[Federal Register: May 21, 2003 (Volume 68, Number 98)]
[Notices]
[Page 27813-27815]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my03-44]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Notice of Hearing: Reconsideration of Disapproval of Michigan
State Plan Amendment (SPA) 02-021
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing on July 10,
2003, at 10 a.m., at the Centers for Medicare & Medicaid Services
(CMS), Chicago Regional Office, 233 North Michigan Avenue; Suite R5-5
NW Minnesota; Chicago, Illinois 60601.
Closing Date: Requests to participate in the hearing as a party
must be filed with the presiding officer by June 5, 2003.
FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding
Officer, CMS, 2520 Lord Baltimore
[[Page 27814]]
Drive, Suite L, Baltimore, Maryland 21244-2670, Telephone: (410) 786-
2055.
SUPPLEMENTARY INFORMATION: This notice announces an administrative
hearing to reconsider the decision to disapprove Michigan SPA 02-021,
which was submitted to the Centers for Medicare & Medicaid Services
(CMS) on December 23, 2002. This SPA was disapproved on February 14,
2003. In this amendment, Michigan proposes to allow the imposition of
prior authorization requirements in the Medicaid program on
prescription drugs when the manufacturer of the drug does not offer
rebates to two State-funded, non-Medicaid programs. The State-funded
programs are the Children's Special Health Care Services program
(CSHCS) and the State Medical program (SMP).
At issue is whether CMS properly concluded as a basis for
disapproving the amendment that: (1) The State had not demonstrated
that its proposed prior authorization program would be consistent with
simplicity of administration and the best interests of Medicaid
recipients, as required by section 1902(a)(19) of the Social Security
Act (the Act); and (2) the State had not demonstrated that its proposed
prior authorization program would be consistent with efficiency,
economy, or quality of care, as required by section 1902 (a)(30)(A) of
the Act. In addition, Michigan contends that CMS does not have the
authority to review the State's implementation of prior authorization
requirements in the Medicaid program, other than for consistency with
section 1927(d)(5) of the Act.
As indicated in a letter to state Medicaid directors dated
September 18, 2002, CMS stated that it would review proposed state plan
amendments seeking to secure prescription drug benefits, rebates, or
discounts for non-Medicaid populations for consistency with the goals
and objectives of the Medicaid program. After review, CMS did not find
the evidence presented by the State in support of this SPA demonstrated
that its prior authorization program furthered Medicaid goals and
objectives. The CMS concluded that Michigan failed to show that a
significant proportion of beneficiaries in either the CSHCS or SMP
programs would meet the requirements needed to become eligible for
Medicaid if their pharmacy benefit was terminated. In light of the
burden that prior authorization may impose on Medicaid beneficiaries
and the absence of documented benefit to current or potential Medicaid
eligibles, CMS determined that the State had failed to document that
such prior authorization procedures would further the goals and
objectives of the Medicaid program and thus be consistent with sections
1902(a)(19) and 1902(a)(30) of the Act.
Therefore, based on the reasoning above, and after consultation
with the Secretary as required under 42 CFR 430.15 (c)(2), CMS
disapproved Michigan SPA 02-021.
Section 1116 of the Act and 42 CFR part 430 establish Departmental
procedures that provide an administrative hearing for reconsideration
of a disapproval of a state plan or plan amendment. The CMS is required
to publish a copy of the notice to a state Medicaid agency that informs
the agency of the time and place of the hearing and the issues to be
considered. If we subsequently notify the agency of additional issues
that will be considered at the hearing, we will also publish that
notice.
Any individual or group that wants to participate in the hearing as
a party must petition the presiding officer within 15 days after
publication of this notice, in accordance with the requirements
contained at 42 CFR 430.76(b)(2). Any interested person or organization
that wants to participate as amicus curiae must petition the presiding
officer before the hearing begins, in accordance with the requirements
contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the
presiding officer will notify all participants.
The notice to Michigan announcing an administrative hearing to
reconsider the disapproval of its SPA reads as follows:
Janet Olszewski,
Director, Michigan Department of Community Health,
Lewis Cass Building,
320 South Walnut Street--Sixth Floor
Lansing, Michigan 48913
Dear Ms. Olszewski:
I am responding to your request for reconsideration of the
decision to disapprove Michigan State Plan Amendment (SPA) 02-021,
which was submitted on December 23, 2002. This SPA was disapproved
on February 14, 2003. In this amendment, Michigan proposes to allow
the imposition of prior authorization requirements in the Medicaid
program on prescription drugs when the manufacturer of the drug does
not offer rebates to two State-funded, non-Medicaid programs. The
State-funded programs are the Children's Special Health Care
Services program (CSHCS) and the State Medical program (SMP).
At issue is whether the Centers for Medicare & Medicaid Services
(CMS) properly concluded as a basis for disapproving the amendment
that: (1) The State had not demonstrated that its proposed prior
authorization program would be consistent with simplicity of
administration and the best interests of Medicaid recipients, as
required by section 1902(a)(19) of the Social Security Act (the
Act); and (2) the State had not demonstrated that its proposed prior
authorization program would be consistent with efficiency, economy,
or quality of care, as required by section 1902 (a)(30)(A). In
addition, Michigan contends that CMS does not have the authority to
review the State's implementation of prior authorization
requirements in the Medicaid program, other than for consistency
with section 1927(d)(5) of the Act.
As indicated in a letter to state Medicaid directors dated
September 18, 2002, CMS stated that it would review proposed state
plan amendments seeking to secure prescription drug benefits,
rebates, or discounts for non-Medicaid populations for consistency
with the goals and objectives of the Medicaid program. After review,
CMS did not find that the evidence presented by the State in support
of this SPA demonstrated that its prior authorization program
furthered Medicaid goals and objectives. The CMS concluded that
Michigan failed to show that a significant proportion of
beneficiaries in either the CSHCS or SMP programs would meet the
requirements needed to become eligible for Medicaid if their
pharmacy benefit was terminated. In light of the burden that prior
authorization may impose on Medicaid beneficiaries and the absence
of documented benefit to current or potential Medicaid eligibles,
CMS determined that the State had failed to document that such prior
authorization procedures would further the goals and objectives of
the Medicaid program and thus be consistent with sections
1902(a)(19) and 1902(a)(30) of the Act. Therefore, based on the
reasoning set forth above, and after consultation with the Secretary
as required under 42 CFR 430.15(c)(2), CMS disapproved Michigan SPA
02-021.
I am scheduling a hearing on your request for reconsideration to
be held on July 10, 2003, at 10 a.m., Centers for Medicare &
Medicaid Services, Chicago Regional Office, 233 Michigan Avenue;
Suite R5-5 NW Minnesota; Chicago, Illinois 60601.
If this date is not acceptable, we would be glad to set another
date that is mutually agreeable to the parties. The hearing will be
governed by the procedures prescribed at 42 CFR, part 430.
I am designating Ms. Kathleen Scully-Hayes as the presiding
officer. If these arrangements present any problems, please contact
the presiding officer. In order to facilitate any communication
which may be necessary between the parties to the hearing, please
notify the presiding officer to indicate acceptability of the
hearing date that has been scheduled and provide names of the
individuals who will represent the State at the hearing.
The presiding officer may be reached at (410) 786-2055.
Sincerely,
Thomas A. Scully.
(Sect. 1116 of the Social Security Act (42 U.S.C. section 1316); (42
CFR 430.18))
[[Page 27815]]
(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid
Assistance Program)
Dated: May 12, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 03-12697 Filed 5-20-03; 8:45 am]
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