12VAC30-20-210. State method on cost effectiveness of employer-based group health plans.

1. A. Definitions. The following words and terms, when used in these regulations, shall have the following meanings, unless the context clearly indicates otherwise:

"Case" means all persons who are living in the same household family members who are eligible for coverage under the group health plan and who are eligible for Medicaid.

"Code" means the Code of Virginia.

"Cost effective" and "cost effectiveness" mean the reduction in Title XIX expenditures, which are likely to be greater than the additional expenditures for premiums and cost-sharing items required under § 1906 of the Social Security Act (the Act), with respect to such enrollment.

"DMAS" means the Department of Medical Assistance Services consistent with Chapter 10 (§ 32.1-323 et seq.) of Title 32.1 of the Code of Virginia, Chapter 10, Title 32.1, §§ 32.1-323 et seq.

"DSS" means the Department of Social Services consistent with Chapter 1 (§ 63.2-100 et seq.) of Title 63.2 of the Code of Virginia, Chapter 1, Title 63.1, § 63.1-1.1 et seq.

"Family member" means individuals who are related by blood, marriage, or adoption.

"Group health plan" means a plan which meets § 5000(b)(1) of the Internal Revenue Code of 1986, and includes continuation coverage pursuant to Title XXII of the Public Health Service Act, § 4980B of the Internal Revenue Code of 1986, or Title VI of the Employee Retirement Income Security Act of 1974. Section 5000(b)(1) of the Internal Revenue Code provides that a group health plan is any a plan, including a self-insured plan, of, or contributed to by, an employer (including a self-insured plan) person) or employee association to provide health care (directly or otherwise) to the employer's employees, former employees, or the families of such employees or former employees, or the employer.

"HIPP" means the Health Insurance Premium Payment Program administered by DMAS consistent with § 1906 of the Act.

"Premium" means that portion of the cost for the group health plan which is the responsibility of the person carrying the group health plan policy.

"Premium assistance" means the portion that DMAS will pay of the family's cost of participating in an employer's health plan to cover the Medicaid eligible members under the employer-sponsored plan if DMAS determines it is cost effective to do so.

"Recipient" means a person who is eligible for Medicaid, as determined by the Department of Social Services.

2. B. Program Purpose purpose. The purpose of the HIPP Program shall be to:

A. To identify cases in which enrollment of a recipient in 1. Enroll recipients who have an available group health plan that is likely to be cost effective;

B. To require that recipients in those cases enroll in the available group health plan as a condition of Medicaid eligibility;

C. To provide 2. Provide for payment of the premiums and other cost-sharing obligations for items and services otherwise covered under the State Plan for Medical Assistance (the Plan); and

D. To treat 3. Treat coverage under such group health plan as a third party liability consistent with § 1906 of the Act.

3. C. Recipient Eligibility eligibility. All persons who are living in the same household family members who are eligible for coverage under the group health plan and who are eligible for Medicaid shall be eligible for consideration for HIPP, except those identified below. The agency will consider recipients in § 3 A through § 3 D this subsection for consideration for HIPP when extraordinary circumstances indicate the group health plan might be cost effective.

A. 1. The recipient is Medicaid eligible due to "spend-down";

B. 2. The recipient is only retroactively eligible for Medicaid;

C. 3. The recipient is in a nursing home or has a deduction from patient pay responsibility to cover the insurance premium; or

D. 4. The recipient is eligible for Medicare Part B, but is not enrolled in Part B.

4. Condition of Medicaid eligibility. When DMAS determines that a group health plan is likely to be cost effective based on the DMAS established methodology, DSS or DMAS shall require recipients to enroll in that group health plan as a condition of Medicaid eligibility. Non-compliance creates ineligibility for Medicaid until the recipient demonstrates a willingness to comply.

A. Cooperation required. The recipient shall, as a condition of Medicaid eligibility, obtain the required information on the group health plans available to the recipient, shall provide this information to DSS or DMAS, and shall apply for enrollment in the group health plan, as directed by DSS or DMAS unless good cause for failure to cooperate has been established or unless the recipient is unable to enroll on his own behalf. Once the good cause circumstances no longer exist, the recipient shall be required to comply.

B. Non-cooperation of parent or spouse. When a parent or spouse fails to provide DSS or DMAS with the required information necessary to determine availability of a group health plan, fails to enroll in the group health plan that DMAS has determined to be cost effective, as directed by DMAS, or disenrolls from a group health plan that DMAS has determined to be cost effective, eligibility for Medicaid benefits for the recipient child or recipient spouse shall not be affected.

C. Application required. If the recipient is not already enrolled in a group health plan at the time the cost effectiveness determination is made, the recipient may not be able to enroll in such group health plan until a later date (such as an open enrollment period). The recipient shall provide to DSS or DMAS a completed application for enrollment in the group health plan which DMAS has determined to be cost effective as proof of cooperation within 30 days of receipt of such request from DSS or DMAS. The recipient shall, as a condition of Medicaid eligibility, enroll in the group health plan at the earliest date in which enrollment is possible, unless good cause for failure to cooperate has been established or unless the recipient is unable to enroll on his own behalf.

D. Non-compliance. If a recipient refuses to obtain the required information on group health plans available to the recipient or refuses to provide such information to DSS or DMAS or does not enroll in the group health plan which DMAS has determined to be cost effective, as directed by DMAS, or refuses to provide DSS or DMAS a completed application for enrollment in the group health plan within the deadline given, the recipient shall lose eligibility for Medicaid. Medicaid eligibility shall end after appropriate written notice is given to the recipient as required by 42 CFR 431.211. This ineligibility shall remain effective until the recipient demonstrates willingness to enroll in the group health plan.

E. Disenrollment. If a recipient disenrolls from a group health plan which DMAS has determined to be cost effective, or fails to pay the premium to maintain the group health plan, the recipient shall lose eligibility for Medicaid. Medicaid eligibility shall end after appropriate written notice is given to the recipient as required by 42 CFR 431.211. This ineligibility shall remain effective until the recipient demonstrates willingness to enroll in the group health plan.

F. Multiple group health plans. When more than one group health plan is available to the recipient, the recipient shall, as a condition of Medicaid eligibility, enroll in one of the group health plans which DMAS has determined to be cost effective, as directed by DSS or DMAS unless good cause for failure to cooperate has been established or unless the recipient is unable to enroll on his own behalf or unless DMAS has determined that none of the available group health plan would be cost effective.

G. All of the requirements pertaining to recipients also apply to parents, spouses, and persons who are acting on behalf of recipients.

D. Application required. A completed HIPP application must be submitted to DMAS to be evaluated for eligibility and cost effectiveness. The HIPP application consists of the forms prescribed by DMAS and any necessary information as required by the program to evaluate eligibility and perform a cost-effectiveness evaluation.

5. E. Payments. When DMAS determines that a group health plan is likely to be cost effective based on the DMAS established methodology, DMAS shall provide for the payment of premiums and other cost-sharing obligations for items and services otherwise covered under the Plan, except for the nominal cost sharing amounts permitted under § 1916.

A. 1. Effective date of premiums. Payment of premiums shall become effective on the first day of the month following the month in which DMAS makes the cost effectiveness determination or the first day of the month in which the group health plan coverage becomes effective, whichever is later. Payments shall be made to either the employer, the insurance company or to the individual who is carrying the group health plan coverage.

B. 2. Termination date of premiums. Payment of premiums shall end:

1. a. On the last day of the month in which eligibility for Medicaid ends;

2. b. The last day of the month in which the recipient loses eligibility for coverage in the group health plan, or

3. c. The last day of the month in which adequate notice has been given (consistent with federal requirements) that DMAS has redetermined that the group health plan is no longer cost effective, whichever comes later.

C. 3. Non-Medicaid eligible family members. Payment of premiums for non-Medicaid eligible family members shall may be made when their enrollment in the group health plan is required in order for the recipient to obtain the group health plan coverage. Such payments shall be treated as payments for Medicaid benefits for the recipient. No payments for deductibles, coinsurances and other cost-sharing obligations for non-Medicaid eligible family members shall be made by DMAS.

D. 4. Evidence of Enrollment Required enrollment required. A person to whom DMAS is paying the group health plan premium shall, as a condition of receiving such payment, provide to DSS or DMAS, upon request, written evidence of the payment of the group health plan premium for the group health plan which DMAS determined to be cost effective.

6. F. Guidelines for determining cost effectiveness.

A. 1. Enrollment limitations. DMAS shall take into account that a recipient may only be eligible to enroll in the group health plan at limited times and only if other non-Medicaid eligible family members are also enrolled in the plan simultaneously.

B. 2. Plans provided at no cost. Group health plans for which there is no premium to the person carrying the policy shall be considered to be cost effective.

C. 3. Non-Medicaid eligible family members. When non-Medicaid eligible family members must enroll in a group health plan in order for the recipient to be enrolled, DMAS shall consider only the premiums of non-Medicaid eligible family members in determining the cost effectiveness of the group health plan.

D. 4. [Reserved.]

E. 4. DMAS shall make the cost effectiveness determination based on the following methodology:

1. a. Recipient and group health plan information. DMAS shall obtain demographic information on each recipient in the case, including, but not limited to: federal program designation, age, sex, geographic location. DMAS [or DSS] shall obtain specific information on all group health plans available to the recipients in the case, including, but not limited to:, the effective date of coverage, the services covered by the plan, the exclusions to the plan, and the amount of the premium.

2. b. Average estimated Medicaid expenditures. DMAS shall estimate the average Medicaid expenditures for a 12 month 12-month period for each recipient in the case based on the expenditures for persons similar to the recipient in demographic and eligibility characteristics. Expenditures shall be adjusted accordingly for inflation and scheduled provider reimbursement rate increases. Average estimated Medicaid expenditures shall be updated periodically.

3. c. Medicaid expenditures covered by the group health plan. DMAS shall compute the percentage of expenditures for group health plan services against the expenditures for the same Medicaid services and then adjust the average estimated Medicaid expenditures by this percentage for each recipient in the case. These adjusted expenditures shall be added to obtain a total for the case.

4. d. Group health plan allowance. DMAS shall multiply an allowance factor by the Medicaid expenditures covered by the group health plan to produce the estimated group health plan allowance. The allowance factor shall be based on a state specific factor, a national factor or a group health plan specific factor.

5. e. Covered expense amount. DMAS shall multiply an average group health plan payment rate by the group health plan allowance to produce an estimated covered expense amount. The average group health plan payment rate shall be based on a state specific rate, national rate or group health plan specific rate.

6. f. Administrative cost. DMAS shall total the administrative costs of the HIPP program and estimate an average administrative cost per recipient. DMAS shall add to the administrative cost any pre-enrollment costs required in order for the recipient to enroll in the group health plan.

7. G. Determination of cost effectiveness. DMAS shall determine that a group health plan is likely to be cost effective if a. subdivision 1 of this subsection is less than b. below subdivision 2 of this subsection:

a. the 1. The difference between the group health plan allowance and the covered expense amount, added to the premium and the administrative cost; and

b. the 2. The Medicaid expenditures covered by the group health plan.

8. If a. subdivision 1 of this subsection is not less than b. above subdivision 2 of this subsection, DMAS shall adjust the amount in b. subdivision 2 of this subsection using past medical utilization data on the recipient, provided by the Medicaid claims system or by the recipient, to account for any higher than average expected Medicaid expenditures. DMAS shall determine that a group health plan is likely to be cost effective if a. subdivision 1 of this subsection is less than b. subdivision 2 of this subsection once this adjustment has been made.

F. 3. Redetermination. DMAS shall redetermine the cost effectiveness of the group health plan periodically, not to exceed every twelve 12 months. DMAS shall also redetermine the cost effectiveness of the group health plan whenever there is a change to the recipient and group health plan information which that was used in determining the cost effectiveness of the group health plan. When only part of the household loses Medicaid eligibility, DMAS shall redetermine the cost effectiveness to ascertain whether payment of the group health plan premiums continue to be cost-effective cost effective.

G. 4. Multiple group health plans. When a recipient is eligible for more than one group health plan, DMAS shall perform the cost effectiveness determination on the group health plan in which the recipient is enrolled. If the recipient is not enrolled in a group health plan, DMAS shall perform the cost effectiveness determination on each group health plan available to the recipient.

7. H. Third party liability. When recipients are enrolled in group health plans, these plans shall become the first sources of health care benefits, up to the limits of such plans, prior to the availability of Title XIX benefits.

8. I. Appeal Rights rights. Recipients shall be given the opportunity to appeal adverse agency decisions consistent with agency regulations for client appeals (12VAC30-110-10 et seq.) (12VAC30-110).

9. J. Provider requirements. Providers shall be required to accept the greater of the group health plan's reimbursement rate or the Medicaid rate as payment in full and shall be prohibited from charging the recipient or Medicaid amounts that would result in aggregate payments greater than the Medicaid rate as required by 42 CFR 447.20.

10. HIPP Program Phase-in across the Commonwealth. The Health Insurance Premium Payment (HIPP) Program will be implemented in phases. The first phase will be implemented in certain pilot areas, full statewide implementation will occur once the pilot phase is completed. DMAS has the Health Care Financing Administration's (HCFA) approval for conducting a pilot phase before full statewide implementation. The pilot phase of the program will be implemented March 1, 1993.

Part I
General Conditions of Eligibility

12VAC30-40-10. General conditions of eligibility.

Each individual covered under the plan:

1. Is financially eligible (using the methods and standards described in Parts II and III of this chapter) to receive services.

2. Meets the applicable nonfinancial eligibility conditions.

a. For the categorically needy:

(i) Except as specified under items (ii) and (iii) below, for AFDC-related individuals, meets the nonfinancial eligibility conditions of the AFDC program.

(ii) For SSI-related individuals, meets the nonfinancial criteria of the SSI program or more restrictive SSI-related categorically needy criteria.

(iii) For financially eligible pregnant women, infants or children covered under § 1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(VI), 1902(a)(10)(A)(i)(VII), and 1902(a)(10)(A)(ii)(IX) of the Act, meets the nonfinancial criteria of § 1902(l) of the Act.

(iv) For financially eligible aged and disabled individuals covered under § 1902(a)(10)(A)(ii)(X) of the Act, meets the nonfinancial criteria of § 1902(m) of the Act.

b. For the medically needy, meets the nonfinancial eligibility conditions of 42 CFR 435.

c. For financially eligible qualified Medicare beneficiaries covered under § 1902(a)(10)(E)(i) of the Act, meets the nonfinancial criteria of § 1905(p) of the Act.

d. For financially eligible qualified disabled and working individuals covered under § 1902(a)(10)(E)(ii) of the Act, meets the nonfinancial criteria of § 1905(s).

3. Is residing in the United States and:

a. Is a citizen; or

b. Is a qualified alien as defined under Public Law 104-193 who arrived in the United States prior to August 22, 1996;

c. Is a qualified alien as defined under Public Law 104-193 who arrived in the United States on or after August 22, 1996, and whose coverage is mandated by Public Law 104-193;

d. Is an alien who is not a qualified alien, or who is a qualified alien who arrived in the United States on or after August 22, 1996, whose coverage is not mandated by Public Law 104-193 (coverage must be restricted to certain emergency services).

4. Is a resident of the state, regardless of whether or not the individual maintains the residence permanently or maintains it a fixed address.

The state has open agreement(s).

5. Is not an inmate of a public institution. Public institutions do not include medical institutions, nursing facilities and intermediate care facilities for the mentally retarded, or publicly operated community residences that serve no more than 16 residents, or certain child care institutions.

6. Is required, as a condition of eligibility, to assign rights to medical support and to payments for medical care from any third party, to cooperate in obtaining such support and payments, and to cooperate in identifying and providing information to assist in pursuing any liable third party. The assignment of rights obtained from an applicant or recipient is effective only for services that are reimbursed by Medicaid. The requirements of 42 CFR 433.146 through 433.148 are met.

An applicant or recipient must also cooperate in establishing the paternity of any eligible child and in obtaining medical support and payments for himself or herself and any other person who is eligible for Medicaid and on whose behalf the individual can make an assignment; except that individuals described in § 1902(1)(1)(A) of the Social Security Act (pregnant women and women in the post-partum period) are exempt from these requirements involving paternity and obtaining support. Any individual may be exempt from the cooperation requirements by demonstrating good cause for refusing to cooperate.

An applicant or recipient must also cooperate in identifying any third party who may be liable to pay for care that is covered under the state plan and providing information to assist in pursuing these third parties. Any individual may be exempt from the cooperation requirements by demonstrating good cause for refusing to cooperate.

7. a. Is required, as a condition of eligibility, to furnish his social security account number (or numbers, if he has more than one number) except for aliens seeking medical assistance for the treatment of an emergency medical condition under § 1903(v)(2) of the Social Security Act (§ 1137(f)).

b. Applicant or recipient is required, under § 1903(x) to furnish satisfactory documentary evidence of both identity and of U.S. citizenship upon signing the declaration of citizenship required by § 1137(d). Qualified aliens signing the declaration of satisfactory immigration status required by § 1137(d) must also present and have verified documents establishing the claimed immigration status under § 137(d). Exception: Nonqualified aliens seeking medical assistance for the treatment of an emergency medical condition under § 1903(v)(2) as described in § 1137(f).

8. Is not required to apply for AFDC benefits under Title IV-A as a condition of applying for, or receiving Medicaid if the individual is a pregnant women, infant, or child that the state elects to cover under § 1902(a)(10)(A)(i)(IV) and 1902(a)(10)(A)(ii)(IX) of the Act.

9. Is not required, as an individual child or pregnant woman, to meet requirements under § 402(a)(43) of the Act to be in certain living arrangements. (Prior to terminating AFDC individuals who do not meet such requirements under a state's AFDC plan, the agency determines if they are otherwise eligible under the state's Medicaid plan.)

10. Is required to apply for enrollment in an employer-based cost-effective group health plan (as determined by the state agency), if such plan is available to the individual. Enrollment is a condition of eligibility except for the individual who is unable to enroll on his own behalf (failure of a parent to enroll a child does not affect a child's eligibility).

11. 10. Is required to apply for coverage under Medicare A, B and/or D if it is likely that the individual would meet the eligibility criteria for any or all of those programs. The state agrees to pay any applicable premiums and cost-sharing (except those applicable under Part D) for individuals required to apply for Medicare. Application for Medicare is a condition of eligibility unless the state does not pay the Medicare premiums, deductibles or co-insurance (except those applicable under Part D) for persons covered by the Medicaid eligibility group under which the individual is applying.

12. 11. Is required, as a condition of eligibility for Medicaid payment of long-term care services, to disclose at the time of application for or renewal of Medicaid eligibility, a description of any interest the individual or his spouse has in an annuity (or similar financial instrument as may be specified by the Secretary of Health and Human Services). By virtue of the provision of medical assistance, the state shall become a remainder beneficiary for all annuities purchased on or after February 8, 2006.

13. 12. Is ineligible for Medicaid payment of nursing facility or other long-term care services if the individual's equity interest in his home exceeds $500,000. This dollar amount shall be increased beginning with 2011 from year to year based on the percentage increase in the Consumer Price Index for all Urban Consumers rounded to the nearest $1,000.

This provision shall not apply if the individual's spouse, or the individual's child who is under age 21 or who is disabled, as defined in § 1614 of the Social Security Act, is lawfully residing in the individual's home.

12VAC30-130-750. Time frames for determining cost effectiveness.

A. The department (DMAS) shall determine cost effectiveness of the group health plan eligibility for the program and shall provide notice to the recipient within 45 calendar days from the date the completed Insurance Information Request Form is received from DSS of receiving an application that contains all information and verifications necessary to determine eligibility.

B. Incomplete applications shall be held for a period of 30 calendar days to enable applicants to provide outstanding information needed for an eligibility determination. Any applicant who fails to provide information or verifications necessary to determine eligibility within 30 calendar days of the receipt of the initial application shall have his application denied.

12VAC30-130-780. Good cause for failure to cooperate. (Repealed.)

Good cause for failure to cooperate shall be established when the recipient, parent, spouse, or person acting on behalf of the recipient demonstrates one or more of the following conditions:

1. There was a serious illness or death of the parent, spouse or a member of the parent's family.

2. There was a family emergency or household disaster, such as fire, flood, or tornado.

3. The parent or spouse offers a good cause beyond the parent's or spouse's control.

4. There was a failure to receive DMAS' request for information or notification for a reason not attributable to the parent or spouse. Lack of a forwarding address is attributable to the parent or spouse.

5. The required information on the group health plan could not be obtained from the employer.

6. The recipient demonstrates a medical need for specific coverage provided by an available group health plan which does not meet the DMAS established cost effectiveness criteria. This specific coverage is not provided by Medicaid or other group health plans which do meet the DMAS established cost effectiveness criteria.

12VAC30-130-790. Information required of applicants and recipients.

All applicants and recipients shall be required to provide all the information contained in the DMAS form Insurance Information Request Form required on the prescribed DMAS HIPP applications forms and all requested information to determine eligibility and cost effectiveness.