Rule2024-06566
Medicaid Program; Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes
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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
April 2, 2024
Effective
June 3, 2024
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This is the second part of a two-part final rule that simplifies the eligibility and enrollment processes for Medicaid, the Children's Health Insurance Program (CHIP), and the Basic Health Program (BHP). This rule aligns enrollment and renewal requirements for most individuals in Medicaid; establishes beneficiary protections related to returned mail; creates timeliness requirements for redeterminations of eligibility; makes transitions between programs easier; eliminates access barriers for children enrolled in CHIP by prohibiting premium lock-out periods, benefit limitations, and waiting periods; and modernizes recordkeeping requirements to ensure proper documentation of eligibility determinations.
Full Text
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<title>Federal Register, Volume 89 Issue 64 (Tuesday, April 2, 2024)</title>
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[Federal Register Volume 89, Number 64 (Tuesday, April 2, 2024)]
[Rules and Regulations]
[Pages 22780-22878]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06566]
[[Page 22779]]
Vol. 89
Tuesday,
No. 64
April 2, 2024
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 431, 435, 436, et al.
Medicaid Program; Streamlining the Medicaid, Children's Health
Insurance Program, and Basic Health Program Application, Eligibility
Determination, Enrollment, and Renewal Processes; Final Rule
Federal Register / Vol. 89 , No. 64 / Tuesday, April 2, 2024 / Rules
and Regulations
[[Page 22780]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 431, 435, 436, 447, 457, and 600
[CMS-2421-F2]
RIN 0938-AU00
Medicaid Program; Streamlining the Medicaid, Children's Health
Insurance Program, and Basic Health Program Application, Eligibility
Determination, Enrollment, and Renewal Processes
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This is the second part of a two-part final rule that
simplifies the eligibility and enrollment processes for Medicaid, the
Children's Health Insurance Program (CHIP), and the Basic Health
Program (BHP). This rule aligns enrollment and renewal requirements for
most individuals in Medicaid; establishes beneficiary protections
related to returned mail; creates timeliness requirements for
redeterminations of eligibility; makes transitions between programs
easier; eliminates access barriers for children enrolled in CHIP by
prohibiting premium lock-out periods, benefit limitations, and waiting
periods; and modernizes recordkeeping requirements to ensure proper
documentation of eligibility determinations.
DATES: These regulations are effective on June 3, 2024.
FOR FURTHER INFORMATION CONTACT: Stephanie Bell, (410) 786-0617,
<a href="/cdn-cgi/l/email-protection#8eddfaebfee6efe0e7eba0ccebe2e2ceede3fda0e6e6fda0e9e1f8"><span class="__cf_email__" data-cfemail="6d3e19081d050c030408432f0801012d0e001e4305051e430a021b">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Since 1965, Medicaid has been a cornerstone of America's health
care system. The program provides free or low-cost health coverage to
low-income individuals and families and helps meet the diverse health
care needs of children, pregnant individuals, parents, older adults,
and people with disabilities. For over 25 years, the Children's Health
Insurance Program (CHIP) has stood on the shoulders of Medicaid with
the goal of ensuring that all children have health insurance. Together
these programs play a major role in making health care available and
affordable to millions of Americans.
Access to health coverage expanded significantly in 2010 with
enactment of the Patient Protection and Affordable Care Act (Pub. L.
111-148, enacted on March 23, 2010), as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March
30, 2010), together referred to as the Affordable Care Act (ACA). The
ACA expanded Medicaid eligibility to low-income adults under age 65
without regard to parenting or disability status, simplified Medicaid
and CHIP enrollment processes, and established health insurance
Marketplaces where individuals without access to Medicaid, CHIP, or
other comprehensive coverage could purchase coverage in a Qualified
Health Plan (QHP). Many individuals with household income above the
Medicaid and CHIP income standards became eligible for premium tax
credits and/or cost-sharing reductions to help cover the cost of the
coverage. In addition, the ACA provided States with the option of
establishing a Basic Health Program (BHP), which can provide affordable
health coverage to individuals whose household income is greater than
133 percent but does not exceed 200 percent of the Federal Poverty
Level (FPL) (that is, lower income individuals who would otherwise be
eligible to purchase coverage through the Marketplaces with financial
subsidies). BHPs allow States to provide more affordable coverage for
these individuals and to improve the continuity of care for those whose
income fluctuates above and below the Medicaid and CHIP levels. To
date, two States, New York and Minnesota, have established BHPs.
In addition to coverage expansion, the ACA also required the
establishment of a seamless system of coverage for all insurance
affordability programs (that is, Medicaid, CHIP, BHP, and the insurance
affordability programs available through the Marketplaces). In
accordance with sections 1943 and 2107(e)(1)(T) of the Social Security
Act (the Act) and sections 1413 and 2201 of the ACA, individuals must
be able to apply for, and enroll in, the program for which they qualify
using a single application submitted to any program. We issued
implementing regulations on March 23, 2012, titled ``Medicaid program;
Eligibility Changes Under the Affordable Care Act of 2010'' final rule
(77 FR 17144) (referred to hereafter as the ``2012 eligibility final
rule''), and July 15, 2013, titled ``Medicaid and Children's Health
Insurance Programs: Essential Health Benefits in Alternative Benefit
Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and
Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment''
final rule (78 FR 42160) (referred to hereafter as the ``2013
eligibility final rule''). These regulations focused on establishing a
single streamlined application, aligning financial methodologies and
procedures across insurance affordability programs, and maximizing
electronic verification in order to create a streamlined, coordinated,
and efficient eligibility and enrollment process for eligibility
determinations based on modified adjusted gross income (MAGI).
Significant progress has been made in simplifying eligibility,
enrollment, and renewal processes for applicants and enrollees, as well
as reducing administrative burden on State agencies administering
Medicaid, CHIP, and BHP, since the issuance of these regulations. The
dynamic online applications developed by States and the Federally
Facilitated Marketplace, which ask only those questions needed to
determine eligibility, have reduced burden on applicants. Of the 48
States that reported application processing time data for the April
2023-June 2023 period, over half (57 percent) of all MAGI-based
eligibility determinations at application were processed in under 24
hours.\1\ By comparison, for the February 2018-April 2018 period, of
the 42 States reporting application processing time data, only 31
percent of all MAGI-based eligibility determinations at application
were processed in under 24 hours. Greater reliance on electronic
verifications has reduced the need for individuals to find and submit,
and for eligibility workers to review, copies of paper documentation,
decreasing burden on both States and individuals and increasing \2\
program integrity. Renewals completed using electronic information
available to States have increased retention of eligible individuals,
while also decreasing the administrative burden on both States and
enrollees.
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\1\ MAGI Application Processing Time Snapshot Report: April
2023-June 2023; accessed on 11/17/2023 at <a href="https://www.medicaid.gov/sites/default/files/2023-10/magi-app-process-time-snapshot-rpt-apr-jun-2023.pdf">https://www.medicaid.gov/sites/default/files/2023-10/magi-app-process-time-snapshot-rpt-apr-jun-2023.pdf</a>.
\2\ MAGI Application Processing Time Snapshot Report: April
2023-June 2023; accessed on 1/18/2024 at <a href="https://www.medicaid.gov/sites/default/files/2020-04/magi-application-time-report.pdf">https://www.medicaid.gov/sites/default/files/2020-04/magi-application-time-report.pdf</a>.
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The critical role of Medicaid and CHIP in providing timely health
care access was highlighted as the coronavirus disease 2019 (``COVID-
19'') spread across our country beginning in early 2020. Medicaid and
CHIP ensured people who may have lost their jobs or been exposed to
COVID-19, or both, had access to coverage, playing a critical role in
the national response. States were
[[Page 22781]]
eligible for a temporary increase in the Federal Medical Assistance
Percentage (FMAP) throughout the COVID-19 public health emergency
(PHE), if they met certain conditions specified in section 6008 of the
Families First Coronavirus Response Act (FFCRA) (Pub. L. 116-127, March
18, 2020), amended by section 5131 of Division FF of the Consolidated
Appropriations Act, 2023 (CAA, 2023) (Pub. L. 117-328, December 29,
2022). One such condition was the continuous enrollment condition
described at section 6008(b)(3) of the FFCRA. This condition required
States to maintain enrollment, through March 31, 2023, for all Medicaid
beneficiaries who enrolled on or after March 18, 2020, with limited
exceptions.
Under the CAA, 2023, the FFCRA's temporary FMAP increase was
extended through December 31, 2023, at a gradually reducing rate, for
States that continued to meet the conditions specified in subsections
6008(b)(1), (2), and (4) of the FFCRA, along with new conditions at
subsection 6008(f) of the FFCRA.\3\ Among the new conditions for
enhanced FMAP were requirements to (a) complete eligibility
redeterminations in accordance with all applicable Federal requirements
(or alternative processes and procedures approved by CMS), (b) update
beneficiary contact information, and (c) make a good faith effort to
contact beneficiaries whose mail was returned to the State. Since early
2023, States have been engaged in an effort to unwind their continuous
enrollment policies and return to normal eligibility and enrollment
operations (this process has commonly been referred to as
``unwinding''). CMS worked actively with States during this period to
review their redetermination processes, approve alternatives when
needed, and ensure that the enrollment protections established by the
ACA were available to all applicants and beneficiaries during the
unwinding period. This final rule builds upon these protections to
promote enrollment and reduce churn.
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\3\ See the January 2023 State Health Official (SHO) #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, for additional information on the
``unwinding period.'' Available online at <a href="https://www.medicaid.gov/sites/default/files/2023-08/sho23002.pdf">https://www.medicaid.gov/sites/default/files/2023-08/sho23002.pdf</a>.
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The Biden-Harris Administration is committed to protecting and
strengthening Medicaid and CHIP and has demonstrated this commitment
through multiple executive actions. For example, on January 20, 2021,
President Biden issued Executive Order 13985 on advancing racial equity
and support for underserved communities.\4\ It charged Federal agencies
with identifying potential barriers that underserved communities may
face to enrollment in programs like Medicaid and CHIP. This was
followed on January 28, 2021, by Executive Order 14009 with a specific
call to strengthen Medicaid and the ACA and remove barriers to
obtaining coverage for the millions of individuals who are potentially
eligible for coverage but remain uninsured.\5\ In April 2022, President
Biden issued another Executive order, building on progress and
reflecting new Medicaid and CHIP flexibilities established by the
American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2). Executive Order
14070, ``Continuing to Strengthen Americans' Access to Affordable,
Quality Health Coverage,'' charges Federal agencies with identifying
ways to help more Americans enroll in quality health coverage.\6\ It
calls upon Federal agencies to examine policies and practices that make
it easier for individuals to enroll in and retain coverage. Building on
this charge, we reviewed the improvements made to implement the ACA,
examined States' successes and challenges in enrolling eligible
individuals, considered the changes brought about by the COVID-19
pandemic, and looked for gaps in our regulatory framework that continue
to impede access to coverage.
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\4\ E.O. 13985, 86 FR 7009. Accessed online on July 19, 2022, at
<a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/</a>.
\5\ E.O. 14009, 86 FR 7793. Accessed online on July 19, 2022, at
<a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/28/executive-order-on-strengthening-medicaid-and-the-affordable-care-act/</a>.
\6\ E.O. 14070, 87 FR 20689. Accessed online on July 19, 2022,
at <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/">https://www.whitehouse.gov/briefing-room/presidential-actions/2022/04/05/executive-order-on-continuing-to-strengthen-americans-access-to-affordable-quality-health-coverage/</a>.
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We have learned through our experiences working with States and
other interested parties that certain policies continue to result in
unnecessary administrative burden and create barriers to enrollment and
retention of coverage for eligible individuals. For example:
<bullet> Individuals whose eligibility is not based on MAGI (non-
MAGI individuals)--such as, those whose eligibility is based on being
age 65 or older, having blindness, or having a disability--generally
were not included in the enrollment simplifications established under
the ACA or our implementing regulations (the 2012 and 2013 eligibility
final rules). This left such individuals at greater risk of being
denied or losing coverage due to procedural reasons, including, for
example, failure to return paperwork,\7\ than their MAGI-based
counterparts, even though we believe many are likely to continue to
meet the substantive Medicaid eligibility criteria due to low
likelihood of changes in their income or other circumstances.\8\
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\7\ Procedural reasons include instances where a beneficiary
fails to provide the information necessary to complete a Medicaid or
CHIP renewal. This many include a renewal form with information
about the individual's continued eligibility or documentation to
verify continued eligibility.
\8\ Assistant Secretary for Planning and Evaluation (ASPE)
(2019). Loss of Medicare-Medicaid dual eligible status: Frequency,
contributing factors and implications. Accessed on August 4, 2023,
at <a href="https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//189201/DualLoss.pdf">https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//189201/DualLoss.pdf</a>.
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<bullet> Current regulations do not consistently provide clear
timeframes for applicants and enrollees to return information needed by
the State to make a determination of eligibility or for States to
process and act upon information received. This may lead to unnecessary
delays in processing applications and renewals and some individuals
being denied increased assistance for which they have become eligible.
<bullet> Recordkeeping regulations, which are critical to ensuring
appropriate and effective oversight to identify errors in State
policies and operations, were last updated in 1986 and are both
outdated and lacking in needed specificity. We believe these outdated
requirements have contributed to inconsistent documentation policies
across States, which may have furthered the incidence of improper
Medicaid payments.
<bullet> Barriers to coverage that are not permitted under any
other insurance affordability program--including lock-outs for
individuals terminated due to non-payment of premiums, required periods
of uninsurance prior to enrollment, and annual or lifetime caps on
benefits--remain a State option in separate CHIPs.
Through the proposed rule that appeared in the Federal Register on
September 7, 2022, entitled ``Streamlining the Medicaid, Children's
Health Insurance Program, and Basic Health Program Application,
Eligibility Determination, Enrollment, and Renewal Processes'' (87 FR
54760) (referred to hereafter as the ``September 2022 proposed rule''),
we proposed policies designed to address these and other gaps, thereby
streamlining Medicaid and CHIP eligibility and enrollment processes,
reducing
[[Page 22782]]
administrative burden on States and enrollees, and increasing
enrollment and retention of eligible individuals. We also sought to
improve the integrity of Medicaid and CHIP. Through the Payment Error
Rate Measurement (PERM) program, the Medicaid Eligibility Quality
Control (MEQC) program, and other CMS eligibility reviews, we have
regular opportunities to work with States in reviewing their
eligibility and enrollment processes. As a result of these reviews and
other program integrity efforts, States are continually making
improvements to their eligibility and enrollment systems both to
enhance functionality and to correct any newly identified issues. We
believe the changes finalized in this rule will further these efforts,
and we will continue to work closely with States throughout
implementation.
Current regulations at 42 CFR 433.112 establish conditions that
State eligibility and enrollment systems must meet to qualify for
enhanced Federal matching funds. Among these conditions, Sec.
433.112(b)(14) requires that each State system support accurate and
timely processing and adjudications of eligibility determinations, and
effective communications with providers, beneficiaries, and the public.
As States submit proposed changes to their eligibility and enrollment
systems and implement new and/or enhanced functionality, we will
continue to provide them with technical assistance on the policy
requirements, conduct ongoing reviews of both the State policy and
State systems, and ensure that all proposed changes support more
accurate and timely processing of eligibility determinations.
We will also continue to explore other opportunities for reducing
the incidence of beneficiary eligibility-related improper payments,
including leveraging the enhanced funding available for design,
implementation, and operation of State eligibility and enrollment
systems, as well as mitigation and corrective action plans that address
specific State challenges. Our goal is to ensure that eligible
individuals can enroll and stay enrolled without unnecessary burden and
that ineligible individuals are redirected to the appropriate coverage
programs as quickly as possible.
On September 21, 2023, the ``Streamlining Medicaid; Medicare
Savings Program Eligibility Determination and Enrollment'' final rule
(88 FR 65230) (referred to hereafter as the ``2023 Streamlining MSP
Enrollment final rule'') appeared in the Federal Register, which
finalized provisions of our September 2022 proposed rule that were
specific to individuals dually eligible for both Medicaid and Medicare.
This rule addresses the remaining provisions of the September 2022
proposed rule. It is focused on aligning enrollment and renewal
requirements for most individuals in Medicaid; improving access for
medically needy individuals; establishing expectations for timely
renewals and redeterminations of eligibility for individuals
experiencing a change in circumstances; streamlining transitions
between Medicaid and CHIP; eliminating access barriers for children
enrolled in CHIP; removing unnecessary administrative barriers; and
modernizing recordkeeping requirements to ensure proper documentation
of eligibility determinations.
If any provision of this final rule is held to be invalid or
unenforceable by its terms, or as applied to any person or
circumstance, it shall be severable from this final rule and not affect
the remainder thereof or the application of the provision to other
persons not similarly situated or to other, dissimilar circumstances.
II. Summary of the Proposed Provisions and Analysis of and Responses to
Public Comments
We received a total of 7,055 timely comments from State Medicaid
and CHIP agencies, advocacy groups, health care providers and
associations, health insurers and plans, and the general public.
Comment: We received many comments supporting the September 2022
proposed rule. Commenters supported the changes proposed to reduce
barriers to coverage, make the eligibility and enrollment process
easier and faster, and help eligible individuals to retain coverage.
The commenters highlighted the benefits our proposed policies would
have on individuals, families, providers, States, and communities. On
the individual level, commenters stated that the proposed rule would
reduce individual burdens and worries, save money, and even make people
happier. The commenters noted that it would help families by removing
some of the barriers to accessing health care services during periods
of great stress and economic insecurity, and that it would ensure their
children have access to the health care services they need. Commenters
noted that a reduction in churning will not only improve the health of
beneficiaries, but it will also protect individual beneficiaries, and
their families, from medical debt and associated stressors. Maximizing
coverage for individuals, these commenters stated, will not only ensure
better outcomes for the people enrolled in Medicaid and CHIP but may
even save lives. Several commenters described the proposed changes as a
long-term complement to our current efforts to minimize inappropriate
coverage losses during the unwinding period following the end of the
continuous enrollment condition.
Commenters also stated that these regulations would reduce burdens
on States, save taxpayer dollars, and serve as a practical step toward
ensuring the long-term sustainability of Medicaid and CHIP. Some
commenters noted their belief that the current rules place an outsized
emphasis on preventing the enrollment of ineligible individuals and
that this rule will balance that interest with the ultimate goal of
ensuring coverage for those who are eligible.
From the provider perspective, commenters explained that the
reduction in enrollment churn resulting from the proposed streamlining
of Medicaid and CHIP eligibility and enrollment processes would reduce
administrative burdens on physicians and their practices. One commenter
stated that it would help providers to maintain continuity of care and
trust in their relationships with their patients. Another commenter
stated that the September 2022 proposed rule would diminish the harmful
consequences of churning, including disruptions in physician care and
medication adherence; increased administrative costs for providers,
Medicaid managed care plans, and States; and higher health costs when
delayed care forces more expensive interventions. One commenter noted
that eliminating barriers to enrollment in Medicaid and CHIP could lead
to an increase in the number of Medicaid and CHIP beneficiaries and a
reduction in uncompensated care costs, thereby protecting the viability
of the medical safety net. Hospitals also commented that reduced churn
from the policies proposed in the September 2022 proposed rule would
lessen the workload for hospital staff who assist patients with program
and financial assistance applications.
At the broader community level, commenters supported the proposed
steps to promote health equity by eliminating barriers to initial and
continuing enrollment in Medicaid (that is, form submission
requirements rather than reliance on electronic data and verification).
The commenters explained that because people of color are
disproportionately likely to be enrolled in Medicaid and CHIP for
health
[[Page 22783]]
coverage, lowering administrative burdens to make it easier to enroll
in coverage and to reduce coverage disruptions could be critical to
advancing health and racial equity. One commenter noted that by
enabling low-income households to access the benefits to which they are
entitled under law, the September 2022 proposed rule would effectively
result in a transfer of funding (spending described in the regulatory
impact analysis) from the Federal Government to Medicaid and CHIP
beneficiaries through additional health care spending by those
programs. The commenter explained that this transfer will not only
enhance the health of the United States' low-income population but will
also likely improve their financial well-being. Commenters also
supported the proposal to address institutional bias by allowing for
the projection of predictable costs in the community for home and
community-based services.
Response: We appreciate commenters' support for the September 2022
proposed rule. As discussed in the background section of this final
rule, Medicaid and CHIP play a key role in the United States health
care system. While Medicaid and CHIP coverage can have a huge impact on
the individuals served by these programs, we agree that the full value
of the programs goes well beyond the individual beneficiaries.
We agree with commenters that the streamlined eligibility and
enrollment processes established by this rule will help to reduce the
churning of eligible individuals on and off Medicaid and CHIP. We agree
with commenters that reduced churn has the potential to reduce
administrative burdens for beneficiaries and their health care
providers, improve the ability of beneficiaries and their providers to
form lasting relationships, reduce the need for high-cost interventions
that can result from delayed care, and protect beneficiaries from
medical debt and providers from non-payment. We also agree with
comments on the broader community impact of this rule. After completing
the upfront investment in systems and training needed to implement the
changes in this final rule, States should begin to see savings from the
reduced administrative burden. In addition, we believe that healthier
beneficiaries can be more productive in their homes, their work, and
their communities.
Recognizing the benefits of this rule, we are finalizing (with some
modifications) the changes included in the September 2022 proposed rule
that were not included in the 2023 Streamlining MSP Enrollment final
rule. Some of the proposed changes are modified in response to
comments, and all modifications are discussed in the comment responses
that follow.
Comment: We also received many comments that generally opposed the
September 2022 proposed rule and urged CMS to withdraw the rule in its
entirety. Commenters opposing the rule cited concerns about increased
enrollment of ineligible individuals, increased program costs, reduced
program integrity, and reduced flexibility for States. Other concerns
raised were that the proposed rule would increase doctors' and
hospitals' profits, take away individuals' choices, and decrease the
quality of health care.
Some commenters stated that this rule would prohibit critical
program integrity protections. These commenters expressed concern that
changes proposed to streamline the enrollment process would permit
ineligible individuals to enroll in Medicaid and CHIP, and they
recommended tighter controls to protect the integrity of these
programs. The commenters stated that loopholes in existing eligibility
and enrollment processes, particularly with respect to the verification
of eligibility, would be expanded by this rule, making it difficult for
States to effectively verify Medicaid and CHIP eligibility.
Commenters opposing the proposals noted the increase in State costs
described in the regulatory impact analysis and expressed concern that
Medicaid and CHIP costs would increase. One commenter expressed concern
that these changes were coming at the expense of State flexibility,
taxpayers, and the truly needy who rely on the sustainability of
Medicaid.
A few commenters stated that the proposed rule gives more control
to the Federal Government at the expense of States. They believe the
proposed rule weakens State flexibility to administer enrollment
determinations. One commenter stated that they opposed the proposed
changes noting that States are best positioned to set eligibility,
renewal, and retention requirements for Medicaid and CHIP. Another
commenter explained that because issues of health care vary from State
to State, they believe it is wrong for CMS to establish a ``one size
fits all'' approach.
Response: We appreciate commenters' concerns about protecting the
integrity of the Medicaid and CHIP programs. As stewards of Federal
funding for Medicaid and CHIP, we take program integrity very
seriously. We maintained a focus on reducing the rate of improper
payments as we developed the proposals finalized in this rule. For
example, we expect the new requirements finalized in this rule for
electronic recordkeeping will help ensure that State and Federal
auditors can more easily verify the accuracy of eligibility
determinations and payments made to providers. We also expect that
establishing clear timeliness standards for acting on changes in
circumstances and completing renewals will ensure that States do not
continue to provide coverage to ineligible individuals for an extended
period. These provisions will also ensure that States do not improperly
deny coverage for a beneficiary who is eligible for Medicaid or CHIP.
Accurate eligibility determinations in both situations are an important
part of program integrity.
We disagree with comments suggesting that streamlining eligibility
and enrollment processes and eliminating unnecessary administrative
requirements will increase the enrollment of ineligible individuals. To
the contrary, the focus of many of the proposed provisions is to reduce
enrollment errors caused when eligible individuals are unable to
overcome administrative barriers to enrollment. For example, by
removing the requirement to apply for other benefits that do not impact
an individual's eligibility for Medicaid or CHIP, this rule eliminates
a burdensome step in the eligibility process that increases potential
for caseworker- or system error. Additionally, this final rule
increases State reliance on electronic data sources, such as States'
asset verification programs, to verify eligibility, thereby reducing
the burden for States, as well as applicants and beneficiaries, of
submitting copies of paper documents that must be reviewed by a
caseworker.
Regarding commenters' concerns about the increased costs associated
with this rule, this final rule does not expand Medicaid or CHIP
eligibility criteria to include new populations (for example,
individuals with higher incomes or in categories not currently eligible
for coverage under these programs). It simply removes barriers that
prevent individuals who satisfy existing financial and other
eligibility criteria from enrolling and remaining enrolled in these
programs. We recognize that many of the provisions will require States
to change their eligibility systems and their enrollment processes, and
that these changes will generate upfront costs. However, as discussed
in the regulatory impact analysis and collection of information
sections, we believe these changes will create administrative savings
that will continue to accrue in the future, and
[[Page 22784]]
that these savings will far outweigh the initial administrative costs.
In addition, we note that enhanced Federal funding for design,
implementation, and operation of State eligibility and enrollment
systems is available in accordance with Sec. 433.112(b)(14) for
changes to support accurate and timely processing of eligibility
determinations.
Finally, we understand commenters' concerns that some of the
changes finalized in this rule will reduce the flexibility currently
available to States. As we considered the comments submitted regarding
each specific provision in this final rule, we looked for opportunities
to provide States with more flexibility in achieving the policy goals
of the September 2022 proposed rule. Revisions finalized in this
rulemaking, which improve State flexibility, are discussed in detail in
the responses to comments that follow.
A. Facilitating Medicaid Enrollment
1. Facilitate Enrollment by Allowing Medically Needy Individuals To
Deduct Prospective Medical Expenses (42 CFR 435.831 and 436.831)
We proposed to amend Sec. 435.831(g)(2) to permit States
additional flexibility to project the incurred medical expenses of
noninstitutionalized individuals who seek to establish eligibility for
Medicaid as medically needy. Generally, the medically needy are
individuals who have incomes too high to qualify in a categorically
needy group described in section 1902(a)(10)(A) of the Act and who
attain income eligibility by reducing their countable income to their
State's medically needy income level (MNIL) by deducting the uncovered
medical and remedial care expenses they, their family members, and
financially responsible relatives have incurred (a process referred to
as a ``spenddown''). When an individual qualifies as medically needy,
the individual's eligibility lasts only as long as the State's
medically needy budget period, which, under Sec. 435.831(a), can be no
longer than 6 months (and can be as short as 1 month), at which point
the individual will need to meet their spenddown amount again with
different incurred medical or remedial expenses to reestablish
eligibility. This process causes frequent disruptions in medically
needy-based Medicaid coverage and can pose administrative challenges to
States.
In 1994, we amended Sec. 435.831 to add a new paragraph (g)(1),
under which we permitted States to project the costs of medical
institutional expenses, at the Medicaid reimbursement rate, that
individuals seeking eligibility as medically needy will incur in a
budget period (59 FR 1659, 1673 (January 12, 1994)). As we explained in
section II.A.5. of the preamble of the September 2022 proposed rule,
``projecting'' expenses means that a State deducts from the
individual's countable income the medical expenses that it anticipates
an individual will incur during a budget period. This can expedite
eligibility because the individual does not have to first incur the
anticipated expenses. As we explained, our rationale for permitting the
projection of institutional expenses has been that such expenses are by
their nature constant and predictable, and allowing their projection at
the Medicaid rate offers States a simplified approach to determining
the eligibility of institutionalized individuals as medically needy
with a high degree of certainty of the accuracy of the determinations.
We believe that allowing projection of only institutional expenses,
while not also allowing projection of predictable and constant services
incurred by community-based individuals, fosters an institutional bias,
and we therefore proposed to amend Sec. 435.831(g)(2) to allow States
to project the expenses of other services that are also reasonably
constant and predictable. Our proposed regulation identified examples
of services that we believe meet this criterion, including home and
community-based services (HCBS) reflected in a person-centered service
plan in accordance with Sec. 441.301(b)(1)(i), Sec. 441.468(a)(1),
Sec. 441.540(b)(5), or Sec. 441.725 (relating to the HCBS authorized
under section 1915(c), (i), (j) and (k) of the Act), and prescription
drugs. We explained that features of these services create a high
degree of likelihood of their continued receipt from month to month. We
also proposed that States use the Medicaid reimbursement rate for the
costs of the services they would project under proposed Sec.
435.831(g)(2). We invited comment on other types of services that may
meet the reasonably constant-and-predictable criteria, which we would
consider including in the regulatory text.
In drafting the September 2022 proposed rule, we inadvertently
failed to include a revision to Sec. 436.831(g)(2) that mirrors the
change proposed at Sec. 435.831(g)(2) to permit Guam, Puerto Rico, and
the Virgin Islands (collectively, the ``436 territories'') to make the
same elections with respect to medically needy eligibility. This
omission was unintentional, as most of the provisions of the proposed
rule that are adopted in this final rule are applicable to the 436
territories as a result of incorporation by reference in existing
regulations (as noted elsewhere throughout this final rule). The same
reasons for adopting this option in Sec. 435.831 also apply in the 436
territories, and we note that reference to the effects of such changes
on all five U.S. territories was included in the discussion of
information collection requirements in the proposed rule (87 FR 54820).
We are including Sec. 436.831(g)(2) in this final rule and note that
all references to Sec. 435.831(g) also apply to Sec. 436.831(g).
We received the following comments on this provision in the
proposed rule, and below are our responses.
Comment: Most commenters strongly supported the proposed
regulation, with nearly all such commenters stating that the proposal
would do one or more of the following: help reduce Medicaid's
institutional bias; further the integration mandates of the Americans
with Disabilities Act (ADA) and section 504 of the Rehabilitation Act;
reduce eligibility churn and ensure greater continuity of coverage; and
reduce administrative burden and complexity. A couple of commenters
specifically noted that the proposed regulation will improve health
equity.
Response: We appreciate the commenters' support. As explained in
the following comment and response, we are finalizing the regulation as
proposed.
Comment: We received many comments in response to our invitation
for the identification of other types of services that are reasonably
constant and predictable, and which could be considered for inclusion
in the regulatory text. Commenters suggested a very broad variety of
services, and many commenters recommended that we include the services
they identified in the regulation text. Examples of the additional
expenses which were suggested to us by commenters include personal care
services, Program of All-Inclusive Care for the Elderly (PACE)
services, additional drug-related costs, behavioral health services,
durable medical equipment (DME), health insurance premiums, and
laboratory tests.
Response: We appreciate the very thorough and thoughtful responses
to our request. We agree that many of the expenses suggested by
commenters, including health insurance premiums (such as, but not
limited to, Medicare or PACE premiums paid by the individual), could
meet the reasonably constant-and-predictable standard. However, we have
decided to finalize the rule as proposed, in which the
[[Page 22785]]
examples of projectable services that will appear in the final
regulation text will be those that were included in the proposed rule--
that is, the services in plans of care for the section 1915-related
HCBS benefits and prescription drugs. We note that the list of specific
services included in the regulation text is illustrative, not
exhaustive, and have concluded that, given the variety and volume of
expenses which could meet the reasonably constant-and-predictable
standard, the addition of all or most of such services to the
regulation text would be too cumbersome. Additionally, we are concerned
that a longer list may actually heighten the potential that someone
would incorrectly conclude that the specifically identified services
are the only permissible ones that States may project as reasonably
constant and predicable.
Although we are not including additional examples in the final
regulation, we confirm that the services in the regulation text are not
exclusive, and that States are authorized to project services not
specifically identified in the regulation which they determine to be
reasonably constant and predicable. The language in the final rule (as
in the proposed rule) provides that States may project expenses that
they have determined to be reasonably constant and predictable
``including, but not limited to,'' the services in a person-centered
service plan for section 1915-related HCBS and prescription drugs.
(Emphasis added.)
We agree that many of the services identified by commenters could
be reasonably constant and predictable. However, we decline to
individually evaluate each service identified against that standard
here. Under the final rule, discretion is left to each State to
evaluate whether, and under what circumstances, a given service is
considered reasonably constant and predictable. We believe that the
services we have included in the regulation reflect practical examples
of the reasonably-constant-and-predictable principle that will guide
the type of services States may choose to project.
Comment: One commenter suggested removing all examples from the
regulation text, expressing concern that the inclusion of examples may
be inadvertently interpreted to limit the projection of expenses to
those contained within a Medicaid-approved plan of care, which would
make the option available only to individuals who have already
established Medicaid eligibility and have an approved plan of care. The
commenter suggested that CMS explicitly provide States with the option
to expand prospective HCBS-related deductions to individuals with
private-pay receipts or who have received support from a qualified
entity (such as an Aging and Disability Resource Center) to develop a
service plan.
Response: As explained previously in this final rule, we believe
that adding other services to the regulation could increase the
possibility that the list may be read as an exclusive one, in contrast
to our intent. We disagree, however, that it is necessary to omit all
examples from the regulatory text, because we believe, as also noted
previously in this final rule, that the examples we include offer a
useful gauge of our expectation on what may be considered reasonably
constant and predictable. We also believe it is clear that the list of
examples is illustrative but not exhaustive.
Comment: A commenter suggested that we replace specific HCBS
references with a blanket reference to HCBS authorized under all
authorities.
Response: As noted previously in this final rule, we believe that
the specific services identified in the regulation offer a useful gauge
of our expectations of what may be considered reasonably constant and
predictable. The proposed regulation identified examples of services
that we believe meet these criteria, including HCBS reflected in a
person-centered service plan pursuant to Sec. 441.301(b)(1)(i), Sec.
441.468(a)(1), Sec. 441.540(b)(5), or Sec. 441.725 (relating to the
HCBS authorized under section 1915(c), (i), (j) and (k) of the Act).
While we agree that HCBS that are not reflected in a person-centered
service plan pursuant to one of the authorities listed in proposed
Sec. 435.831(g)(2) could potentially include services that help an
individual remain in the community (such as transportation), our goal
is to provide clear examples of reasonably constant and predictable
expenses in the regulation text. We believe that the proposed
regulation text accomplishes that goal, since HCBS provided pursuant to
a person-centered service plan necessarily meet that standard, whereas
HCBS not reflected in such a plan may not, depending on the service and
circumstances. We reiterate, however, that States are authorized to
project services not specifically identified in the regulation which
they determine to be reasonably constant and predictable, including
HCBS that are not included in a person-centered service plan.
Comment: We received several comments that either requested
clarification on whether this proposal would be optional for States or
that implied the commenters believed it not to be optional. One
commenter stated that the subsection heading for this proposal in the
preamble is presented as an individual option instead of a State
option, and the commenter recommended that we confirm that States do
not have to elect this option. Another commenter indicated that this
proposal would reduce State discretion. A few other commenters shared
that the proposal would impose a burden on States (that is, additional
staff training and system changes), and that, given the complexity of
the proposal, the timeline for State implementation should be relaxed.
One commenter stated that the proposal might possibly increase
medically needy caseloads.
Response: We confirm that the authority to project noninstitutional
expenses that we proposed and are finalizing at Sec. 435.831(g)(2) in
this final rule is a State option, not a mandate. We agree that the
language of the heading in the preamble to the September 2022 proposed
rule suggests an individual option instead of a State option, and we
have revised it in this final rule preamble. We note, however, that we
did not propose, nor did we make, a change to the paragraph heading of
Sec. 435.831(g) in which this new State authority is inserted
(``Determination of deductible incurred medical expenses: Optional
deductions.'') (Emphasis added). Given the optional nature of this
provision, we disagree that it will impose a burden on States or that
the timeline for State implementation should be longer (as there is not
an implementation timeline for the election of this option). Although
we believe that adopting the option will ease administrative burden, a
State that believes negative outcomes that may possibly stem from
permitting the projection of noninstitutional expenses would outweigh
the benefits would not have to elect this option.
Comment: Many commenters took the position that, for HCBS
participants, CMS should require States to project noninstitutional
medical and remedial expenses, rather than making it optional. The
commenters indicated that making it mandatory would streamline the
process and reduce unnecessary burden on how people with extensive
health care needs receiving HCBS must demonstrate their eligibility.
Response: As we explained in section II.A.5. of the preamble of the
September 2022 proposed rule, our proposal to allow States to project
noninstitutional expenses builds on the preexisting State regulatory
option to project institutional expenses, a primary rationale of which
[[Page 22786]]
was to increase State flexibility. While we agree that expanding
States' authority to project additional types of expenses will help
streamline eligibility processes and offer important advantages to
applicants and beneficiaries, we did not propose to eliminate State
discretion in applying this policy. Doing so would be a substantial
departure from the flexibility principles on which the proposed rule
was based. Therefore, we are finalizing Sec. 435.831(g)(2) as
proposed. The projection of reasonably constant and predictable medical
expenses in determining whether a medically needy individual has met
their spenddown will be a State option under this final rule.
Comment: Several commenters requested that the regulation be
extended to a broader range of people beyond those receiving services
under the specific HCBS authorities included in the regulation text.
One commenter noted that because use of services in an HCBS plan of
care may vary greatly over the course of multiple budget periods,
States may not be able to reasonably predict the individual's services
costs in a forthcoming budget period.
Response: States are permitted under this regulation to project the
cost of noninstitutional services for all medically needy individuals,
regardless of whether such individuals are eligible for HCBS authorized
under section 1915 of the Act, so long as the projected services are
reasonably constant and predictable. States are also not limited to
projecting the specific services identified in the regulation.
Comment: One commenter stated that proposed Sec. 435.831(g)(2)
would not eliminate Medicaid's institutional bias. The commenter
indicated that individuals who become hospitalized and then apply for
Medicaid are typically discharged by hospitals to nursing facilities
instead of the community due to the higher degree of likelihood that
they will establish Medicaid eligibility in the former. The commenter
further stated that individuals who are thus discharged to a nursing
facility and become Medicaid-eligible will likely choose to remain
there, as a return to the community, with different financial
eligibility rules, may pose a threat to their retaining Medicaid.
Response: We appreciate the concerns raised by the commenter. We
have acknowledged in the past the challenges faced by Medicaid-eligible
institutionalized individuals seeking to return to the community, and
the proposed rule did not purport to eliminate all barriers individuals
receiving institutional care may face in returning to the community. We
previously issued a State Medicaid Director Letter on strategies that
States may utilize to facilitate transitions from institutions to the
community and connecting such individuals to HCBS. (Olmstead Update No.
3, July 25, 2000). We believe that the option provided under Sec.
435.831(g)(2) of this final rule complements these strategies to
further assist States in their rebalancing \9\ efforts.
---------------------------------------------------------------------------
\9\ ``Rebalancing'' is defined in this context as achieving a
more equitable balance between the share of spending and use of
services and supports delivered in home and community-based settings
relative to institutional care.
---------------------------------------------------------------------------
Comment: Two commenters stated that a plan of care may only be
developed for an individual who has established Medicaid eligibility,
with one of the commenters indicating that, as a result, projection of
the plan-of-care costs would not assist a prospective medically needy
individual in need of the HCBS.
Response: We disagree with the commenters. The eligibility group
described in Sec. 435.217, which covers individuals who are eligible
for and will receive section 1915(c) services and who would be eligible
if institutionalized, requires that section 1915(c) services be
authorized before the individual may be enrolled in the group. This
requires the completion of the plan of care as a condition precedent;
for example, for individuals seeking coverage under this group, a State
must complete a plan of care for section 1915(c) services prior to
determining them eligible for Medicaid. Similarly, States are
specifically authorized under sections 1915(c)(3) and 1915(i)(3) of the
Act to apply special financial eligibility deeming rules for medically
needy individuals seeking coverage for section 1915(c) or (i) services.
This means that States electing to cover section 1915(c) or (i)
services must confirm the need for such services as part of the
underlying Medicaid eligibility determination. A State could develop a
plan of care for the individual as part of this process; indeed, it
often will make sense for the State to do so.
Comment: We received many comments relating to retroactive coverage
for HCBS, with nearly all such commenters suggesting that retroactive
HCBS coverage should be available to the same extent it is for
institutional services. Some of the commenters claimed that the
misalignment is biased toward institutional services or discriminatory.
Response: While not specifically stated by the commenters, we
assume the comments on this point refer to the ``medical assistance''
definition in section 1915(c)(1) of the Act, which defines HCBS
services as services that are provided ``pursuant to a written plan of
care to individuals with respect to whom there has been a determination
that but for the provision of such [HCBS waiver] services, the
individuals would require the level of care provided in a hospital or a
nursing facility or intermediate care facility for the mentally
retarded the cost of which could be reimbursed under the State plan.''
We further believe that the commenters are proposing that if an
individual is otherwise eligible for Medicaid coverage of other
services, that the services that are in a section 1915(c) waiver
participant's plan of care, but which are received by the individual
before the plan of care is actually developed and the level-of-care
determination has been made, also be eligible for Medicaid coverage. We
appreciate the commenters' interest in this issue; however, it is
beyond the scope of this rule. We note, however, that individuals who
are eligible for HCBS are not categorically excepted from retroactive
medical assistance coverage authorized under section 1902(a)(34) of the
Act, and Medicaid beneficiaries may receive retroactive coverage for
HCBS-related State plan services such as personal care services and
home health care services.
Comment: A couple of commenters stated that requiring use of the
Medicaid rate for noninstitutional expense projection is too
prescriptive and requested that CMS provide flexibility for States to
determine the appropriate rate.
Response: We do not agree that the requirement to use the Medicaid
rate is overly prescriptive. Use of the Medicaid rate is appropriate to
achieve the highest level of certainty that an individual will incur
the liability that the regulation permits States to anticipate prior to
the actual receipt of services. Use of a different rate increases the
possibility that, upon reconciliation at the end of the budget period,
an individual will be found not to have met their spenddown obligation
(and thus to have been erroneously granted eligibility). Limiting the
expenses projected to the Medicaid rate strikes an appropriate balance
between preventing medically needy individuals from having to establish
or reestablish eligibility based on a spenddown prior to receiving
services and ensuring that individuals who are not reasonably certain
to meet
[[Page 22787]]
their spenddown obligation are not erroneously granted eligibility.
Comment: Some commenters recommended including community expenses
that are not currently available to meet a spenddown, such as housing
expenses (that is: rent, mortgage, and property taxes), utilities, and
food.
Response: Expenses that are used to meet an individual's spenddown,
whether they are projected or not, must meet the requirements of Sec.
435.831(e) (``Determination of deductible incurred expenses: Required
deductions based on kinds of services''). Changes to Sec. 435.831(e)
are beyond the scope of this regulation.
Comment: One commenter urged CMS to include in the regulation as
projectable expenses those that are significant in cost but not
necessarily predictable month-to-month.
Response: We are not permitting in the regulation the projection of
expenses that are not reasonably constant and predicable. As explained
in the preamble, the rationale for the projection of expenses is that
the individual has expenses that the State can be reasonably certain
the individual will actually incur the cost of during a budget period.
We do not believe that intermittent or sporadic expenses, regardless of
whether their cost is expected to be high, meet the standard needed to
predict with reasonable certainty that the individual will incur them
within a budget period. While we are not authorizing the projection of
expenses that do not meet a reasonably-constant-and-predictable
standard, we note that an individual's actually incurred medical and
remedial expenses that meet the requirements of Sec. 435.831(e) must
be deducted during a budget period.
Comment: A couple of commenters requested that CMS specifically
include section 1115 waivers in the HCBS authorities that are included
in the regulation.
Response: As noted previously in this final rule, we are not adding
additional services to the regulation beyond those that we originally
proposed, and we reiterate that the services listed in the regulation
text are not exhaustive. We confirm that a State that has received
authority under section 1115(a)(2) of the Act to provide to State-plan
eligible individuals coverage for services for which the State is not
otherwise eligible for Federal Financial Participation (FFP) could
project the cost of such services for individuals seeking to qualify as
medically needy, provided that such services are reasonably constant
and predictable.
Comment: One commenter inquired about whether a State would be
required to define which non-institutional expenses it has determined
meet the criteria and will be projected.
Response: States that elect to project institutional expenses are
currently required to confirm their election in their Medicaid State
plan. States that elect to project non-institutional expenses in
accordance with Sec. 435.831(g) of this final rule similarly will be
required to confirm this election in their Medicaid State plan. States
also should document each of the non-institutional expenses the State
has determined will be projected in accordance with the State's
election under Sec. 435.831(g)(2) of this final rule, and the
circumstances in which such expenses will be projected, in their
policies and procedures.
Comment: Several commenters requested that CMS require States to
revisit and modernize their MNILs to ensure that individuals have
enough income available to meet their needs in the community.
Response: Changes to State MNILs are beyond the scope of this rule.
Comment: One commenter requested that the regulation include a
requirement that if a determination is made that an individual no
longer has reasonably constant and predictable medical expenses that
meet his or her spenddown obligations, the individual should receive
timely and advance notice after the renewal, with appeal and aid-paid-
pending rights.
Response: The circumstances in which Medicaid's notice and fair
hearing rights apply are set forth in 42 CFR part 431, subpart E. If a
State's determination that an individual's medical or remedial care
expenses are no longer constant and predictable implicates one of the
circumstances described in part 431, subpart E (that is, as a result
the individual is no longer eligible for the medically needy group),
the individual will be entitled to advance notice and an opportunity
for a fair hearing. The requirement for States to provide advance
notice and fair hearing rights for individuals losing medically needy
eligibility is not impacted by this final rule.
Comment: A couple of commenters urged CMS to include a longer
period for projection of noninstitutional medical expenses, up to 12
months.
Response: The projection of expenses is made for the duration of
the medically needy budget period elected by the State, which, under
Sec. 435.831(a)(1), cannot be longer than 6 months.
Comment: A few commenters objected to the expectation described in
the preamble that States conduct reconciliations at the end of each
budget period; for example, that they confirm that medically needy
individuals actually incurred the amounts projected at the beginning of
the budget periods. One commenter indicated that reconciliation is
burdensome and could pose a barrier to enrollment. Another commenter
stated that the reconciliations should occur at renewal instead of the
end of budget periods.
Response: We believe reconciliation is necessary to ensure the
projection process does not result in erroneous grants of eligibility.
Reconciliation is also required for States that project institutional
services. We disagree that conducting reconciliation at the point of an
eligibility renewal is appropriate. It will be important for States to
identify as quickly as possible medically needy beneficiaries whose
projected expenses are not actually being incurred to (1) minimize the
financial burden on the individual at the point of reconciliation, and
(2) prevent further payment of medical assistance exceeding the amount
for which the individual is eligible.
Comment: One commenter requested that CMS include language in the
regulatory text that prohibits the termination of coverage
retroactively when individuals are found not to have met spenddown
obligations after reconciliation.
Response: Under Sec. 431.211, States generally are not permitted
to terminate an individual's Medicaid eligibility sooner than 10 days
after providing notice that the individual is no longer eligible for
Medicaid. While there are exceptions to this limitation, described in
Sec. 431.213, none of those exceptions relate to a circumstance in
which an individual may have received an erroneous grant of Medicaid
eligibility based on the projection of their medical or remedial care
expenses. Section 431.211 applies equally to individuals eligible for
medically needy coverage, and we do not consider it necessary or
appropriate to repeat this requirement in Sec. 431.831.
Comment: One commenter recommended that the regulation require only
documentation of the predictability of prospective bills without
requiring proof of payment during the budget period in which expenses
are projected, as there is often a lag in billing times.
Response: Such an addition to the regulation would not be
consistent with Federal policy. Expenses for incurred medical or
remedial care services are
[[Page 22788]]
counted in meeting an individual's spend down amount under Sec.
435.831, regardless of whether or not the individual actually pays the
provider for the services. The regulation at Sec. 435.831(f)(5)
identifies the particular circumstance in which an actual payment must
also be deducted (specifically, payments made during a current budget
period for services incurred previous to the budget period and which
were not deducted as expenses in a previous budget period). In these
circumstances, States may verify that the payment was made. However, we
note that the past consistency of payments made by an individual
seeking to qualify as medically needy by projecting the cost of an
expense that is reasonably constant and predictable may not be a factor
in determining the amount to be projected.
Comment: One commenter inquired about how the new authority to
project noninstitutional expenses will work in conjunction with the
``hypothetical spenddown'' process used by States that determine
eligibility for HCBS through the medically needy eligibility pathway.
Response: As mentioned previously in this final rule, the
eligibility group described in Sec. 435.217 (generally referred to as
``217 group'' beneficiaries) serves individuals who are eligible for
and will receive section 1915(c) services and who would be eligible if
institutionalized. While individuals in this group are, as required
under Sec. Sec. 435.726 and 435.735, subject to post-eligibility
treatment-of-income (PETI) rules, many States allow 217 group
beneficiaries to keep all of their income to meet their community
needs. This is effectuated by a State setting the maintenance allowance
used in the PETI calculation for 217 group beneficiaries at the income
eligibility standard for the State's 217 group. For example, if 300
percent of the supplemental security income (SSI) benefit rate is the
income eligibility standard for the State's 217 group, the State would
elect 300 percent of the SSI benefit rate as the maintenance allowance.
However, individuals who need section 1915(c) services but who have
incomes in excess of the 217 group income standard commonly must
qualify as medically needy to access such services, which requires them
to reduce their income to the State's MNIL, which is typically an
amount well below the State's maintenance allowance for the 217 group.
The hypothetical spenddown policy enables States, at their option,
to project the costs of institutional expenses that would be incurred
by an otherwise medically needy individual if that individual were
institutionalized. If the individual would meet their spenddown if they
were actually in an institution, a State electing this policy could
deem the individual to be one who would be eligible if
institutionalized, thereby enabling the individual to be eligible under
the 217 group. This allows the individual to keep the amount of their
income equal to the State's section 1915(c) maintenance allowance for
the 217 group, instead of having to spend down all of their income in
order to establish eligibility while remaining in the community.
This option is not impacted by the policy finalized in this
rulemaking at Sec. 435.831(g), which enables States to project
reasonably predictable and constant non-institutional medical expenses
an individual expects to incur. However, we note that there is now a
more versatile option available to States. As described in ``State
Flexibilities to Determine Financial Eligibility for Individuals in
Need of Home and Community-Based Services'' (SMD #21-004, December 7,
2021), States can adopt income and resource disregards targeted at
individuals who need HCBS, which includes the authority to target
disregards at the 217 group, which also enables States to provide HCBS
through the 217 group to individuals at higher income levels. We are
available to provide technical assistance to any State interested in
either of these options.
After considering the comments received, we are finalizing the
regulation text at Sec. 435.831(g)(2) as proposed without
modification. We note that because the effect of this change is
specific to the computation of medical expenses of noninstitutionalized
individuals who seek to establish eligibility for Medicaid as medically
needy, it operates independently from the other provisions of this
final rule.
2. Application of Primacy of Electronic Verification and Reasonable
Compatibility Standard for Resource Information (Sec. Sec. 435.952 and
435.940)
We proposed revisions to clarify that the regulations at Sec.
435.952, regarding the use of information to verify an individual's
eligibility, apply not only to verification of income and non-financial
information, but also to the verification of resources. The language of
Sec. 435.952 is written broadly to encompass all factors of
eligibility, including income and resource criteria, when applicable.
However, because Sec. 435.952(b) applies specifically to information
needed by the State to verify an individual's eligibility in accordance
with Sec. 435.948 (relating to income), Sec. 435.949 (relating to
information received through the Federal Data Services Hub), or Sec.
435.956 (relating to non-financial eligibility requirements), some have
interpreted this requirement not to apply to verification of resources.
Therefore, we proposed revisions to paragraphs (b) and (c) of Sec.
435.952 to clarify that this provision applies to any information
obtained by the State, including resource information. Since Sec.
435.952 applies to resource information obtained from electronic data
sources, such as an asset verification system (AVS) described under
section 1940 of the Act, we also proposed a corresponding technical
change to add section 1940 of the Act to Sec. 435.940 (regarding the
basis and scope of the verification regulations). As a reminder, when
implementing a reasonable compatibility standard for resources, States
should continue to evaluate resources on an individual basis (subject
to existing regulations under Sec. 435.602) and not on a household
basis.
We received the following comments on these proposed provisions:
Comment: Commenters overwhelmingly supported the proposed changes
clarifying that States should, to the extent possible and when
reasonably compatible, rely on electronic data for verifying resources
to streamline eligibility processes and alleviate the administrative
burden for States and individuals. Further, commenters expressed that
clarifying that the reasonable compatibility standards also apply to
the verification of resources would increase the efficiency of the
eligibility determination process for individuals who are age 65 or
over, are blind, or have a disability (referred to herein as ABD
individuals), as these individuals generally are required to have
resources under a certain threshold in order to be eligible for
Medicaid. Multiple commenters also supported the proposed changes
because they would reduce churn, where eligible individuals lose
eligibility (generally for a procedural reason such as not returning
requested documentation) and then reapply and are determined eligible
again.
Response: We appreciate the overwhelming support for the proposed
revisions at Sec. 435.952. We agree with commenters that applying a
reasonable compatibility standard will increase the efficiency and
reduce administrative burden for States when determining eligibility
for individuals for whom a resource standard is required. States are
already required to apply a reasonable compatibility standard for
income for all
[[Page 22789]]
populations under existing regulations at Sec. 435.952. As commenters
noted and we agree, our proposed policy will also streamline the
eligibility process for consumers, because individuals will not be
required to provide additional paper documentation of resources when
electronic data sources provide information that is reasonably
compatible with the individual's attestation. This streamlining will
facilitate enrollment of eligible individuals. For example, if the
resource threshold for non-MAGI eligibility is $2,000, the individual
attests to $1,700 in financial assets from two sources and the AVS
returns a resource amount of $1,850, the attested resource information
and the resource information returned from the AVS both would be below
the relevant threshold of $2,000, and therefore considered reasonably
compatible, and no additional information from the individual would be
needed. This is true regardless of the other data elements returned by
the AVS such as the type or name of an asset which differs from the two
sources listed in the attestation, or if the $1,850 includes a third
source that was not included in the attestation.
Comment: A few commenters raised concerns that the proposal would
increase fraud in the Medicaid program and divert health care dollars
and services from the neediest Americans. One commenter suggested that
the rule should require individuals to provide verification of their
resources rather than comparing self-attested information to data from
electronic sources. The commenter stated that the proposed changes
would increase Medicaid enrollment of ineligible individuals. This
commenter suggested that the rule require individuals to verify their
financial information, because such a policy would combat intentional
fraud and remove middle and upper-income individuals from the Medicaid
program.
Response: We disagree that the proposed changes will increase fraud
in the Medicaid program. The proposal would not limit States' statutory
obligation to verify factors of an individual's eligibility. States
currently must verify resources using an AVS described in section 1940
of the Act for individuals whose eligibility is subject to a resource
test, and nothing in this rulemaking changes that requirement. As
clarified in this final rule, Sec. 435.952(c)(2) requires States to
seek additional information, which may include documentation, if
attested information is not reasonably compatible with information
obtained through the AVS or other electronic data match. This means
that if the resource information to which the individual attests is not
reasonably compatible with information obtained through an electronic
data match, and thus could affect whether the individual would be
eligible for Medicaid, the State must seek additional information from
the individual. If electronic data verifies an individual's
attestation, there is no need for a State to require additional proof.
Doing so would only add burden for both the State and the individual
and diminish program integrity by potentially preventing the enrollment
of an individual who is eligible for the program. In the final rule, we
have made minor modifications to Sec. 435.952(c)(1) to make sure it is
clear that the policy described above is the same for income and
resources (meaning that resource information must be considered
reasonably compatible if the resource information obtained
electronically and the information provided by or on behalf of the
individual is either at or below the applicable standard or other
relevant threshold). Thus, we are finalizing the revisions at Sec.
435.952(b) and (c)(1) as proposed with minor clarifying modifications
to paragraph (c)(1).
Comment: One commenter suggested that CMS make our proposed
modifications to Sec. 435.952(b) and (c)(1) optional for States until
more extensive work has been done to ensure that electronic data
sources have sufficient information to verify resources. The commenter
noted that verification of many types of resources may not be available
through electronic data sources such as an AVS, for example, non-
homestead real property, automobiles and other vehicles, equipment,
investments, annuities, and retirement assets.
Response: We disagree that application of the regulations at Sec.
435.952 to verification of resources should be at State option. The
State must attempt to verify and determine eligibility in accordance
with its verification plan, which may include requesting additional
information and documentation from the individual in appropriate
circumstances. Documentation from the individual may be sought to
verify an individual's assets when electronic data is inconsistent with
attested asset information as well as when electronic data are not
available (that is for non-financial assets) and establishing a data
match would not be effective in accordance with Sec. 435.952(c). The
verification rules at Sec. 435.952, including the reasonable
compatibility requirements, reduce burden on both individuals and
States and thus further the effective and efficient administration of
the State plan and best interests of beneficiaries. Further, the
current regulation at Sec. 435.952 is written broadly to encompass all
factors of eligibility, including resource criteria when applicable.
The current regulations apply to verification of resources; this final
rule clarifies the regulations to explicitly reflect as much. Finally,
all 50 States, the District of Columbia, and Puerto Rico are required
to implement an AVS to verify financial assets under section 1940 of
the Act. States would be required to access other electronic data
sources for asset verification only to the extent that such sources are
available and would be effective in accordance with Sec.
435.952(c)(2)(ii).
Comment: A few commenters expressed concerns about operational and
technological challenges in implementing this provision within the
timeframe described in the September 2022 proposed rule, including some
States that operate an AVS as a separate portal that is not integrated
into the State's Medicaid eligibility system. Some commenters shared
that applying a reasonable compatibility standard to resources would
require a manual process until the State is able to make systems
changes. Some commenters stated that system enhancements to make a
reasonable compatibility determination for evaluation of resources
would require the development of a new interface and new system rules,
which would be difficult to complete within the 12-month implementation
timeframe proposed.
Response: We appreciate the operational concerns expressed by
commenters and understand that this provision may lead States to
implement operational changes and system enhancements. It is our
understanding that if a State is using an AVS through a separate
portal, there is already a manual process in place. Modification of the
manual process requires re-training, but not a new interface. If a
State is using an AVS through an automated interface, it may undertake
modification of comparison logic and rules, but no new interface and/or
rules need to be implemented. Because this is an existing requirement,
and because this final rule does not add any new or additional burden,
we are not providing additional time for State compliance with this
provision. We recognize that some States are in the midst of other
significant system changes and we will continue to work with them to
ensure compliance with this requirement as soon as possible.
[[Page 22790]]
Comment: A few commenters expressed concerns about the data quality
and timeliness of responses from an AVS, which can delay eligibility
determinations and prevent States from meeting application and renewal
processing deadlines. Some of these commenters also raised concerns
that not all financial institutions participate in AVS. A number of
commenters requested additional technical assistance from CMS on
details about how AVS programs should be operationalized. For example,
due to the frequency of the AVS returning missing information or
delayed information from smaller banks, one commenter requested
clarification on the timeframe in which the AVS verification is
considered complete and when to apply the reasonable compatibility
standard.
Response: We appreciate the comments regarding data quality and the
timeliness of the information returned from the AVS. We understand that
not all asset information available from financial institutions
participating in the AVS is returned in real time. States may establish
a reasonable timeframe to review information that is returned from an
AVS. We understand that most financial institutions respond to AVS
requests within 5 days, which a State could consider a reasonable
amount of time to wait for information to be returned before the State
applies the reasonable compatibility standard. If the State determines
that the information returned from the AVS is incomplete, or if the AVS
does not return information within the reasonable timeframe established
by the State, the State must attempt to determine eligibility in
accordance with its verification plan, which may include requesting
additional information and documentation from the individual. We
continue to be available to provide additional technical assistance to
States regarding operationalizing of AVS and the application of
verification rules at Sec. 435.952 to electronic information obtained
from an AVS.
Comment: One commenter requested clarification on how reasonable
compatibility would interact with resource assessments and 90-day asset
transfers to community spouses.
Response: We interpret this comment as requesting feedback on how
resource-related reasonable compatibility would operate in the context
of the spousal impoverishment rules described in section 1924 of the
Act (``Treatment of Income and Resources for Certain Institutionalized
Spouses''), both at the underlying eligibility and redetermination
phases. Reasonable compatibility, as explained immediately below, is
sometimes, but not always, relevant under the spousal impoverishment
rules.
Section 1924(c)(2) of the Act requires that a State determine the
amount of countable resources an institutionalized spouse and community
spouse own, jointly or separately, at the time of the institutionalized
spouse's Medicaid application. This amount, minus the community spouse
resource allowance (CSRA) determined under section 1924(f)(2) of the
Act, is the amount deemed available to the institutionalized spouse and
compared to the resource standard of the eligibility group for which
the institutionalized spouse is being evaluated. Effectively, the
resource standard for the institutionalized spouse is the CSRA plus the
resource standard for the relevant eligibility group.
Consider, for example, an institutionalized spouse who is being
evaluated for the eligibility group described in section
1902(a)(10)(A)(ii)(V) of the Act (relating to individuals who have been
in medical institutions for at least 30 consecutive days) in a State in
which the CSRA is $70,000. The resource standard for the eligibility
group is $2,000, which effectively means the institutionalized spouse
will be resource-eligible if the resources owned by the couple are
equal to or less than $72,000. Reasonable compatibility could be
applied in making this determination. If the institutionalized spouse
self-attests that the spouses have $60,000 in a savings account and no
other countable resources, and the data returned on the couple's
resources by the State's AVS is $65,000, the State would consider the
amounts reasonably compatible and determine the institutionalized
spouse resource-eligible without requiring additional documentation.
Section 1924(f)(1) of the Act permits the institutionalized spouse
to transfer their interest in any resources to the community spouse as
soon as practicable after being determined eligible, as any resources
still in the institutionalized spouse's name at their first renewal
will be deemed available to the institutionalized spouse, including
resources that were considered to be part of the CSRA at application.
In other words, while each spouse's ownership of resources is not
relevant at the determination of the institutionalized spouse's
eligibility, it is relevant at the institutionalized spouse's
redetermination. Reasonable compatibility would not serve a role in the
verification of whether the institutionalized spouse maintains
ownership of resources that were included in the initial calculation of
resource eligibility.
We note that section 1924(c)(1) of the Act also requires that a
State determine the resources owned by the institutionalized spouse and
community spouse at the former's first continuous period of
institutionalization. However, while this amount may be relevant in
determining the CSRA under section 1924(f)(2) of the Act, it is not
compared to a resource-eligibility standard, which means that
reasonable compatibility would not apply to a State's verification of
this figure.
Comment: One commenter suggested this September 2022 proposed rule
may be a good opportunity to modernize the MAGI and non-MAGI
verification plan submission and review process and move towards a web-
based submission process instead of submitting verification plans via
email.
Response: We appreciate the comment to improve the verification
plan submission and review process. The comment is outside the scope of
this rule. However, we will consider the comments for future
enhancements of the verification plan review process.
After considering the comments, we are finalizing the revisions at
Sec. Sec. 435.940 and 435.952(b) and (c)(1) as proposed. We note that
because the effect of this change is specific to clarifying current
regulations regarding States' use of electronic data for verification
of assets, it operates independently from the other provisions of this
final rule.
3. Verification of Citizenship and Identity (42 CFR 435.407 and
457.380)
A State must verify an applicant's U.S. Citizenship under section
1902(a)(46)(B) of the Act, implemented at Sec. Sec. 435.406 and
435.956(a). When a State has not been able to verify an applicant's
U.S. citizenship through an electronic data match with the Social
Security Administration (SSA), it must verify the applicant's U.S.
citizenship using alternative methods described under Sec. Sec.
435.407 and 435.956(a)(1). Under current regulations, individuals whose
citizenship is verified based on any of the sources identified in Sec.
435.407(b)--which include a match with a State's vital statistics
records or with the U.S. Department of Homeland Security (DHS)
Systematic Alien Verification for Entitlements (SAVE) program--must
also provide proof of identity. Verification with a State's vital
statistics records or DHS SAVE system, like the data match with SSA,
provides both proof of U.S. citizenship or nationality and reliable
documentation of personal identity. Once U.S.
[[Page 22791]]
citizenship is verified via a State's vital statistic records or DHS
SAVE, a State may not require an individual to provide additional proof
of identity as a condition of eligibility. As such, in the September
2022 proposed rule, we proposed to move verification of birth with a
State's vital statistics records and U.S. citizenship with DHS SAVE
system to the list of primary verifications of U.S. citizenship that do
not require additional proof of identity, at Sec. 435.407(a)(7) and
(8) respectively. These changes are incorporated into CHIP through an
existing cross-reference at Sec. 457.380(b)(1)(i). We also proposed to
remove the phrase ``at State option'' from Sec. 435.407(b)(2), as use
of such data match with a vital statistics agency is not voluntary if
it is available and effective in accordance with Sec.
435.952(c)(2)(ii).
We received the following comments on these proposed provisions:
Comment: The majority of commenters were in support of the proposed
changes to allow verification of birth with a State vital statistics
agency and verification of citizenship with DHS SAVE system, or any
other process established by DHS, as stand-alone evidence of
citizenship. Commenters agreed the changes would provide additional
efficiencies in the eligibility determination process and limit the
burden on applicants to provide documentation of citizenship without
increasing the risk of erroneous eligibility determinations.
Response: We appreciate the support for the proposed changes at
Sec. 435.407(a)(7) and (8). We agree that allowing States to
electronically verify birth with a State vital statistics agency or to
verify citizenship with DHS SAVE system will create administrative
efficiencies for States and eliminate the need for applicants to
provide unnecessary additional information without an increased risk of
erroneous eligibility determinations. In section II.A.7. of the
September 2022 proposed rule, we provided details on the efficacy of
these data sources, both of which serve as primary information sources,
one for evidence of U.S. birth (State vital statistics) and the other
for naturalized U.S. citizenship (DHS SAVE system).
Comment: A few commenters noted that some States do not have
systems alignment with vital statistics, so these system changes could
be costly and time consuming for States to implement.
Response: We considered these comments and acknowledge that not
every State may have an existing electronic system that matches an
applicant's or beneficiary's data with the State vital statistics
agency. It is optional for Medicaid and CHIP agencies to have a data
match established with their State vital statistics agency. We note
that the proposed changes to allow birth verification through an
electronic match to a State's vital statistics agency, if use of such
match is available and effective (considering such factors as
associated costs to the data match, cost of reliance on paper
documentation, and impact on program integrity) in accordance with
Sec. 435.952(c)(2)(ii), is not a new requirement for States in this
final rule. Establishing such a data match with State vital statistics
agencies also promotes data integrity in the Medicaid and CHIP
programs. Once such a data match is established, the State must utilize
it to verify U.S. citizenship when the information from the applicant
is not able to be verified with SSA or DHS, rather than requesting
paper documentation from the individual.
If a State does need to make changes to its eligibility system, FFP
is available at the 90 percent rate (enhanced FFP or enhanced match),
in accordance with Sec. 433.112(b)(14), for changes to support
accurate and timely processing of eligibility determinations, like data
matching with a State's vital statistics agency, other States' vital
statistics agencies, or DHS SAVE system. Approval for enhanced FFP or
enhanced match requires the submission of an Advanced Planning Document
(APD). A State may submit an APD requesting approval for a 90/10
enhanced match for the design, development, and implementation of their
Medicaid Enterprise Systems (MES) initiatives that contribute to the
economic and efficient operation of the program, including the
electronic data exchanges discussed here. Interested States should
refer to 45 CFR part 95, subpart F (Automatic Data Processing Equipment
and Services--Conditions for Federal Financial Participation (FFP)),
for the specifics related to APD submission. States may also request a
75/25 enhanced match for ongoing operations of CMS approved systems.
Interested States should refer to 42 CFR part 433, subpart C
(Mechanized Claims Processing and Information Retrieval Systems), for
the specifics related to systems approval.
For some States, this rulemaking may require some eligibility and
enrollment systems changes, changes to operational eligibility
processes, and/or potential verification plan revisions, at the same
time when States are facing a significant workload following the
unwinding of the continuous enrollment condition. Therefore, we are
providing States with 24 months following the effective date of this
final rule to demonstrate compliance with the changes. We urge all
States to comply as soon as possible.
Comment: One commenter recommended CMS require States to accept
birth certificates (paper or electronic) issued by the State's vital
statistics agency as stand-alone evidence of U.S citizenship.
Response: We thank the commenter for this comment to consider
allowing a paper copy or electronic version (that is, a PDF obtained
via email) of a birth certificate from a State's vital statistics
agency as stand-alone evidence of U.S. citizenship. However, with such
documentation, it may be difficult for the State to know what, if any,
set of identifiable information was used to obtain such birth
certificate or if a data match of such information was required to
obtain the paper or electronic version of the birth certificate. A
paper or electronic copy of a birth certificate could be altered,
causing potential concern for program integrity. By contrast, data
matching for identity occurs when the State agency uses a set of
personally identifiable information from the applicant to check against
the State vital statistics agency for a match, enabling electronic
verification of birth or U.S. citizenship. As such, we believe this
provision will enhance program integrity. Evidence of identity as
specified in Sec. 435.407 would still need to be verified if a paper
copy or electronic version of a U.S. birth certificate is provided,
without evidence that verification with a State vital statistics agency
was completed.
Comment: One commenter requested that REAL IDs be included in the
list of documents providing stand-alone evidence of citizenship, since
they are verified with the State's vital statistics agency.
Response: This comment is outside the scope of the proposed rule.
However, it should be noted that if a State requires proof of U.S.
citizenship for issuing a valid State-issued driver's license, this
document can serve as stand-alone evidence of citizenship under
existing regulations at Sec. 435.407(a)(4).
Comment: Some commenters were concerned that the proposed
regulation would prohibit States from verifying eligibility, could lead
to increased fraud and waste in Medicaid and CHIP, and could result in
ineligible individuals being enrolled in coverage.
Response: We do not believe this proposal would cause ineligible
individuals to be enrolled in coverage. In fact, we believe it may
reduce potential fraud and waste in the
[[Page 22792]]
Medicaid and CHIP programs, thereby improving program integrity. First,
verifying U.S. citizenship directly through an electronic interface
with a State vital statistics agency or through DHS SAVE system
decreases reliance on paper documentation which may be more difficult
for the individual to obtain, take longer to verify, or have a higher
chance of being altered. Second, verification of U.S. citizenship with
a State vital statistics agency or DHS SAVE system requires a robust
data matching process. The Medicaid or CHIP agency must provide the
State vital statistics agency with a minimum set of identifiable
information, including the name, date of birth, and Social Security
number (SSN) before a response is provided. Similarly, DHS SAVE system
reviews a set of identifiable information to verify identity before
providing a response that verifies U.S. citizenship, and in some cases,
the DHS SAVE system requires additional information or paper
documentation from the individual to complete the verification. Third,
State vital statistics agencies record and maintain evidence of birth
in the State, making them the primary source of evidence of U.S.
citizenship for many individuals. Likewise, DHS is the agency that
makes decisions to grant U.S. citizenship for individuals who are
naturalized U.S. citizens. Thus, the DHS SAVE system is the primary
Federal data source that is able to verify an individual's attestation
that they are a naturalized U.S. citizen.
Comment: A few commenters indicated that only U.S. citizens, not
noncitizens, should receive government benefits.
Response: This comment is outside the scope of this proposed rule.
Changes proposed at Sec. 435.407 apply only to individuals who have
declared to be U.S. citizens; they do not apply to noncitizens. We note
that Federal law, such as the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (PRWORA), governs eligibility of
noncitizens for Federal means-tested public benefits, including
Medicaid and CHIP.
After consideration of the public comments we received, we are
finalizing without modification our proposal to move verification
through a match with a State's vital statistics records or with the DHS
SAVE program from paragraph (b) to paragraph (a) of Sec. 435.407 as
proposed. We are also finalizing without modification our proposal to
remove the phrase ``at State option'' from Sec. 435.407(b)(2), as use
of such data match with a vital statistics agency is not voluntary if
it is available and effective in accordance with Sec.
435.952(c)(2)(ii). We note that because the effect of this change is
specific to simplifying verification procedures to allow verification
of citizenship with a state vital statistics agency or SAVE without
separate identity verification, it operates independently from the
other provisions of this final rule.
B. Promoting Enrollment and Retention of Eligible Individuals
1. Aligning Non-MAGI Enrollment and Renewal Requirements With MAGI
Policies (Sec. Sec. 435.907(c)(4) and (d) and 435.916)
Since the passage of the ACA, States have been required to apply
streamlined application and renewal processes to applicants and
beneficiaries whose financial eligibility is based on MAGI. Despite
their potential benefit, these procedures have been optional for
individuals excepted from use of the MAGI-based methodologies at Sec.
435.603(j) (``non-MAGI'' individuals). As discussed in section II.B.1.
of the September 2022 proposed rule, we proposed to revise requirements
at Sec. Sec. 435.907 and 435.916 to require that States adopt many of
the streamlined application and renewal procedures currently required
for MAGI applicants and beneficiaries for non-MAGI individuals as well.
We believe these changes promote equity across all populations served
by Medicaid.
As noted in the proposed rule, States are currently expected to
accept applications and supplemental forms needed for individuals to
apply for coverage on a non-MAGI basis via all modalities identified in
Sec. 435.907(a), although this is not expressly stated in the
regulations. Therefore, we proposed to codify in regulation at new
Sec. 435.907(c)(4) the requirement that any MAGI-exempt applications
and supplemental forms must be accepted through all modalities
currently allowed for MAGI beneficiaries. We also proposed at Sec.
435.916(a)(1) to require that States conduct regularly-scheduled
eligibility renewals once, and only once, every 12 months for all non-
MAGI Medicaid beneficiaries with one narrow exception (discussed
below). Next, we proposed to require that States provide MAGI-excepted
beneficiaries whose eligibility cannot be renewed based on information
available to the State with: Sec. 435.916(b)(2)(i), (1) a pre-
populated renewal form that contains information available to the
agency; and (2) a minimum of 30 calendar days from the date the agency
sends the renewal form to return the signed renewal form along with any
required information; and at Sec. 435.916(b)(2)(iii), (3) a 90-day
reconsideration period for individuals who return their renewal form
after the end of their eligibility period and following termination for
failure to return the form. We also proposed at Sec. 435.916(b)(2)(iv)
to eliminate the State option to require an in-person interview as part
of the application and renewal processes for non-MAGI beneficiaries.
States currently are required to comply with each of these policies for
MAGI-based individuals.
Lastly, in the September 2022 proposed rule, we proposed several
technical changes, on which we did not receive any comments, including:
(1) at proposed Sec. 435.916(b)(2)(i)(B) to clarify that the 30
calendar days that States must provide beneficiaries to return their
pre-populated renewal form begins on the date the State sends the form;
(2) at proposed Sec. 435.916(b)(2)(iii) to specify explicitly our
current policy that the returned renewal form and information received
during the reconsideration period serve as an application and require,
via cross reference to Sec. 435.912(c)(3) of the current regulation,
that States determine eligibility within the same timeliness standards
applicable to processing applications, that is, 90 calendar days for
renewals based on disability status and 45 calendar days for all other
renewals; (3) at proposed Sec. 435.916(d)(2) to ensure that, prior to
terminating coverage for an individual determined ineligible for
Medicaid, States determine eligibility for CHIP and potential
eligibility for other insurance affordability programs (that is, BHP
and insurance affordability programs available through the Exchanges)
and transfer the individual's account in compliance with the procedures
set forth in Sec. 435.1200(e); and (4) at proposed Sec.
435.912(c)(4), with a cross reference in proposed Sec. 435.916(c), to
establish time standards for States to complete renewals of
eligibility.
This final rule redesignates several provisions from Sec. 435.916
to the new Sec. 435.919 rule, as discussed in section II.B.2. of this
preamble. As a result, several paragraphs of Sec. 435.916 are
renumbered in this final rule. For example, Sec. 435.916(g) (relating
to accessibility of renewal forms and notices) is redesignated to Sec.
435.916(e) of this final rule. We did not receive any comments on this
change. However, as a reminder, this provision requires State Medicaid
programs to ensure that any renewal form or notice be accessible to
persons who have limited English proficiency and persons with
disabilities, consistent with Sec. 435.905(b). Further, State Medicaid
[[Page 22793]]
programs are separately required under Federal civil rights laws to
conduct their programs and activities in an accessible manner. State
agencies that receive Federal financial assistance must take reasonable
steps to ensure meaningful access to individuals with limited English
proficiency, which may include provision of language assistance
services (section 1557 of the ACA, 42 U.S.C. 18116; Title VI of the
Civil Rights Act of 1964, 42 U.S.C. 2000d et seq.). States are also
required to take appropriate steps to ensure effective communication
with individuals with disabilities, including provision of appropriate
auxiliary aids and services (section 1557; section 504 of the
Rehabilitation Act of 1973, 29 U.S.C. 794; and Title II of the
Americans with Disabilities Act, 42 U.S.C. 12131 et seq.).\10\ Nothing
in this final rule changes these requirements.
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\10\ For more information, see U.S. Dept of Health & Human
Servs., Re: Ensuring Language Access for Limited English Proficient
(LEP) Individuals and Effective Communication for Individuals with
Disabilities During the States' Unwinding of the Medicaid Continuous
Enrollment Condition (Apr. 4, 2023), <a href="https://www.hhs.gov/sites/default/files/medicaid-unwinding-letter.pdf">https://www.hhs.gov/sites/default/files/medicaid-unwinding-letter.pdf</a>.
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We note that the requirements in part 435, subpart J, apply
specifically to the 50 States, the District of Columbia, the Northern
Mariana Islands, and American Samoa and through a cross reference at
Sec. 436.901 they also apply to Guam, Puerto Rico, and the Virgin
Islands (with the exception of Sec. 435.909). The revisions to
Sec. Sec. 435.907 and 435.916, and all other revisions to part 435,
subpart J, included in this rule, apply equally to the 50 States, the
District of Columbia, and all territories.
We received the following comments on these proposed provisions:
Comment: Commenters generally supported the alignment of the non-
MAGI with MAGI processes proposed under Sec. Sec. 435.907 and 435.916,
including allowing non-MAGI individuals to apply and renew through all
modalities, renewing eligibility no more frequently than every 12
months, providing a pre-populated renewal form, giving enrollees 30
days to respond, and allowing a 90-day reconsideration period.
Commenters noted that these proposed requirements, which originated in
the ACA for the MAGI-based populations, have all proven possible to
implement and effective at reducing churn of beneficiaries on and off
Medicaid. Furthermore, non-MAGI populations tend to have fixed, routine
sources of income, and so tend to stay consistently eligible, and yet,
commenters asserted, States have not been allowed to extend to them the
simplified enrollment and renewal processes available to MAGI
populations that would help prevent churn. Therefore, commenters
support now extending these policies to the non-MAGI groups as proposed
in the September 2022 proposed rule.
Other commenters pointed out that the proposed changes to align
renewal requirements for MAGI and non-MAGI individuals would reduce
administrative burdens on State Medicaid agencies, by creating one
simplified set of renewal rules for State eligibility and enrollment
call center workers, enrollees, assisters, and other interested parties
to understand and implement. One commenter also highlighted that the
September 2022 proposed rule would extend some of the requirements for
applications to renewals, such as at proposed Sec. 435.916(b)(2)(iii),
which, via cross reference to Sec. 435.912(c)(3) of the current
regulation, would require that States determine eligibility at renewal
within the same timeliness standards applicable to processing
applications; this would allow States to consolidate eligibility and
enrollment information for each applicant or beneficiary in one case
record.
Response: We agree with these commenters that aligning these
application and renewal procedures will promote continuity of coverage,
decrease churn, and simplify the renewal process for non-MAGI
beneficiaries in a manner that is in the best interest of
beneficiaries, consistent with section 1902(a)(19) of the Act. We note
that this alignment will be particularly beneficial to individuals in
households in which some individuals are eligible based on MAGI and
others are eligible on a non-MAGI basis, as non-MAGI household members
may otherwise be subject to more burdensome administrative
requirements. We also believe alignment will reduce administrative
burden for States. We want to clarify that, under the current
regulations, States are permitted, at their option, to apply to their
non-MAGI populations the application and renewal procedures we proposed
to require in this rulemaking. The proposed revisions at Sec. Sec.
435.907(c)(4) and 435.916(a)(1) and (b)(2)(i), (iii), and (iv), which
we are finalizing as proposed in this final rule, will make it
mandatory for States to do so.
Comment: One commenter noted that the proposal at Sec.
435.907(c)(4), requiring that States accept all MAGI-exempt
applications and supplemental forms provided by applicants seeking
coverage on a non-MAGI basis through all the modalities allowed for
MAGI individuals, would require substantial systems changes to
implement, as currently non-MAGI renewals are processed in a separate
system from MAGI renewals, and such updates would take longer than 12-
18 months given States' unwinding priorities.
Response: We understand that State system updates needed to accept
applications and supplemental as well as renewal forms via additional
modalities will take time and resources. However, as this is a
longstanding policy being codified through rulemaking, we find this to
be a reasonable investment given the reduction in beneficiary burden
that will result from being able to submit required information in
whatever modality best fits the needs of the applicant or beneficiary.
CMS has been working with States to enforce this requirement, and those
not already in compliance now have a mitigation plan approved by CMS to
come into compliance.
Additionally, while encouraged, there is no requirement for States
to integrate non-MAGI with MAGI systems but rather to make non-MAGI
applications and renewals possible through the same modalities--for
example, paper, phone, web-based--as MAGI applications and renewals. We
do recognize the operational challenges States face and are finalizing
these requirements so that they are effective upon the effective date
of this rule, except as otherwise required (such as by the CAA, 2023).
However, States will have 36 months after the effective date of this
rule to complete all system and operational changes necessary for
compliance. This implementation timeframe will permit States to
complete most unwinding and mitigation-related activities and then have
adequate time to complete any additional system changes needed for full
compliance with the requirements to align non-MAGI application and
renewal requirements with those applicable to MAGI beneficiaries.
We remind States that enhanced FFP is available, in accordance with
Sec. 433.112(b)(14), at a 90 percent matching rate for the design,
development, or installation of improvements to Medicaid eligibility
determination systems, in accordance with applicable Federal
requirements. Enhanced 75 percent FFP is also available for operations
of such systems, in accordance with applicable Federal requirements.
Comment: Some commenters specifically supported the proposed
limitation on renewals to no more than once every 12 months at Sec.
435.916(a)(1),
[[Page 22794]]
stating this would help improve health equity by ensuring that
vulnerable populations maintain their Medicaid coverage. Commenters
stated that more frequent renewals increase the number of eligible
individuals who lose coverage, while conducting eligibility
determinations only once every 12 months will reduce churn and provide
non-MAGI beneficiaries with greater stability of coverage. While
generally supporting the proposal requiring States to conduct regularly
scheduled renewals once, and only once, every 12 months, some
commenters requested that the Medically Needy population be excluded
from this requirement, because the determination of medical expenses
that individuals must incur to establish eligibility must be completed
more frequently than once every 12 months.
Response: We appreciate the support for this proposed provision.
With respect to the request to exempt medically needy beneficiaries
from the limitation on renewals to once every 12 months, we note that a
State's medically needy budget period and its renewal schedule do not
need to be identical. Under Sec. 435.831(a)(1) of the current
regulations, States can adopt a budget period between 1 and 6 months.
While States need to verify that individuals have met their spenddown
every budget period, they do not need to recalculate their spenddown
amount every budget period. The spenddown amount will remain constant
until the next renewal unless the individual experiences a change in
circumstances that might impact their eligibility. For example, a
number of States currently limit renewals for their medically needy
populations to once every 12 months, regardless of the length of their
budget periods. Likewise, we do not know of any States with a 1-month
budget period that conduct a full renewal of eligibility for medically
needy beneficiaries every month on the same timeline. Therefore, we do
not agree that alignment of regular renewals with the budget period is
needed, and we are finalizing the requirement at Sec. 435.916(a)(1) as
proposed to permit renewals no more frequently than once every 12
months, with the limited exception discussed later in this final rule.
Comment: A number of commenters supported our proposal at
Sec. Sec. 435.907(d)(2) and 435.916(b)(2)(iv) to eliminate in-person
interviews for non-MAGI eligible enrollees. They noted that the
proposed change would reduce burden on enrollees, especially those with
difficulties with activities of daily living, disabilities, behavioral
health issues, and any individuals who are hampered by work schedules,
inability to obtain childcare, or lack of transportation.
Response: We agree and appreciate the support for this proposed
provision. We believe in-person interview requirements create a barrier
for eligible individuals to obtain and maintain coverage without
yielding any additional information that cannot be obtained through
other modalities, particularly for individuals without access to
reliable transportation or a consistent schedule.
Comment: A few commenters requested that CMS extend the proposed
prohibition on mandatory in-person interviews at Sec. Sec. 435.907(d)
and 435.916(b) to include all interviews, including phone and video
interviews, for both non-MAGI and MAGI beneficiaries, because they
create significant barriers. These commenters explain that a phone or
video interview is no more necessary than an in-person interview. One
commenter explained that, in States that currently require interviews
as a condition of eligibility, individuals are allowed to complete the
interview by phone, so unless the interview requirement is eliminated
completely, this proposed change is unlikely to reduce procedural
denials based on failure to complete the interview.
Response: We appreciate and share the commenters' desire to remove
unnecessary barriers to retaining enrollment for non-MAGI
beneficiaries. We are finalizing our proposal to prohibit in-person
interviews for non-MAGI beneficiaries as proposed. If any States use
phone or video interviews to fulfill the requirement of an in-person
interview, these interview types are also prohibited.
Comment: One commenter stated their support for requiring that
States provide non-MAGI beneficiaries with prepopulated renewal forms
at Sec. 435.916(b)(2)(i)(A), which should assist many individuals who
have difficulties with eyesight, cognition, and language barriers that
interfere with understanding complex instructions. One commenter
supported CMS requiring a prepopulated form because it will reduce the
burden on people with disabilities, their families, and service
providers and will also reduce burden on legal services and other
assisters who assist individuals seeking coverage across the different
Medicaid eligibility pathways. Another commenter supported CMS
requiring States to give beneficiaries a prepopulated renewal form,
which would make it much easier for beneficiaries to complete the forms
and reduce risk of errors. Another commenter proposed that CMS should
make the proposal to require a prepopulated renewal form for non-MAGI
beneficiaries a State option. This commenter stated that if CMS were to
finalize the requirement as proposed, States would need funding to
support system changes as well as significant technical assistance with
implementation.
Response: We appreciate the support and agree that using a
prepopulated form will reduce burden and the risk of errors both when a
beneficiary completes the form and when the State enters information
into its system. We understand that system updates needed to implement
the form will take time and resources. However, we find this to be a
reasonable investment given the reduction in both beneficiary and State
burden that will result, as beneficiaries will no longer be required to
gather and resubmit, and State workers will not need to re-enter,
information already available to the State or already in the system.
Again, we remind States that enhanced FFP is available, in accordance
with Sec. 433.112(b)(14), at a 90 percent matching rate for the
design, development, or installation of improvements to Medicaid
eligibility determination systems, in accordance with applicable
Federal requirements. Enhanced FFP is also available at a 75 percent
matching rate, in accordance with Sec. 433.116, for operations of such
systems, in accordance with applicable Federal requirements. Receipt of
these enhanced funds is conditioned upon States meeting a series of
standards and conditions to ensure investments are efficient and
effective.
For the reasons noted, we are finalizing Sec. 435.916(b)(2)(i)(A),
which requires States to send a prepopulated renewal form when the
State needs additional information to renew a beneficiary's
eligibility, as proposed.
Comment: One commenter indicated their support for the
determination of Medicaid eligibility to be done through various State
applications, including the use of the Supplemental Nutrition
Assistance Program (SNAP) benefits assessment, to automatically
supplant the renewal process and use that data to determine eligibility
renewals.
Response: Although we support the development of integrated
applications that enable individuals to apply for multiple programs
using a single application, we did not propose to permit States to use
the applications used by SNAP or any other program in lieu of a
Medicaid application or renewal form. Accordingly, this comment is
outside the scope of this rulemaking. For more information about
[[Page 22795]]
States' ability to integrate SNAP and Medicaid applications, see the
August 31, 2015, SHO letter (SHO #15-001) ``RE: Policy Options for
Using SNAP to Determine Medicaid Eligibility and an Update on Targeted
Enrollment Strategies.'' \11\
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\11\ <a href="https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/downloads/SHO-15-001.pdf">https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/downloads/SHO-15-001.pdf</a>.
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Comment: Some commenters expressed concern that States with
integrated eligibility systems would be challenged to implement the
policies proposed at Sec. 435.916(b)(2)(i)(B) and (C), to require that
States provide non-MAGI beneficiaries with at least 30 calendar days to
return the prepopulated renewal form and other requested information,
as well as a 90 calendar day reconsideration period following
termination due to failure to return the renewal form or requested
information, because these timelines do not align with the time frames
for SNAP and Temporary Assistance for Needy Families (TANF). Commenters
believe that lack of alignment with these programs could lead to
beneficiary confusion and increase the risk of a higher rate of
procedural denials. Other commenters encouraged CMS to find a solution
to the different timeframes between Medicaid and SNAP for beneficiaries
to return required additional information and offer a waiver or other
option to States that jointly administer their Medicaid and SNAP
programs to adjust this requirement. Lastly, some commenters opposed
the proposal to apply the renewal processes at current Sec.
435.916(a)(3) to non-MAGI beneficiaries due to concerns that States
with integrated eligibility systems would have trouble implementing a
prepopulated renewal form for Medicaid when the same form is used for
other programs like SNAP and TANF that use different income counting
methodologies.
Response: We acknowledge the important work that many States have
undertaken to establish integrated eligibility systems and simplified
notices across their health and human service programs, like Medicaid,
CHIP, SNAP, and TANF. However, we believe it is equally important to
provide the same streamlined renewal processes for all Medicaid
beneficiaries, regardless of the financial methodologies used to
determine their eligibility. This is particularly important for
households with both MAGI and non-MAGI Medicaid beneficiaries, for whom
unaligned processes could increase confusion and result in increased
procedural terminations.
Further, we have worked with other human service programs,
including SNAP, to better understand their requirements and to identify
areas for potential alignment. While we recognize the challenges that
States face in developing integrated eligibility and enrollment systems
serving multiple programs, we do not believe that the processes
proposed in Sec. 435.907(c)(4) or Sec. 435.916 of the September 2022
proposed rule increase the challenges States face in aligning their
Medicaid and CHIP renewal processes with other human service programs
like SNAP. CMS is available to provide technical assistance to States
attempting to develop such an integrated system.
Comment: A few commenters urged CMS to consider extending the time
period for all beneficiaries to provide requested information at
renewal from a minimum of 30 calendar days to 45 or 60 calendar days.
Others also supported potentially increasing the timeframe available to
non-MAGI beneficiaries to 75 calendar days. These commenters were
concerned that 30 calendar days may not be enough time for current
beneficiaries to gather requested information. Commenters were
concerned that while individuals who may not respond within the 30 days
will have a reconsideration period after termination, they may still
experience gaps in coverage that could potentially be avoided if they
had more time initially to provide requested information.
Response: We appreciate commenters' concerns to ensure that current
beneficiaries have sufficient time to respond and prevent interruptions
to coverage. We note that States continue to retain the ability to
allow additional time beyond the required minimum of 30 calendar days
for both MAGI and non-MAGI beneficiaries. However, our goal is to align
requirements for non-MAGI beneficiaries with those currently applicable
for MAGI beneficiaries. We believe the benefits of aligning the renewal
requirements for all beneficiaries will operationally simplify the
process for States and reduce confusion for beneficiaries. We did not
propose any changes to the amount of time required for MAGI
beneficiaries to return requested information at renewal at Sec.
435.916(a)(3)(i)(B) but may consider extending the minimum timeframe
beyond 30 calendar days for both MAGI and non-MAGI beneficiaries in
future rulemaking. We are finalizing 30 calendar days for non-MAGI
beneficiaries as proposed.
Comment: While most commenters supported requiring a
reconsideration period after the date of termination, a few believed
that 90 calendar days for the reconsideration period proposed at Sec.
435.916(b)(2)(i)(C) is too long and could lead to increased recoupments
from providers. Instead, they suggested 60 calendar days to ensure
beneficiaries have adequate time to receive notices and reply as well
as to align with the Marketplaces' special enrollment period (SEP)
timeframes.
Response: In proposing 90 calendar days for the reconsideration
period, our goal was to provide an equitable experience for all
Medicaid beneficiaries, regardless of the financial methodologies used
to determine their eligibility, and to eliminate the confusion that may
result from different renewal timeframes for different household
members who are subject to different methodologies. The 90 calendar
days for the reconsideration period proposed for non-MAGI beneficiaries
would achieve alignment with the current requirement that provides a
90-day reconsideration period for MAGI beneficiaries.
We do not believe that requiring States to provide non-MAGI
beneficiaries who have been terminated for procedural reasons with 90
calendar days for the reconsideration period to return their renewal
form and any additional documentation needed will have any impact on
recoupment from providers. Indeed, because a reconsideration period
increases the number of terminated individuals who successfully
reenroll in the program relatively quickly, provider reimbursement is
likely to benefit.
The reconsideration period after termination should not be confused
with the amount of time individuals have to return a renewal form and
other needed documentation before their eligibility period expires,
which we proposed to be 30 days at Sec. 435.916(b)(2)(i)(B). We
appreciate the suggestion to align with the Marketplace, but in this
case, we believe the Medicaid standard is preferable. We do not believe
that lack of alignment between Medicaid's reconsideration period and
the 60-day Special Enrollment Period (SEP) poses a significant problem
for coordination between these programs and are not aware of any
challenges that the current 90 calendar days for the reconsideration
period for MAGI beneficiaries poses for coordination between the
Marketplace and Medicaid.
After considering these comments, we are finalizing Sec. Sec.
435.907(c)(4) and (d) and 435.916 as proposed. We note that
[[Page 22796]]
these changes to eligibility determination processes for non-MAGI
populations require States to: conduct renewals no more than once every
12 months; use prepopulated renewal forms; provide a minimum 90-day
reconsideration period after termination for failure to return
information needed to redetermine eligibility; eliminate mandatory in-
person interviews at application and renewal; and limit requests for
information on a change in circumstances to information on the change,
operate independently from the other provisions of this final rule.
Because each of these changes individually serves to reduce the burden
on applicants and beneficiaries associated with eligibility
determinations, we believe they also operate independently from one
another.
2. Acting on Changes in Circumstances Timeframes and Protections
(Sec. Sec. 435.916, 435.919, and 457.344)
In the September 2022 proposed rule, we proposed to add a new Sec.
435.919 to clearly define States' responsibility to act on changes in
circumstances. We proposed to revise and redesignate Sec. 435.916(c)
(related to procedures for reporting changes) and (d) (related to
promptly acting on changes in circumstances and scope of
redeterminations based on changes in circumstances) of the current
regulations to new Sec. 435.919. In addition to modifying these
existing requirements, we proposed to describe the steps that States
must take when reevaluating eligibility based on changes in
circumstances reported by beneficiaries and when reevaluating
eligibility based on changes in circumstances received from a third-
party data source. We also proposed that States must provide
beneficiaries with at least 30 calendar days to respond to requests for
additional information and 90 calendar days for the reconsideration
period during which beneficiaries who failed to provide requested
information related to a change in circumstances can still do so and
have their eligibility reinstated if eligible. Finally, we modified
existing language at Sec. 435.916(d)(2), redesignated to proposed
Sec. 435.919(b)(3), to clarify that States must act on anticipated
changes at an appropriate time (instead of the appropriate time).
Generally, these proposed provisions were incorporated into the CHIP
regulations at new Sec. 457.344.
We received the following comments on these proposals:
Comment: One commenter requested clarification regarding proposed
Sec. 435.919(a) for States ``to ensure that beneficiaries understand
the importance of making timely and accurate reports of changes in
circumstances that may affect their eligibility'' and CMS' expectations
for States to meet these requirements. The commenter expressed concern
that States that currently provide information regarding reporting
requirements via the rights and responsibilities to which individuals
agree when submitting their initial application, and which are repeated
in the notice informing individuals of their eligibility, may not
provide sufficient notice.
Response: As discussed in section II.B.2. of the September 2022
proposed rule, we proposed redesignating current requirements at Sec.
435.916(c) related to procedures for reporting changes to proposed
Sec. Sec. 435.919(a) and 457.344(a). It was not our intent to apply
new requirements about the procedures States must have in place to
communicate with Medicaid and CHIP beneficiaries on accurate and timely
reporting for changes in circumstances that may affect their
eligibility. Providing clear information about this responsibility in
the description of the rights and responsibilities provided to
applicants and individuals determined eligible for coverage can satisfy
this requirement. States continue to have flexibility to communicate
this information through other avenues as well.
Comment: We received many comments regarding the proposed processes
for acting on changes in circumstances at Sec. Sec. 435.919(b) and
457.344(b). Although commenters supported the alignment between
Medicaid and CHIP when States act on changes in circumstances,
commenters generally opposed the proposed approach as being overly
prescriptive and complex for State eligibility workers to implement.
Some commenters raised concerns that the number of decision points,
such as when a request for additional information may be needed and
what actions States must take in the different scenarios, would
increase the likelihood of errors. Others expressed concerns that the
proposed process would increase administrative burden by requiring
States to evaluate each reported change to determine whether it might
impact eligibility prior to processing the information. Commenters
recommended applying a single process to all changes in circumstances
rather than differentiating based on the source that reports the
change.
Response: We appreciate the feedback from commenters about the
potential administrative challenges of implementing Sec. Sec.
435.919(b) and 457.344(b) as proposed. As discussed in section II.B.2.
of the September 2022 proposed rule, our intent in establishing a new
section in part 435 (Sec. 435.919) (and a corresponding new section in
part 457 (Sec. 457.344)) was not to create a set of new requirements
that States must follow when they receive information about a change in
circumstances. Our intent was to clarify existing requirements to
ensure that States act on changes timely and in a manner that protects
the coverage of beneficiaries who remain eligible (thereby, reducing
unnecessary procedural terminations). Rather than increasing
administrative burden by requiring States to establish a host of new
actions and decision points within their process for redetermining
eligibility based on changes in circumstances, the clear set of
required actions described in this final rule is intended to help
States to streamline their processes and reduce errors.
We agree with commenters that the structure of proposed Sec.
435.919(b), differentiating between changes reported by a beneficiary
and changes reported by a third-party data source, with additional
requirements for anticipated changes known to the agency, appears to
create varied and potentially conflicting requirements for different
types of changes and may cause confusion. Therefore, in this final
rule, we revise Sec. 435.919(b) to streamline these requirements and
establish a single set of actions that are required when a State
receives reliable information about a change in circumstances that may
impact a beneficiary's eligibility.
In this final rule, we combined proposed Sec. 435.919(b)(1)(i),
requiring the State to evaluate whether a beneficiary-reported change
may impact that beneficiary's eligibility, with the requirement
proposed at Sec. 435.919(b)(2)(i) that the State evaluate whether the
information received from a third-party data source was accurate and if
accurate, whether it may impact a beneficiary's eligibility. As such,
we are finalizing Sec. 435.919(b) to require States to promptly
redetermine eligibility between regularly scheduled renewals, whenever
they have obtained or received reliable information about a change in a
beneficiary's circumstances that may impact the beneficiary's
eligibility for Medicaid, the amount of medical assistance for which
the beneficiary is eligible, or the beneficiary's premiums or cost
sharing charges. Reliable information includes changes reported by
beneficiaries or
[[Page 22797]]
their authorized representatives, as well as information obtained from
third-party data sources identified in States' verification plans that
the State has determined to be accurate.
At Sec. 435.919(b)(1) we are finalizing the requirement (proposed
in the same paragraph) that in redetermining eligibility based on a
change in circumstances, the agency must complete the redetermination
based on available information, whenever possible. If the State does
not have all information needed to complete a redetermination, it must
request needed information from the beneficiary in accordance with
Sec. 435.952(b) and (c).
At Sec. 435.919(b)(2) and (3) of this final rule, we combine the
requirements proposed at Sec. 435.919(b)(1)(iii) and (b)(2)(iii), to
describe the requirements when a reported change may result in
additional medical assistance (including lower premiums and/or cost
sharing charges). If the change was reported by the beneficiary, as
described at Sec. 435.919(b)(2)(i) of this final rule, prior to
furnishing additional medical assistance, the State must verify the
change in accordance with its verification plan. However, if the change
was obtained from a third-party data source, as described at Sec.
435.919(b)(2)(ii) of this final rule, the State may verify the
information with the beneficiary prior to completing the determination.
States are not required to verify such changes with the beneficiary.
Proposed Sec. 435.919(b)(1)(iii) and (b)(2)(iii) also included a
prohibition against terminating the coverage of a beneficiary who fails
to respond to a request for information to verify their eligibility for
increased medical assistance. This requirement is finalized at Sec.
435.919(b)(3).
We are finalizing, at Sec. 435.919(b)(4), the requirement proposed
at Sec. 435.919(b)(2)(ii) when third-party data indicates a change
that would adversely impact a beneficiary's eligibility. Prior to
taking adverse action based on information from a third-party data
source, the State must provide the beneficiary with an opportunity to
furnish additional information to verify or dispute the information
received. An adverse action, as defined at Sec. 431.201, includes a
termination, suspension, or reduction in covered benefits, services, or
eligibility, or an increase in premiums or cost sharing charges. At
Sec. 435.919(b)(5), we are finalizing the required actions proposed at
Sec. 435.919(b)(4), when a State determines that a reported change in
circumstances results in an adverse action. These include compliance
with the requirements to consider eligibility on other bases, determine
potential eligibility for other insurance affordability programs, and
provide advance notice and fair hearing rights.
We complete the revisions to Sec. 435.919(b) with a requirement at
paragraph (b)(6) regarding anticipated changes. This requirement is
finalized as proposed at Sec. 435.919(b)(3), except we added a cross-
reference to paragraphs (b)(1) through (5) to clarify that the same
steps apply when States are reevaluating a beneficiary's eligibility
based on an anticipated changes in circumstances. Lastly, in this final
rule, we revise the CHIP regulations at Sec. 457.344 to correspond
with the modifications at Sec. 435.919, as discussed previously in
this final rule, and ensure continued alignment between Medicaid and
CHIP. However, we note that there are some minor differences at Sec.
457.344 to account for Medicaid requirements that do not apply to CHIP,
such as considering eligibility on all other bases.
Comment: One commenter sought clarification on what would be
considered ``additional medical assistance'' for purposes of acting on
changes in circumstances under proposed Sec. 435.919(b). Some
commenters also had questions about whether moving individuals between
eligibility groups, when the move results in no change to the benefits
to which the individual is entitled, should be considered ``additional
medical assistance'' when acting on changes in circumstances.
Response: The term ``additional medical assistance'' at Sec.
435.919(b)(2), as well as the term ``additional child or pregnancy-
related assistance'' at Sec. 457.344(b)(2), mean any practical change
to an individual's coverage that is beneficial to the individual. For
example, an individual moving from an eligibility group provided with
limited benefits (for example, the eligibility group limited to family
planning and related services at Sec. 435.214) to another eligibility
group that receives a comprehensive benefit package (for example, the
eligibility group for parents and other caretaker relatives at Sec.
435.110) would be considered to be receiving ``additional medical
assistance'' because the individual is now entitled to more benefits.
Another example would be a reduction or elimination of cost sharing or
premiums, applied to a beneficiary who experienced a reduction in
income. We also consider movement between eligibility groups that does
not result in a practical change in benefits to be included within the
term ``additional medical assistance'' for the purposes of meeting the
requirements under proposed Sec. Sec. 435.919(b)(2) and 457.344(b)(2).
Comment: Some commenters had questions about what States should do
under proposed Sec. 435.919 when a reported change could result in an
individual moving to a different eligibility group, particularly when
the movement between eligibility groups may not impact benefits.
Commenters sought clarification on whether States should reach out to
beneficiaries regarding changes in circumstances that would result in a
beneficiary changing eligibility groups and what to do if the
beneficiary fails to respond to requests for additional information.
One commenter recommended that States be allowed to move the individual
between eligibility groups even if the individual does not respond to
requests for information.
Response: States are required, as described at Sec. Sec.
435.919(b) and 457.344(b) of this final rule, to redetermine
eligibility whenever they receive information about a change in
circumstances that may impact a beneficiary's eligibility. We recognize
that some changes in circumstances result in an adverse action, making
the beneficiary ineligible or eligible for less medical assistance
(that is, fewer benefits or higher cost sharing), some changes in
circumstances result in eligibility for additional medical assistance,
and other changes in circumstances necessitate a change from one
eligibility group to another without impacting the medical assistance
available to the beneficiary. In cases where a change in circumstances
has no practical impact on a beneficiary's coverage, for example,
eligibility for a different group with no change in coverage, the
requirements described at Sec. Sec. 435.919(b)(2) and 457.344(b)(2) of
this final rule apply. The State must attempt to act on the change, if
reported by the beneficiary, consistent with applicable verification
requirements (Sec. Sec. 435.940 through 435.960 for Medicaid and Sec.
457.380 for CHIP) and the State's verification plan. If the State is
able to verify the information, then the beneficiary would be moved to
the new group. If the change was provided by a third-party data source,
the State may verify the change with the beneficiary. If the State
elects to verify information with the beneficiary and the beneficiary
confirms that the change is correct, then the beneficiary would also be
moved to the new group. However, if the State is unable to verify the
information with the beneficiary, the individual must remain in their
current eligibility group; consistent with
[[Page 22798]]
Sec. Sec. 435.919(b)(3) and 457.344(b)(3), the individual's
eligibility may not be terminated for failure to respond to a request
for additional information.
Comment: Some commenters noted a lack of clarity in the proposed
rule about when information from a third-party data source would be
considered ``reliable'' consistent with proposed Sec. 435.919(b)(2)(i)
and encouraged CMS to provide additional guidance on the data sources
or types of information that could be considered reliable.
Response: We expect States to make eligibility determinations for
Medicaid and CHIP based on the most current and reliable information
available to them. Information available in a beneficiary's case record
or other more recent information available to the State, including
information from electronic data sources or other agencies such as
SNAP, would be considered reliable for this purpose. For example, if a
State receives information from a third-party data source, such as
Equifax, indicating a change in a beneficiary's income, but that
information is older than other income information the State received
from another agency, such as TANF, the State should not act on the
older information from the third-party data source. See the December
2020 Center for Medicaid and CHIP Services (CMCS) Informational
Bulletin ``Medicaid and CHIP Renewal Requirements'' for additional
information.\12\
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\12\ See December 2020 CMCS Informational Bulletin ``Medicaid
and Children's Health Insurance Program (CHIP) Renewal
Requirements.'' Available at <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf</a>.
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Comment: One commenter expressed concern about how the proposed
changes in circumstances requirements would interact with the
reasonable opportunity period for individuals otherwise eligible for
full Medicaid or CHIP benefits who do not respond to requests for
additional information to resolve discrepancies about their declared
satisfactory U.S. citizenship or satisfactory immigration status. The
commenter provided an example when an individual is receiving limited
Medicaid benefits for the treatment of an emergency medical condition
who later declares to have a change in immigration status which makes
them eligible for full Medicaid benefits.
Response: Sections 1137(d)(3), 1902(a)(46)(B), 1902(ee) and
2105(c)(9) of the Act require that States verify that an individual is
a U.S. citizen or has a satisfactory immigration status when
determining eligibility for Medicaid and CHIP. If States are unable to
verify a beneficiary's U.S citizenship or satisfactory immigration
status or a reported change in such status, existing regulations at
Sec. Sec. 435.956(b) and 457.380(b)(1) require States to provide
individuals with a reasonable opportunity period to verify such
information. During this reasonable opportunity period, States must
provide the individual with benefits that they would otherwise be
eligible for consistent with Sec. Sec. 435.956(a)(5)(ii) and
457.380(b)(1)(ii).
In this scenario, in which an individual is eligible only for the
treatment of an emergency medical condition in Medicaid due to not
having U.S. citizenship or satisfactory immigration status, but the
individual reports a change by declaring to be a U.S. citizen, U.S.
national, or having satisfactory immigration status, we would expect
the State to attempt to verify the information consistent with Sec.
435.919(b)(1), which cites to existing citizenship/immigration
verification requirements at Sec. 435.956. If the State is unable to
verify the declared U.S. citizenship or satisfactory immigration status
promptly, the State must provide the individual with a reasonable
opportunity period and must continue efforts to complete the
verification of the individual's citizenship or satisfactory
immigration status, or request documentation if necessary. Once the
reasonable opportunity period is provided, the State may begin to
furnish full Medicaid benefits provided the individual is otherwise
eligible (that is, the individual satisfies all other eligibility
criteria). At that time, such State would be expected to follow the
reasonable opportunity requirements at Sec. 435.956(b), including
providing proper notice to the individual about when the reasonable
opportunity period begins and ends. If, by the end of the reasonable
opportunity period, the individual's U.S. citizenship or satisfactory
immigration status has not been verified, States would be expected to
terminate the individual's full Medicaid benefits within 30 days. At
that point coverage would revert back to limited coverage for the
treatment of an emergency medical condition as described in section
1903(v)(2)(A) of the Act.
Comment: Many commenters did not support proposed Sec.
435.919(b)(2)(iii), which would allow States to verify information
received from a third-party data source with the beneficiary before
providing additional medical assistance or lowering cost sharing.
Commenters indicated that currently at renewal States are required to
act on reliable information from a third-party data source that results
in eligibility for additional medical assistance or lower cost sharing
without verifying the information with the individual. The commenters
believe that States similarly should be required to act on reliable
information received from a third-party data source that indicates a
change in circumstances resulting in eligibility for additional medical
assistance or lower cost sharing without verifying the change with the
beneficiary.
Response: We appreciate commenters' concerns. The intent of our
proposal was to codify existing policy. States currently have the
option to act on information obtained from a third-party data source
without verifying the information with the individual prior to
providing the additional benefits. Because we did not propose to change
this policy, we are finalizing this policy as proposed but will take
the comments into consideration in the future. At Sec. Sec.
435.919(b)(2)(ii) and 457.344(b)(2)(ii), we are finalizing the option
for States to confirm third-party information with a beneficiary, prior
to providing additional medical assistance or reducing premiums and/or
cost sharing. However, we retain the requirement at Sec. Sec.
435.919(b)(3) and 457.344(b)(3) that States may not terminate a
beneficiary's eligibility if they do not respond to a request for
additional information to verify such third-party information.
Comment: Some commenters supported the requirement at Sec.
435.919(b)(1)(iv) to require States to send a notice to a beneficiary
who reports a change that does not ultimately impact their eligibility.
However, many other commenters believe that requiring a notice in this
situation would be administratively burdensome for States and could
create confusion for beneficiaries. Commenters were particularly
concerned about the potential for confusion following the end of the
continuous enrollment condition.
Response: While we believe that communication with beneficiaries is
critical, we appreciate commenters' concerns that this requirement both
imposes additional burden on States and could cause unnecessary
confusion for beneficiaries. Therefore, we are not finalizing the
requirement at proposed Sec. Sec. 435.919(b)(1)(iv) and
457.344(b)(1)(iv) that States must send a notice to beneficiaries that
the information they reported was received but did not impact their
eligibility. However, we encourage States to develop clear notices, at
their option, to acknowledge such reported changes and assure
beneficiaries that there is no impact on their eligibility or coverage.
Comment: Many commenters supported the proposed requirement at
[[Page 22799]]
Sec. Sec. 435.919(b)(1)(iii) and (b)(2)(iii) that would prohibit a
State from disenrolling a beneficiary who does not respond to requests
for additional information to verify a change in circumstance that
would result in a beneficial change, such as more medical assistance or
lower cost sharing.
Response: We appreciate commenters' support of our proposal to keep
individuals enrolled in Medicaid and CHIP when they do not respond to
requests that would potentially result in more beneficial coverage,
such as additional benefits or lower cost sharing. We are finalizing
Sec. 435.919(b)(1)(iii) and (b)(2)(iii), redesignated at Sec.
435.919(b)(3) for Medicaid, as proposed. In addition, we are finalizing
the corresponding CHIP provisions, proposed at Sec. Sec.
457.344(b)(1)(iii) and (b)(2)(iii), and redesignated here as Sec.
457.344(b)(3) of this final rule, as proposed.
Comment: Many commenters were supportive of proposed Sec.
435.919(c)(1) to require that States provide beneficiaries with at
least 30 calendar days to respond to requests for additional
information related to a change in circumstances, which would align
with the current policy to provide MAGI-based beneficiaries with at
least 30 days to return a renewal form. Commenters noted that
beneficiaries often have significant difficulty in responding to
requests for additional information, particularly when documentation is
needed. However, some commenters expressed concern that this
requirement would have a significant fiscal impact on States. These
commenters noted that the policy would require States to maintain
coverage for at least two additional months for individuals who may
ultimately be determined ineligible for Medicaid. They stated that this
additional time could have a considerable fiscal impact on States,
especially in the case of beneficiaries enrolled in a managed care
delivery system. Commenters also sought clarification from CMS on how
proposed Sec. 435.919(c)(1) interacts with the minimum 10-day advance
notice currently required prior to taking an adverse action (Sec.
431.211).
Response: We appreciate commenters' support for alignment of
beneficiary response timeframes at renewal and following a change in
circumstances for Medicaid and CHIP. We also appreciate commenters'
concerns about maintaining coverage for individuals who may be
determined ineligible, and we recognize the fiscal constraints that may
incentivize speedy disenrollment of potentially ineligible
beneficiaries. However, the benefits of providing individuals with
adequate time to collect needed information and respond to a request
from their State Medicaid or CHIP agency are clear. As discussed
earlier, maintaining enrollment and reducing enrollment churn has the
potential to improve beneficiary health; reduce the need for high-cost
interventions that can result from delayed care; reduce administrative
burdens for individuals, health care providers, and State agencies;
improve the ability of beneficiaries and their providers to form
lasting relationships; and protect beneficiaries from medical debt and
providers from non-payment.
Current Sec. 435.930(b) requires States to continue to furnish
Medicaid to beneficiaries until they are found to be ineligible, and
States cannot complete a finding of ineligibility without giving the
beneficiary an adequate opportunity to explain, disprove, or verify
information received from a third party. We believe a minimum 30-day
response period provides adequate time for beneficiaries to respond and
does not create undue burden on States. In addition, we agree with
comments that support aligning policies between renewals and changes in
circumstances to make administration simpler for States and reduce
beneficiary confusion in terms of the expectations regarding their
response to requests for additional information. As such, we are
finalizing the 30-day response period at Sec. 435.919(c)(1) for
Medicaid and Sec. 457.344(c)(1) for CHIP as proposed.
We appreciate the question about how the requirement at Sec.
431.211, to provide a minimum of 10 days advance notice prior to taking
an adverse action, fits together with the 30-day response period
finalized in this rule, when a beneficiary's eligibility must be
terminated for failure to provide the requested information and will
provide additional guidance on this question in the future.
Comment: While many commenters viewed requiring a minimum timeframe
for beneficiaries to respond to requests for additional information as
a helpful way to combat churn, one commenter suggested that approach
was not effective. Instead, this commenter highlighted the importance
of providing States with additional flexibility to be able to gradually
end Medicaid benefits for individuals who may appear to be no longer
eligible rather than applying additional rules to States.
Response: This comment is beyond the scope of this rulemaking. We
note that medical assistance can only be provided to individuals who
meet all eligibility requirements under a State plan or demonstration
project authorized under section 1115 of the Act. While States are
required to continue to furnish benefits until an individual has been
found ineligible, consistent with Sec. 435.930 of the current
regulations, Federal financial participation is not available for
individuals determined to no longer meet eligibility criteria.
Comment: Commenters were also generally supportive of the
requirement at proposed Sec. 435.919(c)(1)(ii) that would require
States to allow beneficiaries to respond to requests for information
through any modality specified in Sec. 435.907(a), but a few
commenters expressed concerns at being able to ensure that all methods
were available given that changes in circumstances happen frequently
and that it would be challenging for States to track all modalities of
submission.
Response: We appreciate commenters' raising their concerns about
challenges States may face when developing procedures for beneficiaries
to report changes or provide additional information regarding changes
in circumstances consistent with Sec. Sec. 435.919 and 457.344.
However, we note that these are not policy changes. They simply codify
existing policies. States are currently required to allow beneficiaries
to report information about changes through all modalities that are
also available to individuals submitting a new application under
existing Sec. 435.916(c), which is redesignated at Sec. 435.919(a)
for Medicaid and Sec. 457.344(a) for CHIP in this final rule.
Therefore, we are finalizing Sec. Sec. 435.919(c)(1)(ii) and
457.344(c)(1)(ii) as proposed.
Comment: The majority of commenters supported the redesignation of
existing requirements at Sec. 435.916(d), which limit the scope of
requests for additional information to only those related to the
reported change in circumstance, to new Sec. 435.919(e).
Response: We appreciate commenters' support of our proposal. We are
finalizing Sec. 435.919(e) and the corresponding CHIP regulation at
Sec. 457.344(e) as proposed.
Comment: Similar to the existing 90-day reconsideration period at
application, many commenters expressed support for providing a
reconsideration period for individuals who return requested information
relating to a change in circumstances after their coverage has been
terminated. Many commenters noted that this policy would reduce the
burden of processing new applications and simplify implementation by
applying a
[[Page 22800]]
consistent policy for renewals and changes in circumstances. However,
some commenters urged CMS to consider removing the language in proposed
Sec. 435.919(d) that limited the requirement to provide a 90-day
reconsideration period to only individuals who are terminated for
procedural reasons (that is, because they did not respond to the
State's request for additional information). Commenters stated that
providing a reconsideration period for individuals whose coverage is
terminated for cause, such as individuals with fluctuating income whose
coverage is terminated when their income increases only to become
eligible again shortly thereafter, could be very beneficial and prevent
unnecessary churn.
Response: We appreciate commenters' general support of our
proposal. We agree that aligning policies between renewals and changes
in circumstances simplifies requirements for States. We appreciate
commenters' suggestions to remove the language in proposed Sec.
435.919(d) that limits the proposed 90-day reconsideration period to
only terminations as a result of not providing requested information.
Since we did not propose expanding the scope of the reconsideration
period in this way, we are not including this as a requirement in this
final rule. We may consider the suggestion in future rulemaking and
encourage States to consider existing flexibilities available to
protect individuals whose coverage may be terminated as they experience
frequent changes in circumstances. In the specific scenario raised by
the commenter, we note that States have the flexibility under
Sec. Sec. 435.603(h)(3) and 457.315(a) to take into account reasonably
predictable changes in income when determining current monthly income,
and that this can help reduce churn for individuals whose income
fluctuates over the course of the year.
Comment: One commenter appeared to raise concerns about the current
requirement that States must obtain a signature for any additional
information received at renewal. The commenter noted that it may not
always be possible to obtain a signature depending on how information
is submitted and that it is very common for beneficiaries to forget to
sign when they return additional information at renewal. Second, the
commenter stated that if a similar policy is applied to reconsideration
periods as a result of a change in circumstance, States will likely
face the same challenges as they currently do in obtaining signatures
at renewal. Because of those challenges, they recommended removing the
requirement at Sec. 435.919(d)(2) that States be required to obtain a
signature from the beneficiary to confirm the accuracy of any
information provided to redetermine eligibility during a
reconsideration period following a change in circumstances. They
believe allowing this flexibility will reduce administrative burden.
Response: We appreciate the commenter's concerns about some of the
challenges States may face when attempting to obtain the necessary
signatures during renewal. As a best practice, we encourage States to
continue to reach out to beneficiaries that are missing information on
a returned renewal form. We believe this additional outreach is
particularly important when individuals have provided all of the
information necessary to complete an eligibility determination but have
forgotten to include their signature.
The intent of proposed Sec. Sec. 435.919(d)(2) and 457.344(d)(2)
was to align the policies for the reconsideration period specific to a
change in circumstance with the existing policies for a reconsideration
period provided at renewal. Currently, if a beneficiary provides
additional information during the 90-day reconsideration period at
renewal, States must treat the information as a new application as
described at Sec. Sec. 435.916(b)(2)(iii) and 457.343. As such under
Sec. 435.907(f), the individual must provide a signature to be able to
consent to enrollment (or reenrollment) in Medicaid and CHIP and verify
the accuracy of the additional information or provide correct
information, consistent with section 1137(d)(1)(A) of the Act. In order
to continue to meet these requirements, we are finalizing Sec. Sec.
435.916(d)(2) and 457.344(d)(2) with references to Sec. 435.907(f) as
proposed. Additionally, we note that treating additional information
received during the 90-day reconsideration period as a new application
entitles eligible individuals to up to 3 months of retroactive coverage
under Medicaid consistent with Sec. 435.915.
Comment: Some commenters expressed concern that it would not be
possible for States with an integrated eligibility system that also
determines eligibility for other programs, such as SNAP and TANF, to
comply with protections for Medicaid beneficiaries proposed at Sec.
435.919(c)(1), requiring at least 30 calendar days for beneficiaries to
respond to requests for information related to a change in
circumstances, because these protections are not required under the
other programs.
Response: We acknowledge the important work that many States have
undertaken to establish integrated eligibility systems and simplified
notices across their health and human service programs, like Medicaid,
CHIP, SNAP, and TANF. However, the eligibility requirements and
processes between those programs continue to differ, so we believe that
providing a minimum beneficiary response period to Medicaid and CHIP
beneficiaries is appropriate to ensure that individuals who are
actually eligible have time to provide the necessary information and
reduce the likelihood of churn within Medicaid and CHIP.
We have worked with other human service programs, including SNAP,
to identify areas for potential alignment. While we recognize the
challenges that States face in developing integrated eligibility and
enrollment systems serving multiple programs, we do not believe that
the processes proposed in Sec. Sec. 435.919(c)(1) and 457.344(c)(1) of
the September 2022 proposed rule increase the challenge States face in
aligning their Medicaid and CHIP beneficiary response timeframes with
other human service programs like SNAP. We are available to provide
technical assistance to States attempting to develop such an integrated
system.
Comment: Some commenters sought clarification on when States could
or could not act on information if individuals did not respond to
requests for additional information.
Response: Generally, the intent of proposed Sec. Sec. 435.919 and
457.344 was to outline in more detail the existing requirements States
must follow under Sec. 435.952 when considering information received
by the State and when additional information may be requested from the
beneficiary. For example, proposed Sec. Sec. 435.919(b)(2)(ii) and
457.344(b)(2)(ii), redesignated at Sec. Sec. 435.919(b)(4) and
457.344(b)(4) of this final rule respectively, require States to
provide individuals with the opportunity to dispute third-party
information prior to taking an adverse action, such as terminating a
beneficiary's coverage or their benefits; this is a current requirement
at Sec. 435.952(d) for Medicaid and also applies to CHIP as referenced
at Sec. 457.380.
However, in addition to the existing requirements under Sec. Sec.
435.952 and 457.380, we proposed to clarify at Sec. 435.919(b)(1)(iii)
and (b)(2)(iii), redesignated at Sec. 435.919(b)(3) of this final
rule, that States would not be permitted to terminate a beneficiary's
existing coverage if they do not respond to the State's request for
additional
[[Page 22801]]
information about a change in circumstances (either from the
beneficiary or a third party data source) that may make the individual
eligible for additional medical assistance or lower premiums or cost
sharing charges. We proposed the same requirement for CHIP at Sec.
457.344(b)(1)(iii) and (b)(2)(iii), which we redesignate at Sec.
457.344(b)(3) in this final rule. We believe it is important to affirm
this protection in the regulations to ensure that individuals who
otherwise remain eligible for Medicaid or CHIP retain their current
level of benefits, even if they may have been eligible for additional
coverage if they had responded to the State's request.
After considering the comments regarding requirements for acting on
changes in circumstances, we are finalizing Sec. Sec. 435.919 and
457.344, as well as the changes proposed to Sec. 435.916 with the
modifications discussed. We note that because the effect of these
changes is specific to the steps States are required to take to process
changes in circumstances, including processing timeframes, the a
minimum number of days States must provide for beneficiaries to return
information to verify eligibility, and the reconsideration period
(without requiring a new application) for beneficiaries who return
needed information after being terminated for failure to respond, they
operate independently from the other provisions of this final rule.
Because each of these changes individually serves to protect
beneficiaries during eligibility determinations based on changes in
circumstances, we believe they also operate independently from one
another.
3. Timely Determination and Redetermination of Eligibility (Sec. Sec.
435.907, 435.912, 457.340(d), and 457.1170)
Current requirements at Sec. 435.912 related to the timely
determination of eligibility, including the maximum time period in
which individuals are entitled to a determination of eligibility,
exceptions to timeliness requirements, and considerations for States in
establishing performance standards, only reference applications,
although certain provisions also apply at renewal and when a
beneficiary experiences a change in circumstances. We proposed changes
to Sec. 435.912 to ensure that States complete initial determinations
and redeterminations of eligibility within a reasonable timeframe at
application, at regular renewals, and following changes in
circumstances. We also proposed to add a new paragraph at Sec.
435.907(d)(1), requiring that if a State is unable to determine an
applicant's eligibility based on information provided on the
application and verified through electronic data sources and it must
obtain additional information from the applicant, the State must
provide the applicant with a reasonable period of time to furnish the
information.
At Sec. 435.912(b), we proposed to require that States include
renewals and changes in circumstances within the performance and
timeliness standards described in their State plans. Additionally, we
proposed at Sec. 435.912(c)(1) to clarify the actions that begin and
end the period of time that is considered under a State's timeliness
standards at application, and to specify the actions that begin and end
the period of time that is considered under a State's timeliness
standards at renewal and changes in circumstances. Proposed Sec.
435.912(c)(2) expands the criteria that States need to consider when
developing their performance and timeliness standards. We also proposed
a new requirement at Sec. 435.912(g)(3) that prohibits States from
using the timeliness standards to delay terminating a beneficiary's
coverage or taking other adverse actions. Finally, we proposed
standards to specify the maximum amount of time States may take to
complete renewals and redeterminations based on changes in
circumstances (proposed Sec. 435.912(c)(4) through (6)).
The changes to Sec. Sec. 435.907(d) and 435.912 apply equally to
CHIP through existing cross-references at Sec. Sec. 457.330 and
457.340(d)(1), respectively. We proposed minor changes to Sec.
457.340(d) to clarify when certain Medicaid requirements were not
applicable to CHIP when States consider eligibility on other bases. We
also modified the title of Sec. 457.340(d) to include a reference to
timely redeterminations of CHIP eligibility. We are finalizing all
changes proposed at Sec. Sec. 435.907(d), 435.912, and 457.340(d),
except as described in the following discussions. Additionally, we note
that we revised the references to Medicaid requirements at Sec.
457.340(d)(1)(i), which were redesignated as Sec. 435.912(c)(4)(ii),
(c)(5)(iii), and (c)(6)(ii) in this final rule.
For reference, Table 1 provides an overview of the timeframes for
(1) applicants or beneficiaries to provide additional information, (2)
States to complete a timely determination, and (3) individuals to
submit information for reconsideration at application, when a change in
circumstances occurs, and at renewal. The information provided in Table
1 is offered for ease of reference but does not contain in full detail
the information needed to understand the application of the regulations
summarized within. Additional information on the specific changes
illustrated in Table 1 can either be found in the discussion that
follows or in sections II.B.1. and II.B.2. of this final rule. Readers
should refer to the regulation text and to the text discussion in this
preamble to understand the requirements summarized in Table 1.
BILLING CODE 4120-01-P
[[Page 22802]]
[GRAPHIC] [TIFF OMITTED] TR02AP24.000
BILLING CODE 4120-01-C
a. At Application
Current Sec. 435.912(c)(3) requires States to determine
eligibility within 90 calendar days for new applicants whose
eligibility is being determined on the basis of disability and within
45 calendar days for all other applicants. We did not propose any
changes to this requirement. However, we did propose to establish a
minimum timeframe for applicants to provide additional information when
needed to determine eligibility. Specifically, we proposed new language
at Sec. 435.907(d)(1)(i) that would require the State to provide the
applicant with no less than 30 calendar days to respond to a request
for additional information when eligibility is being considered on the
basis of a disability, and no less than 15 calendar days to respond
when eligibility is being considered on all other bases. We proposed at
Sec. 435.907(d)(1)(ii) to require that States accept additional
information through any of the modes by which an application may be
submitted. We also proposed that when a notice of ineligibility is sent
for failure to respond, States must provide a reconsideration period of
at least 30 calendar days, during which the State
[[Page 22803]]
would be required to accept requested information and reconsider the
individual's eligibility without requiring a new application (proposed
Sec. 435.907(d)(1)(iii)(A)), similar to the minimum 90-day
reconsideration currently required at Sec. 435.916(a)(3) for
individuals terminated at a periodic renewal for failure to return a
renewal form or other information needed to renew their eligibility.
When a reconsideration period is applied, we proposed at Sec.
435.907(d)(1)(iii)(B) that the 45 calendar-day clock for completing an
eligibility determination timely as described at Sec. 435.912(c)(3)
(or 90 calendar days for a determination based on disability) would
restart on the date the requested information is submitted. In
addition, at proposed Sec. 435.907(d)(1)(iii)(C), the effective date
of coverage for individuals determined eligible would be based upon the
original application date (that is, the date the application was
submitted or the first day of the month of submission, in accordance
with the State's election).
We received the following comments related to timely determinations
at application:
Comment: While many commenters agreed that it was important to
provide additional time to individuals who may need to provide
documentation for their disability, they were concerned that applying
different timeframes--30 calendar days for those whose eligibility is
being determined on the basis of disability (proposed Sec.
435.912(d)(1)(i)(A)) and 15 calendar days for those being determined
eligible on all other bases (proposed Sec. 435.912(d)(1)(i)(B))--would
create confusion about what response deadline was applicable to a
specific applicant. Commenters sought clarification about whether the
additional time under proposed Sec. 435.912(d)(1)(i)(B) was available
only to individuals being considered for categorical eligibility based
on disability or available to any applicant with a disability.
Commenters also raised concerns regarding the operational and
administrative burden of applying two separate timeframes for
applicants. They explained that different timeframes may be
particularly challenging when multiple household members are included
on a single application and only one is applying on the basis of
disability, or when an individual applicant is being considered for
eligibility in both a disability-related and non-disability-related
eligibility group. In addition, several commenters expressed concerns
that States with integrated eligibility systems, which may include
SNAP, TANF, and other State-specific programs, would not be able to
provide the same timeframes for applicants to provide additional
information needed across programs. For example, if additional income
information was needed to verify financial eligibility for both
Medicaid and SNAP, SNAP requires States to give households at least 10
days for the individual to return the information, while the Medicaid
agency would be required to provide more time. Commenters expressed
concern that different deadlines would add complexity and confuse
applicants who may be receiving requests for the same information from
each program with different timeframes to respond, and both requests
may be included within the same notice or separate notices sent from
each program.
Some commenters recommended providing additional response time to
other groups of applicants, such as individuals who are subject to an
asset test or who are required to provide a level of care
determination. Other commenters also suggested that for individuals who
need language assistance or are experiencing homelessness, 15 calendar
days was not sufficient.
Many commenters agreed that 15 calendar days would be sufficient
for the majority of applicants, with some commenters citing CMS'
September 2022 Application Processing Time Snapshot report that
indicates the vast majority of MAGI applications are completed within
either the first 24 hours or within days of receipt. However, other
commenters did not agree with that timeframe and provided a range of
suggestions for minimum response times between 15 to 60 calendar days.
Some commenters did not support the establishment of specific
timeframes for any applicants and instead recommended that we continue
to provide flexibility for States to set their own timeframes that best
meet the needs of specific types of applicants and/or are appropriate
for the type of information being requested. Other commenters opposed a
30-calendar day minimum timeframe for applicants to respond to requests
for additional information because it would be challenging for States
to determine eligibility timely for non-disability applications (within
45 calendar days) while others asked for clarity regarding the
interaction between the minimum beneficiary response period and the
maximum timeframe for a timely eligibility determination.
In section II.B.3. of the preamble to the September 2022 proposed
rule, we requested comment on an alternative option providing a 30-
calendar day response period with a new exception to the timeliness
standard. The exception would provide States with up to 15 additional
calendar days if needed to process information provided by an applicant
at or near the end of the applicant's 30-day response period. Some
commenters supported a new exception to the timeliness standard to
ensure that both applicants and States had sufficient time in the
application process; other commenters were concerned that adding a new
exception provided States with too much time that would result in
additional delays for otherwise eligible applicants to be determined
eligible for coverage and obtain access to needed care, because many
States already struggle to meet the current timeliness standards. Some
commenters also were concerned that restarting the clock for completing
a timely determination of eligibility during the reconsideration
period, as proposed at Sec. 435.907(d)(1)(iii)(B), provided too much
time for States.
Response: We appreciate commenters' support for maximizing response
timeframes to ensure that applicants have sufficient time to respond to
requests for additional information, especially when information about
disability, assets, or level of care may be needed. However, we also
understand commenters' concerns about States' ability to meet
application timeliness standards and the need for continued flexibility
to address different types of situations. We agree with commenters that
requiring two separate timeframes for disability-related and non-
disability-related application types may be administratively burdensome
and could create confusion for both applicants and eligibility workers,
depending on how they are implemented. In States with integrated
eligibility systems, a third timeframe could also be needed if the
Medicaid timeframes cannot align with other programs like SNAP. At the
same time, we remain concerned that requiring a single, minimum of 30
calendar days for all applicants would make it challenging for States
to process non-disability-related applications timely (within 45 days).
In order to balance these opposing concerns, we are eliminating the
different standards at proposed Sec. 435.907(d)(1)(i)(A) and (B) and
finalizing a single minimum standard for all applicants. As described
at Sec. 435.907(d)(1)(i) of this final rule, States will be required
to provide all applicants with a reasonable amount of time that is no
less than 15 calendar days to respond to any request for
[[Page 22804]]
additional information needed to determine their eligibility at
application. This flexibility will permit States to elect to create a
single minimum timeframe for all requests for information at
application, including a 15 or 30 calendar day timeframe, that provides
the best balance for a State's specific circumstances. Alternatively, a
State may tailor the timeframes at application to reasonable periods
(no less than 15 calendar days) depending on the circumstances and may
vary the timeframes depending on the circumstances of the request.
Further, to support applicants in States with integrated
operations, we consulted with the U.S. Department of Agriculture (USDA)
to explore options for aligning response periods across Medicaid and
SNAP. As a result of this consultation, USDA anticipates releasing
guidance outlining available flexibilities for States to align their
SNAP processes with Medicaid. Through these flexibilities, a minimum 15
calendar day response period will permit States with integrated
eligibility systems to establish a single response period for SNAP and
Medicaid. This will also support individuals applying for both programs
simultaneously and help to minimize confusion when information is
requested to determine eligibility. CMS and USDA's Food and Nutritional
Service (FNS) are working in close collaboration to permit alignment of
these allied programs wherever possible and will develop coordinated
technical assistance to support state implementation.
We believe modifying Sec. 435.907(d)(1)(i) to require a reasonable
period of time (at least 15 calendar days) strikes an appropriate
balance between applicants' need for sufficient time to gather
necessary information and States' need for sufficient time to complete
the determination, while also considering administrative burden. We
believe that the reasonable response period (minimum of 15 calendar
days) coupled with the reconsideration period proposed and finalized at
Sec. 435.907(d)(1)(iii) for applicants who are denied eligibility for
failure to provide requested information timely alleviates any adverse
impact on individuals who may need more time.
The minimum amount of time that a State may consider reasonable for
an applicant to respond with additional information is 15 calendar
days. Consistent with the revisions at 435.907(d)(1)(i) of this final
rule, a State could consider that it is reasonable to provide only 15
calendar days for an applicant to obtain and submit a recent pay stub
demonstrating income eligibility. However, for an applicant acquiring
documentation of certain assets in order to verify resource eligibility
for a non-MAGI group, the same State may also determine that more time
may be reasonable. There is a limited exception to the 15-day minimum
for certain MSP determinations based on Low Income Subsidy (LIS)
application data (LIS leads data). If the LIS leads data does not
support a determination of Medicare Savings Program (MSP) eligibility
and the State requires additional information for the MSP
determination, Sec. 435.911(e)(8) requires States to provide
individuals with a minimum of 30 days to furnish such information.
Finally, although we are not making changes to the existing 45 and
90 calendar day application timeliness standards at Sec.
435.912(c)(3), we clarify that these standards represent the maximum
amount of time a State may take to complete an eligibility
determination. Recognizing that operational flexibilities and
limitations differ in each State, we believe States are in the best
position to establish reasonable timeframes for beneficiary responses
that will permit the State to complete application processing timely,
subject to the timeframes required under this final rule. Consistent
with existing requirements at Sec. 435.912(g)(1), we expect States to
complete their initial eligibility determinations as quickly as
possible and not use the timeliness standards to delay coverage for
individuals who would otherwise be eligible.
Comment: Almost all commenters were supportive of the
reconsideration period proposed at Sec. 435.907(d)(1)(iii) for
applicants who are denied eligibility for failure to provide requested
information and who subsequently submit the information within the
period allowed by the State.
Some of these commenters supported a 30-day reconsideration period,
while others recommended providing a 90-day period at application to be
consistent with the reconsideration periods at renewal and when an
individual experiences a change in circumstances.
Many commenters did not support our proposal at Sec.
435.907(d)(1)(iii)(B) and (C) to require States to provide a
retroactive effective date of coverage back to the original date of
application if an individual provided information during their
reconsideration period. Some expressed concern that this policy would
incentivize applicants to not respond timely and would be unfair to
individuals who do provide the necessary information by the requested
deadline. Other commenters noted that providing the retroactive
effective date for coverage was an important beneficiary protection
from harmful outcomes, like debt from unpaid medical bills. Some
commenters suggested applying the same effective date rules for
reconsideration periods at application, renewal, and changes in
circumstances, such that the provision of additional information would
be treated like a new application and the effective date of eligibility
would be based on the new application date.
We received only one comment expressing concern about the burden of
implementing a new reconsideration period for applicants. The commenter
explained that they did not believe this would create any improvement
since most application errors are resolved during the application
review process.
Response: We agree with commenters that applying the same policies
across all reconsideration periods, whether at application, renewal, or
changes in circumstances, would promote consistency and reduce
complexity for States and individuals who need to provide additional
information at application, at renewal, or following a change in
circumstances. Therefore, we are modifying proposed Sec.
435.907(d)(1)(iii) in this final rule to increase the reconsideration
period at application from 30 to a minimum of 90 calendar days, and
requiring the effective date of coverage to be based on the date the
requested information is received to align with the policies for
reconsideration periods at renewal and following a change in
circumstances. We do not believe it is reasonable to require States to
provide retroactive coverage based on the original application date
because applicants now have a longer period of time to respond without
having to provide a new application. Additionally, States are required
to provide eligible Medicaid applicants with retroactive coverage
consistent with Sec. 435.915(a).\13\ We believe that this retroactive
coverage will help address the impact of potential gaps in coverage for
applicants who provide requested information during the reconsideration
period. We note that States also have the option to provide retroactive
coverage to individuals applying for CHIP under Sec. 457.340(g).
---------------------------------------------------------------------------
\13\ Unlike other Medicaid eligibility groups, qualified
Medicare beneficiary (QMB) benefits are not retroactive. Coverage
begins the first day of the month following the month in which the
individual is determined to qualify for this eligibility group.
---------------------------------------------------------------------------
Therefore, we are removing the provisions proposed at Sec.
435.907(d)(1)(iii)(B) and (C) regarding the timeliness standard and
effective date of eligibility. We are finalizing a
[[Page 22805]]
single paragraph at Sec. 435.907(d)(1)(iii) that (1) requires States
to accept information submitted by an applicant within 90 calendar days
of the date of denial and (2) specifies that States must treat the
additional information like a new application and reconsider
eligibility consistent with the current timeliness standards at Sec.
435.912(c)(3). Because this information will be treated like a new
application, the effective date of eligibility will be based on the
date the information is returned consistent with current Sec. 435.915.
Comment: A few commenters urged CMS to revise Sec. 435.912(e) to
limit the scope of the exceptions to the timeliness standards in Sec.
435.912. Current Sec. 435.912(e) provides that States must determine
or redetermine eligibility within established timeliness standards
except in unusual circumstances. One commenter was concerned that the
example described at Sec. 435.912(e)(2) for an administrative or other
emergency beyond the agency's control is too broad and recommended
removing the reference to ``administrative.'' Another commenter
recommended that States be required to notify applicants and
beneficiaries when they are taking advantage of the exceptions provided
at Sec. 435.912(e).
Response: We appreciate the commenters' concerns about protecting
access to timely eligibility determinations. We believe the timeliness
standards are critically important for ensuring that applicants and
beneficiaries have timely access to the coverage and services to which
they are entitled. At the same time, we believe it is important that
the language in the example described at Sec. 435.912(e)(2) remain
sufficiently broad to account for a variety of unusual circumstances.
As the introductory language at Sec. 435.912(e) states, the situations
described in paragraphs (e)(1) and (2) are simply examples of the types
of circumstances that may require an exception to the timely
determination of eligibility. We have, and will continue to, work with
States when they experience unusual circumstances like natural
disasters and other emergencies to determine whether a timeliness
exception is warranted and to implement workarounds to ensure that
individuals continue to have access to the benefits they need during
this time. We also note that States are required to document the reason
for the delay in the individual's case record in accordance with Sec.
435.912(f).
Comment: We sought comment about whether States should be afforded
additional time to determine CHIP eligibility for applicants seeking
coverage under a separate CHIP for children with special health care
needs (CSHCN), similar to the additional time provided at Sec.
435.912(c)(3)(i) for States to make a final determination of
eligibility for Medicaid coverage based on disability. Commenters
indicated that it was not appropriate to provide States with extra time
to make an eligibility determination for the separate CHIP for CSHCN
because these children still have to meet the financial eligibility
criteria for CHIP. Also, commenters were concerned that delaying a
child's enrollment into CHIP for the sake of enrolling the child into
CHIP for CSHCN, which offers an enhanced benefit package, could
potentially be harmful. Instead, commenters believed it would be
reasonable for States to continue to work with these children post-
enrollment into CHIP if additional information is necessary to
determine their eligibility for the State's CSHCN program, and to
transition them to such program at a later time if appropriate.
Response: We agree with commenters that providing additional time
for a determination of eligibility for a CSHCN program within CHIP is
not necessary and could potentially delay the receipt of necessary
care. Therefore, we are finalizing Sec. 457.340(d)(1) as proposed.
b. At Renewal
At Sec. 435.912(c)(4) of the proposed rule, we proposed
requirements for timeliness standards for States to complete renewals
conducted under Sec. 435.916. We proposed three timeframes for
completing timely renewals depending on the circumstances of the case.
First, if a beneficiary's eligibility can be renewed based on available
information or the beneficiary returns a renewal form with at least 25
days remaining in the eligibility period, we proposed that a State
would be required to complete the renewal prior to the end of the
individual's eligibility period. Second, if the State is redetermining
eligibility on the basis for which a beneficiary has been enrolled and
the beneficiary returns a renewal form less than 25 calendar days
before the end of the eligibility period, we proposed that the State
must complete the renewal by the end of the following month. Finally,
if the State must redetermine eligibility on another basis other than
disability, we proposed that the State would have an additional 25
calendar days to complete the eligibility determination. However, if
the State is redetermining eligibility on the basis of disability, the
State would have up to 90 additional calendar days from the date the
individual is determined ineligible on their current basis.
Comment: Many commenters supported the clarity of the timeliness
standards for renewals proposed at Sec. 435.912(c)(4), including our
proposal to provide States with additional time to complete a renewal
when renewal forms are received near the end of a beneficiary's
eligibility period. However, other commenters stated that the proposed
timeliness standards were too prescriptive, and that additional
flexibility is necessary for States to be able to effectively manage
their processes.
Response: We appreciate commenter support for our proposal to
ensure that States have sufficient time to complete a timely
eligibility determination, particularly when beneficiaries provide all
necessary information close to the end of their eligibility period. We
also agree with commenters that flexibility is important for States to
effectively administer their Medicaid and CHIP programs, although we
believe our proposal at Sec. 435.912(c)(4) provides more flexibility
than currently is available to States. As discussed in section II.B.3.
of the September 2022 proposed rule, Sec. 435.930(b) currently
requires States to continue furnishing Medicaid benefits to eligible
individuals until they are found to be ineligible. This means a State
must maintain the eligibility of a beneficiary who submits all needed
information at the end of their eligibility period, until the State can
complete a redetermination, and if the beneficiary is no longer
eligible, provide advance notice and fair hearing rights. However,
current regulations do not provide for an extension of the renewal
process beyond the end of a beneficiary's eligibility period, even if
additional information is not provided to the State in a timely manner
and even when the State is required to evaluate eligibility on other
bases. Proposed paragraphs (c)(4)(ii) and (iii) of Sec. 435.912
address this tension in the current regulations, by accounting for
those situations in which States will need additional time to complete
an eligibility determination in order to comply with Sec. 435.930(b)
without running afoul of the requirement in Sec. 435.916 to renew
eligibility once every 12 months. Therefore, we are finalizing the
proposed policy to permit States to extend the redetermination process
beyond the end of a beneficiary's eligibility period when information
is received late in the process or eligibility needs to be determined
on another basis, but we are making some modifications to the standards
[[Page 22806]]
themselves as described in the comment responses that follow.
We note that the timeliness standards described at Sec.
435.912(c)(4) represent the maximum amount of time that States may take
to complete renewals. States maintain significant flexibility when
establishing their timelines to process renewals and are not required
to take the maximum amount of time described in the regulation to
complete a renewal. In establishing standards for timely renewals,
Sec. 435.912(c)(2) which we are finalizing as proposed, requires
States to demonstrate that their timeliness standards address certain
criteria, including prior State experience, availability of
information, the needs of beneficiaries, and advance notice
requirements.
Comment: Many commenters expressed concern about the variety of
timeliness standards proposed for different circumstances at renewal,
which could require completion of the renewal at the end of the
beneficiary's eligibility period (Sec. 435.912(c)(4)(i)), the end of
the month following the end of the beneficiary's eligibility period
(proposed Sec. 435.912(c)(4)(ii)), and 90 or 25 calendar days
following a determination of ineligibility on the current basis when
eligibility on another basis must be determined (proposed Sec.
435.912(c)(4)(iii)). Some commenters also expressed confusion about the
maximum timeliness standard applicable under proposed Sec.
435.912(c)(4)(iii) when eligibility is being determined on a different
basis. There also was concern that requiring several different
timeframes for completion of renewals depending on when information is
returned to the agency would be challenging to implement. Several
commenters indicated that these changes, and the variety of timeframes
associated with them, would require complex systems changes and
extensive training for eligibility workers.
Response: We appreciate commenters' concern that the variety of
different timeframes proposed for timely renewals, which differ from
the current timeframes for application and the proposed timeframes for
changes in circumstances, would add unnecessary complexity and
confusion and would require complex systems changes and significant
training for eligibility workers. In this final rule, we simplify the
maximum timeframes for timely renewals at Sec. 435.912(c)(4) to align
more closely with the existing timeframes for timely eligibility
determinations at application and the timeframes for processing changes
in circumstances.
The September 2022 proposed rule included three maximum timeliness
standards for renewals: (1) the end of the eligibility period for
renewals that can be completed using available information and those
for which all necessary information is returned to the State at least
25 or more calendar days prior to the end of the eligibility period
(proposed Sec. 435.912(c)(4)(i)); (2) the end of the month following
the end of the eligibility period for renewals for which needed
information is returned with no less than 25 calendar days prior to the
end of the eligibility period (proposed Sec. 435.912(c)(4)(ii)); and
(3) following a determination of ineligibility, 90 calendar days for
eligibility determined based on disability or 25 calendar days when
eligibility must be determined on a different basis (proposed Sec.
435.912(c)(4)(iii)). At Sec. 435.912(c)(4) of this final rule, we are
finalizing the requirement to complete all renewals by the end of the
eligibility period with two exceptions.
The first exception, at Sec. 435.912(c)(4)(i), occurs when
additional information needed to determine eligibility is not returned
timely. We proposed a threshold of 25 calendar days, meaning if the
beneficiary returned the renewal form at least 25 calendar days before
the end of the eligibility period, the State must process the renewal
before the end of the eligibility period. If the beneficiary returns
the renewal form with less than 25 calendar days before the end of the
eligibility period, the proposed rule would have required that the
State process the renewal by the end of the month following the end of
the eligibility period. In this final rule, we are increasing this
threshold to 30 calendar days before the end of the eligibility period,
such that if a beneficiary returns their renewal form at least 30
calendar days before the end of their eligibility period, the State
must process the renewal before the end of the eligibility period. If
less than 30 calendar days remain before the end of the eligibility
period, the State must process the renewal by no later than the end of
the following month.
[…truncated; see source link]Indexed from Federal Register on April 2, 2024.
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