Part IV. Third Party Liability
12VAC30-20-190. Requirements for third party liability; identifying liable resources.
1. Definitions
"IEVS" - the Income and Eligibility Verification System.
"Third Party" - any individual, entity or program that is or may be liable to pay all or part of the expenditures for medical assistance furnished under a State Plan.
"Title IV-A agency" - the organizational unit in the State, the Department of Social Service, that has the responsibility for determining eligibility for all groups covered by Medicaid.
"Title IV-D agency" - the organizational unit in the State, the Department of Social Services, that has the responsibility for administering or supervising the administration of a State plan for child support enforcement under Title IV-D of the Act.
"Title XIX agency" - the organizational unit in the State responsible for administering the implementation of programs created by the nineteenth amending title to the Social Security Act.
"TPQY" - Third Party Information Query system administered by the Social Security Administration.
"VEC" - the Virginia Employment Commission (the state SWICA agency) which is the state organizational unit responsible for providing a work ready labor force, temporary income protection to workers involuntarily unemployed, and labor market and economic information.
2. Determining liability of third parties.
2.1. The agency takes all reasonable measures to determine the legal liability of third parties to pay for care and services furnished under the Plan. The Commonwealth is a "209b" state and all eligibility is determined by the Department of Social Services (DSS). At a minimum, such measures include the requirements specified below.
2.2. Health insurance information.
A. Health insurance information is obtained by the Title IV-A agency (DSS) during the initial application and redetermination processes for Medicaid eligibility.
B. The information is coded on the recipient's eligibility card and in the computer system.
C. Health insurance information may include, but is not limited to, the policy holder's name, the relationship to the applicant or recipient, the policy holder's social security number (SSN) and policy number, and the name and address of the insurance company.
D. The Title XIX agency has an agreement with the IV-A agency to collect and to transmit from the applicant or recipient during the initial application and each redetermination process such health insurance information as is useful in identifying legally liable third party resources so that the Medicaid agency may process claims under the third party liability payment procedures specified in 42 CFR 433.139 b-f. Health insurance information may include, but is not limited to, those elements described in item C above.
E. The Title IV-A agency incorporates into the eligibility case file the names and SSNs of absent or custodial parents of Medicaid recipients to the extent such information is available.
F. Payment of health insurance premiums when identified as cost effective.
2.3. Exchange of data.
The Title XIX agency obtains and uses information for the purpose of determining the legal liability of third parties so that the agency may process under the third party liability payment procedures specified in § 433.139 b-f, and the agency utilizes information from these sources:
1. The Title XIX agency does not have an agreement with SWICA or SSA wage and earning files data since the eligibility information is obtained from the IV-A agency. The IV-A agency is responsible for obtaining all necessary eligibility information for applicants and uses IEVS, TPQY and VEC files.
2. The IV-A agency utilizes all wage and earnings information appropriate to the determination of eligibility. The DSS obtains its information through IEVS (the alternate information source allowed by 42 CFR 433.138 (d)(2)) which obtains information from Department of Motor Vehicles (DMV), Internal Revenue Service (IRS) and VEC. The Title IV-A agency updates the Title XIX agency's eligibility file which is then used for claims processing.
3. The Industrial Commission of Virginia (Workers' Compensation agency) has denied the Title XIX agency's request to provide data matches. Documentation of such denial has been provided to the HCFA Regional Office. The Title XIX agency will continue its efforts to obtain data matches with this agency.
4. Agreements to obtain data matches from the DMV (State motor vehicle accident report files) are presently in progress.
2.4. Diagnosis and trauma code edits.
1. The Title XIX agency takes action to identify those paid claims for Medicaid recipients that contain diagnosis codes 800-999 (ICDCM) International Classification of Disease, Ninth Revision Clinical Modification Volume I (as updated annually), inclusive, for the purpose of determining the legal liability of third parties so that the agency may process claims under the third party liability payment procedures specified in 42 CFR 433.139 b-f.
2. These system edits are used daily.
2.5. Follow-up procedures for identifying legally liable third party resources.
1. The Title XIX agency follows up on information within 30 days in order to identify legally liable third party resources for casualty cases.
a. Information is obtained from providers, Title XIX program representatives, third party monthly alert letters, insurance companies, attorneys, probation officers, social service agencies, recipients, newspaper articles, and clerks of court.
b. Information is retained in third party case files.
c. Within 30 days, the Title XIX agency determines the amount of monies paid for health services rendered to injured recipients. The responsible third party is identified and within 30 days is notified that the Commonwealth has a lien for monies expended by the agency for the injured recipient.
d. The agency issues several lien status letters which have 90 day reply due dates depending on the age of the accident date, the lien amount and the agency's historical experience with the third party or the third party's attorney.
e. After no response is received to several lien status letters, the case is referred to the Office of the Attorney General for investigation and/or collection.
2. The agency uses the following procedures for trauma code edits.
a. The system produces monthly third party alert letters from the edits' applications. In third party alert letters, the affected recipients are requested to advise the Title XIX agency about the necessity for their treatment and if attorneys, insurance companies or other third parties are involved in their case. This information is utilized within 30 days of receipt to open cases for recovery of funds where applicable. This information is not entered into the eligibility case file where the agency enters only the individual's health insurance coverage, but is retained in the third party case files.
b. New information as obtained is added to third party case files on a daily basis.
3. The Title XIX agency follows up on health insurance information within 60 days in order to identify legally liable third party resources and incorporates this information into the eligibility case file so that the agency may process claims under the third party liability payment procedures specified under § 433.139 b-f.
The health insurance information which might not be obtained during the eligibility process can appear during invoice processing and this information is researched and investigated and added to the recipient eligibility file.
4. Once an agreement with the state motor vehicle agency has been obtained, the Title XIX agency will incorporate the procedures identifying the methods used by the agency to identify legally liable third party resources.
2.6. Information and data exchanges.
The Title XIX agency complies with 42 CFR 433.138 (h)(1) and (2) and at the present time has a written agreement with the Title IV-D agency. No reimbursement has been requested by the IV-D agency for reasonable costs incurred in furnishing information to the Title XIX agency.
2.7. Reports.
The Title XIX agency will produce such reports as the Secretary prescribes for the purpose of determining compliance under § 433.138 of the CFR and evaluating the effectiveness of the third party liability identification system.
Statutory Authority
Social Security Act Title XIX; 42 CFR 430 to end; all other applicable statutory and regulatory sections.
Historical Notes
Derived from VR460-02-4.2210, eff. November 5, 1990.
12VAC30-20-200. Requirements for third party liability; payment of claims.
1. Probable liability is established at the time claim is filed.
a. When the Title XIX agency has established the probable existence of third party liability at the time the claim is filed, the agency rejects the claim and returns it to the provider for a determination of the amount of liability. The establishment of third party liability takes place when the agency receives confirmation from the provider or a third party resource indicating the extent of third party liability. When the amount of liability is determined, the agency pays the claim to the extent that maximum payment allowed under the agency's payment schedule exceeds the amount of the third party payment.
b. Exhausting all available third party resources is the responsibility of the providers. The Medicaid Management Information System (MMIS) does not allow payments to be made by Virginia Medicaid unless the invoice indicates that the third party has either paid or denied the claim.
c. There are certain circumstances in which cost avoidance may not be utilized:
1. Medical support enforcement. In the case of any service covered under Medicaid provided to an individual on whose behalf child support enforcement is being carried out by the IV-D agency, Medicaid makes payment for such service in accordance with the usual payments schedule. These payments are made without regard to any third party liability, if such third party liability is derived, through insurance or otherwise, from the parent whose obligation to pay support is being enforced by the IV-D agency. Medicaid shall make these payments providing that they have not been made by such third party within 30 days after such service is furnished.
Providers shall not be required to bill the third party in this situation. When the provider does bill Medicaid, he must certify either:
(a) That he has not billed the third party documented on the claim due to medical support enforcement, or
(b) That he has billed the third party documented on the claim but that he has not received payment or denial for the service from the third party within 30 days after the service was furnished. In this case, 30 days must elapse from the date of service to the date of provider certification.
2. Prenatal Care. When the claim is for prenatal, labor and delivery, or postpartum care that is covered under the State Plan, the Commonwealth makes payment for such services in accordance with the usual payment schedule without regard to the liability of a third party for payment for such services.
3. Preventive Pediatric Care. When the claim is for preventive pediatric care, including Early and Periodic Screening, Diagnosis and Treatment (EPSDT) services that are covered under the State Plan, the Commonwealth makes payment for such services in accordance with the usual payment schedule without regard to the liability of a third party for payment for such services.
4. In order to accomplish this pay and chase activity, in accordance with 42 CFR 433.139, (once the claims have been processed for payment), a report is generated advising the third party unit so that recovery of funds can be made.
2. Probable liability is not established or benefits are not available at the time claim is filed.
If the probable existence of third party liability cannot be established or third party benefits are not available to pay the recipient's medical expenses at the time the claim is filed, the agency pays the full amount allowed under the agency's payment schedule.
3. Recovery of reimbursement.
a. When the Title XIX agency learns of the existence of a liable third party after a claim is paid, or benefits become available from a third party after a claim is paid, the Title XIX agency seeks recovery of reimbursement within 60 days after the end of the month it learns of the existence of the liable third party or benefits become available.
b. Reimbursement is sought by the Title XIX agency unless the agency determines that recovery will not be cost effective. The agency uses the threshold amount of $50 as a guideline in its attempts to recover from liable third parties in casualty cases. This $50 guideline is used in consideration with other factors (i.e., expense and difficulty of recovery) in deciding whether to pursue recoveries in the range of smaller dollar expenditures (less than $50). The threshold amount in the determination for the recovery of funds by the health insurance unit is $40. However, the threshold amount may be waived when the agency deems it to be economically and administratively feasible to collect less than the stated amounts. The threshold amounts are based on effectiveness with normal effort for the recovery of funds. Should it be determined that a recovery effort would be cost effective, then attempts are made for recovery of amounts below the threshold levels.
4. Code of Virginia § 8.01-66.9. Lien in favor of Commonwealth and state institutions or Department of Rehabilitative Services on claim for personal injuries.
The State Agency meets the requirements of this section of the Code of Virginia with respect to liens on claims for personal injury.
Statutory Authority
Social Security Act Title XIX; 42 CFR 430 to end; all other applicable statutory and regulatory sections.
Historical Notes
Derived from VR460-02-4.2220, eff. July 4, 1990.
12VAC30-20-205. Health Insurance Premium Payment for Kids.
A. Definitions. The following words and terms when used in this section shall have the following meanings unless the context clearly indicates otherwise:
"Case" means all family members who are eligible for coverage under the qualified employer-sponsored insurance plan and who are eligible for Medicaid.
"Code" means the Code of Virginia.
"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.
"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.
"Family member" means an individual in the household, who is not a parent and who is related by blood, marriage, adoption, or legal custody.
"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 (42 USC § 201 et seq.), § 4980B of the Internal Revenue Code of 1986, or Title VI of the Employee Retirement Income Security Act of 1974 (42 USC § 200I et seq.). Section 5000(b)(1) of the Internal Revenue Code provides that a group health plan is a plan, including a self-insured plan, of, or contributed to by, an employer (including a self-insured person) or employee association to provide health care (directly or otherwise) to the employees, former employees, or the families of such employees or former employees, or the employer.
"High deductible health plan" means a plan as defined in § 223(c)(2) of the Internal Revenue Code of 1986, without regard to whether the plan is purchased in conjunction with a health savings account (as defined under § 223(d) of the Internal Revenue Code of 1986).
"HIPP" means the Health Insurance Premium Payment Program administered by DMAS consistent with § 1906 of the Social Security Act (42 USC § 301 et seq.) (the Act).
"HIPP for Kids" means the Health Insurance Premium Payment Program administered by DMAS consistent with § 1906A of the Act.
"Member" means a person who is eligible for Medicaid as determined by DMAS or a DMAS designated agent, including the Department of Social Services.
"Network provider" means a provider who is enrolled with a DMAS contracted managed care organization (MCO) as a provider and meets the requirement for an expedited enrollment as a fee-for-service (FFS) Medicaid provider for payment and billing purposes.
"Parent" means the biological or adoptive parent, or the biological or adoptive parent and the stepparent, living in the home with the Medicaid-eligible child. The health insurance policyholder shall be a parent as defined in this section.
"Payee" means the insured employee who is the policy holder of the qualified employer-sponsored insurance plan who is paid the HIPP or HIPP for Kids premium and cost-sharing reimbursement.
"Premium" means the fixed cost of participation in the qualified employer-sponsored insurance plan, which cost may be shared by the employer and employee or paid in full by either party.
"Premium assistance subsidy" means the amount that DMAS will pay of the employee's cost of participating in the qualified employer-sponsored insurance plan to cover the Medicaid eligible member younger than 19 years of age if DMAS determines it is cost effective to do so.
"Qualified employer-sponsored insurance" as defined in § 2105(c)(10)(B) of the Social Security Act means a group health plan or health insurance coverage offered through an employer:
1. That qualifies as creditable coverage as a group health plan under § 2701(c)(1) of the Public Health Service Act;
2. For which the employer contribution toward any premium for such coverage is at least 40%; and
3. That is offered to all individuals in a manner that would be considered a nondiscriminatory eligibility classification for purposes of § 105(h)(3)(A)(ii) of the Internal Revenue Code of 1986 without regard to § 105(h)(3)(B)(i).
"State Plan" means the State Plan for Medical Assistance for the Commonwealth of Virginia.
B. Program purpose. The purpose of the HIPP for Kids program shall be to:
1. Enroll members who are eligible for coverage under a qualified employer-sponsored insurance plan.
2. Provide premium assistance subsidy for payment of the employee share of the premiums and other cost-sharing obligations for the Medicaid-eligible child younger than 19 years of age. In addition, to provide cost sharing for the child's parent who is not Medicaid eligible for items and services covered under the qualified employer-sponsored insurance that are also covered services under the State Plan. There is no cost sharing for parents for services not covered by the qualified employer-sponsored insurance.
3. Treat coverage under such qualified employer-sponsored insurance plan as a third-party liability consistent with § 1906 of the Social Security Act.
C. Cost effectiveness methodology.
1. DMAS shall evaluate the member to determine the appropriate managed care organization (MCO) capitation rate to be used. The capitation rate will be determined based on aid category, nursing facility or waiver eligibility, age, gender, and region.
2. DMAS shall adjust the capitation rate to exclude Medicaid services that are not available through commercial group health insurance policies. This requires that the capitation rate be adjusted to exclude services, including nursing facility and long-term services and supports provided in the Commonwealth Coordinated Care (CCC) Plus program as well as community mental health services and nonemergency transportation services available in CCC Plus and Medallion.
3. DMAS shall adjust the reduced capitation rate from subdivision 2 of this subsection to reflect the higher prices employer plans pay. The Virginia price factor shall be based on the national factor of 1.3 that is published by the Centers for Medicare and Medicaid Services.
4. The qualified employer-sponsored insurance plan cost for the member shall be increased to reflect the amount of coinsurance and other member cost sharing typically imposed on HIPP members and paid by DMAS. Such amount shall be determined by averaging the aggregate amount of such expenditures by DMAS in the most recently completed fiscal year by the number of HIPP members covered during the fiscal year.
5. The qualified employer-sponsored insurance plan cost determined in subdivision 4 of this subsection shall be increased to reflect the DMAS administrative expenses directly related to the HIPP program. This additional cost is determined based on the average total monthly compensation paid to each HIPP analyst employed by DMAS and divided by the anticipated caseload.
6. The cost effectiveness shall be affirmed if the adjusted capitation rate from subdivision 3 of this subsection equals or exceeds the adjusted qualified employer-sponsored insurance plan cost from subdivision 5 of this subsection.
D. Member eligibility.
1. DMAS shall obtain specific information on qualified employer-sponsored insurance available to the members in the case including the effective date of coverage, the services covered by the plan, the deductibles and copayments required by the plan, and the amount of the premium paid by the employer and employee. Coverage that is not comprehensive shall be denied premium assistance. A qualified employer-sponsored insurance plan must provide the following services in order to be considered comprehensive:
a. Physician services;
b. Inpatient and outpatient hospitalization;
c. Outpatient labs, shots, and x-rays; and
d. Prescription drugs.
2. All Medicaid-eligible family members younger than 19 years of age who are eligible for coverage under the qualified employer-sponsored insurance shall be eligible for consideration for HIPP for Kids except the following:
a. The member who is Medicaid eligible due to "spenddown"; or
b. The member who is currently enrolled in the qualified employer-sponsored insurance and is only retroactively eligible for Medicaid.
E. Application required. A completed HIPP for Kids application must be submitted to DMAS to be evaluated for program eligibility. The HIPP for Kids application consists of the forms prescribed by DMAS and any necessary information as required by the program to evaluate eligibility and determine if the plan meets the criteria for qualified employer-sponsored insurance.
F. Exceptions. The term "qualified employer-sponsored insurance" does not include coverage consisting of:
1. Benefits provided under a health flexible spending arrangement (as defined in § 106(c)(2) of the Internal Revenue Code of 1986);
2. A high deductible health plan (as defined in § 223(c)(2) of the Internal Revenue Code of 1986), without regard to whether the plan is purchased in conjunction with a health savings account (as defined under § 223(d) of the Internal Revenue Code of 1986); or
3. For self-employed individuals, qualified employer-sponsored insurance obtained through self-employment activities shall not meet the program requirements unless the self-employment activities are the family's primary source of income and the insurance meets the requirements of the definition of qualified employer-sponsored insurance in subsection A of this section. Family for this purpose includes family by blood, marriage, or adoption.
G. Payments. When DMAS determines that a qualified employer-sponsored insurance plan is eligible and other eligibility requirements have been met, DMAS shall provide for the payment of premium assistance subsidy and other cost-sharing obligations for items and services otherwise covered under the State Plan, except for the nominal cost-sharing amounts permitted under § 1916 of the Social Security Act.
1. Effective date of premium assistance subsidy. Payment of premium assistance subsidies and other cost-sharing obligations shall become effective on the first day of the month following an approved application for which qualified employer-sponsored insurance becomes effective. Payments shall be made to the individual who is carrying the qualified employer-sponsored insurance plan coverage.
2. Payments for deductibles, coinsurances, and other cost-sharing obligations.
a. Medicaid eligible children younger than 19 years of age pursuant to § 1906A of the Act. The Medicaid agency pays all premiums, deductibles, coinsurance, and other cost-sharing obligations for items and services covered under the State Plan, as specified in the qualified employer-sponsored insurance, without regard to limitations specified in § 1916 or 1916A of the Act, for eligible individuals younger than 19 years of age who have access to and elect to enroll in such coverage. The eligible individual is entitled to services covered by the State Plan that are not included in the qualified employer-sponsored insurance.
b. In order to receive reimbursement, the individual shall submit to DMAS an explanation of benefits or similar documentation from the insurance company or doctor's office showing the date of service (DOS), that the expense is the responsibility of the member or parent, that the expense was paid prior to the submission of the request, and sufficient identification codes for the DOS to enable DMAS to determine if the service is reimbursable before applying the remaining cost sharing criteria.
c. Reimbursement for cost sharing shall be processed on a quarterly basis.
d. Ineligible family members. When coverage for Medicaid-eligible family members younger than 19 years of age is not possible unless a parent who is not Medicaid eligible enrolls in qualified employer-sponsored health insurance, the Medicaid agency pays premiums for enrollment of the parent who is not Medicaid eligible and other family members who are eligible for coverage under the qualified employer-sponsored insurance. In addition, the agency provides cost sharing for the parent who is not Medicaid eligible for items and services covered under the qualified employer-sponsored insurance that are also covered services under the State Plan. There is no cost sharing for parents who are not Medicaid eligible for items and services not covered by the qualified employer-sponsored insurance.
3. Documentation required for premium assistance subsidy reimbursement. A payee to whom DMAS is paying a qualified employer-sponsored insurance premium assistance subsidy shall, as a condition of receiving such payment, provide documentation as prescribed by DMAS of the payment of the qualified employer-sponsored insurance plan premium, as well as payment of coinsurances, copayments, and deductibles for services received.
H. Cost-sharing wrap.
1. Premium assistance enrollment will be voluntary. Individuals enrolled in the Commonwealth's Health Insurance Premium Payment (HIPP) program are afforded the same member protections provided to all other Medicaid enrollees. Cost sharing shall only be charged to Medicaid members as permitted under §§ 1916 and 1916A of the Social Security Act. Cost sharing shall not exceed 5.0% of household income.
2. The Commonwealth will provide a cost-sharing wrap to any cost-sharing amounts of a Medicaid covered service that exceeds the cost-sharing limits described in the State Plan, regardless of whether individuals enrolled in a HIPP program receive care from a Medicaid participating provider or a nonparticipating provider.
3. To effectuate the cost-sharing wrap, the Commonwealth will encourage nonparticipating providers to enroll by conducting targeted outreach to inform nonparticipating Medicaid providers on how to enroll in Medicaid for the purposes of receiving payment from the Commonwealth for cost-sharing amounts that exceed the Medicaid permissible limits.
4. The Commonwealth will inform members regarding options available when the member obtains care from a nonparticipating provider, including, as applicable, reimbursement for out-of-pocket, cost-sharing costs from this provider.
5. In order to receive reimbursement, the individual shall submit to DMAS an explanation of benefits or similar documentation from the insurance company or doctor's office showing DOS, that the expense is the responsibility of the member or parent, that the expense was paid prior to the submission of the request, and sufficient identification codes for the DOS to enable DMAS to determine if the service is reimbursable before applying the remaining cost-sharing criteria.
6. Reimbursement for cost-sharing shall be processed on a quarterly basis.
I. Program participation requirements. Participants must comply with program requirements as prescribed by DMAS for continued enrollment in HIPP for Kids. Failure to comply with the following may result in termination from the program:
1. Submission of documentation of any changes to the qualified employer-sponsored insurance plan, to include any changes to the employee share of the premium expense, within 10 days of receipt of notice of the change.
2. Any household changes, including income and individuals in the household, must be reported within 10 days of the change.
3. Completion of annual redetermination.
4. Completion of consent forms. Participants may be required to complete a consent form to release information necessary for HIPP for Kids participation and program requirements as required by DMAS.
J. HIPP for Kids redetermination. DMAS shall redetermine the eligibility of the qualified employer-sponsored insurance periodically, at least every 12 months. DMAS shall also redetermine eligibility when changes occur with the qualified employer-sponsored insurance plan information that was used in determining HIPP for Kids eligibility.
K. Program termination. Participation in the HIPP for Kids program may be terminated for failure to comply or meet program requirements. Termination will be effective the last day of the month in which advance notice has been given (consistent with federal requirements at 42 CFR 431.211).
1. Participation may be terminated for failure to meet program requirements including the following:
a. Failure to submit documentation of payment of premiums;
b. Failure to provide information required for reevaluation of the qualified employer-sponsored insurance;
c. Loss of Medicaid eligibility for all household members;
d. Medicaid household member no longer covered by the qualified employer-sponsored insurance;
e. Medicaid-eligible child turns 19 years of age; or
f. Employer-sponsored health plan no longer meets qualified employer-sponsored insurance requirements.
2. Termination date of premiums. Payment of premium assistance subsidy shall end on whichever of the following occurs the earliest:
a. On the last day of the month in which eligibility for Medicaid ends;
b. The last day of the month in which the member loses eligibility for coverage in the qualified employer-sponsored insurance plan;
c. The last day of the month in which the child turns 19 years of age;
d. The last day of the month in which adequate notice has been given (consistent with federal requirements at 42 CFR 431.211) that DMAS has determined that the qualified employer-sponsored insurance plan no longer meets program eligibility criteria; or
e. The last day of the month in which adequate notice has been given (consistent with federal requirements at 42 CFR 431.211) that HIPP for Kids participation requirements have not been met.
L. Third-party liability. When members are enrolled in qualified employer-sponsored insurance plans, these plans shall become the first sources of health care benefits, up to the limits of such plans, prior to the availability of payment under Title XIX.
M. Appeal rights. Applicants and members shall be given the opportunity to appeal adverse agency decisions consistent with agency regulations for client appeals (12VAC30-110-10 through 12VAC30-110-370).
N. Provider requirements. Providers shall be required to accept the greater of the qualified employer-sponsored insurance plan's reimbursement rate or the Medicaid rate as payment in full and shall be prohibited from charging the member or the Medicaid program amounts that would result in aggregate payments greater than the Medicaid rate as required by 42 CFR 447.20.
O. Provider participation or enrollment. The Commonwealth will enroll network providers as full Medicaid providers or enroll as fee-for-service Medicaid providers solely for the purpose of receiving cost sharing, similar to processes related to enrolling Medicare-participating providers that serve dually eligible members. If the Commonwealth enrolls providers for the sole purpose of being reimbursed for cost sharing, the provider would make the decision to enroll knowing that the provider network would be the same as for other enrollees of the qualified employer-sponsored insurance plan. In either scenario, the member would never pay more than the permissible Medicaid copayment.
Statutory Authority
§ 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.
Historical Notes
Derived from Virginia Register Volume 29, Issue 2, eff. November 8, 2012; amended, Virginia Register Volume 38, Issue 12, eff. March 17, 2022.
12VAC30-20-210. State method on cost effectiveness of qualified employer-sponsored insurance plans.
A. Definitions. The following words and terms when used in this section shall have the following meanings unless the context clearly indicates otherwise:
"Case" means all family members who are eligible for coverage under the qualified employer-sponsored insurance 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.
"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.
"Family member" means an individual in the household, who is not a parent and who is related by blood, marriage, adoption, or legal custody.
"Group health plan" means a plan that 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 a plan, including a self-insured plan, of, or contributed to by, an employer (including a self-insured person) or employee association to provide health care (directly or otherwise) to the employees, former employees, or the families of such employees or former employees, or the employer.
"High deductible health plan" means a plan as defined in § 223(c)(2) of Internal Revenue Code of 1986, without regard to whether the plan is purchased in conjunction with a health savings account (as defined under § 223(d) of the Internal Revenue Code of 1986).
"HIPP" means the Health Insurance Premium Payment Program administered by DMAS consistent with § 1906 of the Act.
"Member" means a person who is eligible for Medicaid as determined by DMAS or a DMAS-designated agent, including the Department of Social Services.
"Network provider" means a provider that is enrolled with a DMAS contracted managed care organization (MCO) as a provider and meets the requirement for an expedited enrollment as a fee-for-service (FFS) Medicaid provider for payment and billing purposes.
"Parent" means the biological or adoptive parent, or the biological or adoptive parent and the stepparent, living in the home with the Medicaid-eligible child. The health insurance policyholder shall be a parent as defined in this section.
"Payee" means the insured employee who is the policy holder of the qualified employer-sponsored insurance plan who is paid the HIPP or HIPP for Kids premium and cost-sharing reimbursement.
"Premium" means the fixed cost of participation in the group health plan; such cost may be shared by the employer and employee or paid in full by either party.
"Premium assistance subsidy" means the portion that DMAS will pay of the employee's cost of participating in a qualified employer-sponsored insurance plan to cover the Medicaid eligible members under the employer-sponsored plan if DMAS determines it is cost effective to do so.
"Qualified employer-sponsored insurance" as defined under § 2105(c)(10)(B) of the Social Security Act means a group health plan or health insurance coverage offered through an employer:
1. That qualifies as creditable coverage as a group health plan under § 2701(c)(1) of the Public Health Service Act;
2. For which the employer contribution toward any premium for such coverage is at least 40%; and
3. That is offered to all individuals in a manner that would be considered a nondiscriminatory eligibility classification for purposes of § 105(h)(3)(A)(ii) of the Internal Revenue Code of 1986 without regard to § 105(h)(3)(B)(i).
"State Plan" means the State Plan for Medical Assistance for the Commonwealth of Virginia.
B. Program purpose. The purpose of the HIPP Program shall be to:
1. Enroll members who have qualified employer-sponsored insurance plans that are likely to be cost effective;
2. Provide premium assistance subsidy for payment of the employee share of the premiums and other cost-sharing obligations for items and services otherwise covered under the State Plan for Medical Assistance; and
3. Treat coverage under such qualified employer-sponsored insurance plan as a third-party liability consistent with § 1906 of the Social Security Act.
C. Cost effectiveness methodology.
1. DMAS shall evaluate the individual to determine the appropriate managed care organization (MCO) capitation rate to be used. The capitation rate will be determined based on aid category, nursing facility or waiver eligibility, age, gender, and region.
2. DMAS shall adjust the capitation rate to exclude Medicaid services that are not available through commercial group health insurance policies. This requires that the capitation rate be adjusted to exclude services, including nursing facility and long-term services and supports provided in the Commonwealth Coordinated Care (CCC) Plus program as well as community mental health services and nonemergency transportation services available in CCC Plus and Medallion.
3. DMAS shall adjust the reduced capitation rate from subdivision 2 of this subsection to reflect the higher prices employer plans pay. The Virginia price factor shall be based on the national factor of 1.3 that is published by the Centers for Medicare and Medicaid Services.
4. The qualified employer-sponsored insurance cost for the individual shall be increased to reflect the amount of coinsurance and other member cost sharing typically imposed on HIPP members and paid by DMAS. Such amount shall be determined by averaging the aggregate amount of such expenditures by DMAS in the most recently completed fiscal year by the number of HIPP members covered during the fiscal year.
5. The qualified employer-sponsored insurance plan cost determined in subdivision 4 of this subsection shall be increased to reflect the DMAS administrative expenses directly related to the HIPP program. This additional cost is determined based on the average total monthly compensation paid to each HIPP analyst employed by DMAS divided by the anticipated caseload.
6. The cost effectiveness shall be affirmed if the adjusted capitation rate from subdivision 3 of this subsection equals or exceeds the adjusted qualified employer-sponsored insurance plan cost from subdivision 5 of this subsection.
D. Member eligibility.
1. DMAS shall obtain specific information on all group health plans available to the recipients in the case including the effective date of coverage, the services covered by the plan, the deductibles and copayments required by the plan, the exclusions to the plan, and the amount of the premium. Coverage that is not comprehensive shall be denied premium assistance. A qualified employer-sponsored insurance plan must provide the following services in order to be considered comprehensive:
a. Physician services;
b. Inpatient and outpatient hospitalization;
c. Outpatient labs, shots, and x-rays; and
d. Prescription drugs.
2. All persons who are eligible for coverage under the qualified employer-sponsored insurance plan and who are eligible for Medicaid shall be eligible for consideration for HIPP, except those identified in subdivisions 2 a through 2 e of this subsection.
a. The recipient is Medicaid eligible due to "spenddown."
b. The recipient is currently enrolled in the qualified employee-sponsored insurance plan and is only retroactively eligible for Medicaid.
c. The recipient is in a nursing home or has a deduction from patient pay responsibility to cover the insurance premium.
d. Currently, Medicare beneficiaries who are enrolled in a MCO do not qualify for participation in the HIPP Program. If a Medicaid beneficiary is enrolled in an MCO, the beneficiary must wait until he is disenrolled from the MCO to become eligible for HIPP. HIPP applications are not approved until the managed care eligibility has ended at the end of the month.
e. The recipient is eligible for Medicare Part B but is not enrolled in Part B.
E. Application required. A completed HIPP application must be submitted to DMAS to be evaluated for HIPP program eligibility; if HIPP program eligibility is established, DMAS shall then evaluate the group health plan for 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.
1. Effective date of premium assistance subsidy. Payment of premium assistance subsidy shall become effective on the first day of the month following the month in which DMAS approves the application and makes the cost effectiveness determination. Payment shall be made to either the employer, the insurance company, or to the individual who is carrying the group health plan coverage.
2. Termination date of premium assistance subsidy. Payment of premium assistance subsidy shall end on whichever of the following occurs the earliest:
a. On the last day of the month in which eligibility for Medicaid ends;
b. The last day of the month in which the recipient loses eligibility for coverage in the qualified employer-sponsored insurance plan; or
c. The last day of the month in which adequate notice has been given (consistent with federal requirements at 42 CFR 431.211) that DMAS has redetermined that the group health plan is no longer cost effective.
3. Non-Medicaid-eligible family members. Payment of premium assistance subsidy for non-Medicaid-eligible family members may be made when their enrollment in the qualified employer-sponsored insurance plan is required in order for the recipient to obtain the qualified employer-sponsored insurance 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.
4. Evidence of enrollment required. The payee to whom DMAS is paying the qualified employer-sponsored insurance plan premium assistance subsidy shall, as a condition of receiving such payment, provide to DSS or DMAS, upon request, written evidence of the payment of the employee's share of the plan premium for the qualified employer-sponsored insurance plan that DMAS determined to be cost effective.
F. Cost-sharing wrap.
1. Premium assistance enrollment is voluntary. Individuals enrolled in the HIPP program are afforded the same member protections provided to all other Medicaid enrollees. Cost sharing shall only be charged to Medicaid members as permitted under §§ 1916 and 1916A of the Social Security Act. Cost sharing shall not exceed 5.0% of household income.
2. The Commonwealth will provide a cost-sharing wrap to any cost-sharing amounts of a Medicaid covered service that exceeds the cost-sharing limits described in the State Plan, regardless of whether individuals enrolled in a HIPP program receive care from a Medicaid participating provider or a nonparticipating provider.
3. To effectuate the cost-sharing wrap, the Commonwealth will encourage nonparticipating providers to enroll by conducting targeted outreach to inform nonparticipating Medicaid providers on how to enroll in Medicaid for the purposes of receiving payment from the state for cost-sharing amounts that exceed the Medicaid permissible limits.
4. The Commonwealth will inform members regarding options available when the member obtains care from a nonparticipating provider, including, as applicable, reimbursement for out-of-pocket, cost-sharing costs from this provider.
5. In order to receive reimbursement, the individual shall submit to DMAS an explanation of benefits or similar documentation from the insurance company or doctor's office showing DOS, that the expense is the responsibility of the member or parent, that the expense was paid prior to the submission of the request, and sufficient identification codes for the DOS to enable DMAS to determine if the service is reimbursable before applying the remaining cost-sharing criteria.
6. Reimbursement for cost sharing shall be processed on a quarterly basis.
G. HIPP program participation requirements. Participants must comply with the following program requirements as prescribed by DMAS for continued enrollment in HIPP. Failure to comply shall result in termination from the program.
1. Submission of documentation of any change to the qualified employer-sponsored insurance plan, to include any changes to the employee share of the premium expense, within 10 days of receipt of notice of the change.
2. Any household change, including income and individuals in household, must be reported within 10 days of the change.
3. Completion of annual redetermination.
4. Completion of consent forms. Participants may be required to complete a consent form to release information necessary for HIPP participation and program requirements as required by DMAS.
H. HIPP redetermination. DMAS shall redetermine the cost effectiveness of the qualified employer-sponsored insurance plan periodically, and at least every 12 months. DMAS shall also redetermine cost effectiveness when changes occur with the recipient's average Medicaid cost or with the qualified employer-sponsored insurance plan information that was used in determining the cost effectiveness. When only part of the household loses Medicaid eligibility, DMAS shall redetermine the cost effectiveness to ascertain whether payment of the premium assistance subsidy of the qualified employer-sponsored insurance plan continues to be cost effective.
I. Multiple group health plans. When a member is eligible for more than one group health plan, DMAS shall perform the cost effectiveness determination on the group health plan in which the member is enrolled. If the member is not enrolled in a group health plan, DMAS shall perform the cost effectiveness determination on each group health plan available to the member.
J. 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.
K. Appeal rights. Applicants and members shall be given the opportunity to appeal adverse agency decisions consistent with agency regulations for client appeals (12VAC30-110-10 through 12VAC30-110-370).
L. 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.
M. Provider participation or enrollment. The Commonwealth will enroll network providers as full Medicaid providers or as fee-for-service Medicaid providers solely for the purpose of receiving cost sharing, similar to processes related to enrolling Medicare-participating providers that serve dually eligible members. If the state enrolls providers for the sole purpose of being reimbursed for cost sharing, the payee would make the decision to enroll knowing that the provider network would be the same as for other enrollees of the qualified employer-sponsored insurance. In either scenario, the member would never pay more than the permissible Medicaid copayment.
Statutory Authority
§ 32.1-325 of the Code of Virginia; 42 USC § 1396 et seq.
Historical Notes
Derived from VR460-02-4.2230, eff. April 1, 1993; amended, Virginia Register Volume 25, Issue 20, eff. July 23, 2009; Volume 29, Issue 2, eff. October 25, 2012; Volume 38, Issue 12, eff. March 17, 2022.