January 10
, 2024
The Honorable Phil Mendelson
Chairman
Council of the District of Columbia
John A. Wilson Building
1350 Pennsylvania Avenue, N.W., Suite 504
Washington, D.C. 20004
Dear Chairman Mendelson:
Enclosed for consideration and enactment by the Council of the District of Columbia is the “DC
Healthcare Alliance Financial Eligibility Rulemaking Approval Emergency Act of 2024”, along
with an accompanying emergency declaration resolution.
The legislation will approve proposed final rules of the Department of Health Care Finance
(“DHCF”) regarding the operation of the DC Healthcare Alliance program that will update the
modified adjusted gross income financial methodology and increase the reasonable compatibility
standard for verifying electronic data sources when an individual attests to their financial
information. These changes will provide more room for errors that may be no fault of applicants
or beneficiaries, and create a more streamlined and efficient automation of application and
renewal processing that will reduce the risk of eligible Alliance beneficiaries losing health
coverage.
If you have any questions regarding the proposed legislation, please contact Chief of Staff,
DHCF, Melanie Williamson, at (202) 478-5809.
I urge the Council to take prompt and favorable action on the legislation.
Sincerely,
Muriel Bowser 1
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at the request of the Mayor
A PROPOSED RESOLUTION
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
16 To declare the existence of an emergency with respect to the need to approve proposed
17 final rules submitted to the Council pursuant to section 7a of the Health Care
18 Privatization Amendment Act of 2001 to provide for implementation of updated
19 financial eligibility requirements and standards on eligibility determinations for
20 the DC Healthcare Alliance program.
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22 RESOLVED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That
23 this resolution may be cited as the "DC Health Care Alliance Financial Eligibility
24 Rulemaking Approval Emergency Declaration Resolution
of 2024".
25 Sec. 2. (a) There is an immediate need to approve proposed final rules of the
26 Department
of Health Care Finance regarding the DC Health Care Alliance ("Alliance")
27 program.
28 (b) Pursuant to section 7a of the Health Care Privatization Amendment Act of
29 2001 ("Act" ), effective March 30, 2004 (D.C. Law 15-109; D.C. Official Code§ 7-1406),
30 the Council must approve, by act, proposed final rules that implement the Act, which
31 established the Health Care Safety Net Administration, which administers the Alliance
32 program.
33 (c) The Department of Health Care Finance in March 2023 issued a notice of
34 proposed rulemaking to update its rules governing Alliance program eligibility to create
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parity with certain Medicaid eligibility requirements and processes, including most of the 35
Medicaid modified adjusted gross income (“MAGI”) financial methodology. 36
(d) The rule changes the financial eligibility methodology to further align with37
policy changes to the MAGI financial methodology by incorporating federal legislative 38
changes, which will further streamline eligibility processes. 39
(e) In response to the restart of Alliance program renewals on July 1, 2022, the40
rules also adopt upcoming Medicaid policy changes to increase the reasonable 41
compatibility standard for verifying electronic data sources when an individual attests to 42
their financial information, which will provide more room for errors that may be no fault 43
of the applicants or beneficiaries, and create a more streamlined and efficient automation 44
of application and renewal processing that reduces the risk of eligible Alliance 45
beneficiaries from losing health coverage. 46
(e) Approval on an emergency basis is necessary to reduce barriers to District47
residents establishing and continuing Alliance program eligibility. 48
Sec. 3. The Council of the District of Columbia determines that the 49
circumstances enumerated in section 2 constitute emergency circumstances making it 50
necessary that the DC Health Care Alliance Financial Eligibility Rulemaking Approval 51
Emergency Act of 2024 be adopted after a single reading. 52
Sec. 4. This resolution shall take effect immediately. 53
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DEPARTMENT OF HEALTH CARE FINANCE
NOTICE OF FINAL RULEMAKING
[as submitted to the Council of the District of Columbia for its approval pursuant to section 7a
of the Health Care Privatization Amendment Act of 2001 (D.C. Official Code § 7-1406)]
The Director of the Department of Health Care Finance (“DHCF”), pursuant to the authority set
forth in section 7a of the Health Care Privatization Amendment Act of 2001 (“Health Care
Privatization Amendment Act”), effective July 12, 2001 (D.C. Law 14-18; D.C. Official Code §
7-1406), and section 6(6) of the Department of Health Care Finance Establishment Act of 2007,
effective February 27, 2008 (D.C. Law 17-109; D.C. Official Code § 7-771.05(6)), hereby gives
notice of the adoption of amendments to Chapter 33 (Health Care Safety Net Administration) of
Subtitle B (Public Health and Medicine) of Title 22 (Health) of the District of Columbia Municipal
Regulations (DCMR).
Pursuant to sections 3 and 7 of the Health Care Privatization Amendment Act (D.C. Official Code
§§ 7-1401 and 7-1405), DHCF finances and monitors the health care and medical services that are
provided through contract to District residents enrolled in the District of Columbia Health Care
Alliance program (“Alliance program”). The Alliance program provides comprehensive health
care and medical services to District residents ages twenty-one (21) years and over, who have
incomes at or below two hundred ten percent (210%) of the federal poverty level and are not
otherwise eligible for or enrolled in Medicare, the Children’s Health Insurance Program, or
federally-funded Medicaid benefits.
This rule further aligns with recent amendments to the Medicaid Modified Adjusted Gross Income
(MAGI) financial eligibility requirements, which adopt federal legislative changes pursuant to the
Tax Cuts and Jobs Act of 2017, approved on December 22, 2017 (Pub. L. No. 115-97, 131 Stat.
2054); the Bipartisan Budget Act of 2018, approved on February 9, 2018 (Pub. L. No. 115-123,
132 Stat. 64); the Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping
Insurance Delivery Stable Act, approved on January 22, 2018 (Pub. L. No. 115-120, 132 Stat. 31);
and the Patient Protection and Affordable Care Act of 2010, approved March 23, 2010 (Pub. L.
No. 111-148, 124 Stat 119), as amended. These changes include: (1) qualified lottery winnings
and qualified lump sum income (i.e., gambling) of eighty thousand dollars ($80,000) or more,
which are received in a single payout, shall be counted in the month received and over a period
of up to one hundred twenty (120) months; (2) self-attestation will be accepted as a form of
verification of qualified lottery winnings and qualified lump sum income, subject to post-eligibility
verification using available electronic data sources; (3) an undue medical or financial hardship
exemption is established for individuals impacted by the new treatment of qualified lottery and
gambling winnings, subject to criteria as may be established by the Secretary of the U.S.
Department of Health and Human Services; (4) compensation of a parent mentor, as defined under
42 U.S.C. § 1397mm(f)(5) (part of the Social Security Act) will be excluded from countable
income; (5) the deduction for qualified moving expenses will no longer be counted as an exclusion
from countable income, except for active members of the military; (6) alimony payments under
separation or divorce agreements finalized after December 31, 2018, or pre-existing agreements
modified after December 31, 2018, are no longer deductible from income; (7) payment of tuition
and fees for qualified education expenses for postsecondary education is no longer deductible from
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income; and (8) household composition for married individuals living separately but filing joint
tax returns includes the individual plus his or her spouse. The addition of these changes will create
more parity with Medicaid and further streamline eligibility processes and avoid a bifurcated
process when evaluating eligibility for the programs.
DHCF is also raising the reasonable compatibility standard to match financial information
obtained from federal and state electronic data sources with self-attested application information
to align with upcoming Medicaid policy changes. Consistent with the requirements set forth under
42 U.S.C. 1320b-7 (part of the Social Security Act) and 42 C.F.R. § 435.952, the District uses
electronic data sources to verify Medicaid financial eligibility, and a reasonable compatibility
standard to match financial information obtained from federal and state electronic data sources
with attested application information. Under the District’s reasonable compatibility standard, an
applicant or beneficiary would not be required to provide additional documentation when self-
attested income is below the applicable income threshold, the data source reports an income above
the applicable income threshold, and the difference between them is less than ten percent (10%)
of the amount given by the data sources. The District adopted the same reasonable compatibility
standard for the Alliance program. However, ten percent (10%) is a low range for error, and
electronic income data may not always be completely accurate or up to date with an applicant’s or
beneficiary’s recent income changes. As part of the District’s plan to unwind continuous Medicaid
enrollment when the federal public health emergency ends, the District is raising the reasonable
compatibility standard from ten percent (10%) to twenty percent (20%). This rulemaking aligns
with this upcoming Medicaid policy change, which will provide more room for errors that may be
no fault of the applicants or beneficiaries, and is consistent with guidance provided by the Centers
for Medicare and Medicaid Services that states should raise their reasonable compatibility
standards. This change will also create a more streamlined and efficient automation of application
and renewal processing, minimize the need for paper-based manual work, and help reduce the risk
of eligible Alliance beneficiaries losing health coverage. DHCF estimates that proposed changes
in this rule will result in an increase of six hundred eighty thousand dollars ($680,000) in total
local expenditures in Fiscal Year 2023.
A Notice of Proposed Rulemaking was published in the District of Columbia Register on March
24, 2023, at 70 DCR 003582. No comments were received, and no changes have been made to the
text of the rules as proposed.
The proposed final rules were submitted to the Council of the District of Columbia pursuant to
section 7a of the Health Care Privatization Amendment Act of 2001, effective July 12, 2001 (D.C.
Law 14-18; D.C. Official Code § 7-1406). The Council approved the rules through Resolution No.
[INSERT NUMBER] on [INSERT DATE].
The Director of DHCF took final action to adopt this rulemaking on [INSERT DATE], and the
rules shall become effective upon publication of this notice in the District of Columbia Register.
Chapter 33, HEALTH CARE SAFETY NET ADMINISTRATION, of Subtitle B, PUBLIC
HEALTH AND MEDICINE, of Title 22, HEALTH, of the DCMR is amended as follows:
Section 3304 FINANCIAL ELIGIBILITY REQUIREMENTS, is amended as follows:
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Subsection 3304.2 is amended to read as follows:
3304.2 For individuals who expect to file a federal income tax return or who expect to be
claimed as a tax dependent by another tax filer for the taxable year in which an
eligibility determination is made, household composition shall be determined as
follows:
(a) The household of an individual who expects to be a tax filer consists of the
tax filer and all of the tax dependents the tax filer expects to claim;
(b) The household of a tax dependent, except individuals identified at § 3304.5,
consists of the tax filer claiming the tax dependent and all other tax
dependents expected to be claimed by that tax filer;
(c) The household of a married individual who lives with their spouse consists
of both spouses regardless of whether they expect to file a joint federal tax
return or whether one (1) or both spouses expect to be claimed as a tax
dependent by another tax filer;
(d) The household of a married individual who does not live with their spouse
but who files a joint federal tax return with their spouse includes both
spouses;
(e) The household of a married individual who does not live with their spouse
and who is filing a federal tax return separately from their spouse, does not
include the spouse in the individual’s household; and
(f) The household of a pregnant woman consists of the pregnant woman plus
the number of children she is expected to deliver. In the case of determining
the family size of other individuals who have a pregnant woman in their
household, the pregnant woman is counted herself plus the number of
children she is expected to deliver.
Subsection 3304.6 is amended to read as follows:
3304.6 MAGI-based income shall be determined using federal income tax rules for
determining adjusted gross income except as otherwise provided in this Section.
Countable income shall include the following:
(a) Wages, salaries, tips, and other forms of earned income;
(b) Taxable and tax-exempt interest;
(c) Ordinary dividends;
(d) Qualified dividends;
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(e) Taxable refunds, credits, or offsets of state and local income taxes;
(f) Alimony received;
(g) Business income or losses;
(h) Capital gains or losses;
(i) Other taxable gains or losses;
(j) Taxable Individual Retirement Account (IRA) distributions;
(k) Taxable amounts of pensions and annuities;
(l) Income from certain investments such as rental real estate, royalties,
partnerships, S corporations, trusts;
(m) Farm income or losses;
(n) Unemployment compensation;
(o) Taxable and tax-exempt Social Security benefits except as provided in
Subsection 3304.6(q) below;
(p) Lump sum payments, which shall be counted as follows:
(1) Qualified lottery winnings and qualified lump sum income shall be
counted using the following formula (lottery winnings paid out in
installments shall not be considered “qualified lottery winnings” and
shall be considered unearned, recurring income that is counted in the
month they are received):
(A) Single payment winnings less than eighty thousand dollars
($80,000.00) shall be counted in the month received in their
entirety, only for the individual who received the winnings;
(B) Single payment winnings of at least eighty thousand dollars
($80,000.00) but less than ninety thousand dollars
($90,000.00) shall be counted as income over two (2)
months, with an equal amount counted in each month, only
for the individual who received the winnings. For other
household members, the winnings should be counted under
§ 3304.6(p)(2); and
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(C) For every additional ten thousand dollars ($10,000.00) of
single payment winnings, one (1) month is added to the
period over which total winnings are divided, in equal
installments, and counted as income up to a maximum of
one hundred twenty (120) months only for the individual
who received the winnings. This calculation shall be
consistent with the table showing the amount of monthly
income attributed to increasing amounts of winnings and the
number of months over which the winnings are counted
found in the Centers for Medicare and Medicaid Services
(CMS) State Health Official Letter # 19-003, Attachment B,
pages 12 – 13, at https://www.medicaid.gov/federal-policy-
guidance/downloads/sho19003.pdf (last visited on June 28,
2022). For other household members, the winnings shall be
counted under § 3304.6(p)(2); and
(2) Other lump sum payments that are not qualified lottery winnings or
qualified lump sum income are counted in the month received; and
(q) Any other income reported on the Internal Revenue Service Form 1040.
Subsection 3304.7 is amended to read as follows:
3304.7 Countable income shall exclude the following:
(a) Income scholarships, awards, or fellowship grants used for education
purposes and not for living expenses;
(b) American Indian/Alaska Native income as defined in 42 C.F.R. §
435.603(e);
(c) Educator expenses;
(d) Certain business expenses of reservists, performing artists, and fee-based
government officials;
(e) Health savings account deductions;
(f) Moving expenses for active duty members of the military who are ordered
to move or change duty stations. For individuals that are not active duty
members of the military, moving expenses shall not be excluded from
income through tax year 2025;
(g) Deductible parts of self-employment taxes;
(h) Self-employed Simplified Employee Pension (SEP), Savings Incentive
Match Plan for Employees (SIMPLE), and qualified plans;
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(i) Self-employed health insurance deductions;
(j) Penalties on early withdrawal of savings;
(k) Alimony paid pursuant to a separation or divorce agreement finalized on or
before December 31, 2018 that has not been modified after December 31,
2018;
(l) Alimony received pursuant to a separation or divorce agreement finalized
on or after January 1, 2019, or pursuant to a pre-existing agreement
modified on or after January 1, 2019;
(m) Individual Retirement Arrangements (IRA) deductions;
(n) Student loan interest deductions;
(o) Discharged student loan debt of a borrower if the debt is discharged due to
the death or permanent and total disability of the student, as described under
Section 11031 of the Tax Cuts and Jobs Act of 2017, approved on December
22, 2017 (Pub. L. No. 115-97, 131 Stat. 2054);
(p) Public assistance benefits;
(q) Domestic production activities deductions;
(r) Supplemental Security Income (SSI) benefits under Title XVI of the Social
Security Act; and
(s) Compensation of a parent mentor, as defined under 42 U.S.C. § 1397mm
(f)(5) of the Social Security Act, that assists families with children that are
eligible, but not enrolled, in Medicaid, in accordance with Section 3004 of
the Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth
by Keeping Insurance Delivery Stable Act of 2017, approved on January
22, 2018 (Pub. L. No. 115-120, 132 Stat. 28) (HEALTHY KIDS Act).
Subsection 3304.13 is amended to read as follows:
3304.13 The Department shall verify financial eligibility through one (1) or more federal
and state electronic data sources, except for qualified lottery winnings and qualified
lump sum payments, for which the Department shall accept self-attestation, subject
to post-eligibility verification using available electronic data sources.
Subsection 3304.15 is amended to read as follows:
3304.15 The reasonable compatibility standard for financial information shall be met when:
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(a) The attestation and data sources are both above the District Alliance
program’s applicable income standard;
(b) The attestation and data sources are both below the District Alliance
program’s applicable income standard;
(c) The attestation is below the District Alliance program’s applicable income
standard and the data sources are above the applicable income standard,
when the difference between them is less than twenty percent (20%) of the
amount given by data sources; or
(d) The attestation is zero (0) income and no income data is available from
electronic data sources.
A new subsection 3304.21 is added to read as follows:
3304.21 An individual whose income exceeds the applicable Medicaid Modified Adjusted
Gross Income (MAGI) income limit due to the application of the formula for
qualified lottery winnings and qualified lump sum income, as described in §
3304.6(p)(1), may continue to be eligible to the extent the Department determines
that the denial of eligibility of the individual would cause an undue medical or
financial hardship as determined on the basis of criteria as may be established by
the Secretary of the U.S. Department of Health and Human Services.
Section 3399, DEFINITIONS, is amended as follows:
The following new definition, of “Certification period”, is added after the existing definition
of “Bilateral contract modification”:
Certification period – Alliance program eligibility is determined for a twelve (12)
month period. This period is called a certification period.
The following new definitions, of “Other lump sum payments” and “Parent mentor”, are
added after the existing definition of “Option”, to read as follows:
Other lump sum payments – non-recurring payments that are not qualified lottery
winnings or gambling winnings, and may include but not be limited to
backpay, a retroactive benefit payment, state tax refund, or an insurance
settlement.
Parent Mentor - as defined under 42 U.S.C. § 1397mm (f)(5).
The following new definitions, of “Qualified lottery winnings” and “Qualified lump sum
income”, are added after the existing definition of “Purchase order”, to read as follows:
Qualified lottery winnings – as defined under 42 U.S.C. § 1396a(e)(14)(K)(v).
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Qualified lump sum income – as defined under § 1396a(e)(14)(K)(vi) (i.e.,
gambling winnings).