2. Requirement To Use Reliable Information Available to the State

At § 435.557(a), we define reliable information available to the State for the purpose of verifying an individual's status as a specified excluded individual or an individual's compliance or deemed compliance with the community engagement requirement. We explain that reliable information available to the State means information necessary for determining eligibility to which the State has access or should have access. This includes information from electronic data sources that the agency has determined effective consistent with § 435.557(b)(1)(ii), and as documented in the agency's verification plan in accordance with § 435.557(b)(1)(iii); information from other State or local agencies; information related to community engagement from Federal agencies or other data sources provided through the electronic service established by the Secretary (The Federal Data Services Hub, “the Hub”); information in the State's eligibility system; information in the individual's case record; payroll data; claims(s) relevant to the individual that have been adjudicated in the preceding 12 months, including those that have been paid, pended or denied (hereinafter referred to as “adjudicated claims”); and encounter data, as relevant to the individual, from the preceding 12 months. States must have a process to obtain the information defined as reliable information available to the State without seeking information from the individual. The process may be automated, such as through an Application Programming Interface (API) or other electronic interface or could require a worker to manually obtain the information from its source.

We further specify that reliable information available to the State includes information from electronic data sources that States have determined to be effective, consistent with § 435.557(b)(1)(ii), as documented in the State's verification plan in accordance with § 435.557(b)(1)(iii). Accordingly, wherever possible, States must use existing data sources the State relies upon to verify other eligibility criteria (for example, income data sources) to verify compliance with the community engagement requirement and connect to other data sources (in addition to those specifically enumerated) when doing so is effective, as described in further detail later in this section. We also consider data from other State and local agencies that is needed to determine eligibility to be reliable information available to the State for the purpose of verifying compliance or deemed compliance with the community engagement requirement or that an individual is a specified excluded individual, and, as such, are requiring States to obtain and use information from other State agencies. For example, States must require information from SNAP and TANF agencies and incarceration data from State, county or other local correctional facilities to verify if an individual meets certain specified excluded individual criteria or the mandatory exception for individuals who were inmates of a public institution. To the extent allowable under applicable data sharing and privacy laws, States must also use education information from State colleges or other educational institutions such as community colleges, high school equivalency programs, and high schools, among others, to verify if an individual is meeting the community engagement requirement based on at least half-time enrollment status in an educational program. States must use all available information from other State and local agencies to the extent such information is relevant to verifying compliance or deemed compliance with the community engagement requirement or an individual's specified excluded individual status and may need to establish connections to these sources or implement manual procedures to access and use the reliable information contained in other State and local agencies' systems.

We additionally specify that reliable information available to the State includes information from Federal ( printed page 33394) agencies and other data sources related to community engagement provided through the Federal Data Services Hub (the Hub). As discussed in detail later in this section, we expect to provide States information related to community engagement through the Hub and/or another Federally operated electronic service. Once those data sources are established, States will be required to access that information through the Hub or another Federal service, unless the State has approval to use an alternative mechanism.

In addition, we specify that information in the State's eligibility system and an individual's case record is reliable information available to the State. As described throughout this section, States are required to obtain information that may be relevant to verifying compliance or deemed compliance with the community engagement requirement or status as a specified excluded individual for other purposes, such as verifying other factors of eligibility. For example, States collect information pertaining to pregnancy to determine whether continuous eligibility applies and collect an individual's American Indian status to determine exemptions from cost sharing requirements. When possible, States must use this information collected and stored in an individual's record or other information available in the State's eligibility system to verify an individual demonstrated or was deemed to demonstrate community engagement, or their status a specified excluded individual.

States are also required to use payroll data available to the State, such as payments for caregiver services or other State employee payroll information. Additionally, States must use adjudicated claims data relevant to an individual's medical condition from the last 12 months. Because reimbursement is not provided for all claims submitted for payment, we have included a broader category of adjudicated claims data as reliable information available to the State to also account for pended or denied claims data, in addition to paid claims, from within the last 12 months, so long as the underlying claims data are useful in verifying an exclusion or exception to the community engagement requirement. Additionally, States must use encounter data from the last 12 months as relevant to the individual as a source of reliable information available to the State. Adjudicated claims and encounter data are State Medicaid agency records and are useful verification sources in establishing qualification for certain exceptions to the community engagement requirement and certain specified exclusions, including medical frailty or otherwise having special medical needs, participation in a drug addiction or alcoholic treatment and rehabilitation program, or other criteria such as hospitalization. Because such adjudicated claims and encounter data are records contained in State Medicaid agency systems, we have determined these data are available to the State, and States are required to access this information, even if this requires system builds or other process enhancements to obtain or translate the data for verifying compliance with or exception or exclusion from the community engagement requirement.

States must also request and use data from other sources that provide reliable information that is relevant to determining eligibility, to the extent that establishing a connection or process to obtain information from the source would be effective. Section 1902(xx)(5) of the Act requires States to use reliable information available to the State without requiring information from an individual, where possible, to verify compliance or deemed compliance with the community engagement requirement or an individual's specified excluded status. As such, to comply with the statutory requirement, States must identify data sources (in addition to those specifically enumerated at § 435.557(a)) that provide reliable information and request and use information from such data sources to the extent that establishing a connection or process to obtain the information would be effective. The regulation at § 435.557(b)(1)(ii) provides that in determining whether connecting to and obtaining and using information from a data source would be effective, the State must consider such factors as the administrative costs associated with establishing and using the data match compared with the administrative costs associated with relying on documentation, and on program integrity in terms of the potential for ineligible individuals to be enrolled and for eligible individuals to be denied coverage. States should exercise reasonable judgment in determining that establishing a data match with a data source would not be effective, considering such factors as the accuracy of the information, the timeliness of the information returned, the complexity of accessing the data or data source, the age of the records, the comprehensiveness of the data, any limitations imposed by the owner of the data on its use, as well as other relevant factors, including the impact on program integrity.

The regulation at § 435.945(j) requires States to “develop, and update as modified, and submit to the Secretary, upon request, a verification plan describing the verification policies and procedures adopted by the State agency to implement the provisions set forth in §§ 435.940 through 435.956,” which relate to the verification of income, assets and citizenship status, amongst other eligibility criteria. At § 435.557(b)(1)(iii), we incorporate this requirement for the purpose of verifying that an individual has met, is deemed to have met, or is excluded from the community engagement requirement. As such, we have updated the MAGI verification plan to include a supplement specific to community engagement. Each State must document in its verification plan supplement the policies and procedures the State will implement to verify compliance or deemed compliance with the community engagement requirement or an individual's specified excluded status. In addition to data sources included in the definition of “reliable information available to the State,” States must also document any other data sources the State has determined to be effective (in accordance with factors described at § 435.557(b)(1)(ii)) and will use for community engagement verification as well as when the identified data sources will be used (for example, at application, renewal or both). To effectuate this requirement, we are also making a technical amendment to § 435.945(j) to cross-reference the community engagement verification requirements set forth in § 435.557.

We recognize that State systems evolve over time, and as new data sources become available to verify compliance with the community engagement requirement, or exception or exclusion from it, we may require States to use additional data sources in the future. While this IFC includes the requirement that States obtain and use reliable information available to the State and connect to new data sources that may become available through the Hub within 12 months of the new data source's first availability through that service, subject to the waiver process under § 435.945(k), any other new requirement to connect to additional electronic data sources would be proposed through notice and comment rulemaking. ( printed page 33395)