431.812—Review procedures.

(a) Active case reviews. (1) Except as provided in paragraph (a)(2) of this section, the agency must review all active cases selected from the State agency's lists of cases authorized eligible for the review month, to determine if the cases were eligible for services during all or part of the month under review, and, if appropriate, whether the proper amount of recipient liability was computed.

(2) The agency is not required to conduct reviews of the following cases:

(i) Supplemental Security Income (SSI) recipient cases in States with contracts under section 1634 of the Act for determining Medicaid eligibility.

(ii) Foster care and adoption assistance cases under title IV-E of the Act found eligible for Medicaid.

(iii) Cases under programs that are 100 percent federally funded.

(b) Negative case reviews. Except as provided in paragraph (c) of this section, or unless a State is utilizing an approved sampling plan to conduct negative case action reviews under § 431.978(a) and § 431.980(b), the agency must review those negative cases selected from the State agency's list of cases that are denied, suspended, or terminated in the review month to determine if the reason for the denial, suspension, or termination was correct and if requirements for timely notice of negative action were met. A State's negative case sample size is determined on the basis of the number of negative case actions in the universe.

(iv) Individuals whose eligibility was determined under a State's option under section 1902(e)(13) of the Act.

(c) Alternate systems of negative case reviews— (1) Basic provision. A State may be exempt from the negative case review requirements specified in paragraphs (b) and (e)(2) of this section and in § 431.814(d) upon CMS's approval of a plan for the use of a superior system.

(2) Submittal of plan for alternate system. An agency must submit its plan for the use of a superior system to CMS for approval at least 60 days before the beginning of the review period in which it is to be implemented. If a plan is unchanged from a previous period, the agency is not required to resubmit it.

The agency must receive approval for a plan before it can be implemented.

(3) Requirement for alternate system. To be approved, the State's plan must—

(i) Clearly define the purpose of the system and demonstrate how the system is superior to the current negative case review requirements.

(ii) Contain a methodology for identifying significant problem areas that could result in erroneous denials, suspensions, and terminations of applicants and recipients. Problem areas selected for review must contain at least as many applicants and recipients as were included in the negative case sample size previously required for the State.

(iii) Provide a detailed methodology describing how the extent of the problem area will be measured through sampling and review procedures, the findings expected from the review, and planned corrective actions to resolve the problem.

(iv) Include documentation supporting the use of the system methodology. Documentation must include the timeframes under which the system will be operated.

(v) Provide a superior means of monitoring denials, terminations, and suspensions than that required under paragraph (b) of this section.

(vi) Provide a statistically valid error rate that can be projected to the universe that is being studied.

(d) Reviews for erroneous payments. The agency must review all claims for services furnished during the review month and paid within 4 months of the review month to all members of each active case related in the sample to identify erroneous payments resulting from—

(1) Ineligibility for Medicaid;

(2) Ineligibility for certain Medicaid services; and

(3) Recipient understated or overstated liability.

(e) Reviews for verification of eligibility status. The agency must collect and verify all information necessary to determine the eligibility status of each individual included in an active case selected in the sample as of the review month and whether Medicaid payments were for services which the individual was eligible to receive.

Code of Federal Regulations

The agency must apply the administrative period described in § 431.804 when considering the case circumstances and the case correctness. In order to verify eligibility information, the agency must—

(1) Examine and analyze each case record for all cases under review to establish what information is available for use in determining eligibility in the review month;

(2) Conduct field investigations including in-person recipient interviews for each case in the active case sample, and conduct in-person interviews only when the correctness of the agency action cannot be determined by review of the case record with recipients for cases in the negative case action sample (unless this is otherwise addressed in a superior system provided for in paragraph (c)(1) of this section);

(3) Verify all appropriate elements of eligibility for active cases through at least one primary source of evidence or two secondary sources of evidence as defined by CMS by documentation or by collateral contacts as required, or both, and fully record the information on the appropriate forms;

(4) Determine the basis on which eligibility was established and the eligibility status of the active case and each case member;

(5) Collect copies of State paid claims or recipient profiles for services delivered during the review month and, if indicated, any months prior to the review month in the agency's selected spenddown period, for all members of the active case under review;

(6) Associate dollar values with eligibility status for each active case under review; and

(7) Complete the payment, case, and review information for all individuals in the active case under review on the appropriate forms.

(f) Substitution of PERM data.

(1) A State in its Payment Error Rate Measurement (PERM) year may elect to substitute the random sample of selected cases, eligibility review findings, and payment review findings obtained through PERM reviews conducted in accordance with § 431.978 through § 431.988 of this part for data required in this section, if the only exclusions are those set forth in § 431.978(d)(1) of this part.

(2) PERM cases cited as undetermined may be dropped when calculating MEQC error rates if reasons for drops are acceptable reasons listed in the State Medicaid Manual.

[55 FR 22167, May 31, 1990, as amended at 72 FR 50513, Aug. 31, 2007; 75 FR 48847, Aug. 11, 2010]

CFR

431.812—Review procedures.

Code of Federal Regulations