Medicaid Due Process and COVID-19 – Part I

Medicaid Due Process and COVID-19 – Part I

The individual’s rights to receive notice of and challenge a decision about coverage is the foundation of the Medicaid benefit. But, even in the best of times, state Medicaid agencies and managed care plans don’t always observe these rights. Crisis situations make it more likely that rights will be ignored or neglected and can drive states to ask for exceptions to the normal rules. The COVID-19 pandemic has dealt a stunning blow to the health care system, so it’s no surprise that state Medicaid programs are asking the federal agency for permission to change requirements for notice and hearing. And, some of the other extraordinary measures states are taking pose potential risks for due process rights. This means that advocates must watch for potential violations those rights.

This post, the first in a series addressing due process issues during the coronavirus pandemic, discusses waivers that the federal Centers for Medicare and Medicaid Services (CMS) have granted states to allow them to change or ignore regular Medicaid rules for notice and hearing and highlights potential problems that may arise as a result. For a deeper dive into this issue, see NHeLP’s Issue Brief, Medicaid and Due Process during the COVID-19 Pandemic.

In response to the national disaster and public health emergency caused by the coronavirus outbreak, CMS has encouraged states to apply for permission to waive or modify Medicaid requirements to ensure that services are available to meet the needs of beneficiaries. CMS has publicized options for making modifications, including waivers and state plan amendments under Section 1135 of the Social Security Act, waivers under Section 1115, and amendments to home and community based waivers. Many states have taken CMS up on the offer and received permission to make changes to their programs – changes that have implications for due process rights.

Through Section 1135 waivers, Florida and Washington have received permission to delay scheduling hearings and issuing hearing decisions. This presents obvious problems for applicants for eligibility and services who will wait longer for resolution of their appeals and the services they need. For beneficiaries who are already receiving services and have the right have those services continue pending appeal, there is a financial risk. If they ultimately lose their appeals, they can be held liable for the cost of those services that they received. A delayed decision increases that potential liability.

Advocates in these states should closely watch for problems. As a condition of receiving these 1135 waivers, these states must prioritize hearing requests that are the most exigent. This means prioritization of appeals by individuals who are denied eligibility or initial service coverage, particularly for those placed at risk of illness or institutionalization without services. Advocates should ask the state Medicaid agency to explain its process for prioritizing hearings. Advocates in other states should be aware that their state may have or may in the future ask for this same authority. Moreover, a Medicaid regulation gives states the authority to delay issuing fair hearing decisions when there are emergencies beyond the state’s control. If their state takes this step, advocates should press the state to prioritize hearings consistent with the guidelines CMS provided for Section 1135 waivers.

If a state delays scheduling hearings or issuing decisions, for beneficiaries who have coverage of services pending an appeal decision, advocates should press the agency to adopt a policy that individual cannot be held liable for services provided during appeals at this time. If the state will not, in managed care states, advocates should urge managed care plans to agree not to pursue the services.

When a public health crisis of the magnitude of the COVID-19 pandemic strikes, state Medicaid agencies will need to make changes in the way they normally operate. While some delay and inconvenience will naturally result, advocates can still work to protect Medicaid beneficiaries’ fundamental right to due process.

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