Free Declaration - District Court of Arizona - Arizona

EXHIBIT 22
TO
SUPPLEMENTAL DECLARATION
OF
ELLEN KATZ
Case 2:03-cv-02506-EHC Document 138-8 Filed O3/10/2008 Page 1 0f 4

( itz wa)iver of Nominalityxxt
‘ From: Peterson, Joan A. CMS CMS0
SentE1M3nday,'June 28, 2004 4:00 PM _
To: r unton
Cc: 'Kagan, Carole'; [email protected] us'; Osborne, Ingrid B.
§CMS/CMSO); e§nton& R15 agd L. (CMS/CMSO); Donovan, Sharon M. (CMS/CBC);
eepen, Rona H. CMS wc ~
Subject: AZ waiver of Nominality _
In discussing the Newton Nations lawsuit, we have realized that your current waiver
of section 1902(a)(14) needs to be revisited. whereas the issue in Newton Nations
(as I understand it) is that some individuals in the Medical Expense Deduction (MED)
program are actually in the State plan (although the maqority are 1115 expansion
fol_s), I see this issue as applying more broadly, to a l State—Hlan covered
igdigiduals who are currently subject to the $5 co—payment for t e non—emergency use
o t e ER.
Background
when originally drafted, the waiver of section 1902(a)(14) did not reflect the
existence of different cost sharing policies for State plan versus section 1115
expansion populations. Arizona had no populations made eligible through section
1115(a)(2) expenditure authority at that time. with the exception of the Arizona
Long Term Care System (ALTCS), Arizona still did not have any expansion populations
- with a full benefit package until Prop 204 was implemented in 2001.
on May_9, 2003, Lynn, Sid Trieger and I talked about how Arizona was interpreting
the waiver of section l902(a)(14) in the context of our review of your May 2, 2003
letter about cost sharing changes the State was considerin . At that time, you told
us that Arizona was following current Medicaid rules for all enrollees, with the
exception of charging a $5 co—payment for non—emer ency surgery and the
non—emergency use of the emergency room. This included exempting children and
Eregnaqt women from cost sharing, as required under Medicaid. (Arizona has alse
istorically exempted prenatal care, well—child care, EPSDT, prescriptions, family
planning services, services provided to members in nursing facilities, and visits
scheduled by.the PCP or practitioner not requested by the member from cost sharing.)
At the time of our call, both State Elan and section 1115 populations made eligible
through Prog 204 were being charged t e same cost sharing amounts, namely nominal
amounts wit the exception of the two $5 co—payments cited above.
On February 20, 2004, CMS approved the imposition of co—payments in excess of
Medicaid levels, retroactive to october 1, 2003, for two expansion populations
previously made eligible through section 1115 expenditure authority (i.e., childless
adults with income up to 100% FPL and the majorit of those enrolled in the MED .
program). This was done pursuant to our policy that 1115 expansion populations are
not subject to State plan limits on cost sharing.
However, we now realize that your waiver of section 1902(a)(14), while still on the
books_“to enable the State to impose cost sharing on handatory services and to
individuals enrolled in a health maintenance organization" , does not address the
issue of nominality for State plan populations (including those MED enrollees who
are covered throug the State plan). Actually, the second clause of the waiver is
no logger needed per the BBA; we also need to decide if there is any reason AZ needs
the first _part of the waiver, but these considerations are separate from the issue
of nominality for State plan eligibles. -
waiver of nominality
In order to address the issue of nominality for State plan eligibles, you will need
a so—called “waiver of nominality,” as described in sections 1916 (a)(3) and
19l6(b)(3) of the Social Security Act, and in 42 CFR 431.57. This is not a waiver
under section 1115(a)(1), but follows a different process. ThE law allows a state
to be granted a waiver to charge up to twice the nominal co—payment rate for
non—emergency services furnished in an emergency room setting. As specified at 42
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AZ waiver of Nominality.txt
CFR 447.54(a)(3) and 447.54(b), federal regulations permit a nominal co—payment of
up to $3 for non—institutional services for which the average state payment exceeds
$50, and up to $6 under a waiver. Thus, Arizona’s waiver request shou d include the
relevant state payment information, as well as documentation that alternative
sources on non—emergency outpatient services are available and accessible to _
members. Ron Reepen wi l assist you with the preparation of the request and will
work_with Ingrid Osborne in CMSO to ensure the prompt approval of_your waiver ‘
submission. ‘
we realize that Arizona law was revised to delete the $5 co—payment for
non—emergency surgery. Therefore, this is no longer an issue with regard to
nominality.» However, the waiver described above will address your $5 co—payment for
the non—emergency use of the emergency room.
Next steps ‘ -
1. we should schedule a brief call shortly, to also include Matt Devlin and Carole
Kagan, to talk about this e—mail and the relationship to Newton Nations, as Matt and
Carole have been discussing. .
2. It would probably be helpful to schedule a call involving you, Ingrid Osborne,
Ron Reepen and myself to make sure we’re all on the same page and to get started on
the request for a waiver of nominality. _
If you agree, I will work with wendy to set up these calls. Thanks.
It has come to our attention that your current waiver of section 1902(a)(14) needs
to be revisited. -
when originally drafted, this waiver did not reflect the existence of different cost
sharing policies for State plan versus section 1115 expansion populations. Arizona
had no populations made eligible through section 1115(a)(2) expenditure authority at
that time. with the exception of the Arizona Long Term Care System (ALTCS), Arizona
still did not have any expansion populations with a full benefit package until Prop
204 was implemented in 2001.
On May 9, 2003, you, Sid Trieger and I talked about how Arizona was interpreting the
waiver of section 1902(a)(14) in the context of our review of your May 2, 2003
letter about cost sharing changes the State was considering. At that time, you
told us that Arizona was following current Medicaid rules for all enrollees, with
the exception of charging a $5 co-payment for non—emergency surgery and the
non—emergency use of the emergency room. This included exempting children and
pregnant women from-cost sharing, as required under Medicaid. Arizona has also
historically exempted prenatal care, well—child care, EPSDT, prescriptions, family
planning services, services provided to members in nursing facilities, and visits
scheduled by the PCP or practitioner not reguested by the member from cost sharing.
At the time of our call, both State plan an section 1115 populations made eligib e
through Prog 204 were being charged the same cost sharin amounts, namely nominal
amounts wit the exception of the $5 co-payments cited agove.
On February 20, 2004, CMS approved the imposition of co-payments in excess of
Medicaid levels, retroactive to October 1, 2003, for two expansion populations
previously made eligible through section 1115 expenditure authority. This was done
Page 2
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_ AZ waiver of Nominality.txt
eureuant to our policy that 1115 expansion populations are not subject to State plan
imits on cost sharing. However, we now realize that your waiver of section
1902Ca)(14), while still needed “to enable the State to impose cost sharing on
maedatory services and to individuals enrolled in a health maintenance organization" ‘
[since t is latter clause is no longer needed per the BBA, we should talk with the
State to make sure they still need the first part of the waiver.], does HOT address
the issue of nominality for State plan populations.
;n order to do that, you will need a so-called “waiver of nominality," as described
in sections 1916 (a)(3) and 1916(b)(3) of the Social Security Act, and in 42 CFR
431.57. This is not a waiver under section 1115(a)(1), but follows a different
proeess. ThE law allows a state to be granted a waiver to charge up to twice the
nominal co—payment rate for non-emergency services furnished in an emergency room
setting. AS specified at 42 CFR 447.54(a)(3) and 447.54(b), federal regulations
permit a nominal co—payment of up to $3 for non—institutional services or which the
average state payment exceeds $50, and up to $6 under a waiver. Thus, Ariz0na's
waiver request s ould include the relevant state payment information, as well as
docementation that alternative sources on non-emergency outpatient services are
available and accessible to members. Ron Reepen will assist you with the
preparation of the request and will work to ensure the prompt approval of your
waiver submission.
we realize that Arizona law was revised to delete the $5 co—payment for
nonyemergency surgery. ThEP€fOF€, this is no longer an issue with regard to
nominality. However, the waiver described above will address your S5 co—payment for
the non-emergency use of the emergency room. -
Perhaps it would help if we were to schedule a brief call involving you, Ingrid
Osborne of CMSO, Ron Reepen and myself to make sure we’re all on the same page and
to get started.
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