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NOTICES

Proposed Healthy Pennsylvania Medicaid Reforms and Private Coverage Option—Improving Health Care for Pennsylvania; Federal Medicaid Section 1115 Application and State Plan Amendments

[43 Pa.B. 7186]
[Saturday, December 7, 2013]

 Healthy Pennsylvania is Governor Tom Corbett's plan to ensure that Pennsylvanians have increased access to quality, affordable health care. The Healthy Pennsylvania plan focuses on three key priorities: improving access; ensuring quality; and providing affordability. It is built upon common sense reforms that provide coverage options to this Commonwealth's most vulnerable citizens in a flexible and sustainable way that protects taxpayers. The Medicaid reforms and the Private Coverage Option encompassed in the Healthy Pennsylvania plan will:

 1. Increase health care access for more than 500,000 Pennsylvanians.

 2. Promote healthy behaviors, improve health outcomes and increase personal responsibility.

 3. Ensure that benefits match health care needs.

 4. Implement a strategy for sustainability by aligning the current Medicaid program with private coverage.

 This Commonwealth is home to a robust, world class health care delivery system that has led the way Nationally from covering children in the Children's Health Insurance Program to providing access to top physicians and hospitals. Additionally, the Commonwealth has been a National leader in successfully accessing commercial market innovation, which was demonstrated when it implemented Statewide managed care through the HealthChoices program. The Commonwealth will continue to be a leader through its pursuit of innovative reforms that prove to the nation that the best solutions are developed at the State and local level.

 To implement the Medicaid reforms and Private Coverage Option within the Healthy Pennsylvania plan, various Federal Medicaid waivers and State Plan Amendment approvals are necessary. The Department of Public Welfare (Department) intends to submit an 1115 Demonstration application to the Federal Centers for Medicare and Medicaid Services (CMS) for waivers under section 1115 of the Social Security Act (42 U.S.C.A. § 1315). Section 1115 of the Social Security Act provides the Federal Secretary of Health and Human Services the authority to approve 1115 Demonstration projects that promote the objectives of the Medicaid program.

 The Department anticipates the following additional objectives to be met through the 1115 Demonstration application:

 • Promoting consumer access to health insurance through the private insurance marketplace and increasing access to Employer-Sponsored Insurance (ESI) through the Health Insurance Premium Payment program.

 • Encouraging healthy behaviors and appropriate care, including early intervention, prevention and wellness.

 • Increasing quality of care and efficiency of the health care delivery system.

 The Department seeks public comment on the proposed 1115 Demonstration application and Medicaid reforms. This notice provides the following:

 • A comprehensive description of the proposed 1115 Demonstration application and reforms to the existing Medicaid program.

 • Information on how to view the full 1115 Demonstration application either by web site or hard copy.

 • Information on the public comment process through public hearings, mail and e-mail.

Overview of the Healthy Pennsylvania Medicaid Reforms and Private Coverage Option

 Commonwealth taxpayers and the Federal government currently spend approximately $20 billion annually on Medicaid programs that play a critical role in serving approximately 2.2 million members of this Commonwealth. The Medicaid population includes low-income parents and families, children, pregnant women, persons with disabilities and older residents of this Commonwealth.

 Currently, one in six residents of this Commonwealth receive Medicaid benefits and the costs of the Medicaid program account for 27% of the Commonwealth's entire general fund budget and continue to grow by hundreds of millions of dollars each year. Program innovations and reforms are necessary to improve health outcomes and ensure sustainability so that an adequate and appropriate health care safety net can be provided for those who need it.

 With the proposed 1115 Demonstration application and Medicaid State Plan Amendments, the Department is seeking to improve access to quality, affordable health care by:

 • Increasing access to private market coverage through the Healthy Pennsylvania Private Coverage Option for citizens of this Commonwealth who are 21 years of age or older but under 65 years of age with incomes up to 133% of the Federal Poverty Level (FPL).

 • Modifying the existing Medicaid benefit designs to provide health coverage based on health care needs.

 • Promoting healthy behaviors and improved health outcomes through a cost-sharing design and work search activities.

 The 1115 Demonstration application requests Federal approval for 5 years.

Benefit Plans

 To ensure that the Commonwealth can provide sustainable access to affordable, quality health care coverage into the future, the existing Medicaid infrastructure needs to be improved and reformed. The Commonwealth will implement a Private Coverage Option for newly eligible adults. In addition, as part of this effort, the existing adult benefit packages will be simplified into two commercial-like benefit packages that are consistent with National standards that includes: essential health benefits; mental health parity; and encouragement of preventive services including drug and alcohol services for adults.

Private Coverage Option

 • The Healthy Pennsylvania Private Coverage Option. Those adults 21 years of age or older but under 65 years of age, who are newly eligible and who are not otherwise eligible under the Medicaid State Plan, will only be eligible for the Healthy Pennsylvania Private Coverage Option and will be enrolled into a private coverage plan through the Federally Facilitated Marketplace (FFM), the commercial market or ESI, unless they are determined medically frail. The Department will pay premium assistance for the private coverage plan in an amount equal to the premium and cost sharing components combined of the private coverage plan's Essential Health Benefit (EHB) package, less the amount of the participant's own monthly premium. Newly eligible participants who are deemed medically frail will have the choice to gain coverage through the Private Coverage Option or be covered through the existing Medicaid program. Medically frail will be determined using the same screening tool and criteria used to identify high risk participants. Individuals selecting to enroll in the existing Medicaid program will be placed into the High Risk Alternative Benefit Plan or Low Risk Benefit Plan.

Realigned Medicaid Benefit Plans

 • High Risk Alternative Benefit Plan. This is a benefit plan tailored for those individuals with more complex health needs within the Medicaid program. Adult Medicaid participants whose health needs, when measured using the health screening tool, indicate higher needs will be enrolled into the High Risk Alternative Benefit Plan. All Supplemental Security Income (SSI) beneficiaries, pregnant women, individuals who are dually eligible for Medicare and Medicaid, residents of institutions and individuals receiving home and community-based services through other Medicaid waivers will be enrolled into the High Risk Alternative Benefit Plan. All of these individuals will retain the choice to be enrolled in the Low Risk Benefit Plan, if they desire.

 • Low Risk Benefit Plan. This benefit plan is tailored for those individuals with lower health risks. Current adult Medicaid participants with lower health risks will be enrolled into the Low Risk Benefit Plan.

 • Children under 21 years of age will receive the same benefits that they currently receive under the Medicaid State Plan.

The Healthy Pennsylvania Private Coverage Option

 The Department seeks to use premium assistance to purchase a private coverage plan offered in the FFM, the commercial market or through ESI for individuals deemed newly eligible for coverage under Title XIX of the Social Security Act (42 U.S.C.A. §§ 1396—1396w-5 who are:

 1. Childless adults (who are not entitled to Medicare coverage), 21 years of age or older but under 65 years of age, with incomes no greater than 133% of the FPL.

 2. Adult parents/caretaker relatives (who are not entitled to Medicare coverage), 21 years of age or older but under 65 years of age, with incomes greater than 33% FPL (the Commonwealth's current income limit), but not greater than 133% FPL.

 These participants include individuals who are currently covered through the Commonwealth's General Assistance Medical Assistance, the State Blind Pension medical program, the Medical Assistance for Workers with Disabilities (under the Medicaid category added through the Ticket to Work and Work Incentives Improvement Act) and the SelectPlan for Women Program (a demonstration project to offer family planning services to women of childbearing age). The Department will be transitioning these adults into the newly eligible category

Medically Frail

 Under the Healthy Pennsylvania Private Coverage Option, newly eligible individuals who are determined to be medically frail will have the option to receive premium assistance to enroll in a private coverage plan or to be enrolled in the High Risk Alternative Benefit Plan within the Medicaid program. Individuals will be determined to be medically frail if they have a condition based upon one or more of the following:

 • A disabling mental disorder.

 • An active chronic substance abuse disorder.

 • A serious and complex medical condition.

 • A physical, intellectual or developmental disability that significantly impairs their functioning.

 • A determination of disability based on Social Security Administration (SSA) criteria.

Wraparound Benefits

 The Healthy Pennsylvania Private Coverage Option will provide a private coverage plan to individuals that mirrors the EHBs provided to individuals in the commercial health insurance market. These benefits are broad based and follow robust Federal requirements. Medicaid wraparound benefits will not be provided to Healthy Pennsylvania Private Coverage Option participants. The 1115 Demonstration application seeks waivers for wraparound services.

Eligibility

 The 1115 Demonstration application will provide access to health care coverage for uninsured citizens in this Commonwealth. It also creates incentives and opportunities for low-income individuals to engage in more healthy behaviors and to connect with prospective employers through work search activities. The plan will affect the newly eligible populations and other adults in existing categories of Medical Assistance who may be subject to two additional conditions of eligibility: paying monthly premiums; and work search activities.

 Individuals who qualify and enroll in the Healthy Pennsylvania Private Coverage Option will be required to receive coverage through a private coverage plan. Those individuals who are not exempt and decline coverage through the private coverage plans will not be permitted to receive benefits through the Medicaid program.

 The plan does not impact the eligibility of pregnant women or children under 21 years of age. It also does not affect the eligibility of citizens in this Commonwealth who are institutionalized, those who are receiving SSI or are deemed to be receiving SSI, those who are dually eligible for Medicaid and Medicare and those in categories limited to Medicare cost sharing programs such as Qualified Medicare Beneficiaries. Persons deemed SSI eligible for purposes of Medicaid eligibility are specified under sections 1939(a)(2) and (5) of the Social Security Act (42 U.S.C.A. § 1396v(a)(2) and (5)). Throughout this notice, the term ''institutionalized'' means that an individual is likely to reside or has already resided in a medical institution for more than 30 continuous days.

 When determining whether an individual is eligible for the Healthy Pennsylvania Private Coverage Option, the Department will use the same process and system as well as apply the same financial eligibility standards and methodologies in the Medicaid State Plan.

 For the newly eligible population served in the Healthy Pennsylvania Private Coverage Option, eligibility will be effective on the first day of private coverage plan enrollment.

Premiums

 Currently, the Medicaid cost sharing structure does not provide positive incentives for healthy choices or personal responsibility. Healthy Pennsylvania emphasizes individual responsibility and improved health outcomes for the existing Medicaid adult population, similar to insurance coverage through the commercial market.

 Unless exempt, all adults will be required to pay a monthly premium as a condition of eligibility. These monthly premiums will replace the current copayments applicable in the Medicaid program. Premium changes based upon fluctuations in income or household composition will be adjusted at the annual redetermination, except if income decreases to a level that is at or below 50% FPL or increases above the eligibility income limit. The premiums are structured in an upwards sliding scale of no more than $25 (one adult) or $35 (more than one adult) at the maximum threshold of 133% FPL as follows:

 One Adult:

 • No monthly premium for an individual with an annual income of $5,745 or less (0% to 50% of FPL).

 • Monthly premium of $13 for an individual with annual income greater than $5,745 but no more than $11,490 (>50% to 100% of FPL).

 • Monthly premium of $25 for an individual with annual income of greater than $11,490 but no more than the maximum income limit for the coverage group (for example, $15,281.70 (133% FPL) for childless adults).

 More than One Adult (Household with Two or More Adults):

 • No monthly premium for the household with an annual income of $7,755 or less (0% to 50% of FPL).

 • Monthly premium of $17 for the household with annual income greater than $7,755 but no more than $15,510 (>50% to 100% of FPL).

 • Monthly premium of $35 for the household with annual income greater than $15,510, but no more than the maximum income limit for the coverage group (for example, $20,628.30 (133% FPL) for two childless adults).

 These FPL figures are for calendar year 2013. The FPL is adjusted annually; therefore, the eligibility income levels will be updated each year for that year's applicable FPL, with annual incomes determined using the Modified Adjusted Gross Income methodology. The premiums will be adjusted annually by the inflationary increase in the medical care component of the Consumer Price Index.

 The following individuals are exempt from paying the premium:

 • Individuals with household income that does not exceed 50% FPL.

 • Pregnant women.

 • Individuals 65 years of age or older.

 • Individuals under 21 years of age.

 • SSI recipients and individuals deemed SSI eligible for purposes of Medicaid eligibility.

 • Individuals who are dually eligible for Medicare and Medicaid.

 • Individuals who are institutionalized.

 Premiums will be required to be paid a month in advance. A new applicant subject to a premium will not be charged the first month's premium. Monthly premium invoices will be sent to participants.

 Participants will be required to pay their premium by the date printed on the invoice. However, there will be a grace period after that date where the premium can still be accepted without affecting eligibility, except in situations described as follows.

 Ineligibility for an adult or household will occur whenever an individual or household fails to pay the premium in full for 3 consecutive months by the end of the third month.

 The first time that an adult or the household fails to pay the premium for 3 consecutive months and eligibility is terminated, the adult or the household will be ineligible for 3 months. After eligibility is reestablished, a second failure to pay the premium for 3 consecutive months will result in a 6-month period of ineligibility. A third failure will result in a 9-month period of ineligibility. Previously ineligible individuals who subsequently become exempt from premium payment due to a change in circumstances will be allowed to immediately reenroll in the Medicaid program.

Other Cost Sharing

 The Department is looking to build in numerous avenues to encourage participants to seek preventative care. The goal of improved health and lower costs are not furthered by seeking routine family medical care through the hospital emergency room (ER). As a result, most adults, other than those who are institutionalized, will be responsible for a $10 copayment for each nonemergency use of an ER. All other copayments will be eliminated from the Medicaid program.

Premium Reduction

 Participants who continuously pay their monthly premium will be able to reduce their premium obligation by engaging in approved healthy behaviors or by working at least 20 hours per week, or both. Successful completion of healthy behavior activities can reduce the premium by 25% and working can reduce the premium by up to another 25% for a total reduction up to 50%.

 In the first 3 years of eligibility, adults' premiums will be reduced if they meet all of the following healthy behavior requirements:

 • Paying premiums on time (during most recent 6 months).

 • Completing a Health Risk Assessment (HRA) annually.

 • Completing a physical exam annually.

 After 3 years, the Department will evaluate HRA data and determine broader healthy behaviors that should be used, such as cholesterol testing. The 1115 Demonstration application seeks flexibility and authority to change or expand the list of healthy behaviors for which premium reductions are available.

 Adults who at the time of initial application or redetermination are working 30 or more hours per week will receive an initial 25% reduction in their monthly premium. Adults who are working less than 30 hours but at least 20 hours per week will have their premiums reduced by 15% after 6 months of eligibility.

 Premium amounts will be set annually, but evaluated for reductions every 6 months. If the participant successfully completes the required activities in the first 6-month period, then the premium will be reduced in the second 6-month period. These 6-month cycles will continue throughout the span of enrollment.

Work Search Activities

 Research has demonstrated that employed individuals are both physically and mentally healthier, as well as financially stable. Under the 1115 Demonstration application, the Department will require able-bodied adults to engage in work activities as part of an integrated approach to improving their health and helping them move out of poverty.

 Unless exempt, all adults 21 years of age or older but under 65 years of age, who are working less than 20 hours per week, will be required to register with JobGatewaySM, the online system currently utilized for the Commonwealth's Unemployment Compensation program. Participants will be required to engage in specified work search-related activities as a condition of initial and continuing eligibility.

 Those nonexempt individuals who successfully complete 12 approved work search activities per month during their first 6 months will continue to be eligible for health care coverage. JobGatewaySM provides individuals with access to current job openings, the ability to create and upload a résumé and view job opening recommendations. Additionally, JobGatewaySM includes a mobile application allowing easy use for those individuals seeking jobs on a smart phone and a career exploration tool providing real time labor statistics for existing jobs. Individuals will have access to training for job interviews and the ability to put that training into practice with virtual mock interviews. Individuals may also wish to participate in job training activities provided by PA CareerLink®, with core services being accessible either online or in-person at 66 locations. Services include the ability to look for employment opportunities by career, employer and geography.

 The following individuals are exempt from required work search activities:

 • Determined disabled by the SSA or the Department based upon SSI disability criteria.

 • Pregnant.

 • 65 years of age or older.

 • Under 21 years of age.

 • Institutionalized individuals.

 Full-time and part-time students are exempt from participating in work search activities each year they are enrolled in a postsecondary education institution or technical school. The Department will annually review students' status. Students are not exempt from registration with JobGatewaySM.

 Individuals may request an exemption from work search activities from the Department if they are suffering a crisis, serious medical condition or temporary condition or situation that prevents them from searching for work, such as domestic abuse or substance abuse treatment.

Covered Services in Benefit Plans

 Individuals enrolled in the Healthy Pennsylvania Private Coverage Option will receive the EHB package through their private coverage plan. The EHB package for this Commonwealth is the benchmark package of covered services specified under 45 CFR 156.100(c) and 156.110 (relating to state selection of benchmark; and EHB-benchmark plan standards), based on the package provided under the small group plan with the largest enrollment. For adults this includes ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management. Details on the EHB package in this Commonwealth are available at http://www.cms.gov/CCIIO/Resources/Data-Resources/Downloads/pennsylvania-ehb-benchmark-plan.pdf.

 The Low Risk Benefit Plan includes all Medicaid primary, acute and post-acute care services, prescription drugs and medical equipment and supplies covered for adults under the current Medicaid State Plan. The High Risk Alternative Benefit Plan includes all services covered under the Low Risk Benefit Plan, some additional covered services and higher service limits for certain benefits are as follows:

 • Ambulatory care visits (including physician office visits, routine adult physical exams, certified registered nurse practitioner visits, Federally Qualified Health Center (FQHC) and Rural Health Clinic (RHC) visits, hearing screening and other outpatient clinic services): Low Risk: 12 visits per year. High Risk: 18 visits per year.

 • Radiology (X-Rays): Low Risk: $500 per year. High Risk: $750 per year.

 • Outpatient Surgery: Low Risk: two visits per year. High Risk: four visits per year.

 • Inpatient Acute Hospital: Low Risk: two nonemer-gency admissions per year. High Risk: three nonemergency admissions per year.

 • Inpatient Rehabilitation Hospital: Low Risk: one admission per year. High Risk: two admissions per year.

 • Inpatient Psychiatric Hospital: Low Risk: 30 days per year. High Risk: 45 days per year.

 • Inpatient Drug and Alcohol Treatment: Low Risk: 30 days per year. High Risk: 45 days per year.

 • Outpatient Mental Health Treatment (Clinic): Low Risk: 30 visits per year. High Risk: 40 visits per year.

 • Outpatient Drug and Alcohol Treatment: Low Risk: 30 visits per year. High Risk: 40 visits per year.

 • Targeted Case Management—Behavioral Health Only: Low Risk: Not covered. High Risk: Limited to persons with serious mental illness diagnoses.

 • Skilled Nursing Facility: Low Risk: 120 days per year. High Risk: 365 days per year.

 • Home Health Care: Low Risk: 60 visits per year. High Risk: unlimited visits for first 28 days, limited to 15 days per month thereafter.

 • Intermediate Care Facilities for Individuals with an Intellectual Disability and Intermediate Care Facilities for Other Related Conditions: Low Risk: Not covered. High Risk: 365 days per year.

 • Durable Medical Equipment (Combined with medical supplies): Low Risk: $1,000 per year. High Risk: $2,500 per year.

 • Medical Supplies (combined with durable medical equipment): Low Risk: $1,000 per year. High Risk: $2,500 per year.

 • Laboratory: Low Risk: $250 per year. High Risk: $350 per year.

 The Low Risk Benefit Plan and the High Risk Alternative Benefit Plan coverage is the same for the following services and consistent with current Medicaid State Plan coverage for adults: prescription drugs, dental, emergency room, ambulance, maternity care, methadone maintenance, Clozapine, psychiatric partial hospital, community support services (peer support) and tobacco cessation.

 The Department will grant exceptions to the limits previously specified when it determines that one of the following circumstances applies:

 • The participant has a serious chronic systemic illness or other serious health condition and denial of the exception will jeopardize the life of or result in the serious deterioration of the health of the participant.

 • Granting the exception is a cost-effective alternative for the Medicaid program.

 • Granting the exception is necessary to comply with Federal law.

Early and Periodic, Screening, Diagnosis and Treatment Benefits

 Individuals who are 19 years of age or older but under 21 years of age will be able to receive all medically necessary services under the Early and Periodic, Screening, Diagnosis and Treatment benefit.

Health Screening

 Enrollment in the Medicaid benefit plans is based on a health screening of the individual. The health screening will be completed as part of an online application process in the Commonwealth's COMPASS system. Paper questionnaires will be available in cases when electronic application submittal is not possible. Call centers may be used to facilitate the screening process.

 The health screening tool will consist of a self-administered questionnaire that is completed by the individual, a family member or guardian. The questionnaire includes questions about an individual's health care needs and conditions. The questions are specifically designed to identify an individual's medical and behavioral health needs that align with the two Medicaid benefit plans-particularly any presence of complex medical conditions. The responses will be analyzed by an algorithmic process, which will allow the Department to match the applicant's health care needs to the benefit plan that best serves those needs.

 Participants will be enrolled in the Low Risk Benefit Plan or the High Risk Alternative Benefit Plan based on the results of the health screening tool and eligibility status. For individuals eligible for the Healthy Pennsylvania Private Coverage Option, the health screening tool will be used to determine if they are medically frail. The health screening tool aligns benefits to actual participant health care needs rather than using a system that bases benefit decisions on broad categories of eligibility.

 Completion of the health screening tool is not a condition of eligibility. If newly eligible applicants fail to complete the health care screening tool, they will be enrolled into a Healthy Pennsylvania Private Coverage Option plan. If individuals who are eligible under the current Medicaid eligibility rules fail to complete the health screening tool, they will be enrolled into the Low Risk Benefit Plan.

Delivery System and Payment

 While not part of the 1115 Demonstration application, the Department will concurrently operate its existing HealthChoices program managed care delivery system. The HealthChoices benefit package will change as previously summarized, but there are no plans to modify the delivery system as part of this project.

Research Hypotheses and Evaluation Parameters

 The 1115 Demonstration application provides reforms to the existing Medicaid program, increases access to health care coverage and stabilizes financing by delivering private market health insurance benefits to a new group of low-income adults through use of the Healthy Pennsylvania Private Coverage Option. The core hypotheses in the 1115 Demonstration include:

 1. Increasing access to health care coverage through the Healthy Pennsylvania Private Coverage Option:

 • Healthy Pennsylvania Private Coverage Option participants will have adequate provider access.

 • Healthy Pennsylvania Private Coverage Option participants will have continuous insurance coverage.

 • Per capita administrative costs will be maintained through the use of the Healthy Pennsylvania Private Coverage Option.

 • Healthy Pennsylvania Private Coverage Option will reduce overall premium costs in the Commonwealth.

 • Average per capita uncompensated care costs will decrease as a result of fewer numbers of uninsured.

 2. Implementing work search activities to improve health outcomes and move individuals out of poverty:

 • Implementation of work search activities will result in increased employment for the 1115 Demonstration population.

 • Encouraging work search activities will promote employment, which will result in better physical and mental health outcomes.

 3. Implementing a unique incentive plan to encourage personal accountability, incentivize healthy behaviors and develop cost-conscious consumer behaviors in the consumption of health care services:

 • Reductions in monthly premiums will promote healthy behaviors and improve physical and mental health outcomes.

 4. Utilizing a health screening tool for all adult participants, both initially and periodically, to help identify the benefit plan that best serves their needs:

 • The Low Risk Benefit Plan sufficiently meets the needs of the participants placed in it by the health screening tool.

 • The High Risk Alternative Benefit Plan sufficiently meets the needs of the participants placed in it by the health screening tool.

Federal Waiver and Expenditure Authorities Requested

 To the extent necessary to implement the proposal, the 1115 Demonstration application requests that CMS, under the authority of section 1115(a)(1) of the Social Security Act, waive the following requirements to Title XIX of the Social Security Act (42 U.S.C.A. § 1396) to enable the Department to implement the Healthy Pennsylvania plan:

 • Section 1902(a)(10): To enable the State to deny assistance to otherwise eligible individuals who fail to comply with work search activities.

 • Section 1902(a)(10): To enable the State to deny assistance for up to 9 months to otherwise eligible individuals who fail to comply with premium payment requirements.

 • Section 1902(a)(10)(B): To permit the State to provide benefits that are different in amount, duration and scope.

 • Section 1902(a)(10)(B): To permit the State to provide coverage for the newly eligible population on the date of enrollment in the Healthy Pennsylvania Private Coverage Option.

 • Section 1902(a)(10)(B): To permit the State to provide medically needy coverage to institutionalized blind and disabled individuals.

 • Section 1902(a)(10)(A)(i)(IX): To permit the State to require work search activities and premium payment for nonexempt former foster care participants 21 years of age or older but under 26 years of age.

 • Section 1902(a)(10)(C): To permit the State to end the medically needy coverage group that includes the blind and disabled, but continue it for the aged.

 • Section 1902(a)(10)(C): To permit the State to eliminate the medically needy optional group for adults who are disabled or blind, but retain this coverage for individuals who are 65 years of age and older.

 • Section 1902(a)(14): To permit the State to charge an ER copayment in an amount that exceeds the maximum allowed under regulation.

 • Section 1902(a)(14): To permit the State to charge premiums to individuals whose family income is below 150% FPL.

 • Section 1902(a)(14): To permit the State to require prepayment of a premium.

 • Section 1902(a)(14): To permit the State to make payments to reduce cost sharing, for certain individuals eligible under the approved state plan new adult group described in section 1902(a)(10)(A)(i)(XVIII).

 • Section 1902(a)(17): To permit the State to provide different delivery systems for different populations of Medicaid beneficiaries.

 • Section 1902(a)(17): To permit the State to provide different premium amounts for different populations of Medicaid beneficiaries.

 • Section 1902(a)(23): To make premium payments to private coverage plans for newly eligible Healthy Pennsylvania Private Coverage Option participants and to permit the State to limit beneficiaries' freedom of choice among providers to the providers participating in the network of the Healthy Pennsylvania Private Coverage Option plans.

 • Section 1902(a)(34): To enable the State to eliminate retroactive coverage for the newly eligible population enrolled in the Healthy Pennsylvania Private Coverage Option.

 • Section 1902(a)(54)(A): To permit the State to limit a Healthy Pennsylvania Private Coverage Option participant to receiving coverage for drugs on the formulary of the Healthy Pennsylvania Private Coverage Option participant's plan.

 • Section 1902(a)(54)(A): To permit the State to require that requests for prior authorization for drugs be addressed within 72 hours, rather than 24 hours. A 72-hour supply of the requested medication will be provided in the event of an emergency.

 • Section 1902(a)(10)(A) and (k): To permit the State not to cover wraparound services in the Healthy Pennsylvania Private Coverage Option.

 • Section 1902(a) and 42 CFR 431.53 (relating to assurance of transportation): To permit the State not to cover nonemergency transportation for the newly eligible enrolled in the Healthy Pennsylvania Private Coverage Option.

 • Section 1902(a)(10)(A) and (k): To permit the State not to provide family planning services to individuals 21 years of age or older but under 65 years of age and who are enrolled in the Healthy Pennsylvania Private Coverage Option.

 • Section 1902(a)(10)(A) and (k): To permit the State not to cover FQHC and RHC in the Healthy Pennsylvania Private Coverage Option.

 • Section 1902(a)(15) and (bb): To permit the State to limit reimbursement to FQHCs and RHCs to the amount negotiated with the private coverage plan under the Healthy Pennsylvania Private Coverage Option and not pay under the prospective payment system.

Annual Enrollment and Annual Expenditures

 The following information summarizes Pennsylvania Medicaid expenditures and enrollment for populations included in the Healthy Pennsylvania plan, both historically as well as the period of the demonstration. For purposes of the demonstration the following beneficiaries or services were excluded from this table:

 • Beneficiaries and associated services delivered under the Commonwealth's Section 1115 Family Planning waiver, also known as SelectPlan for Women.

 • Beneficiaries 20 years of age or under have been excluded from historical expenditures and enrollment figures. The Commonwealth defines children as 20 years of age or under.

 • Services delivered under a Section 1915(c) waiver for Home and Community-Based Services as they will not be impacted by this 1115 Demonstration.

 • Beneficiaries (and associated services) funded in State programs not eligible for Federal matching dollars have not been included in historical figures.

 The historical information for enrollment and expenditures is as follows:

Enrollment—Existing Population (Member Months)

SFY 08/09 10,226,432
SFY 09/10 10,908,617
SFY 10/11 11,691,436
SFY 11/12 12,027,024
SFY 12/13 11,926,847

Expenditures—Existing Population

SFY 08/09 $9,044,896,892
SFY 09/10 $9,211,086,072
SFY 10/11 $10,660,621,141
SFY 11/12 $9,923,547,422
SFY 12/13 $10,596,075,535

 Projected enrollment and expenditures are as follows:

Projected Enrollment—Existing Population (Member Months)

CY 2015 13,710,804
CY 2016 14,122,128
CY 2017 14,545,792
CY 2018 14,982,165
CY 2019 15,431,630

Projected Expenditures—Existing Population

CY 2015 $12,948,300,466
CY 2016 $13,861,051,482
CY 2017 $14,850,138,246
CY 2018 $15,918,541,798
CY 2019 $17,068,338,072

Projected Enrollment—Newly Eligible Adults (Member Months)

CY 2015 6,679,722
CY 2016 6,880,113
CY 2017 7,086,517
CY 2018 7,299,112
CY 2019 7,518,086

Projected Expenditures—Newly Eligible Adults

CY 2015 $3,791,803,035
CY 2016 $4,073,267,365
CY 2017 $4,386,326,668
CY 2018 $4,733,781,990
CY 2019 $5,119,734,886

 These projections reference trends of existing populations as well as the newly eligible populations. Expenditure growth is based on the anticipation that trends will be more consistent with medical trends observed Nationally. This proposal at a minimum will be budget neutral to the Federal government while the Department anticipates that some savings may occur as a result of implementation.

 Implementation and operation of this 1115 Demonstration, in particular the Healthy Pennsylvania Private Coverage Option, is conditioned on the Federal Medical Assistance Percentage (FMAP) for the new adult category under the Affordable Care Act (ACA), as provided in section 1905(y) of the Social Security Act (42 U.S.C.A. § 1396d(y)). Therefore, in the event any of the following occur, the Department will withdraw its application, initiate phase-down or early discontinuation of the 1115 Demonstration operations or propose an amendment to secure necessary funding:

 • The methodology for calculating the FMAP for individuals in the Healthy Pennsylvania Private Coverage Option is modified and results in the reduction of the percentage of Federal assistance to the Commonwealth in a manner inconsistent with section 1905(y) of the Social Security Act, as enacted March 23, 2010.

 • The amount of Federal financial participation, including the participation amounts provided in the ACA, for this 1115 Demonstration is reduced through a modification or restriction in the Federal Medicaid appropriation.

 • Federal law, regulation or subregulatory guidance affecting eligibility, benefits, payment, delivery systems, financing, administration, health insurance exchanges or private coverage plans is modified in a manner that conflicts with or materially hinders the operation or financing of this 1115 Demonstration.

1115 Demonstration Financing and Budget Neutrality

 Federal policy requires that section 1115 Demonstration applications be budget neutral to the Federal government. This means that an 1115 Demonstration should not cost the Federal government more than what would have otherwise been spent absent the 1115 Demonstration. Particulars, including methodologies, are subject to negotiation between the Commonwealth and CMS.

 The Department is proposing a ''per capita'' budget neutrality model for the populations covered under the demonstration, including the Healthy Pennsylvania Private Coverage Option participants. Actual waiver expenditures for these populations will be applied against the without waiver budget limit.

Fiscal Impact

 This action will not result in a loss of revenue or an increase in program costs to the Commonwealth or its political subdivisions. The Commonwealth anticipates that some savings could occur as a result of this proposal.

Healthy Pennsylvania Web Site

 Information about the Healthy Pennsylvania plan, including the proposed 1115 Demonstration application, is available at www.dpw.state.pa.us/healthypa. The Department will update this web site throughout the public comment and application process.

 A hard copy of the proposed 1115 Demonstration application may be requested by contacting the Department at the mailing address or e-mail address provided under the Public Comment section. Individuals should include their full name and mailing address when making a request.

Public Comment

 The Department seeks public input on the proposed 1115 Demonstration application for the Healthy Pennsylvania plan. Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Attention: Healthy Pennsylvania Waiver, P. O. Box 2675, Harrisburg, PA 17105-2675, RA-PWHealthyPA1115@pa.gov.

 Comments received within 30 days of the posting of this notice will be reviewed and considered for revisions to the 1115 Demonstration application.

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).

Public Hearings

 Public hearings on the proposed 1115 Demonstration application have been scheduled to solicit public input. Public hearings will be held in six cities across this Commonwealth. Two webinars will also be held as public hearings. The Department will accept verbal and written comments at these public hearings. In case of inclement weather, the Department will develop an alternative hearing date, which could be an in-person hearing or a webinar.

 If individuals intend to provide verbal comments at a public hearing, registration prior to the date is required. Registration is not required for persons attending to listen or for persons submitting their comments in writing, but the Department is requesting those interested in attending register to help ensure there is adequate seating and assist with inclement weather notification. If there are capacity limitations, priority will be given to those who have registered to attend. See the registration deadline for each hearing as follows.

 To register to present verbal comments or to attend in person go to the Department's previously listed web site and follow the registration instructions. Individuals may also call the Department at (877) 395-8939 or (800) 654-5984 (TDD users) with their name, telephone number and the date of the public hearing they will attend. Each individual must register to provide verbal comments.

 For individuals who intend to present verbal comments at a public hearing, comments will be limited to 3 minutes to allow others time to share their comments. To assist the Department in accurately capturing verbal comment, individuals are asked to provide their verbal comments in writing at the address or e-mail provided previously.

 To participate by means of webinar, individuals will need to register in advance. To register, go to the Department's previously listed web site and follow the registration instructions. See the registration deadline for each webinar as follows.

Public Hearing Dates and Locations for In-Person Attendance

Thursday, December 19, 2013, in Erie, PA
Time: 10 a.m. to 1 p.m.
Bayfront Convention Center
1 Sassafras Pier
Erie, PA 16507
Registration Deadline: Monday, December 16, 2013

Friday, December 20, 2013, in Pittsburgh, PA
Time: 10 a.m. to 1 p.m.
Allegheny County Courthouse
436 Grant Street
Pittsburgh, PA 15219
Registration Deadline: Tuesday, December 17, 2013

Friday, January 3, 2014, in Philadelphia, PA
Time: 10 a.m. to 1 p.m.
National Constitution Center
525 Arch Street
Philadelphia, PA 19106
Registration Deadline: Monday, December 30, 2013

Monday, January 6, 2014, in Scranton, PA
Time: 10 a.m. to 1 p.m.
Hilton Scranton and Conference Center
100 Adams Avenue
Scranton, PA 18503
Registration Deadline: Thursday, January 2, 2014

Tuesday, January 7, 2014, in Altoona, PA
Time: 10 a.m. to 1 p.m.
Blair County Convention Center
1 Convention Center Drive
Altoona, PA 16602
Registration Deadline: Thursday, January 2, 2014

Thursday, January 9, 2014, in Harrisburg, PA
Time: 10 a.m. to 1 p.m.
The State Museum of Pennsylvania
300 North Street
Harrisburg, PA 17120
Registration Deadline: Monday, January 6, 2014

Public Hearing Dates for Webinar Presentation

Monday, December 16, 2013
Time: 9 a.m. to 11 a.m.
Registration Deadline: Wednesday, December 11, 2013

Wednesday, January 8, 2014
Time: 9 a.m. to 11 a.m.
Registration Deadline: Friday, January 3, 2014

BEVERLY D. MACKERETH, 
Secretary

Fiscal Note: 14-NOT-849. No fiscal impact. It is anticipated that some savings could occur as a result of this proposal. (8) The Secretary of the Budget recommends adoption of the proposed Section 1115 waiver contained in this notice.

[Pa.B. Doc. No. 13-2284. Filed for public inspection December 6, 2013, 9:00 a.m.]



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