TITLE administration

Part XV. Texas Health and Human Services

Chapter 357. Medicaid Fair Hearings

1 TAC §§357.1, 357.3, 357.5, 357.7, 357.9, 357.11, 357.13, 357.15, 357.17, 357.19, 357.21, 357.23, 357.25, 357.27, 357.29

The Health and Human Services Commission adopts new §§357.1, 357.3, 357.5, 357.7, 357.9, 357.11, 357.13, 357.15, 357.17, 357.19, 357.21, 357.23, 357.25, 357.27 and 357.29 of Chapter 357, concerning Medicaid Fair Hearings. Sections 357.1, 357.5, 357.7, 357.11, 357.13, 357.17, 357.27, and 357.29 are adopted with changes to the proposed text as published in the September 11, 1998, issue of the Texas Register (23 TexReg 9188). Sections 357.3, 357.9, 357.15, 357.19, 357.21, 357.23, and 357.25 are adopted without changes.

The chapter describes the procedures for fair hearings for recipients of the Texas Medicaid program. The fair hearing procedures, which are consistent with the federal regulations concerning fair hearings as described in 42 C.F.R. Subpart E, §§431.200, et seq ., will be used by all agencies operating part of the Medicaid program. The commission promulgates these rules to ensure that all Medicaid recipients are provided an opportunity for a fair hearing as required by federal law and regulations, and to ensure that the procedures relating to fair hearings are uniform for all operating agencies as is required by §531.024(6), Government Code, relating to Planning and Delivery of Health and Human Services.

The following comments were received on the new rules as proposed. Following each comment is the commission's response and any resulting change(s) to the rule.

Comments were received from Advocacy, Incorporated, The ARC of Texas, an interested individual, the Parent Association for the Retarded of Texas, and a parent of a person with mental retardation. Comments were also received at a public hearing held jointly by the Texas Department of Mental Health and Mental Retardation and the Health and Human Services Commission on September 22, 1998. None of the commenters were against the rules in their entirety; however they expressed concerns, asked questions, and suggested recommendations for change as discussed in the summary of comments.

Comment: Two commenters suggested that a definition of "legally authorized representative (LAR)" be added to the rules and that "or LAR" be added after "individual" throughout the rules.

Response: The commission agrees that a definition of "authorized representative" is needed. However, each of the agencies operating part of the Medicaid program must define that term in light of its own Medicaid program. Consequently, the commission has added a provision to §357.1(b) of the rules stating that an authorized representative, as defined by the operating agency, may, on the individual's behalf, take any action that an individual can take.

Comment: Regarding §357.7, two commenters asked why an operating agency or its designee may terminate or reduce services before a hearing decision is rendered if it is determined at the hearing that the sole issue is one of state or federal law or policy, and the operating agency or its designee informs the individual in writing of its intent to reduce or terminate services pending the hearing decision at least five days before the termination or reduction would be effective.

Response: This rule tracks a federal regulation found at 42 C.F.R. §431.230 that allows an agency to terminate or reduce services between the time of the fair hearing and the time the hearing decision is written up if it is determined at the hearing that the issue is purely one of the application of a state or federal law to a particular situation and the operating agency informs the individual at least five days before the termination or reduction would be effective. No change was made as a result of this comment.

Comment: Regarding §357.9, two commenters suggested that, for a hearing official to be impartial, he or she must be someone outside the operating agency, perhaps from the State Office of Administrative Hearings. The commenters were concerned that someone within the operating agency would not be impartial.

Response: Pursuant to federal regulation, found at 42 C.F.R. §431.240(3), the hearing official must be someone who was not directly involved in the initial determination of the action in question. At the operating agencies, the hearing officials are not within the same divisions as those persons who make the initial decisions. For example, at the Texas Department of Health (TDH), the original decision is made by the National Heritage Insurance Company, an independent contractor, and then reviewed by a TDH employee. At the Texas Department of Human Services, the hearings official are not the same persons making the initial decisions. At the Texas Department of Mental Health and Mental Retardation (TDMHMR), the Texas Department of Human Services conducts TDMHMR's hearings; consequently, a different agency will be conducting the fair hearings. No change was made as a result of this comment.

Comment: Regarding §357.13, two commenters suggested that the location of the hearing should be convenient for the individual or authorized representative.

Response: As hearing officials do consider the location of the individual, among other factors, when determining the location of the hearing, language was added for clarification.

Comment: A commenter stated that the rules are difficult to get through, full of legalese, and inconsistent in a number of places. The commenter believes that the rules were developed by people who have no sense about who the folks are that have an absolute right to a fair hearing. The commenter suggested that the commission pull in a broader group of stakeholders to refine the rules.

Response: The rules are patterned after the federal regulations governing fair hearings. There is a certain amount of legal language that is necessary to track the federal language. However, the commission has re-organized the rules and has attempted to make them clearer to understand. Similarly, the commission has attempted to correct any inconsistencies in the rules. The commission did conduct a workgroup in which advocates who represent people requesting fair hearings participated.

Comment: A commenter suggested that written notice of an individual's right to request a fair hearing should be available in alternative formats. At a minimum, the commenter suggests providing the individual with the name and phone number of someone who can provide more detailed information or answer questions regarding the Medicaid fair hearing process.

Response: The notice of an individual's right to request a fair hearing currently is sent in both English and Spanish. The individual is told that he or she may contact the caseworker with questions and, in a subsequent letter, is told about the right to reasonable accommodation in connection with the fair hearing process. The commission agrees that the name and phone number of a person who can answer questions regarding the Medicaid fair hearing process should be included in the notice and has added language to §357.5(c) accordingly.

Comment: A commenter asked why §357.5(d)(1) is overly rigid with respect to how a request for a hearing must be submitted and asked if the commission is attempting to restrict a person's right to a fair hearing.

Response: The commission is not trying to limit a person's right to a fair hearing. The purpose of these rules is to streamline the process for requesting a hearing across the agencies, which should, for some individuals, make the process consistent and, thus, easier to access and understand. Subsection (d)(1) states that the hearing be requested in accordance with the agency's instructions. This provision allows the agencies the flexibility to determine the best methods for the individuals they serve to request a hearing. It is not intended to be restrictive but permissive in nature.

Comment: Regarding §357.5(d)(2), a commenter asked for clarification of what a "rebuttable presumption" is.

Response: The commission agrees that the term is confusing and has deleted §357.5(d)(2).

Comment: Regarding §357.7(c), a commenter asked what would be done if a person is indigent and is unable to pay back the cost of services rendered. The commenter suggested that the commission include a provision that will allow for flexibility and negotiation regarding paying back funds.

Response: This comment is outside the scope of these rules, as repayments are handled by the operating agencies in their program rules. No change was made as a result of this comment.

Comment: Regarding §357.11(b), a commenter suggested that "reasonable timeframe" be replaced with "seven days."

Response: The commission disagrees, as the language in this section tracks the language of the federal regulation. Additionally, seven days may not be reasonable in all circumstances. Language was changed in §357.11(a)(2) and §357.11(b)(1) which addresses the commenter's concern.

Comment: Regarding §357.15(c), a commenter suggested that a timeframe of seven days be inserted for individuals to review material.

Response: The commission believes that the language "in advance of the hearing" is sufficient. No change was made as a result of this comment.

Comment: Regarding §357.27, a commenter suggested that the cost of a court reporter should be borne by the court official.

Response: The commission disagrees with the comment. Federal regulations require that the operating agency keep a transcript or recording of the testimony and exhibits presented at the hearing or an official report containing the substance of what happened at the hearing. (42 C.F.R. §431.244(b)(1)). Typically, the hearing official tape records the hearing. A copy of the tape recording is available to any party at a minimal charge upon request. Asking for a court reporter to be present is above and beyond what is necessary to have a record of the hearing. Consequently, the party asking for a court reporter should bear the court reporter's cost.

Comment: A commenter asked if it is possible for an individual to appeal a hearing decision. The commenter suggested adding an appeal if the individual does not agree with the hearing decision.

Response: State law does not allow an appeal of a hearing decision. Consequently, no change was made as a result of this comment.

Comment: Regarding §357.5(b), a commenter objected to taking action on the same day that notice is mailed. The commenter also stated that the exceptions under subsection (b) are too vague.

Response: These exceptions and the ability to mail the notice and take the action on the same day are taken from federal regulations found at 42 C.F.R. §431.213. Additionally, subsection (b) states that the notice must be mailed not later than the date of action. Consequently, an operating agency could mail the notice sooner than the date of action; the limitation is that the notice must be mailed no later than the date of action.

Comment: One commenter suggested that the language in sections 357.1(a) and 357.3(1) should be changed to allow an appeal of the denial of a prior authorization based on the fact that the service requested is not a Medicaid-covered service. The commenter makes reference to a letter from the federal Health Care Financing Administration regarding the process for determining whether a particular piece of durable medical equipment is a Medicaid-covered service.

Response: The commission appreciates the comment and is currently looking into how durable medical equipment is described and covered under the Medicaid State Plan. The commission will then determine if these rules need to be amended regarding durable medical equipment.

Comment: Regarding §357.3(4), one commenter suggested that examples of operating agency designees, which appeared in previous drafts of the rules, be reinserted to provide clarification.

Response: The commission believes that the definition is sufficient as written without the examples. No change was made as a result of this comment.

Comment: Regarding §357.3(7), a commenter suggested that, aside from the first sentence of the definition, the remaining sentences are a misinterpretation of the amount, duration, and scope rule found at 42 C.F.R. §440.230.

Response: The commission disagrees that this definition is a misinterpretation of the amount, duration, and scope rule found at 42 C.F.R. §440.230. No change was made as a result of this comment.

Comment: Regarding §357.5, a commenter made several suggestions about the organization of the section. The commenter also suggested that §357.5(d)(5) should be simplified and moved under §357.7 relating to maintaining benefits or services.

Response: The commission agrees and has made most of the suggested changes. The commission disagrees with the suggested simplification of §357.5(d)(5), as the commenter's suggested language is overbroad because it would encompass the expiration of a time-limited service. The language in §357.5(d)(5) has been included with the language in §357.7(a) to address the commenter's concern.

Comment: Regarding §357.7, a commenter stated that the language does not correctly track the federal regulations on which it is based.

Response: The commission disagrees with the comment. No change was made as a result of the comment.

Comment: Regarding §357.9, a commenter suggested that the rule encompass training requirements for the hearing officials. The commenter also suggested that, under the proposed language, the Texas Department of Mental Health and Mental Retardation could designate an employee of a local mental health authority or community center to act as the hearing official even though that individual may be familiar with other aspects of the individual's care or treatment or that the Texas Department of Health could designate an impartial employee of a managed care organization to conduct a hearing and render a decision.

Response: Training of hearing officials is beyond the scope of this rule. Additionally, the Texas Department of Human Services will be conducting the fair hearings for the Texas Department of Mental Health and Mental Retardation. Therefore, one of the scenarios that the commenter presents will not occur. Moreover, the Medicaid operating agencies are responsible for conducting the fair hearings; therefore, a managed care organization employee would not be a hearing official for a Texas Department of Health fair hearing.

Comment: Regarding §357.11(a)(2)(D), a commenter suggested inclusion of language found in §357.15(d) that a person with a disability can request an "in-person" hearing if the person cannot effectively participate in a telephone hearing.

Response: The commission disagrees that additional language is needed to clarify §357.11(a)(2)(D).

Comment: Regarding §357.11(a)(2)(C), a commenter suggested that the language should be simplified and a new §357.11(b) added to incorporate both a description of an oral hearing and the text of §357.15 and a new §357.11(c) would incorporate the text of §357.17.

Response: The commission disagrees with the suggested changes, as it believes that the sections are clear as written.

Comment: A commenter stated that §§357.11(b) and 357.23(1) are misleading as written, as it is not clear that an individual has the right to examine "any and all records, including those that the operating agency intends to use at the hearing."

Response: The federal regulation on which this section is based states that an individual must be given an opportunity to examine at a reasonable time before the date of the hearing and during the hearing: (1) the contents of the applicant's or recipient's case file; and (2) all documents and records to be used by the State . . . at the hearing. (42 C.F.R. §431.242(a)). The commission believes that the two sections track the federal regulation. To ensure that the individual is aware of the right to examine the files, documents, and records, the information in §357.11(b)(1) has been added to the notice content in §357.11(a)(2) as a new subparagraph (E).

Comment: Regarding §357.11(b)(2), a commenter stated that requiring a Medicaid beneficiary to submit additional medical information seven days prior to the hearing when the hearing official is required to give only ten days notice of the hearing is unworkable. The commenter made the same suggestion regarding the timeframes in §357.17. The commenter also pointed out that there is no requirement that the notice of hearing contain the information in §357.11(b)(2) so that an individual would be aware of this requirement.

Response: The commission agrees and has shortened the timeframe to five days in §357.11(b)(2) and §357.17. The commission has also amended §357.11(a)(2) to include, as a new subparagraph (F), a notification of the requirement to submit information to the hearing official within the specified timeframe.

Comment: Regarding §357.11(b)(2), a commenter suggested that keeping the record open to obtain a medical review of medical material filed not seven days before the hearing but at the hearing violates an individual's right to question or refute any testimony or evidence.

Response: The commission agrees and has amended §357.11(b)(2) to require the hearing official to provide a copy of the medical review to the individual and to allow the individual to file a written response or rebuttal to the medical review before the record is closed.

Comment: Regarding §357.29, a commenter suggested that it would be useful to state that if the action was proposed by a designee of the operating agency, the designee will be notified of and bound by the hearing official's decision.

Response: The commission agrees and has amended §357.29(e) to include all designees rather than just managed care organizations.

The commission also made some clarifying changes for consistency throughout the rules and added needed punctuation.

The new sections are adopted under the Texas Government Code, chapter 531, §531.033, which authorizes the Commissioner of Health and Human Services to adopt rules necessary to carry out the Health and Human Services Commission's duties under chapter 531, and §531.024, which requires the promulgation of uniform fair hearings rules for all Medicaid-funded services.

§357.1.Purpose and Scope.

(a)

Purpose. The Health and Human Services Commission (HHSC) is required by state law to promulgate uniform fair hearing rules for all Medicaid-funded services. An opportunity for a fair hearing is required by federal law and regulation in any Medicaid case for an individual whose claim for services is denied or not acted upon promptly. An opportunity for a fair hearing is also required when an operating agency or its designee takes action to suspend, terminate, or reduce services, including a denial of a prior authorization request for Medicaid-covered services. These fair hearing rules will also apply to any hearing involving the transfer or discharge of an individual from a nursing facility or to an individual adversely affected by the preadmission screening and annual resident review requirements.

(b)

Scope.

(1)

These rules establish fair hearing procedures which an operating agency will follow when the operating agency is required to conduct a fair hearing for Medicaid-funded services.

(2)

An individual's authorized representative, as defined by the operating agency, may, on the individual's behalf, take any action that the individual can take as described in these rules.

§357.5.Notice.

(a)

Agency Notice.

(1)

Notice at time of action. If the action of the operating agency or its designee is the denial of Medicaid or program eligibility or the denial of a prior authorization request, at the time of action, the operating agency or its designee shall give an individual written notice of the individual's right to request a fair hearing on the action.

(2)

Advance Notice. If an operating agency or its designee proposes to take an action other than the denial of Medicaid or program eligibility, denial of a prior authorization request, the failure to act upon an individual's request for Medicaid-covered services, or failure to determine eligibility within a reasonable amount of time, the operating agency or its designee shall deliver to the individual notice of the individual's right to request a hearing on the action at least ten days prior to the date of action unless the circumstances in subsection (b) of this section otherwise provide.

(b)

Exceptions. The operating agency or its designee may mail written notice to an individual not later than the date of action if:

(1)

the operating agency or its designee has factual information confirming the death of the individual;

(2)

the operating agency or its designee receives a clear written statement signed by the individual that:

(A)

he or she no longer wishes services; or

(B)

gives information that requires termination or reduction in services and indicates that he or she understands that this must be the result of supplying that information;

(3)

the individual has been admitted to an institution where he or she is ineligible for further services;

(4)

the individual's whereabouts are unknown and the post office returns agency or designee mail directed to him or her indicating no forwarding address;

(5)

the operating agency or its designee establishes the fact that the individual has been accepted for Medicaid services by another state;

(6)

a change in the level of medical care is prescribed by the individual's physician;

(7)

the notice involves an adverse determination made with regard to the preadmission screening requirements; or

(8)

the action is the transfer or discharge of a resident from a nursing facility and the date of action will occur in less than ten days pursuant to 42 C.F.R. §483.12(a)(5)(ii) because:

(A)

the safety or health of individuals in the facility would be endangered;

(B)

the resident's health improves sufficiently to allow a more immediate transfer or discharge;

(C)

an immediate transfer or discharge is required by the resident's urgent medical needs; or

(D)

a resident has not resided in the facility for thirty days.

(c)

Content of Notice. The notice shall contain:

(1)

the action that the operating agency, its designee, or nursing facility is taking in the case of a denial of Medicaid or program eligibility or a denial of a prior authorization request, or intends to take in the case of any other action except for failing to act upon an individual's request for Medicaid covered services or for an eligibility determination within a reasonable amount of time;

(2)

the date of action;

(3)

a statement of the reason for the action;

(4)

a reference to the statutory or regulatory authority supporting the action, or the change in federal or state law that requires the action;

(5)

an explanation of the individual's right to request a hearing and the procedure for requesting same;

(6)

a statement that the individual may represent himself or herself or use legal counsel, a relative, a friend, or other spokesperson;

(7)

the name and phone number of a person who can answer questions regarding the fair hearing process; and

(8)

an explanation of the circumstances under which services are continued, or a transfer or discharge is deferred, if a hearing is requested.

(d)

Timeframe for Requesting a Hearing. The operating agency and its designee must allow the individual to request a hearing within 90 days from the date the notice required under subsection (a) of this section is mailed.

(1)

The request for hearing must be submitted according to the instructions provided in the notice sent to the individual under subsection (a) of this section.

(2)

If a request for a hearing is not received before the date of action, the action may be taken or allowed.

(3)

If a request for hearing is not received within the 90-day period, the individual is deemed to have waived the hearing and the action becomes final.

§357.7.Maintaining Benefits or Services.

(a)

Except as otherwise specified in subsections (b), (d) and (e) of this section, if the action is other than a denial of Medicaid or program eligibility or a denial of a prior authorization request and a request for hearing is received before the date of action, the action will not be taken and services will be continued until a final decision is rendered following a fair hearing.

(b)

The operating agency or its designee may terminate or reduce services before a hearing decision is rendered if:

(1)

it is determined at the fair hearing that the sole issue is one of state or federal law or policy; and

(2)

the operating agency or its designee informs the individual in writing of its intent to reduce or terminate services pending the hearing decision at least five days before the termination or reduction would be effective.

(c)

The operating agency or its designee may recover or recoup the cost of any services provided to the individual to the extent that the services were furnished solely by reason of this section if the fair hearing decision supports the operating agency's or designee's action.

(d)

If notice is mailed under §357.5(b) of this title (relating to Notice) and the operating agency or its designee receives the individual's request for a hearing within ten days of the mailing of the notice, and the operating agency or its designee determines that the action resulted from something other than the application of federal or state law or policy, the operating agency or its designee will reinstate and continue an individual's services until a hearing decision is rendered.

(e)

The operating agency or its designee has no obligation to begin services requiring prior authorization pending a final decision.

§357.11.Preliminary Matters.

(a)

Notification of Hearing. The hearing official shall, at least ten days prior to the date of the hearing, send a written notification of the hearing to the individual who has requested the hearing.

(1)

This notice will be sent to the address of record for the individual or to the address indicated in the request for hearing.

(2)

The notification shall contain:

(A)

the basis of the proposed action;

(B)

the time, date, and place of the hearing;

(C)

a statement that the individual may request the hearing to be conducted based on the taking of oral testimony (an "oral hearing"), or a hearing based on written information contained in any appropriate file and additional information that the individual may wish to submit for consideration (a "document hearing"), as is described in §357.17 of this title (relating to Document Hearing);

(D)

a statement that the individual may request any reasonable accommodation required due to disability or language comprehension;

(E)

a statement that, before and during the hearing, the individual may request to examine any appropriate file and documents or records the operating agency wants the hearing official to consider; and

(F)

instructions on submitting written medical information for the hearing official to consider and the deadline for submitting that information.

(b)

Access to Records.

(1)

Upon the individual's request, the individual shall be given the opportunity to examine any appropriate file, and other documents or records the operating agency wants the hearing official to consider.

(2)

If the individual intends to introduce written medical information at the hearing, that information must be submitted to the hearing official at least five days prior to the hearing, to allow the operating agency to obtain a review of the material by medical staff persons. The failure to so submit such medical information shall not render the material inadmissible, but the hearing official shall be permitted to keep the hearing record open. The hearing official may request a medical review by the operating agency of the submitted material. If a hearing official requests a medical review, the hearing official will mail a copy of that medical review to the individual within seven days after the hearing. The individual will have ten days from the date the medical review was mailed to submit to the hearing official a written response or rebuttal to the medical review. The hearing official will close the hearing record at the end of the tenth day from the date the medical review was mailed to the individual.

(c)

Representation. An individual may represent himself or herself, or be represented by legal counsel, a relative, a friend, or other designated spokesperson. If the individual does not appear at the hearing, the operating agency may require the submission of documentation demonstrating that the representative appearing on the individual's behalf has authority to represent the individual.

(d)

Additional Medical Assessment. If the hearing involves medical issues such as those concerning a diagnosis, an examining physician's report, or a medical review team's decision, and if the hearing official considers it necessary to have a medical assessment other than that of the person involved in making the original decision, that medical assessment must be obtained at the operating agency's expense and made part of the record.

§357.13.Location of Hearing and Accommodations.

(a)

The hearing official shall determine the location of the hearing or whether it is appropriate to conduct the hearing by telecommunication as provided in §357.15 of this title (relating to Telecommunication). In making this determination, the hearing official will consider the location of the individual.

(b)

The operating agency shall provide any reasonable accommodation for disclosed disabilities. Requests for any reasonable accommodation should be made in writing to the hearing official at least three days prior to the hearing date.

(c)

The operating agency shall provide suitable interpretation for individuals with limited English proficiency. Requests for an interpreter should be made in writing to the hearing official at least three days prior to the hearing date.

§357.17.Document Hearing.

The hearing may be conducted based on the written information contained in any appropriate file and additional written information submitted to the hearing official and the other party not less than five days prior to the hearing without the necessity of taking oral testimony, provided that the parties are given the opportunity to respond to any written material submitted.

§357.27.Recording.

The hearing official shall make a record of the proceeding, either through a tape recording or a court reporter.

(1)

The cost of a court reporter or a transcript shall be borne by the person who requests the court reporter or transcript.

(2)

If the hearing official makes a tape recording of the hearing, the individual may receive a copy of the tape at minimal charge.

(3)

The individual shall have the right to make an audio recording of the fair hearing.

(4)

Any witness shall have the right to make an audio recording of his or her testimony.

§357.29.Hearing Decisions.

(a)

Hearing decisions must be based exclusively on evidence introduced at the hearing and received in evidence.

(b)

The operating agency or its designee may grant, deny, terminate, suspend, modify, or reduce services in accordance with the hearing decision as rendered following a fair hearing.

(c)

Record. The record of the hearing consists of the following:

(1)

A transcript or recording of testimony and exhibits received in evidence.

(2)

All documents and requests for admission, together with the ruling on admissibility made by the hearing official.

(3)

The hearing official's decision, composed of a statement of the persuasive evidence, findings of fact and conclusions of law (identifying the relevant regulations and/or statutes), and a statement of restored benefits, if appropriate.

(d)

The hearing decision must be made and a copy of the decision furnished to the individual within 90 days of the request for a fair hearing unless the individual waives the 90-day requirement in writing.

(e)

If the action was proposed by a designee of the operating agency, the operating agency will also notify the designee of its decision. The decision of the operating agency is binding on the designee.

(f)

Hearing decisions are available to the public, subject to the requirements under federal and/or state law for safeguarding information relating to the Medicaid program.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 11, 1999.

TRD-9901486

Marina S. Henderson

Executive Deputy Commission

Texas Health and Human Services

Effective date: March 31, 1999

Proposal publication date: September 11, 1998

For further information, please call: (512) 424-6576