File No. 36869

This notice was published in the October 15, 2012, issue (Vol. 2012, No. 20) of the Utah State Bulletin.


Health, Health Care Financing, Coverage and Reimbursement Policy

Rule R414-70

Medical Supplies, Durable Medical Equipment, and Prosthetic Devices

Five-Year Notice of Review and Statement of Continuation

DAR File No.: 36869
Filed: 09/27/2012 04:15:57 PM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Section 26-18-3 requires the Department to implement Medicaid policy through administrative rules, which allow the Department to implement services to Medicaid recipients who need medical supplies, durable medical equipment (DME), and prosthetic devices. This rule is also authorized under Section 26-18-2.3, which requires the Department to provide these services in an efficient and economical manner that safeguards against unnecessary, unreasonable, or inappropriate use.

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

The received comments by the Division of Health Care Financing (DHCF) are: 1) The term "entitled to nursing facility services" is relevant in that home health services are a mandatory category of services for all individuals for whom nursing facility care is an entitlement (42 USC 1396a(a)(10)(D)). The definition of "entitled to nursing facility services" is determined by federal Medicaid law. Medicaid mandates nursing facility services for persons 21 years of age or over who fall within the categorically needy eligibility group. States have the option to cover nursing facility services for Medicaid beneficiaries that fall within various medically needy eligibility categories. Utah has elected to make many selected categories of the medically needy "entitled to nursing facility care". Thus, under the Utah Medicaid Plan all categorically needy and most medically needy Medicaid recipients are entitled to nursing facility services. Entitlement to nursing facility services does not have the same meaning as eligible for nursing facility care. As a matter of federal law, entitlement may not be conditioned upon the factors described in the proposed definition, which address eligibility (level of care) criteria. In Subsection R414-70-2(2), DHCF defines "Entitled to nursing facility services" to mean an individual who: a) is in a nursing facility and whose nursing stay is covered by Medicaid; or b) is receiving services in a waiver program for individuals who require nursing facility services. In this definition, DHCF is mixing up "entitlement" with "eligibility". Under federal Medicaid law eligibility is a sub-level of entitlement. An individual is entitled to services if they fall within a category that is in the state's Medicaid plan. The state agency may condition eligibility for those services by factors such as medical necessity and certain limits on utilization. The criteria used by DHCF in proposed Subsection R414-70-2(2) are eligibility criteria, not entitlement criteria. Source: "Understanding Medicaid Home and Community Services; A Primer," United States (U.S.) Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, October 2000, Chapter 3, p 41-42; 2) in 42 USC 1396a(a)(10)(D), it states that home health services are mandatory services for any individual who is entitled to nursing facility services. As a consequence, home health services are mandatory for categorically needy persons over 21 and older, and persons belonging to optional categories of the medically needy for whom nursing facility services are reimbursable under Utah's Medicaid Plan. Medical supplies and DME are mandatory components of home health services (42 CFR 440.70(b)). In Rule R414-70, the DHCF indicates that medical supplies and DME are optional services for most Medicaid recipients, see Subsections R414-70-3(1) and R414-70-4(1). This erroneous assumption flows from its mistaken definition of "Entitled to nursing facility services". Medical supplies and DME are optional only for those few Medicaid recipients that are not entitled to nursing facility services because they fall within a medically needy eligibility category that is not entitled to nursing facility care; 3) DHCF's suggested discretion between providing mandatory versus optional services is inconsistent with the Medicaid Act. States are not required to include optional categories of services in their state Medicaid plans. However, if they choose to do so, the services in the optional category are governed by the same requirements as mandatory services; 4) the "suitable for use in the home" limitation is found in several definitional sections of the new proposed rule, Subsection R414-70-2(1)(5)(7). Now, as in the past, the meaning of this phrase has been a source of misunderstanding and concern. To avoid similar problems in the future, the definition of DME should eliminate this phrase; 5) in Section R414-70-5, particular medical supplies or DME are a covered service if they are included on a list that appears in the Medicaid Supplies Manual and List. If the device does not appear on the list, an individual can request agency review of whether reimbursement for the device should be granted (Subsection R414-70-5(3)). This exception process must be available whether the device is considered optional or mandatory for the individual. In other words, subsection (3) should be included in both Sections R414-70-4 and R414-70-5. This exception process should be triggered automatically when medical supplies or DME are considered mandatory or optional for that individual. There must also be some explanation provided when an exception will be granted. The criteria should only be the medical necessity of the device; 6) the law firm requests that the written decision include language informing the applicant that the firm is available to provide legal representation for individuals seeking to appeal a denial; and 7) the agency should also adopt procedures that allow a representative of the firm to attend meetings of the Medical Utilization Review Committee.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule is necessary because it specifies criteria for Medicaid recipients who are eligible to receive medical supplies, DME, and prosthetic devices as either optional services, mandatory services, or services provided in long-term care facilities. Therefore, this rule should be continued. The Department response to the written comments is as follows: 1) there is no federal statutory law that provides for mandatory coverage of home health service to everyone that is categorically needy and to certain medically needy if a state plan covers the medically needy. Instead, 42 USC 1396a(a)(10)(A), excludes home health care services from the Medicaid list of mandatory services and leaves home health care services on the list of optional services. 42 USC 1396a(a)(10)(D), provides a limited exception of making home health services mandatory in the particular circumstance of when "any individual who, under the State plan, is entitled to nursing facility services". The "Understanding Medicaid Home and Community Services; A Primer" cited in the comments is an informational document written by members of private disability advocacy groups and published by the U.S. Department of Health and Human Services. The "Primer" cites no statutory or legal source for the view that Medicaid covered individuals who may eventually reach a physical condition to qualify for home health services are presently entitled to receive such services. Such an assertion is opposite and contrary to the Medicaid statutory scheme of home health services being specifically listed as an optional service with a limited exception for individuals who qualify and are thereby entitled to nursing facility services; 2) there is no federal Medicaid statute which states that home health services are mandatory for categorically needy persons over 21 or medically needy persons who can try to obtain nursing facility services under the state plan. Contrary to this assertion, 42 USC 1396a(a)(10)(A), specifically places home health care on its list of optional coverage services. Rule R414-70 implements the federal exception found in 42 USC 1396a(a)(10)(D), which only makes home health care mandatory in limited situations of when recipients are entitled to nursing facility services. Accordingly, DME and medical supplies are only mandatory for recipients who presently qualify and are therefore entitled to live in a nursing facility, yet, reside at home; 3) the agency believes the discretion to limit the scope of optional services is supported by the statutory and regulatory scheme governing Medicaid. States are given broad discretion to manage the Medicaid program and it is the right and obligation of the agency to define the extent to which optional services will be provided; 4) "Suitable for use in the home" is an express limitation set forth in 42 CFR 440.70(b)(3). DHCF believes it would be inappropriate to eliminate the phrase; 5) Utah Medicaid has broad discretion in setting the scope of services that will be covered within an optional category without reference to medical necessity criteria. With mandatory services, Utah Medicaid's discretion is more limited in defining the scope of coverage, where medical necessity is part of exercising agency discretion. The Medicaid Supplies Manual and List reflect what Utah Medicaid has determined to be medically necessary services for home health services. Nevertheless, with mandatory coverage a process is provided for contesting denial of coverage if medical necessity can be shown. Sections R414-70-4 and R414-70-5 reflect these Medicaid principles that optional and mandatory services are treated differently; 6) DHCF is unaware of any Medicaid regulation authorizing such a referral to the law firm. In the absence of such a regulation, the request presents two major difficulties. First, it appears inappropriate for the agency to support referrals to one legal provider among many within the state who may wish to obtain such a referral. Second, while many recipients are disabled, all are not and it is unclear that firm would be able to assist those who are not disabled; and 7) such representation would be inappropriate and would violate the privacy standards described in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) which apply to Medicaid. The Utilization Review Committee considers medical issues and reviews medical information regarding individual Medicaid recipients. The representatives of the firm have no right under HIPAA to access such information and the presence of such a representative would constitute an unauthorized release of protected health information and would violate relevant HIPAA regulations.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Health
Health Care Financing, Coverage and Reimbursement Policy
CANNON HEALTH BLDG
288 N 1460 W
SALT LAKE CITY, UT 84116-3231

Direct questions regarding this rule to:

  • Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at [email protected]

Authorized by:

David Patton, Executive Director

Effective:

09/27/2012


Additional Information

The Portable Document Format (PDF) version of the Bulletin is the official version. The PDF version of this issue is available at https://rules.utah.gov/publicat/bull-pdf/2012/b20121015.pdf. The HTML edition of the Bulletin is a convenience copy. Any discrepancy between the PDF version and HTML version is resolved in favor of the PDF version.

For questions regarding the content or application of this rule, please contact Craig Devashrayee at the above address, by phone at 801-538-6641, by FAX at 801-538-6099, or by Internet E-mail at [email protected].