More Options for Eligibility Determination Potentially Crack the Seamless System – Say Ahhh! A Children’s Health Policy Blog

This week, CMS released a Q & A on State-Exchange
 with new information on several topics, which are described
below. Of concern and worth highlighting is the disappointing departure from
the proposed rules by now allowing states that choose not to implement a
state-based exchange to retain control over Medicaid and CHIP eligibility. The
Notice of Proposed Rulemaking (NPRM) issued on August 12, 2011 supported the
vision of a seamless, streamlined system, ensuring that the Exchange would determine eligibility and enroll all applicants in the program that best matches their
circumstances, be it Medicaid, CHIP, the Basic Health Plan or subsidized
coverage in the Exchange. Instead, the Q & A allows the state to opt for
the federal exchange to only conduct a preliminary assessment of Medicaid and
CHIP eligibility, leaving the final determination to the Medicaid or CHIP

This concept is similar to the “screen and enroll” provisions
currently in place for Medicaid and CHIP that have yet to be perfected. It has
taken years to identify and fill the cracks in the system and this experience
has shown that a single point of entry and single eligibility system results in
fewer eligible individuals slipping through the cracks. The new option offered
to states in the Q & A perpetuates the current bifurcated system. This will
require more concerted oversight and tracking to ensure that the “eligibility
handoff” is successful. If CMS is not going to fulfill the full promise of a
seamless, streamlined system, then it will be critically important to establish
strong performance metrics (and penalties) to ensure that individuals and
families are not asked to provide the same information to multiple agencies and
that specific timeliness standards are met.

Another new option potentially will allow states
that choose to establish a state-based Exchange to access federally-managed
eligibility determinations for premium tax credits and reduced cost-sharing
reduction, access to minimum essential coverage and exemptions to the
individual mandate. It is somewhat unclear if CMS intends to simply do the
determinations for states or allow them access to a new “shared service.” This
option has major implications for state information technology (IT) systems, in
particular, giving states more time to upgrade or build new eligibility systems
of their own.

In addition to the new eligibility determination
options, the Q & A also provides the following information:

Costs to States – For those states that choose to have
the federal Exchange determine eligibility for Medicaid and CHIP, there will be
no cost to states for the eligibility determination. However, states will be
required to share in the cost of the interfaces needed to exchange data. States
also will not have to pay for data accessed through the federal data services
hub, which will provide eligibility information including modified adjusted
gross income (MAGI), as well as citizenship and immigration status.

Exchange Establishment Grants – The clock has been
ticking on securing Exchange establishment grants with the final of three more
rounds of funding set for June 29, 2012. The Q & A indicates that CMS will
modify and extend the deadline for applying for these grants.  It also discusses how Exchange planning
or establishment grants can be used in exploring and implementing the Basic
Health Plan Option.

IRS Data – The Q & A outlines the data that will be
available through the federal data hub, which does not appear to be all the
data needed to verify applicant information such as the names of all tax

Quality Ratings for QHPs – States will be given more time
to develop QHP-specific quality measures. CMS is proposing a phased approach to
the quality rating provisions in which quality ratings in 2014 would be based
on existing quality metrics and measures, transitioning to a QHP-specific
rating in 2016.

Audits – The Q & A reassures states that audits will
be based on current federally-approved state policy. So for example, if a state
allows (and the federal government approved the state plan for)
self-attestation of income, then the statement of the applicant, not other
data, will be used for audit purposes.

Other – There’s more in the Q & A on risk adjustment,
coordination of the federal exchange with existing state insurance rules and
multi-state plans.

It’s helpful to see more details emerging on the
implementation of exchanges, but many questions remain unanswered. Keep
checking Say Ahhh! for the latest news from Washington as we continue on to

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