What a Medicaid Fair Hearing Is

Answer first: it is a required administrative hearing with a due process standard attached

Every state Medicaid agency must maintain a hearing system. Section 431.205(a) places the responsibility on the agency itself and (b) sets out the permitted structures: a hearing before the Medicaid agency; or, for denials of eligibility for individuals whose income eligibility is determined on a modified adjusted gross income basis, before an Exchange or Exchange appeals entity to which authority has been delegated — provided individuals who requested a hearing are given the choice to have it conducted instead by the Medicaid agency; or an evidentiary hearing at the local level with a right of appeal to the agency.

The standard the system is measured against is named in the regulation rather than left to inference. Paragraph (d) states that "the hearing system must meet the due process standards set forth in Goldberg v. Kelly, 397 U.S. 254 (1970), and any additional standards specified in this subpart." Paragraph (f) adds that the system must comply with the United States Constitution, the Social Security Act, title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, and section 1557 of the Affordable Care Act and implementing regulations. Paragraph (e) requires the system to be accessible to persons who are limited English proficient and persons who have disabilities.

A citation to a Supreme Court case inside a regulation is unusual and it is doing real work. It fixes the floor as a constitutional one, not merely an administrative one.

When the agency must grant a hearing

Section 431.220(a) lists the situations. The agency must grant an opportunity for a hearing to any individual who requests it because they believe the agency has taken an action erroneously, denied a claim for eligibility or for covered benefits or services, issued a determination of an individual's liability, or "has not acted upon the claim with reasonable promptness."

The same paragraph itemises what falls inside that: an initial or subsequent decision regarding eligibility; a determination of the amount of medical expenses an individual must incur to establish eligibility; a determination of the amount of premiums and cost sharing charges under subpart A of part 447; a change in the amount or type of benefits or services; a request for exemption from mandatory enrollment in an Alternative Benefit Plan; and — listed expressly — a prior authorization decision.

Three further categories follow. A nursing facility resident who believes a transfer or discharge determination was erroneous. An individual who believes the state made an erroneous determination under the preadmission screening and annual resident review requirements. And any managed care enrollee entitled to a hearing under subpart F of part 438, which is the route a managed care appeal takes once the plan's own process is finished or deemed exhausted.

There is one stated exception. Paragraph (b) provides that the agency "need not grant a hearing if the sole issue is a Federal or State law requiring an automatic change adversely affecting some or all beneficiaries." A hearing is a forum for disputing how a rule was applied to a person, not for disputing the rule.

The agency has to tell people the system exists

Section 431.206 turns the hearing right into a disclosure obligation. The agency must issue and publicize its hearing procedures, and must inform every applicant or beneficiary in writing of four things: the right to a fair hearing and the right to request an expedited fair hearing; the method by which a hearing may be obtained; that the person may represent themselves or use legal counsel, a relative, a friend or other spokesman; and the timeframes within which the agency must take final administrative action under § 431.244(f).

The timing of that information is specified rather than left open. It must be provided at the time the individual applies for Medicaid; at the time the agency denies a claim for eligibility, benefits or services, denies a request for exemption from mandatory enrollment in an Alternative Benefit Plan, or takes other action as defined at § 431.201, or whenever a hearing is otherwise required; at the time a skilled nursing facility or nursing facility notifies a resident of a transfer or discharge; and at the time an individual receives an adverse preadmission screening or annual resident review determination.

The information must be accessible to individuals who are limited English proficient and to individuals with disabilities, and may be provided in electronic format. Where hearing authority has been delegated to an Exchange or Exchange appeals entity, the agency must inform the individual in writing of the right to have the hearing before the agency instead, and of the method for making that election.

Ten days before the action, with a listed set of exceptions

The provision that most often decides whether someone can act in time is one sentence long. Section 431.211 provides: "The State or local agency must send a notice at least 10 days before the date of action, except as permitted under §§ 431.213 and 431.214."

Section 431.213 lists the circumstances in which the agency may instead send notice no later than the date of action. They are narrow and mostly factual: the agency has factual information confirming the beneficiary's death; the agency receives a clear written statement signed by the beneficiary that they no longer wish services, or that gives information requiring termination or reduction with an indication that they understand that consequence; the beneficiary has been admitted to an institution where they are ineligible for further services; the beneficiary's whereabouts are unknown and mail is returned with no forwarding address; the agency establishes that the beneficiary has been accepted for Medicaid by another jurisdiction; a change in the level of medical care is prescribed by the beneficiary's physician; the notice involves an adverse preadmission screening determination; or the date of action will occur in less than 10 days under the nursing facility transfer rules.

The regulation attaches a sunset to one of those items: the whereabouts-unknown exception in paragraph (d) sunsets on October 1, 2034, and CMS states it will follow rulemaking procedures to have replacement policy effective on that date.

The ten-day rule and the exception list together explain a pattern people often read as arbitrary. Advance notice is the default and the exceptions are enumerated, so a notice arriving on the day of the action is either within one of those listed situations or is not compliant with the default.

Requesting a hearing, and keeping services while it runs

Section 431.221 governs the request. The agency must establish procedures permitting an individual or an authorized representative to submit a hearing request through the modalities described in § 435.907(a) — with the internet, telephone and other electronic modalities effective no later than the date described in § 435.1200(i) — and to include a request for an expedited fair hearing in that submission. The agency "may not limit or interfere with the applicant's or beneficiary's freedom to make a request for a hearing," and may assist in submitting and processing the request.

The outer window is in paragraph (d): the agency must allow "a reasonable time, not to exceed 90 days from the date that notice of action is mailed, to request a hearing." Ninety days is a ceiling on what a state may allow, not a floor a state must reach — the operative words are "a reasonable time, not to exceed."

Section 431.230 governs what happens to services in the meantime. If the agency sent the 10-day or 5-day notice required under § 431.211 or § 431.214 and the beneficiary requests a hearing before the date of action, the agency may not terminate or reduce services until a decision is rendered after the hearing — unless it is determined at the hearing that the sole issue is one of federal or state law or policy, and the agency promptly informs the beneficiary in writing that services are to be terminated or reduced pending the decision.

The timing condition inside that sentence is the whole of it. Continuation depends on the request being made before the date of action, which is what makes the ten-day advance notice a practical right rather than a formality. And the following paragraph states the cost: if the agency's action is sustained by the hearing decision, "the agency may institute recovery procedures against the applicant or beneficiary to recoup the cost of any services furnished the beneficiary, to the extent they were furnished solely by reason of this section."

What the decision must be built from, and when it is due

Section 431.244 constrains the decision itself. Recommendations or decisions "must be based exclusively on evidence introduced at the hearing." The record must consist only of the transcript or recording of testimony and exhibits or an official report of what happened, all papers and requests filed in the proceeding, and the recommendation or decision of the hearing officer. The applicant or beneficiary must have access to the record at a convenient place and time.

The written decision has different requirements depending on the type of hearing. In an evidentiary hearing it must summarize the facts and identify the regulations supporting the decision. In a de novo hearing it must specify the reasons for the decision and identify the supporting evidence and regulations.

Paragraph (f) sets the deadline for final administrative action. Ordinarily it is within 90 days from the date the enrollee filed a managed care appeal — not counting the days the enrollee took to subsequently file for a state fair hearing — or, for all other fair hearings, from the date the agency receives the hearing request. Two faster tracks exist. Where a managed care plan sends the agency a case file for an appeal that met the expedited criteria but was not resolved in the expedited timeframe, or was resolved in that timeframe but wholly or partly against the enrollee, the agency must act as expeditiously as the enrollee's health condition requires and no later than 3 working days after receiving the file. And for individuals granted an expedited fair hearing, eligibility-related and nursing-facility claims run to no later than 7 working days after the agency receives the request, effective no later than the date described in § 435.1200(i).

The regulation allows delay only in defined circumstances: where the agency cannot reach a decision because the appellant requests a delay or fails to take a required action, or where there is an administrative or other emergency beyond the agency's control. In either case the agency must document the reasons for the delay in the appellant's record. Paragraph (g) closes with a transparency rule — the public must have access to all agency hearing decisions, subject to the information-safeguarding requirements of subpart F.