[Federal Register: August 13, 2003 (Volume 68, Number 156)]
[Notices]
[Page 48392-48393]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13au03-89]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Notice of Hearing: Reconsideration of Disapproval of Virginia
State Plan Amendment (SPA) 02-09
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing on September
25, 2003, 10 a.m., Room 217; Second Floor; Suite 216, The Public Ledger
Building; 150 South Independence Mall West; Philadelphia, Pennsylvania
19106 to reconsider our decision to disapprove Virginia State Plan
Amendment (SPA) 02-09.
Closing Date: Requests to participate in the hearing as a party must be
received by the presiding officer by August 28, 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, dated June 16, 2003, to disapprove
Virginia State Plan Amendment (SPA) 02-09. This SPA proposes to provide
supplemental payment for services rendered by a newly created class of
physicians and other health professionals who are State employees
affiliated with a State academic medical center. There are two
supplemental payment methodologies described in the SPA. The first,
effective July 2, 2002, until August 12, 2002, would provide payment
equal to the difference between the amount indicated on the Medical
Assistance (Medicaid) fee schedule applicable to other providers of the
same type, and the lower of Medicare-allowed amount or billed charges.
The second method, effective August 13, 2002, would be equal to the
difference between the Medicaid fee schedule and providers' usual and
customary charges. There is no ceiling on charges during the second
period.
At issue is whether the State has documented that its proposed
supplemental payment methodology is consistent with efficiency,
economy, and quality of care when the supplemental payment methodology:
(1) Is not justified by any increased costs to the State to ensure
access to services for Medicaid beneficiaries; (2) pays significantly
more than other third party payers for the same services; (3) is not a
usual and customary payment methodology; and (4) would unduly
complicate tracking and audit processes.
Section 1902 (a)(30)(A) of the Social Security Act (the Act)
requires that states have methods and procedures to ensure that
payments are consistent with efficiency, economy, and quality of care.
The State was unable to document that other third party payers pay an
amount equal to billed charges. In addition, the State did not document
that the providers affected by this amendment have higher costs than
other providers of the same type in the State, nor did it demonstrate
that any portion of the increased payment would be required to pay
actual costs incurred in order to ensure access to the Medicaid
services at issue. Virginia also failed to justify why the supplemental
payment is warranted for public providers only.
The supplemental payment methodology proposed by the State is
[[Page 48393]]
not a customary method for paying physicians and other health
professionals. The methodology would make it difficult to track
payments for specific services and would complicate auditing processes.
For the above-stated reasons, and after consulting with the
Secretary as required by 42 CFR 430.15(c)(2), CMS disapproved Virginia
SPA 02-09 because CMS concluded that the State had failed to
demonstrate that it fulfilled the conditions as specified in section
1902(a)(30)(A) of the Act to ensure that payments are ``consistent with
efficiency, economy, and quality of care.''
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. 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 Virginia announcing an administrative hearing to
reconsider the disapproval of its SPA reads as follows:
Mr. Patrick W. Finnerty, Director,
Virginia Department of Medical Assistance Services,
600 East Broad Street, Suite 1300,
Richmond, VA 23119.
Dear Mr. Finnerty:
I am responding to your request for reconsideration of my
decision, dated June 16, 2003, to disapprove Virginia State Plan
Amendment (SPA) 02-09. This SPA proposes to provide supplemental
payment for services rendered by a newly created class of physicians
and other health professionals who are State employees affiliated
with a State academic medical center. There are two supplemental
payment methodologies described in the SPA. The first, effective
July 2, 2002, until August 12, 2002, would provide payment equal to
the difference between the amount indicated on the Medical
Assistance (Medicaid) fee schedule applicable to other providers of
the same type, and the lower of Medicare-allowed amount or billed
charges. The second method, effective August 13, 2002, would be
equal to the difference between the Medicaid fee schedule and
providers' usual and customary charges. There is no ceiling on
charges during the second period.
At issue is whether the State has documented that its proposed
supplemental payment methodology is consistent with efficiency,
economy, and quality of care when the supplemental payment
methodology: (1) Is not justified by any increased costs to the
State to ensure access to services for Medicaid beneficiaries; (2)
pays significantly more than other third party payers for the same
services; (3) is not a usual and customary payment methodology; and
(4) would unduly complicate tracking and audit processes.
Section 1902(a)(30)(A) of the Social Security Act (the Act)
requires that states have methods and procedures to ensure that
payments are consistent with efficiency, economy, and quality of
care. The State was unable to document that other third party payers
pay an amount equal to billed charges. In addition, the State did
not document that the providers affected by this amendment have
higher costs than other providers of the same type in the State, nor
did it demonstrate that any portion of the increased payment would
be required to pay actual costs incurred in order to ensure access
to the Medicaid services at issue. Virginia also failed to justify
why the supplemental payment is warranted for public providers only.
The supplemental payment methodology proposed by the State is
not a customary method for paying physicians and other health
professionals. The methodology would make it difficult to track
payments for specific services and would complicate auditing
processes.
For the above stated reasons, and after consulting with the
Secretary as required by 42 CFR 430.15(c)(2), CMS disapproved
Virginia SPA 02-09 because CMS concluded that the State had failed
to demonstrate that it fulfilled the conditions as specified in
section 1902(a)(30)(A) of the Act to ensure that payments are
``consistent with efficiency, economy, and quality of care.''
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 Virginia SPA 02-09.
I am scheduling a hearing on your request for reconsideration to
be held on September 25, 2003, at 10 a.m., Room 217; Second Floor;
Suite 216; The Public Ledger Building; 150 South Independence Mall
West; Philadelphia, Pennsylvania 19106 to reconsider our decision to
disapprove Virginia SPA 02-09. 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.
Section 1116 of the Social Security Act (42 U.S.C. 1316); 42 CFR
430.18)
(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid
Assistance Program)
Dated: July 28, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 03-20672 Filed 8-12-03; 8:45 am]
BILLING CODE 4120-03-P