[Federal Register: July 21, 2006 (Volume 71, Number 140)]
[Notices]
[Page 41448-41450]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jy06-56]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
Notice of Hearing: Reconsideration of Disapproval of Alaska State
Plan Amendment 05-06
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice of hearing.
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SUMMARY: This notice announces an administrative hearing to be held on
August 29, 2006, at the Blanchard Plaza Building, 2201 Sixth Avenue,
11th Floor Conference Room, Seattle, WA 98121, to reconsider CMS'
decision to disapprove Alaska State plan amendment 05-06.
Closing Date: Requests to participate in the hearing as a party
must be received by the presiding officer by August 7, 2006.
FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding
Officer, CMS, Lord Baltimore Drive, Mail Stop LB-23-20, Baltimore,
Maryland 21244. Telephone: (410) 786-2055.
SUPPLEMENTARY INFORMATION: This notice announces an administrative
hearing to reconsider CMS' decision to disapprove Alaska State plan
amendment (SPA) 05-06, which was submitted on August 1, 2005. This SPA
was disapproved on April 21, 2006. Under SPA 05-06, Alaska proposed to
add certain school-based behavioral health services under the
rehabilitation services benefit.
This amendment was disapproved because it did not comport with the
requirements of section 1902(a) of the Social Security Act (the Act)
and implementing regulations. Specifically, the following issues will
be considered on reconsideration: (1) Whether the State demonstrated
that the proposed services would be within the scope of ``medical
assistance'' under the State plan pursuant to section 1902(a)(10) of
the Act, as defined at section 1905(a) of the Act; (2) whether the
State has assured that there is non-Federal funding as required under
section 1902(a)(2) to support expenditures that would be claimed under
the State plan as the basis for Federal matching funding in light of
financial arrangements that do not appear to result in net
expenditures; (3) whether the proposed payment rates meet the
requirements of section 1902(a)(30)(A) of the Act to be consistent with
efficiency, economy, and quality of care, in light of financial
arrangements under which the providers do not retain
[[Page 41449]]
Medicaid payments; and (4) whether the State plan complied with the
requirements of section 1902(a) generally, and implementing Federal
regulations at 42 CFR 430.10, to include all information necessary to
serve as the basis for Federal financial participation. We describe
each of these issues in detail below.
Section 1902(a)(10) of the Act requires that the State plan provide
for making medical assistance available to eligible beneficiaries. The
State did not establish that the proposed ``school-based rehabilitative
services'' are within the scope of ``medical assistance,'' which is
defined in section 1905(a) of the Act. While we understand the State
has placed the proposed services under the rehabilitative services
benefit in the State plan, the State has provided no clear definition
of the proposed services so that CMS can determine whether they are,
indeed, within the scope of the rehabilitation benefit. After repeated
requests for further information, the State did not provide any
description of what elements the ``behavioral health services
(including medication services)'' encompass, and how they are different
(or the same) as services in the currently approved State plan. It is
not clear whether this is an expansion of coverage or a different
payment methodology for school providers. Absent such information, SPA
05-06 did not comply with the requirements of section 1902(a)(10) of
the Act to provide for medical assistance as defined in section 1905(a)
of the Act.
Section 1902(a)(2) of the Act provides that the State plan must
assure adequate funding for the non-Federal share of expenditures from
State or local sources for the amount, duration, scope, or quality of
care and services available under the plan. Section 1902(a)(30)(A) of
the Act requires that State plans provide for payment for care and
services available under the plan that is ``consistent with economy,
efficiency, and quality of care.'' In order to assess compliance with
these provisions, State officials were asked to provide information
related to Alaska's funding mechanisms for payments, and the net State
and local expenditures that are incurred. Nor did Alaska respond to
requests for descriptions of any transfers of funds between providers
and State or local governments, and information as to whether the
providers keep 100 percent of the total computable funds given as
Medicaid payments.
According to a flow chart provided by the State, the Medicaid
agency pays the schools 100 percent of the claimed amount. A quarterly
bill for the State match is then submitted to school providers who
transfer to the Medicaid agency the State share of the services
provided. This transfer of funds is made after the schools have been
reimbursed for the services they provide, and is effectively a refund
by the schools for part of their Medicaid payments. As a result of this
refund, the net expenditure by the State Medicaid agency is wholly
federally funded. In light of this refund arrangement, we cannot
conclude that the proposed payment rate reflects the net expenditure by
the State for Medicaid services provided by schools, and that the net
non-Federal share meets the requirements of section 1902(a)(2) of the
Act. Moreover, the refund is an indication that the full payment amount
is not required to ensure Medicaid beneficiaries' access to the
providers' services. The result is that proposed payments under this
section of the plan would not be in compliance with the requirement
under section 1902(a)(30)(A) of the Act that payment rates must be
consistent with economy, efficiency, and quality of care.
Finally, the proposed SPA does not comply with the general
provisions of section 1902(a), including section 1902(a)(4) of the Act,
as implemented in part by Federal regulations at 42 CFR 430.10. This
regulation requires that States include in their State plans all
information necessary for CMS to determine whether the plan can be
approved to serve as a basis for Federal financial participation. There
is absent information that would more precisely identify the covered
services. Therefore, the proposed SPA does not comply with this
requirement.
For the reasons cited above, and after consultation with the
Secretary, as required by Federal regulations at 42 CFR 430.15(c)(2),
Alaska SPA 05-06 was disapproved.
Section 1116 of the Act, and Federal regulations at 42 CFR part
430, establish Department 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 in Federal regulations 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 in Federal regulations at 42 CFR
430.76(c). If the hearing is later rescheduled, the presiding officer
will notify all participants.
The notice to Alaska announcing an administrative hearing to
reconsider the disapproval of its SPA reads as follows:
Mr. Jerry Fuller, Medicaid Director, State of Alaska, Department of
Health and Social Services, Office of the Commissioner, P.O. Box
110601, Juneau, AK 99811-0601.
Dear Mr. Fuller: I am responding to your request for
reconsideration of the decision to disapprove the Alaska State plan
amendment (SPA) 05-06, which was submitted on August 1, 2005, and
disapproved on April 21, 2006. Under SPA 05-06, Alaska was proposing
to add certain school-based behavioral health services under the
rehabilitation services benefit. This amendment was disapproved
because it did not comport with the requirements of section 1902(a)
of the Social Security Act (the Act) and implementing regulations,
as discussed in more detail below.
Specifically, the following issues will be considered on
reconsideration: (1) Whether the State demonstrated that the
proposed services would be within the scope of ``medical
assistance'' under the State plan pursuant to section 1902(a)(10) of
the Act, as defined at section 1905(a) of the Act; (2) whether the
State has assured that there is non-Federal funding as required
under section 1902(a)(2) of the Act to support expenditures that
would be claimed under the State plan as the basis for Federal
matching funding in light of financial arrangements that do not
appear to result in net expenditures; (3) whether the proposed
payment rates meet the requirements of section 1902(a)(30)(A) of the
Act to be consistent with efficiency, economy, and quality of care,
in light of financial arrangements under which the providers do not
retain Medicaid payments; and (4) whether the State plan complied
with the requirements of section 1902(a) of the Act generally, and
implementing Federal regulations at 42 CFR 430.10, to include all
information necessary to serve as the basis for Federal financial
participation. We describe each of these issues in detail below.
Section 1902(a)(10) of the Act requires that the State plan
provide for making medical assistance available to eligible
beneficiaries. The State did not establish that the proposed
``school-based rehabilitative services'' are within the scope of
``medical assistance,'' which is defined in section 1905(a) of the
Act. While we understand the State has placed the proposed services
under the rehabilitative services benefit in the State plan, the
State has provided no clear definition of the proposed services so
that the Centers for Medicare & Medicaid Services (CMS) can
determine whether they are, indeed, within the scope of the
rehabilitation benefit. After repeated requests for further
information, the State provided no
[[Page 41450]]
description of what elements the ``behavioral health services
(including medication services)'' encompass, and how they are
different (or the same) as services in the currently approved State
plan. It is not clear whether this is an expansion of coverage or a
different payment methodology for school providers. Absent such
information, SPA 05-06 did not comply with the requirements of
section 1902(a)(10) of the Act to provide for medical assistance as
defined in section 1905(a) of the Act.
Section 1902(a)(2) of the Act provides that the State plan must
assure adequate funding for the non-Federal share of expenditures
from State or local sources for the amount, duration, scope, or
quality of care and services available under the plan. Section
1902(a)(30)(A) of the Act requires that State plans provide for
payment for care and services available under the plan that is
``consistent with economy, efficiency, and quality of care.'' In
order to assess compliance with these provisions, State officials
were asked to provide information related to Alaska's funding
mechanisms for payments, and the net State and local expenditures
that are incurred. Nor did Alaska respond to requests for any
transfers of funds between providers and State or local governments,
and information as to whether the providers keep 100 percent of the
total computable funds given as Medicaid payments.
According to a flow chart provided by the State, the Medicaid
agency pays the schools 100 percent of the claimed amount. A
quarterly bill for the State match is then submitted to school
providers who transfer to the Medicaid agency the State share of the
services provided. This transfer of funds is made after the schools
have been reimbursed for the services they provide, and is
effectively a refund by the schools for part of their Medicaid
payments. As a result of this refund, the net expenditure by the
State Medicaid agency is wholly federally funded. In light of this
refund arrangement, we cannot conclude that the proposed payment
rate reflects the net expenditure by the State for Medicaid services
provided by schools, and that the net non-Federal share meets the
requirements of section 1902(a)(2) of the Act. Moreover, the refund
is an indication that the full payment amount is not required to
ensure Medicaid beneficiaries' access to the providers' services.
The result is that proposed payments under this section of the plan
would not be in compliance with the requirement under section
1902(a)(30)(A) of the Act that payment rates must be consistent with
economy, efficiency, and quality of care.
Finally, the proposed SPA does not comply with the general
provisions of section 1902(a), including section 1902(a)(4) of the
Act, as implemented in part by Federal regulations at 42 CFR section
430.10. This regulation requires that States include in their State
plans all information necessary for CMS to determine whether the
plan can be approved to serve as a basis for Federal financial
participation. As discussed above, Alaska did not provide
information that would more precisely identify the covered services
or the non-Federal funding source. Therefore the proposed SPA does
not comply with this requirement.
For the reasons cited above, and after consultation with the
Secretary, as required by Federal regulations at 42 CFR
430.15(c)(2), Alaska SPA 05-06 was disapproved.
I am scheduling a hearing on your request for reconsideration to
be held on August 29, 2006, at the Blanchard Plaza Building, 2201
Sixth Avenue, 11th Floor Conference Room, Seattle, WA 98121, to
reconsider the decision to disapprove SPA 05-06. 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 by Federal regulations 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 at (410) 786-2055. 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.
Sincerely,
Mark B. McClellan, M.D., PhD.
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 14, 2006.
Mark B. McClellan,
Administrator.
[FR Doc. E6-11577 Filed 7-20-06; 8:45 am]
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