Friday, August 7, 2015

(***UPDATES) Federal regulations demand that states give Medicaid beneficiaries "at least 30 days" to respond to renewal notices

Posted By on Fri, Aug 7, 2015 at 12:52 PM

click to enlarge HUTCHINSON'S MEDICAID MESS: The 10-day response demand that Gov. Asa Hutchinson has vigorously defended may be in violation of federal regulations.
  • HUTCHINSON'S MEDICAID MESS: The 10-day response demand that Gov. Asa Hutchinson has vigorously defended may be in violation of federal regulations.
Throughout the Arkansas Medicaid eligibility verification scandal, state officials have insisted that the 10-day deadline they have imposed on beneficiaries to reply to an income-verification letter was based on the minimum allowed by the feds. However, the relevant regulations appear to demand "at least 30 days" for beneficiaries to reply, putting the state in clear violation of federal rules. 

Almost 50,000 beneficiaries have been kicked off of their health insurance, or will be later this month, because they did not reply quickly enough to the letters (or they did reply but DHS was unable to process them quickly enough). Many or most of these letters were likely sent to people who were eligible for the Medicaid program according to the very data that triggered the letters in the first place.

Gov. Asa Hutchinson has defended the 10-day response period, despite it leading to tens of thousands of eligible beneficiaries losing their coverage, an untold number of people having coverage terminated despite responding to the letters on time, and a bureaucratic nightmare to come as eligible folks are forced to re-enroll. Hutchinson's defense, such as it is, has been centered on claims that it is the minimum allowed by the feds. (No one disputes that there is no maximum at all — though DHS officials erroneously claimed there was earlier this week — so it's truly baffling why, under the circumstances, Hutchinson would want to use the minimum rather than giving beneficiaries, not to mention DHS, a more reasonable amount of time...but I digress.)

But about that 10-day minimum...Hutchinson and DHS officials appear to be referencing a 10-day minimum advance notice of an adverse action against a beneficiary, part of long-standing Medicaid law pre-dating the Affordable Care Act. However, the relevant federal regulations for states doing annual income Medicaid eligibility verification (promulgated in 2012, see here) clearly state that beneficiaries must be given "[a]t least 30 days from the date of the renewal form to respond and provide any necessary information." 

"It is clear that the 10 days is in violation of federal Medicaid regulation," said Tricia Brooks, Senior Fellow at the Center for Children and Families at Georgetown University and an expert on Medicaid eligibility and enrollment practices, who pointed out the issue to me. If that's the case, Brooks added, all beneficiaries who have been terminated without the minimum 30-day response period have legal grounds to have their coverage reinstated. Brooks said that she was unaware of any other state imposing a questionable 10-day response period in this manner. "It certainly has not surfaced as a common problem as other issues have," she said. 

"After reviewing the federal regulations and conferring with national partners, it is our opinion that the state is wrongly imposing a 10-day deadline for consumers to verify their eligibility in violation of federal law," said Marquita Little, health policy director for Arkansas Advocates for Children and Families. "The regulations on annual redeterminations are very clear and require individuals be given at least 30 days to respond to a request for information."  

I have made repeated requests for a response from DHS and am still waiting. I will update this post when I hear back. I am also awaiting comment from the federal Center for Medicaid and Medicare Services (CMS). 

postscript: These same federal regulations state, "The agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual's account or other more current information available to the agency." Hmmm...the state had access to updated wage data from the Arkansas Department of Workforce Services — that's what it used to flag changes in income. Why couldn't that have been used to automatically re-enroll people who were still income eligible? Federal regulations demand that states do so if they're able, without requiring beneficiaries to jump through additional hoops. I asked DHS yesterday why they flagged beneficiaries based on small changes in income, up or down, instead of simply checking their eligibility. I still have not received a response. 

UPDATE: Here is the DHS response. Heavy legalese but they are not addressing the core issue (see below).

The policy you noted needs to be read in conjunction with another policy (I think we’ll be redoing policies to put the policies together to simplify this). For the individuals who are receiving 10-day notices, we have sufficient information to determine their eligibility, the information just hasn’t been verified. In other words, they have reported an income to us, so we have the information available; but if the information we have conflicts with the electronic data source as outlined by federal rules relating to reasonable compatibility, we must verify it under G-114, which allows 10 days. Policy I-220 and the 30-day allowance would apply only if there were information completely unavailable (missing). There is a difference between information that is unverified and information that is unavailable. So, for example, that is why we are giving 30 days to the clients who are still in ANSWER and haven’t moved to Curam yet, because there is information they must submit to us for us to determine their eligibility.

policy I-220 says:
“If the system cannot complete an ex parte renewal because sufficient information to determine eligibility is not available through existing data sources, then the individual will be required to provide the necessary information. … The individual will be given 30 days from the date of renewal form to provide any necessary information and return the form to the agency.”

The 10-day limit is contained in another part of the policy, G-114:
“Verification must first occur through electronic sources. If unable to obtain verification though electronic sources, verification will be required from the client and a 10 day notice will be sent requesting the required verification.”

DHS appears to be noting that if the state receives information that someone's income has changed (or in this case, initiates its own investigation and identifies changes in income) it can legally demand income verification documents within 10 days. This much is true. However, the state is legally mandated to do a renewal process. It's months (for some beneficiaries more than a year) late in initiating that process. The system it put in place — checking for changes in income, auto-renewing anyone with a change in income less than 10 percent, and sending income-verification letters for anyone with a change in income more than 10 percent — that is the state's renewal process for those beneficiaries. Indeed, DHS officials have stated directly that they are doing this in lieu of the required renewal process. And the law is crystal clear that the renewal process demands 30 days for beneficiaries to respond. The fact that the state can, legally if needlessly, troll the rolls for income changes and make those beneficiaries jump through additional hoops on a 10-day deadline, is not directly relevant to the issue at hand. The state can do that on an ongoing basis throughout the year; it still needs to do a proper renewal process, including giving beneficiaries 30 days to respond. 

I showed the DHS response to Brooks and she found it unconvincing. She noted, first of all, that when DHS states the following: "For the individuals who are receiving 10-day notices, we have sufficient information to determine their eligibility" — then DHS must, legally, act on this information, including automatically renewing anyone who is eligible. 

Brooks acknowledged that the 30-day rule does not necessarily apply to an eligibility re-determination because someone has a change in income — whether self-reported or identified by the state — during the course of year, if the state is unable to then verify eligibility with available data. However, in this scenario: 

They haven’t renewed these people in a year and a half. They are overdue for renewal. They cannot replace a valid renewal process with what they might do on an ongoing basis when everything’s cleaned up. They’re under obligation to do real renewal here and to follow the renewal rules.

I'll bow out here and let the lawyers duke it out, but at the very least, it's worth noting that the federal regulations around the annual eligibility re-determination process clearly spell out a scenario in which beneficiaries have at least 30 days to respond. Does DHS have the legal wiggle room to impose a de facto 10-day limit instead? We'll have to wait and see what CMS says. 

But this comes back to Hutchinson. Whether DHS or Brooks has the right read, why is the state imposing a 10-day response period that is wreaking havoc on the lives of eligible beneficiaries and creating a bureaucratic nightmare at CMS? No one disputes the fact that the governor is well within his power to give more time (and arguably the law demands it). Why is he not doing so? Why is the state using an expensive data system to run a check on whether people's incomes have gone up or down by 10 percent — a completely irrelevant data point to the question of whether they are Medicaid eligible? 

p.s. For any hardcore wonks still reading, Brooks believes that the state is not properly applying the reasonable compatibility standard. The idea behind that standard is to give states wiggle room — if reported income and the income based on electronic data sources is close (in Arkansas, within 10 percent), then it still counts for purposes of eligibility. For example, if someone's reported income is right at the cutoff line and then wage data shows it to be 10 percent more, they're still eligible—"it's reasonably compatible." But Arkansas seems to be using that standard as a non-sequitur to the eligibility question — they're saying that an income change of less than 10 percent is equivalent to no change, and therefore those folks are assumed eligible and automatically re-enrolled. But that doesn't answer the question of why they're flagging small changes in income instead of income eligibility itself. Here's Brooks: 

If the self-attested/data on file when compared with the new data source are both above or below the Medicaid cutoff, even if the numbers don’t match precisely, they are reasonably compatible. So in these cases, if both are below the Medicaid cutoff, they must be determined eligible for Medicaid without requesting any information. This is required by federal regulation.

When self-attested/data on file is below the Medicaid cutoff and the data source is above, then the state has the option to apply a reasonable compatibility standard. That standard is submitted to CMS in the state’s verification plan. Arkansas has chosen a standard of 10% of the FPL level for the applicable household size.

To apply the standard accurately, you only ask for information if the new data is more than 10% of the FPL level above what is in the file, and only if the new data is above the Medicaid cutoff. These policies work in concert.

Arkansas is just looking at a 10% differential up or down, without regard to whether the new data shows the individual as eligible.

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