Medicaid Premiums and Cost Sharing (#29)

G3 - Cost Sharing Limitations
Statute: 1916, 1916A
Regulation: 42 CFR 447.56

INTRODUCTION
State plan page (fillable PDF) G3 includes information regarding mandatory exemptions from
cost sharing and other cost sharing limitations. This state plan page is also used for states to
indicate additional optional exemptions, as well as, the procedures used to implement and
enforce cost sharing exemptions and to meet the tracking requirement.
State plan page G3 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 G3 need only be submitted
when changes are being proposed to the general provisions contained on page G3.

BACKGROUND
For background information related to the cost sharing state plan pages, including state plan page
G3, please see separate document, 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, and has submitted G2a, G2b, or G2c, it must submit page G3. Once G3 is approved, it does
not need to be submitted with future state plan amendments, unless the state wants to change any
of its policies included in G3 related to any new SPA that is submitted.
State plan page G3 begins with the state providing assurance that the state administers cost
sharing in accordance with the limitations described at 42 CFR 447.56, and 1916(a)(2) and (j)
and 1916A(b) of the Social Security Act.
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.
The remainder of this state plan page is divided into the following sections:

G3 - Cost Sharing Limitations

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Groups of Individuals - Mandatory Exemptions
Groups of Individuals - Optional Exemptions
Services - Mandatory Exemptions
Enforceability of Exemptions
Payments to Providers
Payments to Managed Care Organizations
Aggregate Limits

For each Yes or No question, if Yes or No is not selected by the state, this state plan page
cannot be approved.
Groups of Individuals - Mandatory Exemptions
This section consists of a list of groups of individuals who are exempt from cost sharing. These
are all pre-checked as they are mandatory exemptions for all states imposing cost sharing.
Groups of Individuals - Optional Exemptions
The state must first select Yes or No as to whether the state elects to exempt individuals under
age 19, 20 or 21, or any reasonable category of individuals 18 years of age or over.

If Yes, the state then selects one of the four options listed. If the state checks, “Other reasonable
category”, they must describe the category of individuals in the text box.
Review Criteria
If one of the options is not selected, this state plan page cannot be approved. If “other
reasonable category” was selected, a description must be entered or this state plan page cannot
be approved. 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 then selects Yes or No as to whether the state elects to exempt individuals whose
medical assistance for services furnished in a home and community-based setting is reduced by
amounts reflecting available income other than required for personal needs.
Review Criteria
If Yes or No is not selected, this state plan page cannot be approved.
Services - Mandatory Exemptions
This section consists of a list of groups of services which are exempt from cost sharing. These
are all pre-checked as they are mandatory exemptions for all states imposing cost sharing.

G3 - Cost Sharing Limitations

Enforceability of Exemptions
In this section states provide information about their procedures for implementing and enforcing
exemptions from cost sharing for American Indians/Alaskan Natives (AI/AN) and all other
individuals exempt from cost sharing.
American Indians/Alaskan Natives (AI/AN)
First, the state provides information about procedures used to identify American
Indians/Alaskan Natives (AI/AN) who are currently receiving or have ever received an item
or service furnished by an Indian health care provider or through referral under contract
health services in accordance with 42 CFR 447.56(a)(1)(x). The state must select one or
more of the five options listed. If the state selects “Other procedure,” it must enter a
description(s) of the other procedure(s).

Review Criteria
If the state did not select at least one of the options listed, this state plan page cannot be
approved. If “other procedure” was selected, at a minimum, one other procedure
description must be entered or this state plan page cannot be approved. 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.
Next, at the state’s option the state may provide additional description for any of the
enforcement procedures selected or entered by the state.
All Other Individuals Exempt from Cost Sharing
First, the state provides information about procedures used to identify all other individuals
exempt from cost sharing. The state must select one or more of the five options listed. If the
state selects “Other procedure”, it must enter a description of the other procedure(s).

Review Criteria
If the state did not select at least one of the options listed, this state plan page cannot be
approved. If “other procedure” was selected, at a minimum, one other procedure
description must be entered or this state plan page cannot be approved. 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.
Next, at the state’s option the state may provide additional description for any of the
enforcement procedures selected or entered by the state.

G3 - Cost Sharing Limitations

Payments to Providers
The state must provide assurance that the state reduces the payment it makes to a provider by the
amount of a beneficiary's cost sharing obligation, regardless of whether the provider has
collected the payment or waived the cost sharing, except as provided under 42 CFR 447.56(c).
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.
Payments to Managed Care Organizations
The state must select Yes or No to indicate whether or not the state contracts with one or more
managed care organizations to deliver services under Medicaid.

If Yes, the state must then provide assurance that it calculates its payments to managed care
organizations to include cost sharing established under the state plan for beneficiaries not exempt
from cost sharing, regardless of whether the organization imposes the cost sharing on its
recipient members or the cost sharing is collected.
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.
Aggregate Limits
This section includes the following 2 subsections:
• Aggregate Limit
• Additional Aggregate Limits
Aggregate Limit
The state must first provide assurance that Medicaid premiums and cost sharing incurred by
all individuals in the Medicaid household do not exceed an aggregate limit of 5 percent of
the family's income applied on a quarterly or monthly basis.

G3 - Cost Sharing Limitations
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.
Second, the state must select the percentage of family income used for the aggregate limit
from the list provided. The state selects only one of the options. If the state selects “Other,”
then it must enter a percentage amount. Since the maximum aggregate limit cannot exceed 5
percent of family income, the amount entered cannot be greater than 5.
Review Criteria
The state must check one of the options listed or this state plan page cannot be approved.
If the state selected “Other,” it must enter an amount in the percentage box or this state
plan page cannot be approved. The number entered cannot be greater than 5 or this state
plan page cannot be approved.
Third, the state selects either quarterly or monthly to indicate the frequency by which the
state calculates family income for the purpose of the aggregate limit.
Review Criteria
The state must select either quarterly or monthly or this state plan page cannot be
approved.
Next, the state must select Yes or No to indicate whether the state has a process to track each
family's incurred premiums and cost sharing through a mechanism that does not rely on
beneficiary documentation.
If No, the state must provide an explanation of why the state's premium and cost sharing
rules do not place beneficiaries at risk of reaching the aggregate family limit.
If Yes, the state is then asked to describe the tracking mechanism. The state does so by
selecting one or more of the three options listed. If the state selects “Managed care
organization(s) track each family's incurred cost sharing, as follows,” it must then enter a
description of the tracking process used by the managed care organizations. If the state
selects “Other process,” it must enter a description of the other tracking process used.

G3 - Cost Sharing Limitations
Next, the state must describe how the state informs beneficiaries and providers of the
beneficiaries' aggregate limit and notifies beneficiaries and providers when a beneficiary has
incurred premiums and cost sharing up to the aggregate family limit and individual family
members are no longer subject to premiums or cost sharing for the remainder of the family's
current monthly or quarterly cap period:
The state must select Yes or No to indicate if it has a documented appeals process for
families that believe they have incurred premiums or cost sharing over the aggregate limit
for the current monthly or quarterly cap period.
If Yes, the state must then describe the appeals process used.
Next, the state must describe the process used to reimburse beneficiaries and/or providers if
the family is identified as paying over the aggregate limit for the month/quarter.
Finally, the state must describe the process for beneficiaries to request a reassessment of
their family aggregate limit if they have a change in circumstances or if they are being
terminated for failure to pay a premium.
Additional Aggregate Limits
In the last section of this state plan page, the state must select Yes or No to indicate if the
state imposes additional aggregate limits, consistent with 42 CFR 447.56(f)(5). For
example, if the state places a monthly or annual limit on cost sharing charges for a particular
service, they would select Yes here.
If Yes, the state must then describe the additional aggregate limits used.
Review Criteria
All relevant descriptions that have to be entered under this section 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 state does
not enter this description, this state plan page cannot be approved.