DEPARTMENT OF HEALTH AND SOCIAL SERVICES

Division of Medicaid and Medical Assistance

PROPOSED

PUBLIC NOTICE

Asset Verification System

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and under the authority of Title 31 of the Delaware Code, Chapter 5, Section 512, Delaware Health and Social Services (DHSS) / Division of Medicaid and Medical Assistance (DMMA) provides notice of intent to submit a State Plan Amendment (SPA) to implement section 1940 of the Social Security Act that requires all States to implement Asset Verification System, a system for verifying the assets of aged, blind or disabled applicants for and recipients of Medicaid.

Any person who wishes to make written suggestions, compilations of data, testimony, briefs or other written materials concerning the proposed new regulations must submit same to Sharon L. Summers, Planning & Policy Development Unit, Division of Medicaid and Medical Assistance, 1901 North DuPont Highway, P.O. Box 906, New Castle, Delaware 19720-0906 or by fax to 302-255-4425 by October 31, 2011.

The action concerning the determination of whether to adopt the proposed regulation will be based upon the results of Department and Division staff analysis and the consideration of the comments and written materials filed by other interested persons.

SUMMARY OF PROPOSAL

The proposal serves as notice of intent of the Division of Medicaid and Medical Assistance (DMMA) to submit a State Plan Amendment (SPA) to implement section 1940 of the Social Security Act that requires all States to implement Asset Verification System, a system for verifying the assets of aged, blind or disabled applicants for and recipients of Medicaid.

Statutory Authority

Background

Title VII, section 7001(d) of P.L. 110-252 (Supplemental Appropriations Act of 2008) added a new section 1940 to the Social Security Act. Section 1940 of the SSA requires all States to add "asset verification programs" to their Medicaid State plans.

Individuals whose eligibility is being determined or redetermined (and others whose finances are relevant to eligibility) must authorize the State agency to obtain records from any financial institution in connection with the eligibility determination in order to verify the individual's assets. The verification program is to be "consistent with the approach of the Commissioner of Social Security" under Section 1631 of the SSA, i.e., an electronic verification system. Individuals who refuse or revoke their authorization may be determined ineligible for medical assistance.

States are required to submit a state plan amendment which describes how they will implement an asset verification system. Plan amendments will have to be submitted at least six months before the implementation deadline applicable to each State. Delaware has been scheduled by CMS to implement an electronic asset verification system in year 2013. (Public Law 110-252)

If a State fails to implement an asset verification system as required by section 1940, Federal Financial Participation (FFP) for services provided to aged, blind or disabled individuals for whom assets should have been verified will be withheld.

Summary of Proposal

The Division of Medicaid and Medical Assistance (DMMA) will be implementing the Asset Verification System to comply with Section 1940 of the Social Security Act (SSA) and with the Centers for Medicare and Medicaid Services (CMS) directives.

The provisions of this State plan amendment are subject to approval by the CMS.

Fiscal Impact Statement

These revisions impose no increase in cost on the General Fund.

The costs for system changes are already budgeted in the General Fund.

Savings/Cost Avoidance may be achieved to the extent that the asset verification data increases the accuracy of eligibility determinations.

DMMA PROPOSED REGULATION #11-38

REVISION:

Revision: SUPPLEMENT 16 TO ATTACHMENT 2.6-A

PAGE 1

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

State/Territory DELAWARE

Asset Verification System

1940(a) 1. The Agency will provide for the verification of assets for purposes of determining

or redetermining Medicaid eligibility for aged, blind and disabled Medicaid

applicants and recipients using an Asset Verification System (AVS) that meets the

following minimum requirements.

A. The request and response system must be electronic:

(1) Verification inquiries must be sent electronically via the internet or similar

means from the Agency to the financial institution (FI).

(2) The system cannot be based on mailing paper-based requests.

(3) The system must have the capability to accept responses electronically.

B. The system must be secure, based on a recognized industry standard of

security (e.g., as defined by the U.S. Commerce Department’s National

Institute of Standards and Technology, or NIST).

C. The system must establish and maintain a database of FIs that participate in

the Agency’s AVS.

D. Verification requests also must be sent to FIs other than those identified by

applicants and recipients, based on some logic such as geographic proximity

to the applicant’s home address, or other reasonable factors whenever the

Agency determines that such requests are needed to determine or

redetermine the individual’s eligibility.

E. The verification requests must include a request for information on both open

and closed accounts, going back up to 5 years.

Revision: SUPPLEMENT 16 TO ATTACHMENT 2.6-A

PAGE 2

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

State/Territory DELAWARE

ASSET VERIFICATION SYSTEM

2. System Development

A. ___ The Agency itself will build and maintain an AVS.

In 3 below, describe how the system will meet the requirements in Section 1.

B. ___ The Agency will hire the following contractor to build and maintain an

AVS.

In 3 below, identify the contractor, if known, and describe how the system

will meet the requirements in Section 1.

C. ___ The Agency will be joining a consortium to develop an AVS.

In 3 below, identify the States participating in the consortium. Also identify

the contractor, if known, who will build and maintain the consortium’s

AVS, and how the system will meet the requirements in Section 1.

D. ___ The Agency already has a system in place that meets the requirements

for an acceptable AVS:

In 3 below, describe how the system meets the requirements in Section 1.

E. ___ Other alternative not included in A. - D. above.

In 3 below, describe this alternative approach how it will meet the

requirements in Section 1.

Revision: SUPPLEMENT 16 TO ATTACHMENT 2.6‑A

Page 3

STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT

State/Territory DELAWARE

ASSET VERIFICATION SYSTEM

3. Provide the AVS implementation description and other information requested for

the implementation approach checked in Section 2.

The contractor is not known at this time.

The Agency will select a contractor through the Request for Proposal (RFP)

process.

The system and entity chosen will be able to comply with the following

requirements of Supplement 16 to Attachment 2.6-A, Page 1:

A. An electronic request and response process for asset verification;

B. A database of financial institutions (FIs) that provide data to the entity

meeting the geographic requirements of the entity;

C. A 5-year look-back of the assets on individual applicants, recipients, spouses

and partners;

D. A secure system based on a recognized industry standard as defined by the

United States Commerce Department’s National Institute of Standards and

Technology, or NIST;

E. Verification request will include both open and closed asset account

information as determined by the State;

F. The acceptable asset verification entity will provide adequate data for the

generation of all required reports expected to meet federal reporting

requirements such as the number of requests, number of responses and

amounts of undisclosed assets found.