Dear Regulatory Supervisor McClellan:

These comments are submitted by the Virginia Poverty Law Center (VPLC) on behalf of low-income  Virginians. VPLC advocates for low-income adults, individuals with disabilities, and the welfare of children and families many of whom rely on Medicaid for their healthcare needs. We also provide support to legal aid agencies throughout Virginia who represent  people who have been improperly denied a benefit or lost a service for which they are eligible. We appreciate the opportunity to comment on these regulatory changes and are pleased to see previous changes made in the policy manual and through provider memos incorporated into regulation. This is an important step in bringing Virginia in line with federal due process hearing requirements and we applaud the agency for their work ensuring Medicaid applicants and enrollees are able to exercise their rights through the Fair Hearing process.

Most of our comments on the regulations relate to the basic due process requirements:

In the seminal due process case Goldberg, when considering the state’s burden to provide hearings where there is a loss to an entitled benefit, the US Supreme Court found, “there is one overpowering fact which controls here. By hypothesis, a welfare recipient is destitute, without funds or assets. Suffice to say that to cut off a welfare recipient in the fact of ‘brutal need’ without a prior hearing is unconscionable[…]” Goldberg v. Kelly, 397 U.S. 254, 261 (1970). Much of the requirements listed in Goldberg are still the requirements today, such as: an opportunity to be heard in a meaningful manner, timely and adequate notice, effective opportunity to defend by confronting adverse witnesses and presenting witnesses at an oral hearing, the opportunity to obtain counsel, hearing decisions explaining the reasoning for the decision and based on the legal rules and evidence from the hearing, and an impartial decisionmaker.

The due process requirement of adequate notice was later clarified to require that “interested parties be given a reasonable opportunity to know the claims of adverse parties and an opportunity to meet them.” North Alabama Express, Inc. v. United States, 585 F.2d 783, 786 (5th Cir.1978). Adequate notice should "specify the nature of the facts and evidence on which the agency proposes to take action." Hess & Clark, Division of Rhodia, Inc. v. Food and Drug Administration, 161 U.S. App. D.C. 395, 495 (D.C.Cir.1974). Wolff v. McDonnell, 418 U.S. 539, 564 (1974) ("Part of the function of notice is to give the charged party a chance to marshal the facts in his defense and to clarify what the charges are, in fact"). Due process imposes this burden of adequate notice on the government, not the individual.  Driver v. Housing Authority, 713 N.W.2d 670, 676, 678 (Wis. Ct. App. 2006). Issue switching occurs where the decision-maker decides against the appellant on an alternative ground that was not provided in the notice and therefore the appellant was unable to defend against the new issue. See Camacho v. Bolling, 562 F. Supp.1012, 1019 (N.D. Ill. 1983).

Additionally, changes to regulations related to MCOs beyond those currently proposed are needed to comply with federal de novo hearing requirements. Virginia operates a complex Medicaid program that is heavily reliant on managed care organizations (MCOs), with 90% of beneficiaries enrolled in an MCO. While some of the suggested changes are outside the sections under review in this rulemaking, it is critical to address them as they relate to MCO requirements for the hearing process and recipient rights and responsibilities. Some of the missing regulations outline the appellant’s right to receive information regarding an adverse benefit decision as required by federal regulation and therefore fall under the purview of this rulemaking as it relates to the timeframes for submission of documents. Since the underlying issue leading to these changes were caused by improper deference to MCO decisions and improper cuts of benefits by MCOs, we believe more attention must be paid to the MCO requirements. State regulation has yet to be updated to reflect federal MCO regulation. 

Definitions: We want to note that the definition for adverse decision includes the reasons listed in 42 CFR 431.244 but does not include all of the appeal reasons listed in 42 CFR 438.400(b) and also does not include appealable reasons, such as inaction, found in 12VAC30-110-10. We would ask that this definition be revised.

Notification of adverse agency action:

• 12VAC30-110-70: There are no changes to this section in the proposed regulations, but, as stated above, Virginia has not updated state regulation to align with federal MCO requirements. Many of these are outlined in DMAS’s 3/9/2021Memo “Information Regarding Contract Requirements for Medicaid Managed Care Organization”, but should also be incorporated into state code. 42 CFR 438.404 (Also in 42 CFR 438.406 (b)(4)) states that the following must be included in timely and adequate notice of adverse benefit determinations: “The reasons for the adverse benefit determination, including the right of the enrollee to be provided upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the enrollee's adverse benefit determination. Such information includes medical necessity criteria, and any processes, strategies, or evidentiary standards used in setting coverage limits.”

If this section is unable to be amended under this emergency regulation, we would suggest that this requirement be included in the Appeal summary (12VAC30-110-185.A.3).

Appeal Summary:

• 12VAC30-110-185.A.3: The appeal summary should state the name of the individual/s who reviewed the evidence and made the decision. The ability to call adverse witnesses is a fundamental aspect of due process. 12VAC30-120-670.G states that appellant’s have “the opportunity to confront and cross-examine agency representatives.” If the appellant does not know who made the decision, they do not know who to cross-examine. Additionally, the MCO contract requires individuals’ titles and qualifications to be provided. Without their name, you cannot confirm that the titles and qualifications are current, sufficient under federal law, or if there are any complaints or other issues which disqualify them from being a decision-maker.
• 12VAC30-110-185.A.4: we would suggest adding the following language to A.4.: “[…] the adverse action that has sufficient information such that the appellant will have a clear understanding of what was relied on in making the decision.” 
• 12VAC30-110-185.A.6: we would suggest clarifying the level of detail required in documenting records that were relied upon and providing them to the appellant so that the individual has actual notice of what the decision-maker relied on so as to be able to adequately prepare and cross-examine adverse witnesses. Additionally, when an adverse decision is overturning prior decisions (such as service authorizations), the appeal summary should include the previous approval notices and any documents reviewed or relied on in making the previous decisions.
• 12VAC30-110-185.B: federal law requires information to be provided “sufficiently in advance” 42 CFR 438.406(b)(5). Appeals can involve a very large amount of information to review, sending information five days prior to hearing is insufficient under due process.
• First, information that is sent five days prior to a hearing may very well not be received until after the hearing has occurred due to the time it takes to mail information. The language should be changed to say how many days prior to hearing the information must be received by.
• Second, the definition section has changed the definition of days to calendar not business days. So even if the language is changed to received, someone receiving the notice on a Friday on a holiday weekend would only have two business days to review evidence prior to hearing. This is insufficient to allow basic due process rights of preparing a defense and access to counsel.
• Third, subpoena requests are required to be issued 10 days before the fair hearing, if an individual does not have notice of who to subpoena until less than five days prior to the hearing, they will be unable to bring witnesses/adverse witnesses to the hearing as required by due process.

Virginia civil procedure provides that all evidence must be provided 30 days prior to hearing which would allow adequate review. Alternatively, since the MCO is given 21 days to gather their evidence (See M1680.100.C) and provide it to appellant, the appellant should be given the same 21 days after receipt of evidence to review the record, gather their evidence, and issue subpoenas. Other states have also used 21 days.

Evidentiary Hearings

• 12VAC30-110-220.B. We suggest including the following language to clarify that the submission of additional evidence is an appellant’s right. “[…]consider all relevant evidence presented by the appellant or appellant’s representative during the appeal […].”

We are very supportive of Section B as a whole but suggest clarifying agency or MCO deference:

“The hearing officer shall consider[...] and shall not give deference to the agency or managed care organization.”

• 12VAC30-110-220.C. Section C improperly creates an arbitrary and non-impartial hearing officer where it states that proof must be to the “satisfaction” of an individual hearing officer. Federal requirements are that "[…] the decision maker must be impartial…" Goldberg v. Kelly at 270-271. We suggest the following edit to remove this due process violation: “To prevail in the appeal, the party with the assigned burden of proof shall establish its position to the satisfaction of the hearing officer by a preponderance of the evidence.” What satisfies a hearing officer is irrelevant, what needs to be established is which side the evidence and legal rules support.
• 12VAC30-110-220.D: Section D too broadly allows delays to fair hearing timelines that would have the effect of removing any timeliness requirement from the agency, improperly create a requirement to submit evidence with an appeal, and is in violation of federally allowed delays. Federal law allows delays in an emergency situation or where “[t]he agency cannot reach a decision because the appellant requests a delay or fails to take a required action;” 42 CFR 431.244(A). This rule cannot be applied as the agency is attempting to apply it where they state the following: “Failure to submit information with the appeal so that it can be moved forward will add delay to the appeal decision due date per 42 CFR 431.244” for four main reasons:
• First, submitting evidence with an appeal is not a required action under federal law and Virginia cannot arbitrarily make it a required action. Federal law prohibits the agency from “interfere[ing] with the applicant’s or beneficiary’s freedom to make a request for a hearing.” 42 CFR § 431.221. Creating a new required piece of an appeal request without federal authority is interfering with an individual’s right to file an appeal and have a timely decision. There may be a circumstance where information submitted late does create a delay but that must be a case-by-case decision and cannot be applied to all cases where evidence was not submitted with the appeal paperwork, that defeats the purpose of a De Novo hearing and timely decision.  
• Second, given that an individual will not receive an appeal summary until less than five days prior to a hearing, and therefore will not know the reasoning of the agency nor evidence it needs to respond to until that time period, it is hard to imagine that there is any circumstance where an appellant will know what information they need to provide with their initial appeal and therefore the agency is giving itself the ability to delay every single hearing at no fault of the appellant.
• Third, under due process it is the state’s obligation to provide adequate notice, and if the decision lacks adequate information in order to know what evidence to submit with an appeal, then any delay in submission of evidence is in fact that state’s fault. Making a blanket delay for submission of evidence with an appeal improperly shifts the due process burden from the state to provide adequate notice so someone can marshal a defense to the recipient.
• Fourth, it punishes recipients for delays that might be outside of their control (such as a records requests that they must wait on). The state has required deadlines to file an appeals. However, a third-party record request could take longer than either timeline. In that case, a recipient will be punished for an inability to obtain a record request, an action outside of their control.

To comply with federal law, I would suggest the following language change:

“D. Submission of evidence. If possible, the [...] Failure to submit information with the appeal so that it can be moved forward will add delay to the appeal decision due date per 42 CFR 431.244.”

Where the decision is unable to be reached, in an unusual circumstance beyond the agency’s control, the agency still has the right pursuant to 42 CFR§ 431.244(4)(i)(B) to extend the timeline for the decision. However, failure to submit evidence with an appeal request will never meet this rule as that is not a required action. It is only where evidence is submitted so late that it causes an actual delay that a delay can be allowed—unusual circumstances.

• 12VAC30-110-220.E DMAS’s May 10, 2021 Memo: Information Regarding DMAS Client Appeals (State Fair Hearing) states that “The existence of a previously approved service authorization indicates the requested services previously were deemed medically necessary. For a reduction or termination of those same services, due process to the Member requires an explanation as to what has changed, or how the previous service authorization approval was made in error.” We agree with this assessment and suggest that a new section be added to 12VAC30-110-220. to clarify this requirement. Further, the presumption of medical necessity should be strengthened when the services has been approved multiple times.

E. Previously approved services. In an appeal involving a proposed termination or reduction of a previously approved Medicaid service, the existence of a previously approved service authorization shall create a presumption that the service was medically necessary when it was approved. The strength of this presumption is directly related to the number and duration of previous approvals. For the entity that has proposed the termination or reduction to satisfy its burden of proof, it must demonstrate by a preponderance of the evidence that the Member’s condition has changed since the previous approval such that a reduction or revocation of the service is required by law, regulation, or policy, or it must demonstrate that the previous authorization was made in error with evidence sufficient to rebut the presumption that the service was previously medically necessary. 

Final Decision and Transmission of the Hearing Record

• 12VAC30-110-370.A. The language about hearing officer’s not giving deference to the MCO should also be in this section.
• 12VAC30-110-370.A.4 Conclusions and reasoning that explains how the hearing officer valued certain evidence and that addresses all arguments made at hearing.

Hearing officers have failed to address legal arguments made in hearings in their reasoning and failed to explain why evidence was not probative in violation of due process.

State fair hearing process and final decisions

• 12VAC30-120-670.B.2.  “Unless compelling reasons exist which shall be determined by the department hearing officer.” This language is incredibly vague and could lead to arbitrary decision-making. We would suggest defining what compelling reasons mean or using “good cause” or some other term that has an ascertainable standard.

• 12VAC30-120-670.E. We would suggest language referencing the administrative code section that details how a hearing officer must respond to requests for subpoenas as this section only lists the right to ask for them but not what the hearing officer’s obligations are after the request is made. I believe the relevant section is §2.2-4022.  
• 12VAC30-120-670.F.  This language was already in the code but we would suggest these minor edits to more clearly align it with due process requirements.

• “assure that the state fair hearing remains relevant to the issue being appealed, where the agency or MCO switches the reasons for the decision from the reason stated in the notice, the agency or MCO decision must be overturned.” Issues switching by the decision-maker is a violation of due process. Where this occurs, the agency should lose on the original notice of action and be required to issue a new notice on the new grounds they are alleging.
• “The hearing officer shall [...] decide who may participate in or observe the state fair hearing.” This language is overly broad and allows a hearing officer to improperly deny an appellant the opportunity to bring witnesses without limiting the circumstances in which this denial of participation is allowed. The right to bring witnesses is a federally protected due process right as well as being listed in Section G.

• 12VAC30-120-670.G.  

• Section G uses a confusing word when referring to state fair hearing when it states that it “shall be conducted in an informal, nonadversarial manner.” The word nonadversarial may have mistakenly been used instead of the word impartial, which is the federal requirement. § 431.240(a)(3). A hearing is by necessity adversarial as “due process requires an opportunity to confront and cross-examine adverse witnesses.” Goldberg v. Kelly. Nonadversarial should be replaced with impartial as a clean up in line with federal requirements.

• H. The word “nonrepetitive” should be stricken as it is an unclear standard that can lead to arbitrary decisions. Repetitive evidence may be probative and go towards showing that something is an ongoing repeating problem or towards the severity of a need.
• I.4. “Any additional evidence received will become a part of the state fair hearing record, but the hearing officer must determine whether evidence received from an entity other than the appellant or appellant’s representative or not it will be used in making the decision.”

We appreciate all of the work that has gone into implementing the de novo hearing system and the opportunity to comment on these changes.

Sincerely,

Emily Hardy                                 Sara Cariano

Elder Law Attorney                    Senior Health Policy Analyst