Overview of Federal Law and Regulations

Section Highlights

Statutory Authority and Related Federal Rules and Guidance for the New Option

What do the federal rules allow hospitals to do?

  • The Affordable Care Act and subsequent regulations allow qualified hospitals (those that accept Medicaid) to make presumptive eligibility determinations.
  • Qualified hospitals may determine an individual to be presumptively eligible for Medicaid on the basis of basic, preliminary information asked of the individual.
  • Hospitals can elect to make presumptive eligibility determinations regardless of whether the state in which the hospital operates has opted to use presumptive eligibility more broadly.
  • Hospitals can elect to make presumptive eligibility determinations regardless of whether the state in which the hospital operates has elected to expand its Medicaid program to adults with incomes up to 133 percent of the poverty level.

Sample Presumptive Eligibility Application

Sample PE Application

What is a “qualified hospital?”

  • A “qualified hospital” is a hospital that participates in Medicaid—either through a state plan or through a Medicaid section 1115 waiver.

Who can be determined presumptively eligible for Medicaid?

  • Hospitals that elect to make presumptive eligibility determinations may use it for income-based Medicaid eligibility for children, pregnant women, parents and caretaker relatives, and former foster care children. Hospital PE must also be permitted for adult groups, individuals with income above 133% FPL and under age 65, individuals eligible for family planning services, and certain individuals needing treatment for Breast and Cervical Cancer if the state covers these groups.
    • Hospitals are permitted to make PE determinations for the above groups regardless of the state’s rules with respect to broader PE.
    • How hospitals determine income will be either a) based on the individual or family’s gross income or b) based on a simplified method that the state chooses. States cannot require full MAGI-based eligibility determinations to be used to make PE determinations.
  • States may allow hospitals to use PE for additional groups of individuals as well, including those whose eligibility is not based on MAGI (such as people eligible through a disability-related pathway or through a Medicaid 1115 waiver).
  • PE determinations can be made for patients, patients’ families, and community members based on the above criteria.

How will a hospital be paid when providing services to those determined presumptively eligible?

  • Hospitals will be paid at regular Medicaid rates for services regularly covered by Medicaid.
  • Payment for services is guaranteed for a hospital during an individual or family’s presumptive eligibility period, even if the individual fails to complete the full Medicaid application or is ultimately determined to be ineligible for Medicaid.
  • States will not be permitted to recoup money from the hospital for services rendered during the presumptive eligibility period.

What rules do hospitals have to comply with?

  • States must provide qualified hospitals with information on all policies and procedures related to presumptive eligibility.
  • A hospital must inform the state Medicaid agency that it intends to make presumptive eligibility determinations and that it agrees to follow the state’s policies and procedures. CMS has provided a sample form for hospitals to send their state Medicaid agencies. Many states have created their own forms (See: State-Specific HPE Policies).
  • Hospitals are encouraged to tell individuals determined presumptively eligible how to apply for ongoing Medicaid coverage. A state can also establish policies that require hospitals to assist those individuals in completing the full application for coverage.
  • State Medicaid agencies can establish standards for hospitals that make presumptive eligibility determinations. For more information on state standards, see: State-Specific HPE Policies
    • In particular, the state may impose standards related to the accuracy of a hospital’s presumptive eligibility determinations, which may be based on the proportion of individuals determined to be presumptively eligible for Medicaid who either submit a regular Medicaid application before the end of the presumptive eligibility period or who are determined eligible for Medicaid by the state Medicaid agency.
    • If a hospital is not making (or is “not capable of making”) presumptive eligibility determinations in accordance with these state policies and procedures, the state cannot disqualify the hospital from using the option until it has provided the hospital with additional training or taken other corrective action.
    • The state may also develop proficiency standards, trainings, and audits with which hospitals must comply.
  • States may adopt policies that would require individuals to attest their immigration and residency status to a hospital before being given a presumptive eligibility determination. However, states may not require hospitals to verify an individual’s immigration or residency status.

Can eligibility vendors or other third party vendors make PE determinations on a hospital’s behalf?

  • CMS released a set of Frequently Asked Questions on January 24, 2014 that addresses this question. While hospitals can use third party vendors to help implement PE, hospitals are ultimately responsible for all PE determinations. Thus, third parties can meet with consumers, help consumers fill out PE applications, and help with a hospital’s general PE operations. However, a hospital will be held responsible for all PE determinations that are made.
  • Also note that hospitals may use third-party vendors to assist individuals in completing and submitting the full application.
  • Because this guidance is new, it is important for hospitals to work with state Medicaid agencies to ensure mutual understanding of the appropriate role for third party vendors. Some hospitals have already signed state agreements prohibiting third party vendors from playing a role, so agreements may need to be amended.

How is the hospital PE requirement different from states’ option to allow PE for other qualified entities?

In addition to the hospital PE requirement, the Affordable Care Act also gives states a new option to allow qualified entities — including, but not limited to hospitals — to conduct presumptive eligibility determinations for income-based Medicaid eligibility determinations as long as the state uses presumptive eligibility for pregnant women or children. For more about the state option, see Presumptive Eligibility: New Options in 2014.

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