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CMS Issues New Proposed Rule on Medicaid, CHIP, and Health Insurance Marketplace Reform Provisions of the ACA

January 18, 2013—The Centers for Medicare and Medicaid Services (CMS) Jan. 14 issued a proposed rule to implement provisions of the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) related to Medicaid, the Children’s Health Insurance Program (CHIP), and other health insurance marketplace reforms.

The proposed rule updates CMS regulations to reflect changes in Medicaid and CHIP eligibility under the ACA, and provides standards for beneficiary appeals, notices, and related procedures.  Proposals include:

  • Establishing standards for adjudicating appeals of individual eligibility determinations and exemptions from the individual responsibility requirements, and determinations of employer-sponsored coverage and determinations of Small Business Health Options Program (SHOP) employer and employee eligibility;

  • Outlining criteria related to the verification of and enrollment in minimum essential coverage though an employer-sponsored plan;

  • Updating and simplifying complex Medicaid premiums and cost-sharing requirements, including updating the maximum allowable cost-sharing levels.  This would expand flexibility for states by proposing new options to establish higher cost-sharing for non-preferred drugs, and to impose higher cost-sharing for non-emergency use of the emergency department;

  • Providing notice that CMS is considering whether various provisions of the Medicaid and CHIP regulations should be effective Oct. 1, or a later effective date for the initial open enrollment period for the new health insurance marketplaces (until recently, called “exchanges” and referred to as such in this proposed rule).

The proposed rule is intended to modernize administrative procedures to further promote coordination in eligibility, verification, and enrollment systems across multiple health coverage programs.  This will include the purchase of coverage through a health insurance marketplace with advance payments of premium tax credits and cost-sharing reductions as authorized by the ACA.

Comments on the proposed rule are due February 13.


Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085

Jane Eilbacher
Policy and Regulatory Specialist
Telephone: 202-828-0896


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806