Action | Client Appeals Update |
Stage | Emergency/NOIRA |
Comment Period | Ended on 10/26/2022 |
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:
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:
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
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.”
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.
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
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
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