WSR 02-15-180

PROPOSED RULES

HEALTH CARE AUTHORITY


(Basic Health)

[ Order 01-07 -- Filed July 24, 2002, 11:15 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-01-115.

Title of Rule: Basic Health enrollee recertification and recoupment of subsidy overpayment.

Purpose: The agency is proposing to amend its rules to clarify the requirements and schedule for verifying continued eligibility for subsidized Basic Health coverage (recertification) and incorporate criteria for imposing penalties.

Statutory Authority for Adoption: RCW 70.47.050, 70.47.060(9).

Statute Being Implemented: RCW 70.47.060(9).

Summary: These draft rules outline the requirements and schedule for verifying enrollees' eligibility for subsidized Basic Health enrollment and imposing penalties, consistent with the requirements of section 212(5), chapter 371, Laws of 2002. The revised rules would impose penalties in cases where a subsidy overpayment is the result of fraud or intentionally withholding or misrepresenting information the enrollee knew was material.

Reasons Supporting Proposal: Proviso language in chapter 371, Laws of 2002 (ESSB 6387) has clearly stated the legislative expectation regarding recertification of enrollees, recoupment of subsidy overpayments, and assessment of penalties.

Name of Agency Personnel Responsible for Drafting: Rosanne Reynolds, Lacey, Washington, (360) 923-2948; Implementation and Enforcement: Becky Loomis, Lacey, Washington, (360) 923-2996.

Name of Proponent: Washington State Health Care Authority, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: RCW 70.47.060(9) gives Basic Health the authority to bill enrollees for subsidy overpayments resulting from the enrollees' failure to report income or income changes accurately or to impose penalties. The agency is instructed to adopt rules to define the application of these sanctions and the processes used to impose them. Previous rules outlined the process, but did not include the criteria for imposing penalties, since the agency was not yet imposing penalties. Chapter 371, Laws of 2002 (budget proviso), requires the agency to both recover subsidy overpayments and impose penalties, provides guidelines for the minimum action the agency is expected to take for verifying eligibility, and requires the disenrollment of enrollees who do not respond to a recertification request. These rules clarify the requirements and process for recertification, using the guidelines in the budget proviso language, change the result of noncompliance from conversion to nonsubsidized coverage to disenrollment, and establish criteria for imposing penalties. Penalties would be imposed only in cases where the subsidy overpayment was the result of fraud or intentionally withholding or misrepresenting information the enrollee knew was material to verification of eligibility for the subsidy.

Proposal Changes the Following Existing Rules: The amendments to WAC 182-25-040 add specific information on the schedule for requiring updated information and the information required from enrollees to verify their eligibility for subsidized Basic Health coverage. Rules regarding the consequences to enrollees for failure to comply with a recertification request are revised to allow for disenrollment, to be consistent with the language in chapter 371, Laws of 2002. Criteria for imposing penalties and further information on action the agency may take to recover a subsidy overpayment are also added.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The Health Care Authority is not required by chapter 19.85 RCW to prepare a small business economic impact statement. There will be little, if any, cost to small businesses.

RCW 34.05.328 does not apply to this rule adoption. RCW 34.05.328 does not apply to the Health Care Authority rules unless requested by the Joint Administrative Rules Review Committee or applied voluntarily.

Hearing Location: Health Care Authority, 676 Woodland Square Loop S.E., Building B, Second Floor Conference Room, Lacey, WA, on August 28, 2002, at 1:30 p.m.

Assistance for Persons with Disabilities: Contact Nikki Johnson by August 26, 2002, TDD (888) 923-5622 or (360) 923-2805.

Submit Written Comments to: Rosanne Reynolds, P.O. Box 42686, Olympia, WA 9854 [98504]-2686, e-mail Rrey107@hca.wa.gov, fax (360) 412-4276, by August 28, 2002.

Date of Intended Adoption: September 12, 2002.

July 24, 2002

Melodie Bankers

Rules Coordinator

OTS-5867.3


AMENDATORY SECTION(Amending Order 99-06, filed 11/18/99, effective 12/19/99)

WAC 182-25-040   Enrollment in the plan.   (1) Any individual applying for enrollment in BHP must submit a signed, completed BHP application for enrollment. Applications for enrollment of children under the age of eighteen must be signed by the child's parent or legal guardian, who shall also be held responsible for payment of premiums due on behalf of the child. If an applicant is accepted for enrollment, the applicant's signature acknowledges the applicant's obligation to pay the monthly premium in accordance with the terms and conditions identified in the member handbook. Applications for subsidized enrollment on behalf of children under the age of nineteen shall be referred to the department of social and health services for Medicaid eligibility determination, unless the family chooses not to access this option.

(2) Each applicant shall list all eligible dependents to be enrolled and supply other information and documentation as required by BHP and, where applicable, DSHS medical assistance.

(a) Documentation ((will be required)), showing the amount and sources of the applicant's gross family income is required. Documentation will include a copy of the applicant's most recently filed federal income tax form, and/or other documentation that shows year-to-date income, or income for the most recent thirty days or complete calendar month as of the date of application. Applicants who were not required to file a federal income tax return may be required to provide verification of nonfiling status. An average of documented income received over a period of several months may be required for purposes of eligibility determination.

(b) Documentation of Washington state ((residency shall also be required)) residence, displaying the applicant's name and address is required, for example, a copy of a current utility bill or rent receipt. Other documentation may be accepted if the applicant does not have a physical residence, for example, a signed statement from a person or other entity who is providing temporary shelter.

(c) BHP may request additional information from applicants for purposes of establishing or verifying eligibility, premium responsibility or ((managed health care system)) MHCS selection.

(d) Submission of incomplete or inaccurate information may delay or prevent an applicant's enrollment in BHP. Intentional submission of false information ((may)) will result in disenrollment of the subscriber and all enrolled dependents.

(3) Each member may be enrolled in only one BHP account. Each family applying for enrollment must designate a ((managed health care system)) MHCS from which the applicant and all enrolled dependents will receive covered services. All applicants from the same family who are covered under the same account must receive covered services from the same ((managed health care system)) MHCS (with the exception of cases in which a subscriber who is paying for BHP coverage for his/her dependent who lives in a different service area). No applicant will be enrolled for whom designation of a ((managed health care system)) MHCS has not been made as part of the application for enrollment. ((The administrator will establish)) Procedures for the selection of ((managed health care systems, which will include conditions under which an enrollee may change from one managed health care system to another. Such procedures will allow enrollees to)) MHCS are set forth in the BHP member handbook. Generally, enrollees may change from one ((managed health care system)) MHCS to another only during open enrollment((, or otherwise upon showing of)) or if they are able to show good cause for the transfer, for example, when enrollees move to an area served by a different MHCS or where they would be billed a higher premium for their current MHCS.

(4) When a ((managed health care system)) MHCS assists BHP applicants in the enrollment process, it must provide them with the toll-free number for BHP and information on all MHCS available within the applicant's county of residence and the estimated premiums for each available MHCS.

(5) If specific funding has been appropriated for that purpose, insurance brokers or agents who have met all statutory and regulatory requirements of the office of the insurance commissioner, are currently licensed through the office of the insurance commissioner, and who have completed BHP's training program, will be paid a commission for assisting eligible applicants to enroll in BHP.

(a) Individual policy commission: Subject to availability of funds, and as a pilot program, BHP will pay a one-time fee to any currently licensed insurance broker or agent who sells BHP to an eligible individual applicant if that applicant has not been a BHP member within the previous five years.

(b) Group policy commission: Subject to availability of funds, and as a pilot program, fees paid for the sale of BHP group coverage to an eligible employer will be based on the number of employees in the group for the first and second months of the group's enrollment.

(c) Insurance brokers or agents must provide the prospective applicant with the BHP toll-free information number and inform them of BHP benefits, limitations, exclusions, waiting periods, co-payments, all ((managed health care systems)) MHCSs available to the applicant within his/her county of residence and the estimated premium for each of them.

(d) All statutes and regulations of the office of the insurance commissioner will apply to brokers or agents who sell BHP, except they will not be required to be appointed by the MHCS.

(e) BHP will not pay renewal commissions.

(6) Except as provided in WAC 182-25-030(6), applications for enrollment will be reviewed by BHP within thirty days of receipt and those applicants satisfying the eligibility criteria and who have provided all required information, documentation and premium payments will be notified of their effective date of enrollment.

(7)(a) Eligible applicants will be enrolled in BHP in the order in which their completed applications, including all required documentation, have been received by BHP, provided that:

(((a))) (i) At least one MHCS is accepting new enrollment in the program for which the applicant is applying and from the geographic area where the applicant lives; and

(((b))) (ii) The applicant also remits full payment of the first premium bill to BHP by the due date specified by BHP.

(b) In the event a reservation list is implemented, eligible applicants will be enrolled in accordance with WAC 182-25-030(6).

(8) An open enrollment period of at least twenty consecutive days will be held annually. During this open enrollment period, enrollees may apply to enroll additional family members or to transfer their enrollment to a different MHCS, provided the MHCS selected is accepting new enrollment for the enrollee's program in the geographic area where the enrollee lives.

(9) Not all family members are required to apply for enrollment in BHP; however, any family member for whom application for enrollment is not made at the same time that other family members apply, may not subsequently enroll as a family member until the next open enrollment period, unless the subscriber has experienced a "qualifying change in family status." "Qualifying changes in family status" include:

(a) The loss of other health care coverage, for a family member who has previously waived coverage, provided BHP receives the family member's application within thirty days of the loss of other coverage, along with proof of the family member's continuous medical coverage from the date the subscriber enrolled in BHP;

(b) Marriage or assuming custody or dependency of a child or adult dependent (other than newborn or newly adopted children), provided BHP receives the new family member's application within thirty days of the change in family status; or

(c) Addition of an eligible newborn child or a child newly placed for adoption provided BHP receives the child's application for enrollment within sixty days of the date of birth or placement for adoption. These children may be enrolled effective from the date of birth or placement for adoption.

(10) ((On a schedule approved by the administrator, BHP will request verification of information from all or a subset of enrollees ("recertification"), requiring new documentation of income to determine if the enrollee has had a change in income that would result in a different subsidy level.)) Subscribers must notify BHP of any changes that could affect their eligibility or subsidy or their dependents' eligibility or subsidy:

(a) Within thirty days of the end of the first month of receiving an increased income; or

(b) Within thirty days of a change other than an income change (for example, a change in family size or address).

(11) BHP will verify the continuing eligibility of enrollees through the recertification process at least once every twelve months. Upon request of BHP, enrollees must submit evidence satisfactory to BHP, proving their continued eligibility for enrollment and for the premium subsidy they are receiving.

(a) BHP will verify income through comparison with other state and federal agency records or other third-party sources.

(b) If the enrollee's income on record with other agencies or third-party source differs from the income the enrollee has reported to BHP, or if questions arise concerning the documentation submitted, BHP will require updated documentation from the enrollee to prove continued eligibility for the subsidy they are receiving. At that time, BHP may also require updated documentation of residence to complete the recertification process.

(c) Enrollees who have been enrolled in BHP six months or more and have not provided updated income documentation for at least six months will be required to submit new income documentation if their wage or salary income cannot be compared to an independent source for verification.

(12) In addition to verification of income, enrollees must annually submit documentation satisfactory to BHP of the following:

(a) Washington state residence;

(b) Full-time student status for dependent students age nineteen through twenty-two; and

(c) Medicare ineligibility for enrollees age sixty-five or over.

(13) For good cause such as, but not limited to, when information received indicates a change in income or a source of income the enrollee has not reported, BHP may require ((recertification on a more widespread or more frequent basis)) enrollees to provide verification required in subsections (11) and (12) of this section more frequently, regardless of the length of time since their last recertification.

(14) Enrollees who fail to comply with a recertification request will be ((converted to nonsubsidized enrollment for at least one month, until new income documentation has been submitted and processed. Each enrollee is responsible for notifying BHP within thirty days of any changes which could affect the enrollee's eligibility or premium responsibility)) disenrolled, according to the provisions of WAC 182-25-090 (2)(f).

(15) If, as a result of recertification, BHP determines that an enrollee has not reported income or income changes accurately, the enrollee will be subject to the provisions of WAC 182-25-085.

[Statutory Authority: RCW 70.47.050, 70.47.060 and 70.47.100. 99-24-005 (Order 99-06), 182-25-040, filed 11/18/99, effective 12/19/99. Statutory Authority: RCW 70.47.050 and 70.47.060. 99-16-022 (Order 99-02), 182-25-040, filed 7/26/99, effective 8/26/99. Statutory Authority: RCW 70.47.050. 98-07-002, 182-25-040, filed 3/5/98, effective 4/5/98; 97-15-003, 182-25-040, filed 7/3/97, effective 8/3/97; 96-15-024, 182-25-040, filed 7/9/96, effective 8/9/96.]


AMENDATORY SECTION(Amending Order 99-01, filed 5/26/99, effective 6/26/99)

WAC 182-25-085   Enrollees' failure to report correct income.   (1) If ((the HCA)) BHP determines that the enrollee has received a subsidy overpayment due to failure to report income correctly, ((the HCA)) BHP may:

(a) Bill the enrollee for the amount of subsidy overpaid by the state; or

(b) If the overpayment was due to fraud, intentional misrepresentation of information, or withholding information that the enrollee knew or should have known was material or necessary to accurately determine the premium, impose civil penalties of up to two hundred percent of the subsidy overpayment.

(2) Any ((HCA)) BHP determination under subsection (1) of this section is subject to the enrollee appeal provisions in WAC 182-25-105.

(3) When a decision under subsection (1)(a) of this section is final, ((the HCA)) BHP may establish a payment schedule and, for enrollees who remain enrolled in BHP, will collect the amount owed through future premium statements. Enrollees who disenroll prior to paying the full amount of the subsidy overpayment may continue the payment plan previously approved by BHP or may be billed for the entire amount due. BHP may charge interest for the amount past due, at the rate specified under RCW 43.17.240 and rules promulgated thereunder. The payment schedule will be for a period of no more than six months, unless ((the HCA)) BHP approves an alternative payment schedule requested by the enrollee. When a payment schedule is established, ((the HCA)) BHP will send the enrollee advance written notice of the schedule and the total amount due. The total amount due each month will include the regular monthly premium plus charges for subsidy overpayment. If an enrollee does not pay the amount due, including charges for subsidy overpayment, the enrollee and all family members enrolled on the account will be disenrolled for nonpayment under WAC 182-25-090 (2)(b).

(4) When a final decision is made under subsection (1)(b) of this section ((becomes final, the HCA)), BHP will send the enrollee notice that payment of the civil penalty is due in full within thirty days after the decision becomes final, unless ((the HCA)) BHP approves a different due date at the enrollee's request. If the enrollee does not pay the civil penalty by the due date, the enrollee and all family members on the account will be disenrolled for nonpayment under WAC 182-25-090 (2)(c).

(5) Individuals who are disenrolled from BHP may not reenroll until charges for subsidy overpayments or civil penalties imposed under subsection (1) of this section have been paid or ((the HCA)) BHP has approved a payment schedule and all other requirements for enrollment have been met.

(6) ((The HCA)) BHP will take all necessary and appropriate administrative and legal actions to collect the unpaid amount of any subsidy overpayment or civil penalty, including recovery from the enrollee's estate.

(7) Enrollees under employer group or financial sponsor group coverage who do not follow the income reporting procedures established by BHP and their employer or financial sponsor may be billed directly by ((the HCA)) BHP for subsidy overpayments or civil penalties assessed under subsection (1) of this section. Enrollees who do not pay the amount due will be disenrolled under WAC 182-25-090 (2)(b) or (c). Enrollees who are disenrolled for nonpayment of a subsidy overpayment or civil penalties will be excluded from the minimum participation calculation for employer groups under WAC 182-25-050(2).

[Statutory Authority: RCW 70.47.050, 70.47.060 and 70.47.090. 99-12-033 (Order 99-01), 182-25-085, filed 5/26/99, effective 6/26/99.]


AMENDATORY SECTION(Amending Order 99-06, filed 11/18/99, effective 12/19/99)

WAC 182-25-090   Disenrollment from BHP.   (1) An enrollee or employer group may disenroll effective the first day of any month by giving BHP at least ten days prior written notice of the intention to disenroll.

(2) BHP may disenroll any enrollee or group from BHP for good cause, which includes:

(a) Failure to meet the eligibility requirements set forth in WAC 182-25-030, 182-25-050, 182-25-060, and 182-25-070;

(b) Nonpayment of premium under the provisions of subsection (((5))) (6) of this section;

(c) Nonpayment of civil penalties assessed under WAC 182-25-085;

(d) Changes in MHCS or program availability when the enrollee's MHCS will no longer be available to him or her and no other MHCS in the area where the enrollee lives is accepting new enrollment in the enrollee's program;

(e) Repeated failure to pay co-payments in full on a timely basis;

(f) Fraud, intentional misrepresentation of information or withholding information that the enrollee knew or should have known was material or necessary to accurately determine their eligibility or premium responsibility, failure to provide requested verification of eligibility or income, or knowingly providing false information;

(g) Abuse or intentional misconduct;

(h) Danger or threat to the safety or property of the MHCS or the health care authority or their staff, providers, patients or visitors; and

(i) Refusal to accept or follow procedures or treatment determined by a MHCS to be essential to the health of the enrollee, when the MHCS has advised the enrollee and demonstrated to the satisfaction of BHP that no professionally acceptable alternative form of treatment is available from the MHCS.

(3) In addition to being disenrolled, any enrollee who knowingly provides false information to BHP or to a participating managed health care system may be held financially responsible for any covered services fraudulently obtained through BHP.

(((3))) (4) At least ten days prior to the effective date of disenrollment under subsection (2)(a) and (c) through (i) of this section, BHP will send enrollees written notice of disenrollment.

(a) The notice of disenrollment will:

(i) State the reason for the disenrollment;

(ii) State the effective date of the disenrollment;

(iii) Describe the procedures for disenrollment; and

(iv) Inform the enrollee of his or her right to appeal the disenrollment decision as set forth in WAC 182-25-100 and 182-25-105.

(b) The notice of disenrollment will be sent to both the employer or sponsor and to all members of an employer group, home care agency group or financial sponsor group that is disenrolled under these provisions. Enrollees affected by the disenrollment of a group account will be offered coverage under individual accounts. Coverage under individual accounts will not begin unless the premium for individual coverage is paid by the due date for the coverage month. A one-month break in coverage may occur for enrollees who choose to transfer to individual accounts.

(((4))) (5) Enrollees covered under BHP Plus or receiving maternity benefits through medical assistance will not be disenrolled from those programs when other family members lose BHP coverage, as long as they ((are still)) remain eligible for those programs.

(((5))) (6) Under the provisions of this subsection, BHP will suspend or disenroll enrollees and groups who do not pay their premiums when due, including amounts owed for subsidy overpayment, if any. Partial payment or payment by check which cannot be processed or is returned due to nonsufficient funds will be regarded as nonpayment.

(a) At least ten days before coverage will lapse, BHP will send a delinquency notice to each subscriber whose premium payment has not been received by the due date. The delinquency notice will include a ((delinquency)) final due date and a notice that BHP coverage will lapse unless payment is received by the ((delinquency)) final due date.

(b) Except as provided in (c) of this subsection, coverage will be suspended for one month if an enrollee's premium payment is not received by the ((delinquency)) final due date, as shown on the delinquency notice. BHP will send written notice of suspension to the subscriber, stating:

(i) The effective date of the suspension;

(ii) The due date by which payment must be received to restore coverage after the one-month suspension;

(iii) The subscriber and any enrolled dependents will be disenrolled if payment is not received by the final due date; and

(iv) The enrollee's right to appeal under WAC 182-25-105.

(c) Enrollees whose premium payment has not been received by the delinquency due date, and who have been suspended twice within the previous twelve months will be disenrolled for nonpayment as of the effective date of the third suspension.

(d) Enrollees who are suspended and do not pay the premium for the next coverage month by the due date on the notice of suspension will be immediately disenrolled and issued a notice of disenrollment ((as provided in subsection (3)(a) of this section)), stating:

(i) The effective date of the disenrollment; and

(ii) The enrollee's right to appeal under WAC 182-25-105.

(((6))) (7)(a) Enrollees who voluntarily disenroll or are disenrolled from BHP may not reenroll for a period of twelve months from the date their coverage ended and until all other requirements for enrollment have been satisfied. An exception to this provision will be made for:

(i) Enrollees who left BHP for other health insurance, who are able to provide proof of continuous coverage from the date of disenrollment, and who apply to reenroll in BHP within thirty days of losing the other coverage;

(ii) Enrollees who left BHP because they lost eligibility and who subsequently become eligible to reenroll; and

(iii) Persons enrolling in subsidized BHP, who had enrolled and subsequently disenrolled from nonsubsidized BHP under subsection (1) or (2)(b) of this section while waiting on a reservation list for subsidized coverage.

(iv) Enrollees who were disenrolled by BHP because no MHCS was contracted to serve the program in which they were enrolled in the geographic area where they live; these enrollees may reenroll, provided all enrollment requirements are met, if a MHCS begins accepting enrollment for their program in their area or if they become eligible and apply for another BHP program.

(b) An enrollee who is required to wait twelve months for reenrollment under (a) of this subsection ((and who has been waiting on a reservation list for subsidized BHP)) may not reenroll prior to the end of the required twelve-month wait. If ((the)) an enrollee satisfies the required twelve-month wait ((for reenrollment)) after applying for subsidized coverage and while ((on the reservation list)) waiting to be offered coverage, enrollment will not be completed until funding is available to enroll him or her ((from the reservation list)).

[Statutory Authority: RCW 70.47.050, 70.47.060 and 70.47.100. 99-24-005 (Order 99-06), 182-25-090, filed 11/18/99, effective 12/19/99. Statutory Authority: RCW 70.47.050, 70.47.060 and 70.47.090. 99-12-033 (Order 99-01), 182-25-090, filed 5/26/99, effective 6/26/99. Statutory Authority: RCW 70.47.050. 98-07-002, 182-25-090, filed 3/5/98, effective 4/5/98; 97-15-003, 182-25-090, filed 7/3/97, effective 8/3/97; 96-15-024, 182-25-090, filed 7/9/96, effective 8/9/96.]

Washington State Code Reviser's Office