Health, Health Care Financing

Rule R410-14

Administrative Hearing Procedures

Five-Year Notice of Review and Statement of Continuation

DAR File No.: 36870
Filed: 09/27/2012 04:23:29 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 establish a fair hearing process for Medicaid recipients and recipients in the Children's Health Insurance Program (CHIP). In addition, Section 1902(a)(3) of the Social Security Act requires the Department to grant a fair hearing to any individual whose claim is denied or not acted upon with reasonable promptness.

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

One managed care organization (MCO) provided comments which assert the Department exceeded its authority by allowing all Medicaid providers to bring nearly any dispute to the administrative hearing process. According to the MCO, this allowance violated state and federal law, was contrary to public policy, and interfered with the MCO's existing contracts with its providers. The MCO also felt that recent changes in the rule discouraged arbitration between contracted parties (providers and health plans) and increased administrative costs due to the greater number of disputed claims. In addition, the MCO asserted that the changes allowed non-contracted providers fair hearing rights not afforded to contracted providers, and thus discouraged contracted providers from contracting with Medicaid plans for the provision of Medicaid services. The lack of provider incentive, therefore, is contrary to policies designed to encourage efficient and effective health program management. The MCO further insisted that changes in the rule are ambiguous as to whether contract provisions control or whether administrative hearings control, and that the changes do not address the real issues of claim disputes, breaches, and provider performance.

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 establishes a fair hearing process for Medicaid recipients and CHIP recipients who disagree with any decision made by a state agency or MCO that is based on payment of a claim, service coverage, or client eligibility. It is also necessary because it establishes administrative hearing procedures for the Division of Medicaid and Health Financing, the Department of Workforce Services, the Department of Human Services, and the MCOs that carry out the fair hearing process. Therefore, this rule should be continued. The Department agrees that the rule must be consistent with public policy and state and federal law. Nevertheless, the Department does not agree that changes in the rule limit the fair hearing rights of contracted providers. Moreover, the Department supports alternative dispute resolution and does not intend to abrogate the rights of parties to arbitrate their disagreements. There is no evidence to support the MCO's assertion that the rule increases the cost of administering the Medicaid program through an increase in fair hearings. For example, when the Department made changes to the rule in April 2011 that did not allow non-contracted parties access to the fair hearing process, it did not see a significant reduction of administrative cases or a lessening of the administrative burden. The Department further disagrees that non-contracted parties who participate in the administrative hearing process will discourage medical professionals from becoming providers. The Department also maintains that having an impartial party to hear a dispute serves as a benefit rather than as a deterrent for a provider. The Department acknowledges the need to update language in the rule and will remove any ambiguities.

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

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 cdevashrayee@utah.gov

Authorized by:

David Patton, Executive Director

Effective:

09/27/2012