Medicaid Premiums and Cost Sharing (#29)

Generic Clearance for Medicaid and CHIP State Plan, Waiver, and Program Submissions

IG_G1-Cost Sharing Requirements_Draft_MMDL_2-3-14(final clean)

Medicaid Premiums and Cost Sharing (#29)

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G1 - Cost Sharing Requirements
Statute: 1916, 1916A
Regulation: 42 CFR 447.50 - 447.57 (excluding 447.55)

INTRODUCTION
This state plan page (fillable PDF) G1 is used to indicate if the state charges cost sharing (deductibles,
co-insurance or co-payments) to individuals covered under the Medicaid state plan, and the general
provisions and assurances related to the imposition of cost sharing.
State plan page G1 must be submitted by states implementing cost sharing for the first time or for the
initial cost sharing state plan amendment submission in MMDL for existing cost sharing in the state
plan. For subsequent state plan amendment submissions, state plan page G1 need only be submitted
when changes are being proposed to provisions contained on page G1.

BACKGROUND
For background information related to the cost sharing state plan pages, including state plan page G1,
please see separate Implementation Guide, titled “Background - Medicaid Cost Sharing.”

TECHNICAL GUIDANCE
PREREQUISITES:
If the state is proposing to establish new cost sharing or modify existing cost sharing in the state plan,
it must submit the following pages prior to or concurrently with state plan page G1. These
prerequisites do not apply to states proposing to discontinue all cost sharing currently imposed under
the state plan.
•
•

G2a, G2b, and G2c – Cost Sharing Amounts for the Categorically Needy; Medically
Needy and Targeting
G3 - Cost Sharing Limitations

This state plan page is divided into 5 major sections:
• Selection of Cost Sharing Option
• General Provisions
• Cost Sharing for Non-emergency Services Provided in a Hospital Emergency Department (ED)
• Cost Sharing for Drugs
• Beneficiary and Public Notice Requirements
• Other Relevant Information
Selection of Cost Sharing Option
The state must first indicate Yes or No as to whether it charges cost sharing (deductibles, co-insurance
or co-payments) to individuals covered under the Medicaid state plan. A state that is not planning to

G1 - Cost Sharing Requirements
charge or amend cost sharing need not complete this state plan page. If a state wants to discontinue all
cost sharing currently imposed under the state plan, they should submit G1 and indicate No.
If the state selects Yes, additional text will be displayed describing general cost sharing requirements,
including options for the state to select. Additional provisions and options are provided in state plan
pages G2a, G2b andG2c (Cost Sharing Amounts for the Categorically Needy; Medically Needy and
Targeting) and G3 (Cost Sharing Limitations).
Review Criteria
For the initial cost sharing state plan amendment submittal in MMDL states electing to impose or
amend cost sharing, must select Yes or this state plan page and their cost sharing SPA cannot be
approved.
If the state selects Yes, the state must provide assurance that it administers cost sharing in accordance
with the provisions in this state plan page and sections 1916 and 1916A of the Social Security Act (the
Act) and 42 CFR 447.50 through 447.57.
The state provides this affirmative assurance by checking the box next to the assurance statement.
Review Criteria
The state must check the assurance box or this state plan page cannot be approved.
General Provisions
This section begins with the state providing another assurance that cost sharing amounts established by
the state for services are always less than the amount the agency pays for the service. The state
provides this affirmative assurance by checking the box next to the assurance statement.
Review Criteria
The state must check the assurance box or this state plan page cannot be approved.
Next is a policy statement that “No provider may deny services to an eligible individual on account of
the individual's inability to pay cost sharing, except as elected by the state in accordance with 42 CFR
447.52(e)(1). This policy statement is pre-checked and does not require any entry by the state as it
applies to all states with cost sharing.
The state then indicates the state’s process for identifying for providers whether cost sharing for a
specific item or service may be imposed on a beneficiary and whether the provider may require the

G1 - Cost Sharing Requirements
beneficiary to pay the cost sharing as a condition for receiving the item or service. The state does this
by selecting one or more of the options listed and should check all that apply.
Review Criteria
The state must select at least one of the options listed or this state plan page cannot be approved.
If the state selects “Other process”, it then enters the description of the process.
Review Criteria
The state must enter a description of the process. The description should be sufficiently clear,
detailed and complete to permit the reviewer to determine that the state’s election meets applicable
federal statutory, regulatory and policy requirements. If the description of the process is not entered,
this state plan page cannot be approved.
This section ends with another pre-checked policy statement that “Contracts with managed care
organizations (MCOs) provide that any cost-sharing charges the MCO imposes on Medicaid enrollees
are in accordance with the cost sharing specified in the state plan and the requirements set forth in 42
CFR 447.50 through 447.57.”
Cost Sharing for Non-emergency Services Provided in a Hospital ED
The state indicates by selecting Yes or No as to whether the state imposes cost sharing for nonemergency services provided in a hospital emergency department.
Review Criteria
Yes or No must be selected with respect to whether or not the state imposes cost sharing for nonemergency services provided in a hospital emergency department. If Yes or No is not selected, this
state plan page cannot be approved. This election must be consistent with the cost sharing described
on G2a, G2b, and G2c; i.e., if the state indicates that cost sharing is imposed for non-emergency
services provided in a hospital emergency department, such cost sharing must be listed on G2a, G2b,
and/or G2c.
If Yes is selected, the state must then provide two assurances:
• Before providing non-emergency services and imposing cost sharing for such services, the state
ensures that hospitals providing care comply with the provisions listed below the assurance.
• The state assures that it has a process in place to identify hospital emergency department
services as non-emergency for purposes of imposing cost sharing. This process does not limit a
hospital's obligations for screening and stabilizing treatment of an emergency medical

G1 - Cost Sharing Requirements
condition under section 1867 of the Act; or modify any obligations under either state or federal
standards relating to the application of a prudent-layperson standard for payment or coverage of
emergency medical services by any managed care organization.
The state provides these affirmative assurances by checking the boxes next to the assurance statements.
Review Criteria
The state must check the assurance boxes or this state plan page cannot be approved.
The state must then enter a description of the state’s process for identifying emergency department
services as non-emergency for purposes of imposing cost sharing.
Review Criteria
The description should be sufficiently clear, detailed and complete to permit the reviewer to
determine that the state’s election meets applicable federal statutory, regulatory and policy
requirements. The state must enter the description of the process or this state plan page cannot be
approved.
Cost Sharing for Drugs
The state indicates by selecting Yes or No as to whether the state charges cost sharing for drugs.
Review Criteria
Yes or No must be selected with respect to whether or not the state charges cost sharing for drugs. If
Yes or No is not selected, this state plan page cannot be approved. This election must be consistent
with the cost sharing described on G2a, G2b, and G2c; i.e., if the state indicates that cost sharing is
imposed for drugs such cost sharing must be listed on G2a, G2b, and/or G2c.
If yes is selected, the state then indicates by selecting Yes or No as to whether the state has established
differential cost sharing for preferred and non-preferred drugs.
Review Criteria
Yes or No must be selected with respect to whether or not the state charges differential cost sharing
for preferred and non-preferred drugs. If Yes or No is not selected, this state plan page cannot be
approved. As above, this election must be consistent with the cost sharing described on G2a, G2b,
and G2c.

G1 - Cost Sharing Requirements
If No is selected, and the state does not charge differential cost sharing for preferred and nonpreferred drugs, a pre-checked provision stating that “All drugs will be considered preferred
drugs” is displayed.
If Yes is selected, and the state charges differential cost sharing for preferred and non-preferred
drugs, a pre-checked provision stating that “The state identifies which drugs are considered to
be non-preferred” is displayed. The identification of non-preferred drugs is not contained in the
state plan, but should be available upon request.
If the state selected Yes that if differentiates cost sharing between preferred and non-preferred drugs,
the state must provide assurance that the state has a timely process in place to limit cost sharing to the
amount imposed for a preferred drug in the case of a non-preferred drug within a therapeutically
equivalent or similar class of drugs, if the individual's prescribing provider determines that a preferred
drug for treatment of the same condition either will be less effective for the individual, will have
adverse effects for the individual, or both. In such cases, reimbursement to the pharmacy is based on
the appropriate cost sharing amount.
The state provides this affirmative assurance by checking the box next to the assurance statement.
Review Criteria
The state must check the assurance box or this state plan page cannot be approved.
Beneficiary and Public Notice Requirements
The state provides assurance that “Consistent with 42 CFR 447.57, the state makes available a public
schedule describing current cost sharing requirements in a manner that ensures that affected applicants,
beneficiaries and providers are likely to have access to the notice. If the state imposes cost sharing for
non-emergency use of the emergency department, the public schedule must include a list of hospitals
that impose this cost sharing. Additionally, if cost sharing is imposed on prescription drugs, the public
schedule must provide information about where individuals can access a list of the state’s preferred
drugs.
Prior to submitting a SPA which establishes or substantially modifies existing cost sharing amounts or
policies,, the state provides the public with advance notice of the SPA, specifying the amount of cost
sharing, who is subject to the charges, and what are the consequences for non-payment, if any. The
state must provide a reasonable opportunity for stakeholder comment. Documentation demonstrating
that the notice requirements have been met are submitted with the SPA. The state also provides
opportunity for additional public notice if cost sharing is substantially modified during the SPA
approval process.”

G1 - Cost Sharing Requirements
The state provides this affirmative assurance by checking the box next to the assurance statement.
Note: Specific information about the format used to provide public notice will be entered into the
General Information for each SPA in MMDL.
Review Criteria
The state must check the assurance box or this state plan page cannot be approved.
Other Relevant Information
In this section states may enter any other information which the state feels is relevant, but has not been
covered in any of the cost sharing state plan pages.


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