Frequently Asked Questions

The traditional MEQC program at 42 CFR § 431.810 through 431.822 was originally designed to implement sections 1902(a)(4) “Administration Methods for Proper and Efficient Operation of the State Plan” and 1903(u) “Limitation of FFP for Erroneous Medical Assistance Expenditures” of the Social Security Act (the Act). The program required annual state reviews of Medicaid cases identified through a statistically valid statewide sample of cases selected from the state’s eligibility files. The reviews were conducted to determine whether the sampled cases meet applicable Medicaid eligibility requirements. The program evolved over time to allow states the option of selecting specific areas of focus within the Medicaid program for their annual MEQC reviews.

On July 5, 2017, CMS published a final regulation entitled “Changes to the Payment Error Rate Measurement (PERM) and Medicaid Eligibility Quality Control (MEQC) Programs (CMS-Medicaid Coordination of Benefits8- F).” This final rule updated the MEQC and PERM programs based on the changes to Medicaid and Children’s Health Insurance Program eligibility requirements under the Patient Protection and Affordable Care Act. The new regulation has restructured the MEQC program into an ongoing series of pilots that states are required to conduct during the two off-years between triennial PERM review years. The MEQC portions of the regulation are now covered by 42 CFR §§ 431.800-820.

FAQ ID:93416

The regulation requires states to submit a pilot planning document to CMS by November 1 of the year in which each state’s PERM review year ends. The pilot planning document must describe how states will conduct their active and negative case reviews and must be approved by CMS before the MEQC pilots can begin. In addition, the regulation requires states to submit case-level reports and corrective action plans to CMS by August 1 of the year after the MEQC review period ends. The specifications for the MEQC pilot planning documents are provided in the MEQC sub-regulatory guidance effective August 29, 2018. More details on the specifications of the case-level reports and corrective action plans are included in a second round of guidance, MEQC sub-regulatory guidance effective October 22, 2018.

FAQ ID:93421

As reconfigured under the final regulation of July 5, 2017, MEQC will work in conjunction with the Payment Error Rate Measurement (PERM) program. In those years when states undergo their triennial PERM reviews, the states will not conduct MEQC pilots. The latter will only be required in the two off-years between PERM review years. CMS has restructured the MEQC program so that it more effectively complements the PERM program and provides states with the necessary flexibility and opportunity to target specific problems or high-interest areas during the two off-years of the PERM cycle.

FAQ ID:93146

The MEQC requirements on active case reviews generally mirror the requirements of the eligibility component of PERM reviews. The regulation requires that states perform reviews of a sample of active Medicaid and Children’s Health Insurance Program (CHIP) cases to identify new eligibility approvals and renewals that were made in error. As in PERM, states will be required to submit case-level reports on the sampled cases they review and corrective action plans that describe steps taken to remediate the errors found.

However, in contrast to PERM, when states identify errors in their active Medicaid and CHIP cases, they will be required to undertake a payment review. This will consist of a review of all claims paid over the first three months after an erroneous eligibility determination was made, and a summary of the overstated or understated liability. States will in turn be required to submit adjustments to the amount of federal financial participation (FFP) claimed through the CMS-64 reporting process for Medicaid and the CMS-21 reporting process for CHIP. The adjustments are required for identified claims in which too much or too little FFP was received. There is no payment review or re-crediting requirement in PERM, although disallowance of FFP can be taken in states whose PERM error rate exceeds the national threshold of 3% based on a formula described at 42 CFR 431.1010. MEQC contains no such disallowance provision.

The MEQC program also contains one other significant element that is not found in PERM. Besides the requirement that states review at least 400 cases in their active case universe (including a minimum of 200 cases), MEQC requires states to review at least 400 negative case actions. At least 200 of these must be Medicaid and 200 must be CHIP. Negative case actions involve erroneous denials of Medicaid or CHIP eligibility or erroneous terminations from Medicaid or CHIP. This is an area with no PERM counterpart in which states will be developing case-level reporting and corrective actions. Negative case action reviews will not be triggered by PERM findings. Largely for this reason, the regulation requires that states pull their sample of these from the entire Medicaid and CHIP universe of cases. By sampling from the full range of Medicaid and CHIP cases, states should be able to obtain an overview of those sectors in their programs that may be especially vulnerable to improper denials or terminations.

FAQ ID:93196

The PERM/MEQC dates/cycles are as follows:

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CMS = Centers for Medicare & Medicaid Services
CAP = ??

FAQ ID:95156

Yes, services covered under the state plan rendered during the PE period will qualify for federal match regardless of the ultimate Medicaid eligibility decision. The standards that states can set for hospitals and the findings from reviews of hospital performance relative to those standards are intended to ensure that hospitals are making appropriate PE determinations and following state hospital PE procedures. When problems are identified, states should take corrective action to ensure future compliance with state policies and procedures.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 151.09 KB)

FAQ ID:92111

To date, CMS has not published a list of revenue codes that must be included or excluded from this service category.  Medicaid outpatient hospital services are defined at 42 Code of Federal Regulations (CFR) 440.20 and include “preventive, diagnostic, therapeutic, rehabilitative, or palliative services”.  In the state plan, states further define those services covered as outpatient hospital services.

FAQ ID:92411

States have the option to require hospitals to assist individuals in submitting the full application, which can help connect more people to longer-term coverage. While we encourage states to do so, to promote ongoing coverage, as noted above, a full application cannot be required as a condition of receiving a hospital PE determination, as the purpose of PE is to promote quick access to care on an interim basis while the full application process is underway. States can strike a reasonable balance by using the full application for hospital PE determinations, but clearly delineating which questions are necessary for PE purposes. States and hospitals can also use inserts or additional language to differentiate between the hospital PE application and the full application.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 151.09 KB)

FAQ ID:91581

Real-time eligibility determinations make the role of PE different than it has been in the past. In situations in which the individual files a full application right away, the PE period would likely be considerably shorter-and eliminated altogether, as a practical matter, if a real-time determination is made. However, even with the most modernized systems, there invariably will be individuals for whom a real-time eligibility determination will not be possible. There also will be individuals who will not be comfortable with the online application, or ready with the information needed to complete a full online application and will instead opt to apply later or use a paper application. In such situations and for such individuals, PE remains a useful tool to facilitate prompt coverage and enrollment in the program. States have flexibility to in effect minimize the length of the PE periods by requiring that hospitals and other qualified entities assist individuals in submitting the single streamlined application online, as long as the individual is not required to submit the full application online as a condition of qualifying for PE.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 151.09 KB)

FAQ ID:91586

Yes. A simplified method of determining income (e.g., using use of gross income rather than or other simplified approximation of MAGI) per 42 CFR 435.1102(a) is permitted for all types of PE. Our regulations at 42 CFR 435.1102(a) discuss the use of simplified income methods and clearly state that full MAGI-based eligibility determinations cannot be used to determine PE. This requirement applies to all forms of PE, including hospital PE, per 42 CFR 435.1103(a) and 435.1110(a).

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 151.09 KB)

FAQ ID:91591