[Federal Register: May 21, 2003 (Volume 68, Number 98)]
[Notices]
[Page 27815-27816]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21my03-45]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Notice of Hearing: Reconsideration of Disapproval of Arkansas
(SPA) 02-17 State Plan Amendment
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing on June 25,
2003, at 10 a.m., at the Centers for Medicare & Medicaid Services
(CMS), Dallas Regional Office, 1301 Young Street, Room 1119; Dallas,
Texas 75202.
Closing Date: Requests to participate in the hearing as a party
must be received by the presiding officer by June 5, 2003.
FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding
Officer CMS, 2520 Lord Baltimore 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 Arkansas State Plan
Amendment (SPA) 02-17, which was submitted to the Centers for Medicare
& Medicaid Services (CMS) on July 29, 2002. This amendment proposes to
provide supplemental payments to physicians and other allied health
professionals who provide services through Faculty Group Practices
associated with the University of Arkansas School of Medicine. The
supplemental payment would be equal to the difference between the
existing fee schedule rates and Faculty Group Practices' charges. CMS
issued its initial determination disapproving Arkansas SPA 02-17 on
March 6, 2003.
Arkansas timely requested reconsideration by letter dated April 14,
2003. At issue is whether the State has demonstrated that this SPA is
consistent with the requirements of section 1902 (a)(30)(A) of the
Social Security Act (the Act). The CMS concluded that the information
provided with this SPA was insufficient to document consistency with
economy, efficiency, and quality of care. Arkansas indicated that no
other major payers in the State pay these Faculty Group Practices at
these levels; indeed, Arkansas indicated that the five largest private
third-party payers pay less than half of these levels. Arkansas
provided no documentation to show that the Faculty Group Practices have
higher costs than other providers of the same type in the State. In the
light of evidence, CMS found that the State had not established that it
was consistent with economy or efficiency for Medicaid to pay twice the
rate paid by other third-party insurers for the same services.
Moreover, the annualized payment methodology proposed by the State is
not a customary method for paying physicians and other allied health
professionals. The methodology would make it difficult to track
payments for specific services and would complicate auditing processes.
In the initial decision, CMS also cited the complicated nature of this
payment scheme and difficulty in tracking and auditing payments for
services as a reason why the proposed payment methodology was not
consistent with section 1902(a)(30)(A) of the Act.
Section 1116 of the Act and 42 CFR part 430 establish Department
procedures that provide an administrative hearing for reconsideration
of a disapproval of a State plan or plan amendment. The Centers for
Medicare & Medicaid Services (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 Arkansas announcing an administrative hearing to
reconsider the disapproval of the SPA reads as follows:
Mr. Kurt Knickrehm, Director
Arkansas Department of Human Services
Donaghey Plaza South
PO Box 1437, Slot S401
Little Rock, Arkansas 72203-1437
Dear Mr. Knickrehm:
I am responding to your request for reconsideration of the
decision to disapprove Arkansas State Plan Amendment (SPA ) 02-17,
which was submitted to the Centers for Medicare & Medicaid Services
(CMS) on July 29, 2002. This amendment proposes to provide
supplemental payments to physicians and other allied health
professionals who provide services through Faculty Group Practices
associated with the University of Arkansas School of Medicine. The
supplemental payment would be equal to the difference between the
existing fee schedule rates and Faculty Group Practices' charges.
The CMS issued its initial determination disapproving Arkansas SPA
02-17 on March 6, 2003. Arkansas timely requested reconsideration by
letter dated April 14, 2003.
At issue is whether the State has demonstrated that this SPA is
consistent with the requirements of section 1902(a)(30)(A) of the
Social Security Act. The CMS concluded that the information provided
with this SPA was insufficient to document consistency with economy,
efficiency and quality of care. Arkansas indicated that no other
major payers in the State pay these Faculty Group Practices at these
levels; indeed, Arkansas indicated that the five largest private
third-party payers pay less than half of these levels. Arkansas
provided no documentation to show that the Faculty Group Practices
have higher costs than other providers of the same type in the
State. In the light of evidence,CMS found that the State had not
established that it was consistent with economy or efficiency for
Medicaid to pay twice the rate paid by other third-party insurers
for the same services. Moreover, the annualized payment methodology
proposed by the State is not a customary method for paying
physicians and other allied health professionals. The methodology
would make it difficult to track payments for specific services and
would complicate auditing processes. In the initial decision, CMS
also cited the complicated nature of this payment scheme and
difficulty in tracking and auditing payments for services as a
reason why the proposed payment methodology was not consistent with
section 1902(a)(30)(A).
This notice announces an administrative hearing on June 25,
2003, at 10 a.m., Centers for Medicare & Medicaid Services (CMS),
Dallas Regional Office, 1301 Young Street, Room 1119; Dallas, Texas
75202.
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.
[[Page 27816]]
Sincerely,
Thomas A. Scully.
(Sect. 1116 of the Social Security Act (42 U.S.C. section 1316); (42
CFR 430.18))
(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. 03-12698 Filed 5-20-03; 8:45 am]
BILLING CODE 4120-01-P