more States
did not comply with these requirements, those States could be assessed
CMPs that would result in a transfer from States to CMS and could lead
to additional actions.
This rule also implements a statutory FMAP reduction for
noncompliance with reporting requirements under section 1902(tt)(1) of
the Act. States out of compliance with these reporting requirements
between July 1, 2023, and June 30, 2024, would be assessed a reduction
in FMAP of 0.25 percentage points for each quarter they are out of
compliance, and this would increase by 0.25 percentage points for each
additional quarter they are out of compliance. States that fail to
comply with reporting requirements may also be required to submit a
CAP, and if the reporting violations impeded CMS oversight of
procedural disenrollments, States that fail to submit or implement an
approvable CAP will be required to suspend procedural disenrollments
and will also be subject to CMPs. If the reporting violation did not
impede CMS' oversight of procedural disenrollments, CMS will delay
suspension of procedural disenrollments for 1 month but will still
impose CMPs (except in extraordinary circumstances, as discussed in
section II.E. of this rule). We assume that at most an additional three
States would be out of compliance with reporting requirements for one
quarter each. Although States that are noncompliant are at risk of
additional enforcement action, we estimate that most States will
correct violations without a CAP or, if a CAP is imposed, will
implement the CAP to address any violations and not be subject to
additional enforcement actions. We estimate that the impact of the
States that are noncompliant with reporting requirements would result
in a FMAP reduction of $30 million, which would be a transfer from
those States to the Federal government.
In total and consistent with the assumptions noted above, the
estimated net effects of this rule would be Federal costs of about $6
million in fiscal year 2024 ($36 million in costs for additional
enrollment, and $30 million in collections from States assessed an FMAP
reduction) and $66 million in fiscal year 2025. For States, the
estimated effects are $44 million in costs in fiscal year 2024 ($14
million in costs for additional enrollment, and $30 million in payments
related to the FMAP reduction) and $27 million in fiscal year 2025.
The actual impact could be more or less than we have estimated. The
key uncertainties are the number of States out of compliance, which
States those would be (as Federal spending varies significantly across
States, depending on the Medicaid population and spending levels and
the FMAP rates for each State), and the number of quarters those States
are out of compliance. We anticipate that States would quickly remedy
any issues that would result in an FMAP reduction, and thus would be
unlikely to be assessed an FMAP reduction in more than one quarter.
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 14094 amends section 3(f) of Executive Order 12866. The amended
section 3(f) of Executive Order 12866 defines a ``significant
[[Page 84732]]
regulatory action'' as an action that is likely to result in a rule:
(1) having an annual effect on the economy of $200 million or more in
any 1 year (adjusted every 3 years by the Administrator of the Office
of Information and Regulatory Affairs (OIRA) for changes in gross
domestic product), or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, territorial, or
tribal governments or communities; (2) creating a serious inconsistency
or otherwise interfering with an action taken or planned by another
agency; (3) materially altering the budgetary impacts of entitlement
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raise legal or policy issues for which
centralized review would meaningfully further the President's
priorities or the principles set forth in this Executive order, as
specifically authorized in a timely manner by the Administrator of OIRA
in each case.
A regulatory impact analysis (RIA) must be prepared for rules that
are significant under section 3(f)(1) of Executive Order 12866 as
amended by Executive Order 14094 ($200 million or more in any 1 year).
Based on our analysis, OIRA has designated this rule as not significant
under section 3(f)(1). In reviewing the economic effect of this rule,
we have assumed that States will generally meet reporting requirements
and requirements for Medicaid eligibility redeterminations and continue
to meet the conditions for the temporary FFCRA FMAP increase, and thus
will not be subject to FMAP reductions, suspensions of procedural
disenrollments, CMPs, or loss of Federal matching funds that would rise
to the level of $200 million or more in any one year. While we assume
that only a handful of States would have failed to comply absent this
interim final rule, even in those hypothetical cases, we assume States
will come into compliance promptly and avoid the enforcement actions
described in this interim final rule, further minimizing the rule's
economic impact. For example, we assumed States will use existing
contracts to modify systems to ensure data are reported to CMS timely.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
less than $9.0 million to $47.0 million in any one year. Individuals
and States are not included in the definition of a small entity. The
good cause exception of the APA applicable to this rule allows CMS to
waive the regulatory impact analysis typically required under the RFA.
In addition, section 1102(b) of the Act requires CMS to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside a Metropolitan Statistical Area and has fewer than
100 beds. This rule applies to State Medicaid and CHIP agencies and
will not add requirements for rural hospitals or other small providers.
Therefore, we are not preparing an analysis for section 1102(b) of the
Act because we have determined, and the Secretary certifies, that this
rule will not have a significant impact on the operations of a
substantial number of small rural hospitals.
Section 202 of the UMRA also requires that agencies assess
anticipated costs and benefits before issuing any rule whose mandates
require spending in any one year of $100 million in 1995 dollars,
updated annually for inflation. In 2023, that is approximately $177
million. We believe that this rule will not mandate spending by State,
local, or tribal governments nor by private sector entities over this
level.
C. Administrative Burden
We do not anticipate this rule will significantly impact
administrative spending by the Federal Government.
D. Alternatives Considered
In developing this final rule, the following alternatives were
considered:
1. Not Finalizing the Rule
We considered not finalizing this rule and considering the
provisions of section 1902(tt) of the Act to be self-implementing.
However, we believe the authority to require State reporting under
section 1902(tt)(1) of the Act, to impose CAPs on States that fail to
meet Federal redetermination requirements or the reporting requirements
under section 1902(tt)(1) of the Act, and to suspend procedural
disenrollments and impose CMPs on States that fail to submit or
implement a required CAP, required regulation in order to enable CMS to
exercise its full statutory enforcement authority fairly and uniformly.
For example, we believe the mitigating circumstances outlined in this
rule, which memorialize when and how CMS will exercise its discretion
to take enforcement action under section 1902(tt)(2)(B) of the Act,
necessitated regulation.
2. Implementing Section 1902(tt) of the Act Through Subregulatory
Guidance
We considered not promulgating a regulation but instead
implementing section 1902(tt) of the Act through subregulatory
guidance. However, CMS believes that the policy interpretations in this
rule are different enough from the statutory language to necessitate
regulation. For example, while the statute gives CMS discretion
regarding whether to require a State to submit a CAP and regarding
whether to require suspension of procedural disenrollments or impose
CMPs if a State fails to submit or implement that CAP, the rule
outlines in detail how CMS will exercise this discretion.
3. Promulgating a Proposed Rule
We considered promulgating a proposed rule rather than an IFC to
implement these same provisions. However, as outlined in section III.
of this rule, we believe notice-and-comment procedures and a delay in
the effective date of this rule are impracticable and/or contrary to
the public interest.
E. Limitations of the Analysis
As described previously, we have assumed that all but three States
would comply with the reporting requirements, and all but five States
would comply with Federal redetermination requirements referenced in
this interim final rule and be subject to the CAP requirements at
430.49(b). It is possible that one or more of these States would fail
to comply with the CAP requirements, and thus be ineligible for the
temporary FFCRA FMAP increase, or be subject to the other penalties
discussed in this rule, including suspension of procedural
disenrollments and CMPs, and thus that the economic impact of the rule
would be greater. In those cases, we would also assume more individuals
would be disenrolled than would occur if the State complied with these
requirements. We have not attempted to quantify the non-administrative
program impact (that is, changes in enrollment and/or spending on
benefits, not the costs associated with training/hiring workers,
programming systems, or printing notices, for example) of a State
failing to comply with the CAP requirements in the interim final rule.
In accordance with the provisions of Executive Order 12866, this
regulation
[[Page 84733]]
was reviewed by the Office of Management and Budget.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on September 27, 2023.
List of Subjects
42 CFR Part 430
Administrative practice and procedure, Grant programs--health,
Medicaid, Reporting and recordkeeping requirements.
42 CFR Part 435
Aid to Families with Dependent Children, Grant programs--health,
Medicaid, Reporting and recordkeeping requirements, Supplemental
Security Income (SSI), Wages.
45 CFR Part 16
Procedures of the Departmental Grants Appeals Board.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services and the Department of Health and Human Services
amend 42 CFR chapter IV and 45 CFR subtitle A, subchapter A, as set
forth below:
Title 42
PART 430--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS
0
1. The authority citation for part 430 continues to read as follows--
Authority: Sec. 1102 of the Social Security Act, (42 U.S.C.
1302).
0
2. Section 430.3 is amended by revising the introductory text and
adding paragraph (d) to read as follows:
Sec. 430.3 Appeals under Medicaid.
Four distinct types of disputes may arise under Medicaid.
* * * * *
(d) Imposition of suspensions of procedural disenrollments and
civil money penalties under section 430.49 of this part. Disputes that
pertain to CMS' imposition of suspensions of procedural disenrollments
and civil money penalties under Sec. 430.49(c) of this part are heard
by the Board in accordance with procedures set forth in 45 CFR part 16.
0
3. Section 430.5 is amended by adding definitions for ``Federal
redetermination requirements'' and ``Procedural disenrollment'' in
alphabetical order to read as follows:
Sec. 430.5 Definitions.
* * * * *
Federal redetermination requirements means, for the purposes of
Sec. 430.49, Federal requirements applicable to eligibility
redeterminations outlined in 42 CFR 435.916, including renewal
strategies authorized under section 1902(e)(14)(A) of the Social
Security Act or other alternative processes and procedures approved by
CMS under section 1902(e)(14)(A) of the Act or section 6008(f)(2)(A) of
the Families First Coronavirus Response Act.
Procedural disenrollment means, for the purposes of Sec. 430.49
and 45 CFR part 16, a termination of a beneficiary's Medicaid
eligibility after advance notice under subpart E of part 431 for
reasons that are unrelated to a State's determination of whether the
individual meets eligibility criteria to qualify for coverage,
including for failure to return a renewal form or documentation needed
by the State to make a determination of eligibility.
* * * * *
0
4. Section 430.49 is added to subpart C to read as follows:
Sec. 430.49 Corrective action plans, suspensions of procedural
disenrollments, and civil money penalties.
(a) Statutory basis. This section interprets and implements section
1902(tt)(2)(B) of the Social Security Act.
(b) Corrective action plans--(1) Basis for corrective action. After
consideration of any mitigating circumstances in accordance with
paragraph (d) of this section and notwithstanding whether an FMAP
reduction has been imposed under Sec. 435.928 of this subchapter, CMS
will determine whether to require the State to submit a corrective
action plan if CMS finds that the State is not in compliance during the
period beginning on April 1, 2023, through June 30, 2024, with either
of the following requirements:
(i) The requirement to submit data required under section
1902(tt)(1) of the Act in accordance with Sec. 435.927 of this
subchapter; or
(ii) Federal redetermination requirements described at Sec. 430.5.
(2) Notice of need for corrective action plan. If, after
considering mitigating circumstances as described in paragraph (d) of
this section, the Administrator decides to require the State to submit
and implement a corrective action plan for noncompliance described in
paragraph (b)(1) of this section or to revise or resubmit such a plan,
the Administrator will provide the State with a written notice
directing the State to submit a corrective action plan to correct the
identified areas of noncompliance. Such notice will--
(i) Explain the violation of Federal redetermination or reporting
requirements that CMS has identified and the basis for CMS' finding;
(ii) Inform the State of the requirement to submit and implement a
corrective action plan:
(iii) Include instructions on the method and deadline by which the
State must submit a corrective action plan to CMS; and
(iv) Explain the enforcement actions that CMS may pursue if the
State fails to submit or implement an approved corrective action plan,
including if CMS disapproves the State's submitted CAP or if the State
fails to meet the requirements set forth in the approved CAP, in
accordance with this section.
(3) Content of corrective action plan. A corrective action plan
must describe in detail--
(i) The actions the State will take immediately, if needed to
prevent further harm or risk of harm to beneficiaries while it
implements the corrective action plan, including to prevent increased
burden for beneficiaries in completing the renewal process, loss of
coverage at renewal for individuals who continue to meet the
substantive eligibility criteria and whose eligibility should otherwise
be retained but for failure to meet a procedural requirement, and
delays in access to coverage or care;
(ii) The steps the State will take to ensure compliance with
Federal requirements, including but not limited to new policies,
procedures, operational processes or systems changes it will implement;
(iii) Key milestones and a detailed timeline for achieving
compliance; and
(iv) A plan for communicating the steps the State will take to
prevent actual harm or risk of harm to beneficiaries and to ensure
compliance with Federal requirements per paragraphs (b)(3)(i) and (ii)
of this section to State staff, including staff of non-Medicaid
agencies or entities to which the agency has delegated authority to
conduct redeterminations of eligibility in accordance with Sec.
431.10(c)(1)(i) of this subchapter; CMS; and beneficiaries, as
applicable.
(4) Timeframes for submission, approval, and implementation of
corrective action plan--(i) Submission. A State that receives a notice
described in paragraph (b)(2) of this section must submit a corrective
action plan, including the elements in paragraph (b)(3) of this
section, not later than 14 calendar days from the date of the notice of
noncompliance.
(ii) Approval. CMS must approve or disapprove a corrective action
plan submitted by the State within 21 calendar days of the date it is
submitted.
[[Page 84734]]
If CMS does not approve or disapprove the corrective action plan within
21 calendar days of submission, the corrective action plan will be
deemed approved.
(iii) Implementation. A State must begin implementation of the
corrective action plan not later than 14 calendar days after the date
that either the State receives CMS approval, or the corrective action
plan is deemed approved.
(5) Approval or disapproval of corrective action plan. A corrective
action plan will be approved if CMS determines that the plan-
(i) Meets the requirements at paragraph (b)(3) of this section;
(ii) Promptly eliminates or minimizes any harm or risk of harm to
beneficiaries, including increased burden for beneficiaries in
completing the renewal process, loss of coverage at renewal for
individuals who continue to meet the substantive eligibility criteria
and whose eligibility should otherwise be retained but for failure to
meet a procedural requirement, and delays in access to coverage or care
due to the noncompliance to be addressed by the plan; and
(iii) Results in the State achieving compliance in a reasonable
time, taking into account systems challenges and circumstances faced by
the agencies involved.
(c) Suspensions of procedural disenrollments and civil money
penalties. (1) After considering any applicable mitigating
circumstances in accordance with paragraph (d) of this section and
notwithstanding whether the State is subject to an FMAP reduction under
Sec. 435.928 of this subchapter, CMS may take one or both of the
following actions if the State fails to submit or implement an approved
corrective action plan, including if CMS disapproves the State's
submitted corrective action plan due to the State's failure to include
required elements in accordance with the requirements described in
paragraph (b) of this section, or if the State fails to meet the
requirements set forth in the approved corrective action plan:
(i) Require the State to suspend some or all procedural
disenrollments, in accordance with paragraph (c)(3)(i) of this section;
and
(ii) Impose civil money penalties in accordance with paragraph
(c)(3)(ii) of this section.
(2) Notice. (i) Prior to requiring the State to suspend procedural
disenrollments of Medicaid eligibility or imposing civil money
penalties, CMS will issue a notice to the State. Such notice will
include--
(A) A description of the enforcement action(s) CMS is taking and
the basis for such action(s);
(B) Whether CMS is requiring the State to suspend some or all
procedural disenrollments and, in the case of a partial suspension, the
affected populations;
(C) The date on which the State must begin suspending procedural
disenrollments, if applicable;
(D) The daily amount owed for any civil money penalties imposed,
the date the penalties will begin to be charged, the timeline for
payment (including information on how the timeline for payment would be
affected by an appeal), and instructions on how to submit payment;
(E) The steps the State must take to cure its noncompliance and for
CMS to lift the enforcement action(s); and
(F) Information on the State's appeal rights as described in
paragraph (f) of this section, including the deadline to submit an
appeal request, and the effect of requesting an appeal on the
applicability of any enforcement actions pending the decision in such
appeal. The notice must also provide that the decision outlined in the
notice is final unless it is timely appealed as described in paragraph
(f) of this section.
(ii) CMS may issue additional notices requiring a State to take
additional actions (including paying increased civil money penalties or
implementing or broadening the scope of a required suspension of
procedural disenrollments) if CMS identifies additional violations of
corrective action plan provisions. Such notices will meet the
requirements outlined in paragraph (c)(2)(i) of this section.
(3) Scope of actions--(i) Suspensions of procedural disenrollments.
(A) If the noncompliance determined by CMS under paragraph (b)(1) of
this section impacts a substantial number of (meaning all or nearly
all) individuals who are or should have been found eligible for
Medicaid, CMS will require the State to suspend all procedural
disenrollments.
(B) If the impact of the noncompliance is limited (for example, to
a specific population or geographic area), CMS may limit the suspension
of procedural disenrollments to the impacted population(s). After
requiring a limited suspension of procedural disenrollments, CMS may
later opt to require the State to suspend all procedural disenrollments
if CMS subsequently determines that the impact of the noncompliance is
greater than was initially determined, or if the State fails to comply
with the initial requirement to suspend some procedural disenrollments
in accordance with the notice issued under paragraph (c)(2) of this
section. In these circumstances, CMS will issue a subsequent notice
under paragraph (c)(2).
(ii) Civil money penalties. CMS may require the State to pay a
civil money penalty of not more than $100,000, as adjusted annually
under 45 CFR part 102, for each day that the State has not submitted or
implemented an approved corrective action plan in accordance with the
requirements described in paragraph (b) of this section or has failed
to meet the requirements of the approved plan, until the penalty is
lifted due to the State meeting the conditions described in paragraph
(e) of this section.
(A) Civil money penalties will start accruing five (5) calendar
days after the date of the initial notice described in paragraph (c)(2)
of this section and become payable 60 calendar days after the date of
the notice, if not timely appealed, or 60 calendar days after issuance
of a final determination at the conclusion of any appeal pursuant to
paragraph (f) of this section.
(B) The amount of any applicable civil money penalties for failure
to submit or implement a corrective action plan, including if CMS
disapproves the State's submitted corrective action plan or if the
State fails to meet the requirements set forth in the approved
corrective action plan, will be determined according to the following
formula, after the date specified in paragraph (c)(3)(ii)(A) of this
section: Days 1-30 of noncompliance: $25,000/day; Days 31-60 of
noncompliance: $50,000/day; and Days 61 or more of noncompliance until
lifted in accordance with paragraph (e) of this section: $100,000/day.
Each of these amounts is adjusted annually under 45 CFR part 102.
(C) Consistent with paragraph (c)(2)(ii) of this section, if CMS
identifies additional violations of corrective action plan provisions,
CMS may issue additional notices to increase civil money penalties more
quickly than provided for by the formula in paragraph (c)(3)(ii)(B) of
this section.
(4) Noncompliance with requirements to suspend procedural
disenrollments or pay civil money penalties. If the State fails to
suspend procedural disenrollments as required pursuant to a notice
described in paragraph (c)(2) of this section, or to pay civil money
penalties as specified in that notice, or both, CMS may issue an
additional notice pursuant to paragraph (c)(2) of this section to
increase the civil money penalties to the maximum allowable
[[Page 84735]]
daily amount, if not already reached, or may pursue additional
enforcement action under section 1904 of the Act and Sec. 430.35 of
this subpart, including withholding some or all Federal financial
participation.
(d) Mitigating circumstances. CMS will consider the following
mitigating circumstances when deciding whether to take the following
enforcement actions:
(1) Requirement to submit corrective action plan for violation of
redetermination requirements. In the case of noncompliance relating to
a violation of Federal redetermination requirements, CMS may delay
requiring, or determine not to require, a State to submit a corrective
action plan under paragraph (b) of this section if--
(i) The noncompliance caused neither actual harm nor a substantial
risk of harm to beneficiaries, including increased burden for
beneficiaries in completing the renewal process, loss of coverage at
renewal for individuals who continue to meet the substantive
eligibility criteria and whose eligibility should otherwise be retained
but for failure to meet a procedural requirement, and delays in access
to coverage or care to beneficiaries; or
(ii) CMS determines that there is an emergency or other
extraordinary circumstances preventing the State's compliance.
(2) Requirement to submit corrective action plan for violation of
reporting requirements. In the case of noncompliance relating to a
violation of the reporting requirements under Sec. 435.927 of this
subchapter, CMS may delay requiring, or determine not to require, a
State to submit a corrective action plan under paragraph (b) of this
section if--
(i) CMS has determined that the State implementing a corrective
action plan is not necessary to ensure that the noncompliance is
remedied; or
(ii) CMS determines that there is an emergency or other
extraordinary circumstances preventing the State's compliance.
(3) Suspensions of procedural disenrollments and imposition of
civil money penalties. (i) In the case of a State that has failed to
submit or implement an approved corrective action plan relating to a
violation of either the reporting requirements under Sec. 435.927 of
this subchapter or Federal redetermination requirements, CMS may delay
or forgo imposing civil money penalties if CMS determines that the
State faces an emergency or other extraordinary circumstances that--
(A) Occurred after the violation resulting in CMS' requirement of a
CAP for noncompliance with Federal redetermination requirements or
reporting requirements under Sec. 435.927; and
(B) Has significantly impeded the State's ability to submit or
implement a corrective action plan.
(ii) In the case of a State's failure to submit or implement a
corrective action plan relating to a violation of the reporting
requirements under Sec. 435.927 of this subchapter in which the
underlying reporting violation does not impede CMS' oversight of the
State's procedural disenrollments, CMS will:
(A) Delay suspension of procedural disenrollments for 1 month; and
(B) Impose civil money penalties, except in cases where there are
also extraordinary circumstances as described in paragraph (d)(3)(i) of
this section.
(e) Lifting of enforcement actions. (1) In cases where CMS had sent
a State a notice under paragraph (c)(2) of this section for failure to
submit or implement an approved corrective action plan--
(i) The State will be required to continue any suspension of
procedural disenrollments required pursuant to such notice, and any
civil money penalties imposed in accordance with the terms of such
notice will continue to be charged, until--
(A) For a State that failed to submit a corrective action plan, the
State submits a corrective action plan that CMS determines is
approvable consistent with paragraph (b)(5) of this section.
(B) For a State that failed to implement an approved corrective
action plan, the State has implemented or resumed implementation of
such plan.
(ii) CMS will continue the accrual of civil money penalties from
the date specified in the original notice provided to the State under
paragraph (c)(2) of this section until CMS determines whether the plan
is approvable. If CMS determines that the plan is approvable, CMS will
retroactively end the accrual of the civil money penalties on the day
the CAP was submitted and cease charging civil money penalties
prospectively. If CMS determines that the plan is not approvable, CMS
will continue charging civil money penalties imposed under the terms of
the enforcement notice without interruption until the State submits an
approvable plan.
(2) Where a State has met the conditions under paragraph (e)(1)(i)
of this section, CMS will notify the State that the enforcement actions
are being lifted. For States that were required to suspend procedural
disenrollments, such notice will include the date on which the State
may resume such disenrollments. For States that were subject to civil
money penalties, such notice will include the date on which such civil
money penalties stopped accruing, the total number of days for which
civil money penalties accrued and the amount(s) of such civil money
penalties, and the total amount of civil money penalties owed.
(f) Administrative review--(1) Appeal to the Departmental Appeals
Board. A State that is dissatisfied with CMS's determination under
paragraph (c) of this section that the State must suspend procedural
disenrollments or pay civil money penalties because the State has
failed to submit or implement an approvable corrective action plan may
appeal, pursuant to 45 CFR part 16, the imposition of such suspensions
of procedural disenrollments or civil money penalties to the
Departmental Appeals Board (the Board) within 30 days after receipt of
a notice described in paragraph (c)(2) of this section. The appeal
request must comply with 45 CFR 16.7, and the process for counting days
to submit an appeal will follow the provisions under 45 CFR 16.19. The
appeals process is governed by 45 CFR part 16. If the State does not
submit an appeal request within the 30-day timeframe provided for an
appeal to the Board, then the decision described in the notice received
by the State under paragraph (c)(2) of this section is the final
decision of the Secretary and is final agency action within the meaning
of 5 U.S.C. 704.
(2) Reconsiderations by the Administrator. (i) If any party to the
appeal is dissatisfied with the Board's decision under paragraph (f)(1)
of this section, it may seek the Administrator's reconsideration of
that decision within 15 calendar days of receiving notice of the
decision pursuant to 45 CFR 16.21.
(A) The request for reconsideration must be filed with the
Administrator and must include a copy of the Board's decision, a brief
statement of why the party believes the decision was wrong, and a
statement of the amount of any civil money penalties in dispute.
(B) The party requesting reconsideration must send a copy of the
request described in paragraph (f)(2)(i)(A) of this section to all
other parties to the appeal and other participants in the appeal (as
described in 45 CFR 16.16) at the same time that the request is filed
with the Administrator.
(C) Any other party to the appeal, or other participant in the
appeal, may respond to the request for reconsideration in writing and
file their
[[Page 84736]]
response with the Administrator within 15 calendar days of the date the
request for reconsideration is filed with the Administrator.
(D) The Administrator will review the Board's decision and any
additional information submitted by the parties and other participants
under paragraphs (f)(2)(i)(A) or (C) of this section and, within 60
calendar days after the Board issues notice of its decision under 45
CFR 16.21, will either affirm the Board's decision or issue a new
decision.
(ii) Within the 60-day period that is described in paragraph
(f)(2)(i)(D) of this section, the Administrator may also modify or
reverse the Board's decision even if no party to the appeal has
requested reconsideration of that decision.
(iii) If no request for reconsideration is filed under paragraph
(f)(2)(i) of this section and the Administrator does not modify or
reverse the Board's decision within the 60-day period described in
paragraph (f)(2)(ii) of this section, then the decision of the Board is
the final determination of the Secretary and is final agency action, as
described in paragraph (f)(2)(v) of this section, and the Administrator
will provide notice to all parties and other participants of such
decision as described in paragraph (f)(2)(iv) of this section.
(iv) The Administrator will provide a notice to all parties and
other participants of the final decision together with a notice
indicating that this is the final determination of the Secretary and is
final agency action, as described in paragraph (f)(2)(v) of this
section.
(v) The determination of the Administrator pursuant to paragraph
(f)(2)(i)(D) or (f)(2)(ii) of this section is the final determination
of the Secretary and is final agency action within the meaning of 5
U.S.C. 704.
(g) Severability. Any provision of this section held to be invalid
or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further State action, shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA
0
5. The authority citation for part 435 continues to read as follows--
Authority: 42 U.S.C. 1302.
0
6. Sections 435.927 and 435.928 are added to subpart J to read as
follows:
Sec. 435.927 Requirements for States to submit certain data on
redeterminations.
(a) Basis. This section implements section 1902(tt)(1) of the
Social Security Act.
(b) Definitions. As used in this section--
(1) Timely means the following:
(i) Data submitted according to an existing process governed by CMS
regulation or guidance (other than data submitted through the
Transformed Medicaid Statistical Information System (T-MSIS)) are
timely if they are reported by the deadline specified in the applicable
CMS regulation or guidance.
(ii) Data submitted under the existing process for the T-MSIS are
timely if they are submitted on a monthly basis, before the last day of
the subsequent month.
(iii) Data that States submit according to an alternative process
approved by CMS or an alternative timeline approved by CMS under the
circumstances specified in paragraph (b)(4) of this section are timely
if they are submitted on the deadline CMS specifies when it approves
the alternative process or timeline.
(2) Complete means that all required elements are reported.
(3) Sufficient quality means the following:
(i) For data submitted according to an existing process governed by
CMS regulation or guidance, the data adhere to specifications outlined
in the applicable CMS regulation or guidance.
(ii) For data submitted according to an alternative process
approved by CMS under the circumstances specified in paragraph (b)(4)
of this section, the data adheres to the specifications approved by CMS
when it approves the alternative process.
(4) Good faith effort means that--
(i) The State is experiencing significant, unforeseeable, or
unavoidable challenges in complying with the reporting requirements of
paragraph (c) of this section, or is experiencing significant
foreseeable challenges in complying and is working to remediate these
challenges but needs additional time to address them;
(ii) The State requested, and CMS approved an alternative process
for submitting the data or an alternative timeline; and
(iii) The approved alternative process for submitting the data or
timeline is sufficient to ensure CMS can obtain and use the data to
meet CMS' obligations to report the data publicly per section
1902(tt)(1) of the Act.
(c) Reporting requirement. For data representing activities
conducted by a State during the time period beginning April 1, 2023,
and ending June 30, 2024, each State must submit to CMS the data
described in paragraph (d) of this section, and those data must be
timely, complete, and of sufficient quality (as those terms are defined
in paragraph (b) of this section). To meet this requirement, a State
must:
(1) Submit data via existing CMS-approved processes; or
(2) Submit data through alternative processes approved by CMS,
under the circumstances specified in paragraph (b)(4) of this section.
(d) Required data elements. States must submit the following data
to CMS in accordance with paragraph (c) of this section:
(1) Total number of Medicaid and Children's Health Insurance
Program (CHIP) beneficiaries for whom a renewal was initiated.
(2) Total number of Medicaid and CHIP beneficiaries whose Medicaid
or CHIP coverage is renewed.
(3) Of the Medicaid and CHIP beneficiaries whose Medicaid or CHIP
coverage is renewed, the total number whose coverage is renewed on an
ex parte basis.
(4) Total number of individuals whose coverage for Medicaid or CHIP
was terminated.
(5) Total number of individuals whose coverage for Medicaid or CHIP
was terminated for procedural reasons.
(6) Total number of beneficiaries who were enrolled in a separate
CHIP.
(7) For each State call center, total call center volume.
(8) For each State call center, average wait times.
(9) For each State call center, average abandonment rate.
(10) For States with State-based Exchanges (SBEs) using a Non-
Integrated Eligibility System and not using the Federal Exchange
eligibility and enrollment platform:
(i) Total number of individuals whose accounts are received by the
SBE or Basic Health Program (BHP) due to a Medicaid/CHIP
redetermination.
(ii) Total number of individuals who apply for coverage due to a
Medicaid/CHIP redetermination who are determined eligible for a QHP or
a BHP.
(iii) Total number of individuals who apply for coverage due to a
Medicaid/CHIP redetermination who are determined eligible for a QHP or
a BHP, and who make a QHP plan selection or are enrolled in a BHP.
(11) For States with SBEs with an Integrated Eligibility System and
not using the Federal Exchange eligibility and enrollment platform:
(i) Total number of individuals who apply for coverage due to a
Medicaid/
[[Page 84737]]
CHIP redetermination who are determined eligible for a QHP or a BHP.
(ii) Total number of individuals who apply for coverage due to a
Medicaid/CHIP redetermination who are determined eligible for a QHP or
BHP, and who make a QHP plan selection or are enrolled in a BHP.
(e) Severability. Any provision of this section held to be invalid
or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further State action, shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
Sec. 435.928 Reduction in FMAP for failure to submit certain data.
(a) Basis. This section implements section 1902(tt)(2)(A) of the
Social Security Act.
(b) Application of the FMAP reduction. (1) FMAP means the State-
specific Federal medical assistance percentage as defined in the first
sentence of section 1905(b) of the Act.
(2) If CMS finds that, for a fiscal quarter in the period beginning
on July 1, 2023, and ending on June 30, 2024, the State was
noncompliant with the requirements of Sec. 435.927, CMS will reduce
the State's Federal medical assistance percentage (FMAP) for that
fiscal quarter as described in paragraph (b)(4) of this section.
(3) A State is noncompliant in a fiscal quarter if it has failed to
comply with the reporting requirements described in Sec. 435.927 for
one or more months of the quarter.
(4) The FMAP reduction under paragraph (b)(2) of this section will
equal the product of 0.25 percentage points and the number of the
fiscal quarters during the period from July 1, 2023, through June 30,
2024, in which the State is noncompliant with the reporting
requirements described in Sec. 435.927. When States are noncompliant
in multiple quarters during that period, the FMAP reduction will
increase by 0.25 percentage points for each successive quarter of
noncompliance, even if nonconsecutive, but in no case will the
reduction for any single quarter exceed 1 percentage point.
(c) Severability. Any provision of this section held to be invalid
or unenforceable by its terms, or as applied to any person or
circumstance, or stayed pending further State action, shall be
severable from this section and shall not affect the remainder thereof
or the application of the provision to persons not similarly situated
or to dissimilar circumstances.
Title 45
PART 16--PROCEDURES OF THE DEPARTMENTAL GRANT APPEALS BOARD
0
7. The authority for part 16 continues to read as follows:
Authority: 5 U.S.C. 301 and secs. 1, 5, 6, and 7 of
Reorganization Plan No. 1 of 1953, 18 FR 2053, 67 Stat. 631 and
authorities cited in the Appendix.
0
8. Section 16.22 is amended by revising paragraphs (b)(3) and (4) and
adding paragraph (b)(5) to read as follows:
Sec. 16.22 The effect of an appeal.
* * * * *
(b) * * *
(3) In programs listed in appendix A, B.(a)(1), to this part
implement a decision to disallow Federal financial participation
claimed in expenditures reported on a statement of expenditures, by
recovering, withholding or offsetting payments, if the decision is
issued before the reported expenditures are included in the calculation
of a subsequent grant;
(4) Take other action to recover, withhold, or offset funds if
specifically authorized by statute or regulation; or
(5) Take action to require a State to suspend procedural
disenrollments, as defined at 42 CFR 430.5, or continue the accrual of
the civil money penalties a State owes under 42 CFR 430.49(c).
0
9. Appendix A of part 16 is amended in section B by adding paragraph
(a)(7) to read as follows:
Appendix A to Part 16--What Disputes the Board Reviews
* * * * *
B. * * *
(a) * * *
(7) Decisions relating to suspensions of procedural
disenrollments and civil money penalties under 42 CFR 430.49(c).
* * * * *
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-26640 Filed 12-4-23; 4:15 pm]
BILLING CODE 4120-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on December 6, 2023.
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.