FR Doc E8-3206

[Federal Register: February 22, 2008 (Volume 73, Number 36)]
[Proposed Rules]
[Page 9714-9727]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22fe08-16]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 440

[CMS-2232-P]
RIN 0938-A048

Medicaid Program; State Flexibility for Medicaid Benefit Packages

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement provisions of section 6044
of the Deficit Reduction Act of 2005, Pub. L. 109-171, which amends the
Social Security Act by adding a new section 1937 related to the
coverage of medical assistance under approved State plans. Under this
new section, States have increased flexibility under an approved State
plan to define the scope of covered medical assistance by offering
coverage of benchmark or benchmark-equivalent benefit packages to
certain Medicaid recipients.

DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. March 24, 2008.

ADDRESSES: In commenting, please refer to file code CMS-2232-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on specific
issues in this regulation to http://www.cms.hhs.gov/eRulemaking. Click
on the link ``Submit electronic comments on CMS regulations with an
open comment period.'' (Attachments should be in Microsoft Word,
WordPerfect, or Excel; however, we prefer Microsoft Word.)
2. By regular mail. You may mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-2232-P, P.O. Box 8016, Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-2232-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to one of the following addresses. If you
intend to deliver your comments to the Baltimore address, please call
telephone number (410) 786-7195 in advance to schedule your arrival
with one of our staff members. Room 445-G, Hubert H. Humphrey Building,
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security
Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
Submission of comments on paperwork requirements. You may submit
comments on this document's paperwork requirements by mailing your
comments to the addresses provided at the end of the ``Collection of
Information Requirements'' section in this document.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Donna Schmidt, (410) 786-5532.

SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
CMS-2232-P and the specific ``issue identifier'' that precedes the
section on which you choose to comment.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://
www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on
CMS Regulations'' on that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.

I. Background

Under title XIX of the Social Security Act (the Act), the Secretary
is

[[Page 9715]]

authorized to provide funds to assist States in furnishing medical
assistance to needy individuals whose income and resources are
insufficient to meet the costs of necessary medical services, including
families with dependent children and individuals who are aged, blind,
or disabled. To be eligible for funds under this program, States must
submit a State plan, which must be approved by the Secretary. Programs
under title XIX are jointly financed by Federal and State governments.
Within broad Federal guidelines, each State determines the design of
its program, eligible groups, benefit packages, payment levels for
coverage and administrative and operating procedures.
Before the passage of the Deficit Reduction Act (DRA), States were
required to offer at minimum a standard benefit package to eligible
populations identified in section 1902(a)(10)(A) of the Act (with some
specific exceptions, for example, for certain pregnant women, who could
be limited to pregnancy-related services). Under section 1902(a)(10)(A)
of the Act, this standard benefit package had to include certain
specific benefits identified in the definition of ``medical
assistance'' at section 1905(a) of the Act. These identified benefits
include inpatient and outpatient hospital services, physician services,
medical and surgical services furnished by a dentist, rural health
clinic services, federally qualified health center services, laboratory
and X-ray services, nursing facility services, early and periodic
screening, diagnostic and treatment services for individuals under age
21, family planning services to individuals of child-bearing age,
nurse-midwife services, certified pediatric nurse practitioner, and
certified family nurse practitioner services. Under section
1902(a)(10)(D) of the Act, the standard benefit package is also
required to include home health services.
Section 6044 of the Deficit Reduction Act of 2005 (DRA) (Pub. L.
109-171, enacted on February 8, 2006), amended the Act by adding a new
section 1937 that allows States to amend their Medicaid State plans to
provide for the use of benefit packages other than the standard benefit
package, namely benchmark benefit packages or benchmark-equivalent
packages, for certain populations. The statute delineates what benefit
packages qualify as benchmark packages and what would constitute a
benchmark-equivalent package. The statute also specifies those exempt
populations that may not be included or mandated in the benchmark
coverages. To be eligible for funds under this new provision, States
must submit a State plan amendment, which must be approved by the
Secretary.
This proposed rule would incorporate and integrate into Centers for
Medicare & Medicaid Services (CMS) regulations the statutory framework
for alternative benchmark packages.

II. Provisions of the Proposed Rule

[If you choose to comment on issues in this section, please include
the caption ``PROVISIONS OF THE PROPOSED RULE'' at the beginning of
your comments.]
By creating section 1937 of the Act, we believe the Congress
intended to provide States unprecedented flexibility within Medicaid
State Plans to provide health benefits coverage. This authority,
created by section 6044 of the DRA, allows States broad flexibility to
develop innovative health coverage plans for Medicaid recipients.
States may create more mainstream packages like those found in the
private insurance market by implementing health benefit packages
mirroring employer sponsored group health plans.
These flexibilities give States new opportunities to provide
benefit plans to meet the health care needs of Medicaid populations
while maintaining the sustainability of the program. For the first time
in the State plan, States may create innovative Medicaid programs that
further strengthen and support the overall health care system. States
now have the tools they need to provide person-centered care to
maximize health outcomes for individuals. These tools may be used in
conjunction with other title XIX and XXI authorities and other
programs, to strategically align the Medicaid Program with today's
healthcare environment to expand access to affordable mainstream
coverage; to promote personal responsibility for health and accessing
health care; and to improve quality and coordination of care.
The enactment of this provision of the DRA gave States new options
to create programs that are more aligned with the needs of today's
Medicaid populations and the health care environment. States may use
this flexibility to capitalize on the strengths of their existing
health care systems by incorporating and building upon the private
insurance market. Additionally, we encourage States to use these
flexibilities to shape innovations in the health care marketplace. The
authority under this provision creates great opportunities for States
to focus the health care system on delivering person-centered health
care for all individuals. States will be able to reconnect families
receiving health care through Medicaid to the larger insurance system
that serves most Americans and promote continuity of coverage. This in
turn will strengthen the private market and assist in creating better
access to health care in the State.
Section 1937 of the Act gives States greater control over the
administration of their Medicaid programs by moving innovative programs
into State plans. This in turn, provides States with ease in leveraging
the private market forces to provide care to Medicaid recipients in
much the same way this care is provided to those with benefits through
private insurance.
We began issuing guidance about the new flexibilities available to
States within months of the enactment of the DRA. For example, on March
31, 2006, we issued a State Medicaid Director letter providing guidance
on the implementation of section 6044 of the DRA. This proposed rule is
consistent with that guidance.
Under section 1937 of the Act, a State may require that medical
assistance to individuals, within one or more groups of individuals
specified by the State, be provided through enrollment in a benchmark
or benchmark-equivalent benefit coverage package. A State has the
option to amend its State plan to provide benchmark or benchmark-
equivalent coverage without regard to comparability, statewideness,
freedom of choice, the assurance of transportation to medically
necessary services and other requirements in order to tailor and
provide the coverage to the individuals. The purpose of this section,
as indicated in the title of section 6044 of the DRA, was to provide
States with increased flexibility. In order to maximize that
flexibility, we are proposing to interpret the statutory clause
``notwithstanding any other provision of this title'' to relieve States
of the responsibility to assure transportation to and from providers,
which is the regulatory requirement at 42 CFR 431.53 that is based on
sections 1902(a)(4) and 1902)(a)(19) of the Act. The statute provides
benchmark options available to States that are equivalent to those
found in the private health insurance market. Generally, private health
insurance plans do not offer non-emergency medical transportation as a
benefit to enrollees. It would be a strong disincentive for States to
offer benchmark coverage through private health insurance plans if
States had to supplement benchmark benefit plans with additional
transportation benefits. We are therefore proposing to exempt States
that elect benchmark coverage from the transportation assurance
requirement. This provides maximum

[[Page 9716]]

flexibility to states and is consistent with the stated purpose of
section 6044.
Populations Affected. Benchmark or benchmark-equivalent coverage
packages may only be offered to individuals whose eligibility is based
on an eligibility category of the Act that would have been covered
under the State's plan on or before the enactment of the DRA on
February 8, 2006. We are interpreting the statutory term ``eligibility
category'' in this rule to mean an eligibility category listed under
section 1905(a) of the Act, in order to maximize State flexibility. All
recipients within a covered category would be eligible to participate
in a benchmark plan at the State's option, unless specifically exempted
by statute as discussed below, even when the State makes modifications
to the income and resource eligibility levels for a group or groups
under such an eligibility category after February 8, 2006.
A State may require recipients to obtain benefits by enrolling in
benchmark or benchmark-equivalent coverage only if they are ``full
benefit eligibles.'' A full benefit eligible is an individual who would
otherwise be eligible to receive the standard full Medicaid benefit
package under the approved Medicaid State plan, but does not include
individuals determined eligible by the State for medical assistance
under section 1902(a)(10)(C) of the Act, or by reason of section
1902(f) of the Act, or otherwise eligible based on a reduction of
income based on costs incurred for medical or other remedial care
(medically needy and spend-down populations).
The statute also specifies other individuals who are also exempt
from being required to enroll in benchmark or benchmark-equivalent
benefit coverage. These individuals include:
A pregnant woman who is required to be covered under the
State plan under section 1902(a)(10)(A)(i) of the Act;
A recipient qualifying for medical assistance under the
State plan on the basis of being blind or disabled (or being treated as
being blind or disabled) without regard to whether the individual is
eligible for Supplemental Security Income (SSI) benefits under title
XVI on the basis of being blind or disabled and including an individual
who is eligible for medical assistance on the basis of section
1902(e)(3) of the Act;
A recipient entitled to benefits under any part of
Medicare;
A terminally ill recipient receiving benefits for hospice
care under title XIX;
A recipient who is an inpatient in a hospital, nursing
facility, intermediate care facility for the mentally retarded, or
other medical institution, and is required, as a condition of receiving
services in such institution under the State plan, to spend for costs
of medical care all but a minimal amount of the individual's income
required for personal needs;
A recipient who is medically frail or otherwise an
individual with special medical needs (as described by the Secretary);
A recipient qualifying based on medical condition for
medical assistance for long-term care services described in section
1917 (c)(1)(C) of the Act;
A recipient with respect to whom aid or assistance is made
available under part B of title IV to children in foster care or with
respect to whom adoption or foster care assistance is made available
under part E of title IV, without regard to age;
A recipient qualifying for medical assistance on the basis
of eligibility to receive assistance under a State plan funded under
part A of title IV (as in effect on or after welfare reform effective
date defined in section 1931(i) of the Act);
Recipients eligible based on the diagnosis of breast or
cervical cancer by virtue of the application of sections
1902(a)(10)(ii)(XVIII) and 1902(aa) of the Act; and
Recipients who receive limited services because they are
eligible only under section 1902(a)(10)(A)(ii)(XII) of the Act because
they are TB-infected, or because they are not qualified aliens (as
defined in section 431 of the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA) of 1996 (Pub. L. 104-193,
enacted on August 22, 1996) and receive only the care and services
necessary for the treatment of an emergency medical condition in
accordance with section 1903(v) of the Act.
For purposes of the exempted populations under section 1937 of the
Act, the Secretary is proposing in Sec. 440.315(f) to define
individuals with special medical needs to include those groups defined
by Federal regulations at 42 CFR 438.50(d)(1) and Sec. 438.50(d)(3) of
the managed care regulations. These groups are: dual eligibles and
certain children under age 19 who are eligible for Supplemental
Security Income (SSI); children eligible under section 1902(e)(3) of
the Act/Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
children; individuals in foster care or other out of home placement;
individuals receiving foster care or adoption assistance; or
individuals receiving services through a family-centered, community-
based, coordinated care system that receives grant funds under section
501(a)(1)(D) of title V, as defined by the State in terms of either
program participation or special health care needs.
There may be instances when an exempted individual may benefit from
enrolling in a benchmark or benchmark-equivalent benefit package.
States are permitted to offer these individuals a benchmark or
benchmark-equivalent package, but may not require them to enroll in
one. In any case in which a State offers an individual the option to
enroll in a benchmark or benchmark-equivalent benefit package, the
State must inform the individual that the enrollment is voluntary and
that he or she may opt out at any time. In addition, the State must
inform the individual of the benefits available under the benchmark or
benchmark-equivalent benefit package, provide a comparison of how they
differ from the benefits available under the regular Medicaid program,
and must document that the individual was informed.
Generally, we would expect that the benchmark or benchmark
equivalent plan would have sufficient enrollment capacity for eligible
individuals. However, there may be circumstances when it is beneficial
for the State to limit enrollment or when the benchmark or benchmark-
equivalent plan would not have the capacity to enroll all interested
and eligible individuals. In these instances, the State would maintain
selection criteria for such plans based on factors such as geography or
date of application that are not related to health status. The State
would provide otherwise available benefits to individuals under the
State plan, which may include the option of enrolling in another
benchmark or benchmark-equivalent plan. And, if applicable, the State
would have a system under which recipients already enrolled in the
benchmark or benchmark equivalent plan are given priority to continue
enrollment if the plan does not have the capacity to accept all those
seeking enrollment under the program.
Benefit Packages. Under section 1937 of the Act, benchmark coverage
is either Federal Employees Health Benefit Plan Equivalent Health
Insurance Coverage; State Employee Coverage; a Health Maintenance
Organization (HMO) plan that has the largest insured commercial, non-
Medicaid enrollment in the State; or Secretary approved coverage.
Secretary approved coverage is any other health benefits coverage that
the Secretary determines, upon application by a State, provides
appropriate

[[Page 9717]]

coverage for the population proposed to be provided this coverage.
In determining the coverage available under a benchmark coverage
package, we do not consider cost sharing to be a limitation on the
coverage (even when the benchmark plan itself does so). Thus, for
example, if the selected benchmark plan document indicates that it
provides coverage for only half of the cost of mental health services,
we view that as a coinsurance requirement rather than as a limitation
on coverage. Cost sharing and premiums for recipients may not exceed
cost sharing limits under the State's plan with respect to sections
1916 and 1916A of the Act. The State would assure that all out of
pocket costs for the recipients do not exceed the applicable limits.
However, benchmark and benchmark-equivalent benefit packages may
include annual coverage limitations on the numbers and types of
particular services.
In determining whether a proposed health benefits coverage package
should be Secretary approved because it provides appropriate health
benefits coverage for the proposed population, we would require that
States submit full descriptions of the proposed coverage, including
comparisons to one of the benchmark plans or to the State's standard
full Medicaid coverage package under section 1905(a) of the Act. In
addition, the State would submit any other information that would be
relevant to a determination that the proposed health benefits coverage
would be appropriate for the proposed population. The scope of a
Secretary-approved health benefits package will be limited to benefits
within the scope of the categories available under a benchmark coverage
package or the standard full Medicaid coverage under section 1905(a) of
the Act.
In determining Secretary approved coverage, a State may consider a
benefit package for a specific population that excludes a certain
category of service. For example, a State may utilize a Secretary
approved package that is benchmarked to the State employees benefit
package which does not include pregnancy-related services. This would
be appropriate where the targeted population is a population group that
does not require such category of service--for instance non-pregnant
adults. If an individual within the targeted population group enrolled
in the Secretary approved benefit was initially eligible through a
category targeted for the Secretary approved coverage, but later
qualified for Medicaid through a group excluded from mandatory
enrollment (e.g., non-pregnant female enrolled in the Secretary
approved benefit becomes pregnant and qualifies under the State plan
under section 1902(a)(10)(A)(i)), such individual must have the
opportunity to receive state plan services not available through the
benchmark and must be given the choice to remain in the Secretary
approved benchmark or revert to traditional Medicaid. In either event,
the individual must be provided the State plan services not available
through the benchmark through either wrap around coverage to the
Secretary approved benefit or by virtue of reverting back to
traditional Medicaid.
A State may elect to offer one or more benchmark coverage options.
The State may also specify in the State plan criteria establishing the
benchmark options, if any, available for any specific group of
recipients. For example, the State plan may identify groups of
recipients who receive benefits through a Federal Employees Health
Benefit Plan (FEHBP) benchmark coverage plan and may identify other
groups who receive benefits through a State Employee Coverage benchmark
coverage plan.
A State may also elect to offer benchmark-equivalent benefit
coverage. Coverage would be considered benchmark-equivalent coverage if
it has an aggregate actuarial value equivalent to a benchmark plan
described above, and it includes the following basic categories of
service: inpatient and outpatient hospital services; physicians'
surgical and medical services; laboratory and x-ray services; well-baby
and well-child care, including age-appropriate immunizations; and other
appropriate preventive services.
In addition to the categories of services set forth above,
benchmark-equivalent coverage may include coverage of additional health
benefits in categories of services included in the benchmark package or
described in section 1905(a) of the Act. If the benchmark coverage
package used by the State as a basis for comparison in establishing the
aggregate actuarial value of the benchmark-equivalent package includes
the following four categories of services: prescription drugs; mental
health services; vision services; and hearing services; then the
actuarial value of the coverage for each of these categories of service
in the benchmark-equivalent coverage package must be at least 75
percent of the actuarial value of the coverage for that category of
service in the benchmark plan used for comparison by the State. If the
benchmark coverage package does not cover one of the additional four
categories of services, then the benchmark-equivalent coverage package
may, but is not required to, include coverage for that category of
service.
As a condition of approval of benchmark-equivalent coverage, the
State must provide an actuarial report with an actuarial opinion that
the benchmark-equivalent coverage meets the actuarial requirements.
Benchmark or benchmark-equivalent benefit coverage may be offered
through employer sponsored health plans for individuals with access to
private health insurance. For example, if an individual has access to
employer sponsored coverage and that coverage is determined by the
State to offer a benchmark or benchmark-equivalent benefit package
(either alone or with the addition of wrap-around services covered
separately under Medicaid), a State may elect to provide premium
payments on behalf of the recipient to purchase the employer coverage.
The State may also provide premium payments on behalf of the recipient
to purchase private health insurance coverage. The premium payments
would be considered medical assistance, the State could require the
recipient to enroll in the group health plan, and the resulting
coverage would comprise the Medicaid benefit. In addition, cost sharing
for recipients should not exceed cost sharing limits under the State's
plan with respect to sections 1916 and 1916A of the Act.
The State must make available to recipients under age 19 who are
covered under the State plan under section 1902(a)(10)(A) of the Act
benefits consisting of Early and Periodic Screening, Diagnostic, and
Treatment (EPSDT) services which are medically necessary for that
individual as defined in section 1905(r) of the Act. For those
individuals who are enrolled in benchmark coverage, the individual must
seek coverage through the benchmark plan before seeking wrap-around
benefits from the State. As always, medical necessity as determined by
the State guides the delivery of EPSDT services. A State must also
assure that individuals in a benchmark or benchmark-equivalent plan
have access, through that coverage or otherwise, to rural health clinic
services and federally qualified health center (FQHC) services.
Under section 1937(a)(1)(C) of the Act, States have the option to
provide additional or wrap-around services to the benchmark or
benchmark-equivalent plans. The wrap-around services do not need to
include all State plan services. However, the State plan must describe
the populations covered and the

[[Page 9718]]

procedures for assuring those services. We interpret the term
``additional or wrap-around services'' to mean health benefits that are
of the same type as those covered under the benchmark or considered to
be health benefits under the Medicaid statute. We propose in Sec.
440.360 that additional or wrap-around services must be within the
scope of categories of services covered under the benchmark plan, or
described in section 1905(a) of the Act.
Generally, we would expect that the benchmark or benchmark
equivalent plan would have sufficient enrollment capacity for eligible
individuals. However, because benchmark and benchmark equivalent plans
are not bound by comparability, statewideness, freedom of choice, the
assurance of transportation to medically necessary services and other
requirements of title XIX of the Act, there may be a circumstance,
particularly in rural areas, when a plan is not capable of enrolling
all interested and eligible individuals. In this instance, the State
must have a process for enrolling the individual in an alternate
option. If applicable, the State must have a system under which
recipients already enrolled in the benchmark or benchmark equivalent
plan are given priority to continue enrollment if the plan does not
have the capacity to accept all those seeking enrollment under the
program.
Program Integrity. We propose to establish in Sec. 440.370 of this
regulation that States are required to implement benchmark coverage in
a cost effective and efficient manner. While section 1937 of the Act is
premised with a provision that states notwithstanding any other
provision of this title, we do not believe that the Congress intended
to permit States to bypass efficiency and effectiveness rules that were
tightened up in other sections of title XIX. Therefore, we are
clarifying that States must deliver benchmark benefits in a manner that
is cost effective and efficient. States may not use this provision to
recycle funds or deliver services to the detriment of the Federal/State
partnership. Benchmark or benchmark-equivalent coverage and any
additional benefits must be provided in accordance with economy and
efficiency principles that would otherwise be applicable to the
services or delivery system through which the coverage and benefits are
obtained. In other words, if benchmark coverage is provided on a fee-
for-service basis, the same upper payment limits would apply to each
service as to these services under standard full Medicaid coverage.
Similarly, the same procurement requirements, or other economy or
efficiency principles would apply to this coverage as would apply to
the purchase of managed care coverage as under the managed care rules
at part 438 of our regulations.
To achieve economy and efficiency, States may use a variety of
delivery systems for benchmark and benchmark-equivalent coverage.
States may furnish benefits using one or more of the following: a fee-
for-service delivery system, a fee-for-service delivery system operated
with a primary care case management system, a managed care delivery
system, or through premium assistance.
The State may use a selective procurement process to restrict the
managed care entity or other provider from (or through) whom a
recipient can obtain services, except in emergency situations. The
selected provider must meet the reimbursement, quality and utilization
standards under the State Plan. If a State chooses to selectively
contract for the provider of the benchmark or benchmark equivalent plan
services, it can do so without any waiver authority, but only to the
extent that: (1) The selected provider complies with the reimbursement,
quality, and utilization standards under the State plan; (2) the
selection process does not discriminate among classes of providers on
grounds unrelated to their demonstrated effectiveness and efficiency in
providing the benchmark benefit package; and (3) all providers are paid
on a timely basis in the same manner as health care practitioners must
be paid under Sec. 447.45. To the extent that these conditions are
met, the State does not need to obtain a waiver under the authority of
section 1915(b)(4) of the Act in order to selectively contract.
Requirements Not Applicable. In authorizing implementation of
section 1937 of the Act ``notwithstanding any other provision of this
title,'' we believe that the Congress intended to permit States to
bypass the comparability, statewideness, freedom of choice, the
assurance of transportation to medically necessary services and other
requirements of title XIX of the Act in order for States to tailor
benefit packages appropriate to specified groups of Medicaid
recipients.
We believe that the Congress intended for States to have a great
amount of flexibility in crafting programs for those populations which
may be mandated into a benchmark or benchmark-equivalent plan. We also
believe that the Congress intended for those individuals to have health
coverage which mirrored that of the coverage millions of Americans
receive through employer sponsored plans in the private health
insurance market.
Therefore, we propose in Sec. 440.375, Sec. 440.380, Sec.
440.385, and Sec. 440.390 to provide States this flexibility by
allowing them to amend their State plans to provide benchmark or
benchmark-equivalent coverage without regard to comparability,
statewideness, freedom of choice, the assurance of transportation to
medically necessary services, and/or other requirements in order to
tailor and provide benefits.
Changes to Regulations Text. We propose to add a new subpart C
beginning with Sec. 440.300.

Subpart C--Benchmark Packages: General Provisions

Sections 440.300, 440.305, and 440.310 Basis, Scope, and Applicability
At proposed Sec. 440.300 (Basis), Sec. 440.305 (Scope), and Sec.
440.310 (Applicability), the regulations would reflect the new
statutory authority for States to provide medical assistance to
recipients, within one or more groups of Medicaid eligible recipients
specified by the State, through enrollment in benchmark coverage or
benchmark-equivalent coverage. A State may only require that
individuals obtain benefits by enrolling in that coverage if they are a
``full benefit eligible'' whose eligibility is based on an eligibility
category under section 1905(a) of the Act that would have been covered
under the State's plan on or before February 8, 2006, and are not
within exempted categories under the statute. The proposed regulatory
definition of full benefit eligible individuals would include
individuals who would otherwise be eligible to receive the standard
full Medicaid benefit package under the approved Medicaid State plan,
but would not include individuals within the statutory exceptions for
individuals, who are determined eligible by the State for medical
assistance under section 1902(a)(10)(C) of the Act, or by reason of
section 1902(f) of the Act, or otherwise eligible based on a reduction
of income based on costs incurred for medical or other remedial care
(other medically needy and spend-down populations).
Section 440.315 Exempt Individuals
Proposed Sec. 440.315 would reflect statutory limitations on
mandatory enrollment of specified categories of individuals. A State
may not require enrollment in a benchmark or benchmark-equivalent
benefit plan by the following individuals:
The recipient who is a pregnant woman who is required to
be covered

[[Page 9719]]

under the State plan under section 1902(a)(10)(A)(i) of the Act.
The recipient who qualifies for medical assistance under
the State plan on the basis of being blind or disabled (or being
treated as being blind or disabled) without regard to whether the
individual is eligible for SSI benefits under title XVI on the basis of
being blind or disabled and including an individual who is eligible for
medical assistance on the basis of section 1902(e)(3) of the Act.
The recipient who is entitled to benefits under any part
of Medicare.
The recipient who is terminally ill and is receiving
benefits for hospice care under title XIX.
The recipient who is an inpatient in a hospital, nursing
facility, intermediate care facility for the mentally retarded, or
other medical institution, and is required, as a condition of receiving
services in such institution under the State plan, to spend for costs
of medical care all but a minimal amount of the individual's income
required for personal needs.
The recipient who is medically frail or otherwise an
individual with special medical needs (as described by the Secretary in
section 440.315(f)). For purposes of this section, we would propose
that individuals with special needs includes those groups defined by
Federal regulations at Sec. 438.50(d)(1) and Sec. 438.50(d)(3) of the
managed care regulations (that is, dual eligibles and certain children
under age 19 who are eligible for SSI; eligible under section
1902(e)(3) of the Act, TEFRA children; in foster care or other out of
home placement; or receiving foster care or adoption assistance). We
are not proposing a definition for medically frail populations but we
invite public comments to assist us in defining this term in the final
regulation.
The recipient who qualifies based on medical condition for
medical assistance for long-term care services described in section
1917(c)(1)(C) of the Act.
The recipient who receives aid or assistance under part B
of title IV for children in foster care or an individual with respect
to whom adoption or foster care assistance is made available under part
E of title IV, without regard to age.
The recipient who qualifies for medical assistance on the
basis of eligibility to receive assistance under a State plan funded
under part A of title IV (as in effect on or after welfare reform
effective date defined in section 1931(i) of the Act). This provision
relates to those individuals who qualify for Medicaid solely on the
basis of qualification under the Temporary Assistance for Needy
Families (TANF) rules (that is, the State links Medicaid eligibility to
TANF eligibility).
The recipient is a woman who is receiving medical
assistance by virtue of the application of sections
1902(a)(10)(ii)(XVIII) and 1902(a) of the Act. This provision relates
to those individuals who are eligible for Medicaid based on the breast
or cervical cancer eligibility provisions.
The recipient qualifies for medical assistance as a TB-
infected individual on the basis of section 1902(a)(10)(A)(ii)(XII) of
the Act.
The recipient is not a qualified alien (as defined in
section 431 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996) and receives only care and services
necessary for the treatment of an emergency medical condition in
accordance with section 1903(v) of the Act.
Section 440.320 State Plan Requirements: Optional Enrollment for Exempt
Individuals
At proposed Sec. 440.320, we would allow States to offer exempt
individuals specified in Sec. 440.315 the option to enroll into a
benchmark or benchmark-equivalent benefit plan. The State plan must
identify in its State plan the exempt groups for which this coverage is
available. There may be instances in which an exempted individual may
benefit from enrolling in a benchmark or benchmark-equivalent benefit
package. States are permitted to elect in the State plan to offer
exempted individuals a benchmark or benchmark-equivalent package, but
States may not require them to enroll in one. For example, in some
States the State employee benchmark coverage may be more generous than
the State Medicaid plan. Secretary-approved coverage may offer the
opportunity for disabled individuals to obtain integrated coverage for
acute care and community-based long-term care services. Additionally,
States may be able to better integrate disease management programs to
provide better coordinated care which targets the specific needs of
individuals with special health needs.
Section 440.325 State Plan Requirements: Coverage and Benefits
At proposed Sec. 440.325, we set forth the conditions under which
a State may offer enrollment to exempt recipients specified in Sec.
440.315. When a State offers exempt recipients the option to enroll in
a benchmark or benchmark-equivalent benefit package, the State must
inform the recipients that enrollment is voluntary and that the
individual may opt out of the benchmark or benchmark-equivalent benefit
package at any time and regain immediate eligibility for the standard
full Medicaid program under the State plan. The State must inform the
recipient of the benefits available under the benchmark or benchmark-
equivalent benefit package and provide a comparison of how they differ
from the benefits available under the standard full Medicaid program.
The State must document in the individual's eligibility file that the
individual was informed in accordance with this paragraph and
voluntarily chose to enroll in the benchmark or benchmark-equivalent
benefit package.
At proposed Sec. 440.325, a State would have the option to choose
to specify the benchmark or benchmark-equivalent coverage packages
offered under the State's Medicaid plan. A State may select one or all
of the benchmark plans described in Sec. 440.330 or establish
benchmark-equivalent plans described in Sec. 440.335, respectively.
Section 440.330 Benchmark Health Benefits Coverage
At proposed Sec. 440.330, benchmark coverage is described as any
one of the following:
Federal Employees Health Benefit Plan Equivalent Coverage
(FEHBP--Equivalent Health Insurance Coverage). A benefit plan
equivalent to the standard Blue Cross/Blue Shield preferred provider
option service benefit plan that is described in and offered to Federal
employees under 5 U.S.C. 8903(1).
State employee coverage. A health benefits plan that is
offered and generally available to State employees in the State
involved.
Health Maintenance Organization (HMO) plan. A health
insurance plan that is offered through an HMO (as defined in section
2791(b)(3) of the Public Health Service Act) that has the largest
insured commercial, non-Medicaid enrollment in the State.
Secretary approved coverage. Any other health benefits
coverage that the Secretary determines, upon application by a State,
provides appropriate coverage for the population proposed to be
provided that coverage. States wishing to opt for Secretarial approved
coverage should submit a full description of the proposed coverage and
include a benefit-by-benefit comparison of the proposed plan to one or
more of the three benchmark plans specified above or to the State's
standard full Medicaid coverage package under section 1905(a) of the
Act, as well as a full description of the

[[Page 9720]]

population that would be receiving the coverage. In addition, the State
should submit any other information that would be relevant to a
determination that the proposed health benefits coverage would be
appropriate for the proposed population. The scope of a Secretary-
approved health benefits package will be limited to benefits within the
scope of the categories available under a benchmark coverage package or
the standard full Medicaid coverage package under section 1905(a) of
the Act.
A State may select one or more benchmark coverage plan options. The
State may also specify the benchmark plan for any specific recipient.
For example, one recipient may be enrolled in the FEHBP and another may
be enrolled into State Employee Coverage at the option of the State.
Section 440.335 Benchmark-Equivalent Health Benefits Coverage
At proposed Sec. 440.335, we would provide that if a State designs
or selects a benchmark plan other than those specified in Sec.
440.330, the State must provide coverage that is equivalent to
benchmark coverage. Coverage that meets the following requirements will
be considered to be benchmark-equivalent coverage:
Required Coverage. Benchmark-equivalent coverage includes
benefits for items and services within each of the following categories
of basic services and must include coverage for the following
categories of basic services:
+ Inpatient and outpatient hospital services.
+ Physicians' surgical and medical services.
+ Laboratory and x-ray services.
+ ``Well-baby'' and ``well-child'' care, including age-appropriate
immunizations.
+ Other appropriate preventive services, as designated by the
Secretary.
Aggregate actuarial value equivalent to benchmark
coverage. Benchmark-equivalent coverage must have an aggregate
actuarial value, determined in accordance with proposed Sec. 440.340
that is at least equivalent to coverage under one of the benchmark
packages outlined in Sec. 440.330.
Additional coverage. In addition to the categories of
services set forth above, benchmark-equivalent coverage may include
coverage for any additional services included in the benchmark plan or
described in section 1905(a) of the Act.
Application of actuarial value for benchmark-equivalent
coverage that includes prescription drugs, mental health, vision, and
hearing services. Where the benchmark coverage package used by the
State as a basis for comparison in establishing the aggregate actuarial
value of the benchmark-equivalent package includes any or all of the
following four categories of services: prescription drugs; mental
health services; vision services; and hearing services; then the
actuarial value of the coverage for each of these categories of service
in the benchmark-equivalent coverage package must be at least 75
percent of the actuarial value of the coverage for that category of
service in the benchmark plan used for comparison by the State.
If the benchmark coverage package does not cover one of the four
categories of services mentioned above, then the benchmark-equivalent
coverage package may, but is not required to, include coverage for that
category of service.
Section 440.340 Actuarial Report for Benchmark-Equivalent Health
Benefit Coverage
In accordance with 1937(a)(3) of the Act, at proposed Sec.
440.340, we would require a State as a condition of approval of
benchmark-equivalent coverage, to provide an actuarial report, with an
actuarial opinion that the benchmark-equivalent coverage meets the
actuarial requirements of Sec. 440.335.
At proposed Sec. 440.340, we would require the actuarial report to
obtain approval for benchmark-equivalent health benefit coverage and to
meet all the provisions of the statute. The actuarial report must
state:
The actuary issuing the opinion is a member of the
American Academy of Actuaries (AAA) (and meets Academy standards for
issuing an opinion).
The actuary used generally accepted actuarial principles
and methodologies of the AAA, standard utilization and price factors
and a standardized population representative of the population
involved.
The same principles and factors were used in analyzing the
value of different coverage (or categories of services) without taking
into account differences in coverage based on the method of delivery or
means of cost control or utilization used.
The report should also state if the analysis took into
account the State's ability to reduce benefits because of the increase
in actuarial value of health benefits coverage offered under the State
plan that results from the limitations on cost sharing (with the
exception of premiums) under that coverage.
The actuary preparing the opinion must select and specify
the standardized set of utilization and pricing factors as well as the
standardized population.
The actuary preparing the opinion must provide sufficient
detail to explain the basis of the methodologies used to estimate the
actuarial value or, if requested by CMS, to replicate the State's
result.
Section 440.345 EPSDT Services Requirement
At proposed Sec. 440.345, we would require States to make
available EPSDT services as defined in section 1905(r) of the Act that
are medically necessary for those individuals under age 19 who are
covered under the State plan. We expect that most benchmark or
benchmark equivalent plans will offer the majority of EPSDT services.
To the extent that any medically necessary EPSDT services are not
covered through the benchmark or benchmark-equivalent plan, States are
required to supplement the benchmark or benchmark-equivalent plan in
order to ensure access to these services. Individuals mandated into a
benchmark or benchmark-equivalent plan and entitled to have access to
EPSDT services cannot opt out of the benchmark or benchmark equivalent
plan just to receive these services. While individuals are required to
have access to such medically necessary services first under the
benchmark or benchmark-equivalent plan, the State may provide wrap-
around or additional coverage for medically necessary services not
covered under such plan. Any wrap-around benefits must be sufficient so
that, in combination with the benchmark or benchmark-equivalent
benefits package, an individual would have coverage for his or her
medically necessary services consistent with the requirements under
1905(r) of the Act. The State plan must include a description of how
wrap-around benefits or additional services will be provided to ensure
that these recipients have access to full EPSDT services under 1905(r)
of the Act.
In addition, individuals must first seek coverage of EPSDT services
through the benchmark or benchmark equivalent plan before seeking
coverage of such through wrap-around benefits.
Section 440.350 Employer Sponsored Insurance Health Plans
At proposed Sec. 440.350, the use of benchmark or benchmark-
equivalent benefit coverage would be at the discretion of the State and
may be used in conjunction with employer sponsored health plans as a
coverage option for individuals with access to private health
insurance. Additionally, the use of benchmark or benchmark-equivalent
coverage may be used for individuals with access to private health

[[Page 9721]]

insurance coverage. For example, if an individual has access to
employer sponsored coverage and that coverage is determined by the
State to be benchmark or benchmark-equivalent, a State may, at its
option, provide premium payments on behalf of the recipient to purchase
the employer coverage. Additionally, a State could create a benchmark
or benchmark-equivalent plan combining employer sponsored insurance and
wrap-around benefits to that employer sponsored insurance benefit
package. The premium payments would be considered medical assistance
and the State could require the recipient to enroll in the group health
plan.
Section 440.355 Payment of Premiums
At proposed Sec. 440.355, payment of premiums by the State, net of
beneficiary contributions, to obtain benchmark or benchmark-equivalent
benefit coverage on behalf of beneficiaries under this section will be
treated as medical assistance under 1905(a) of the Act.
Section 440.360 State Plan Requirement for Providing Additional Wrap-
Around Services
At proposed Sec. 440.360, a State may at its option provide
additional wrap-around services to the benchmark or benchmark-
equivalent plans. The wrap-around services do not need to include all
State plan services. However, the State plan must describe the
populations covered and the payment methodology for assuring those
services. Such additional or wrap-around services must be within the
scope of categories of services covered under the benchmark plan, or
described in section 1905(a) of the Act.
Section 440.365 Coverage of Rural Health Clinic and Federally Qualified
Health Center (FQHC) Services
At proposed Sec. 440.365, a State that provides benchmark or
benchmark-equivalent coverage to individuals must assure that the
individual has access, through that coverage or otherwise, to rural
health clinic services and FQHC services as defined in subparagraphs
(B) and (C) of section 1905(a)(2) of the Act. Payment for these
services must be made in accordance with the payment provisions of
section 1902(bb) of the Act.
Section 440.370 Cost Effectiveness
At proposed Sec. 440.370, benchmark or benchmark-equivalent
coverage and any additional benefits must be provided in accordance
with Federal upper payment limits, procurement requirements and other
economy and efficiency principles that would otherwise be applicable to
the services or delivery system through which the coverage and benefits
are obtained.
Section 440.375 Comparability
At proposed Sec. 440.375, a State may at its option amend its
State plan to provide benchmark or benchmark-equivalent coverage to
recipients without regard to comparability.
Section 440.380 Statewideness
At proposed Sec. 440.380, a State may at its option amend its
State plan to provide benchmark or benchmark-equivalent coverage to
recipients without regard to statewideness.
Section 440.385 Freedom of Choice
At proposed Sec. 440.385, a State may at its option amend its
State plan to provide benchmark or benchmark-equivalent coverage to
recipients without regard to freedom of choice. States may restrict
recipients to obtaining services from (or through) selectively procured
provider plans or practitioners that meet, accept, and comply with
reimbursement, quality and utilization standards under the State Plan,
to the extent that the restrictions imposed meet the following
requirements:
(+) Do not discriminate among classes of providers on grounds
unrelated to their demonstrated effectiveness and efficiency in
providing the benchmark benefit package.
(+) Do not apply in emergency circumstances.
(+) Require that all provider plans are paid on a timely basis in
the same manner as health care practitioners must be paid under Sec.
447.45 of the chapter.
Section 440.390 Assurance of Transportation
At proposed Sec. 440.390, a State may at its option amend its
State plan to provide benchmark or benchmark-equivalent coverage to
recipients without regard to the assurance of transportation to
medically necessary services requirement specified in section 42 CFR
431.53.

III. Collection of Information Requirements

While the following requirements are subject to the PRA, they are
currently approved under OMB 0938-0993 with an expiration date
of October 31, 2009.
Section 440.320 State Plan Requirements: Optional Enrollment for Exempt
Individuals
Section 440.320(a)requires a State to: (1) Inform the individuals
that the enrollment is voluntary and that the individual may opt out of
the benchmark or benchmark-equivalent coverage at any time and regain
immediate access to standard full Medicaid coverage under the State
plan; (2) Inform the exempt recipient of the benefits available under
the benchmark or benchmark-equivalent benefit package and provide a
comparison of how they differ from the benefits available under the
standard full Medicaid program; and, (3) Document in the exempt
recipient's eligibility file that the recipient was informed in
accordance with this section and voluntarily chose to enroll in the
benchmark or benchmark-equivalent benefit package.
Section 440.330 Benchmark Health Benefits Coverage
Section 440.330(d) requires States wishing to opt for Secretarial-
approved coverage to submit a full description of the proposed coverage
and include a benefit-by-benefit comparison of the proposed plan to one
or more of the three other benchmark plans specified.
Section 440.340 Actuarial Report for Benchmark-Equivalent Coverage
Section 440.340 requires a State trying to obtain approval for
benchmark-equivalent health benefits coverage described in 440.335 to
submit, as part of its State Plan Amendment, an actuarial report. The
report must provide sufficient detail to explain the basis of the
methodologies used to estimate the actuarial value or, if requested by
CMS, to replicate the State's result.
Section 440.345 Requirement to Provide EPSDT Services
Section 440.345(a)(2) requires a State to include a description in
their State Plan of how the wrap-around benefits or additional services
will be provided to ensure that recipients receive full EPSDT services.
The description must describe the populations covered and the
procedures for assuring those services.
Section 440.350 Employer-Sponsored Insurance Health Plans
Section 440.350(b) requires a State to set forth in the State plan
the criteria it will use to identify individuals who would be required
to enroll in an available group health plan to receive

[[Page 9722]]

benchmark or benchmark-equivalent coverage.
Section 440.360 State Plan Requirement for Providing Additional Wrap-
Around Services
This section requires States opting to provide additional services
to the benchmark-equivalent plans, to describe the populations covered
and the payment methodology for these services in their State plan.

IV. Response to Comments

Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.

V. Regulatory Impact Analysis

A. Overall Impact

We have examined the impacts of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which
merely reassigns responsibility of duties) directs agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
We issued a State Medicaid Director's letter on March 31, 2006
providing guidance on the new flexibilities available to States as a
result of the enactment of the Deficit Reduction Act of 2005. This
proposed rule simply codifies that guidance. States have already begun
implementing this provision well in advance of this proposed rule. As a
result, while we anticipate that implementation of this flexibility
would be economically significant, the significance is based on the
changes authorized by statute and not based on discretionary policies
contained in the rule itself. The impact of the rule would be limited
to ensuring uniform policies for States that implement the flexibility
afforded under section 1937 of the Social Security Act, as added by the
Deficit Reduction Act of 2005. The aggregate amount of Federal savings
is estimated to be $2.3 billion from FY 2006 through FY 2010.
We have estimated the impact of this rule by analyzing the
potential Federal savings related to lower per capita spending that may
be achieved if States choose to enroll beneficiaries in eligible
populations in plans that are less costly than projected Medicaid
costs. To do this, we developed estimates based on the following
assumptions:
The number of eligible beneficiaries and the Federal
Medicaid costs of these beneficiaries are based on 2003 Medicaid
Statistical Information System (MSIS) data;
Projections of the number of eligible beneficiaries and
their associated Federal Medicaid costs were made using assumptions
from the President's Budget 2007, including enrollment growth rates and
per capita spending growth rates;
The relative costs of the new plans allowed under this
rule to current Medicaid spending were estimated based on reviews of
Medicaid spending data and the plans described in this rule.
Additionally, we have assumed that not all States would immediately use
the options made available through this rule; therefore, we assume that
State use of these plans would continue to increase through 2011. We
assume that use in 2006 will be about 10% of 2011-level of use; 40% in
2007; 60% in 2008; 80% in 2009; and 90% in 2010.''
These estimates assume that there will be a negligible impact on
State administration costs. As States already have experience in
dealing with alternative plan designs, including through waivers or
managed care plans, we have assumed States are equipped to implement
these plans and will be part of their normal administrative spending.
These estimates are subject to a substantial amount of uncertainty
and actual experience may be significantly different. The range of
possible experience is greater than under most other rules for the
following two reasons. First, this rule provides the option for States
to use alternative plans; to the extent that States participate more or
less than assumed here (both the number of States that participate and
the extensiveness of States' use of these plans), Federal savings may
be greater than or less than estimated. Second, this rule also provides
a wide range of options for States in designing these plans; to the
extent that States use plans that are relatively more or less costly
than assumed here, Federal savings may be less than or greater than
estimated.

Estimated Annual Federal Savings Discounted at 0%, 3% and 7%--From FY 2006 to FY 2010
[In millions]
----------------------------------------------------------------------------------------------------------------
Total 2006-
Discount rate 2006 2007 2008 2009 2010 2010
----------------------------------------------------------------------------------------------------------------
0%.................................................... $70 $280 $460 $660 $810 $2,280
3%.................................................... 68 264 421 586 699 2,038
7%.................................................... 65 245 375 504 578 1,767
----------------------------------------------------------------------------------------------------------------

We anticipate that States would phase in alternative benefit
programs, and changes would not be fully realized until 2010. The
majority of savings would be achieved through cost avoidance of future
anticipated costs by providing appropriate benefits based on a
population's health care needs, appropriate utilization of services,
and through gains in efficiencies through contracting. States would be
able to take greater advantage of marketplace dynamics within their
State. We also anticipate that a number of States will use this
flexibility to create programs that are more similar to their SCHIP
programs. Because States are no longer tied to statewideness and
comparability rules for non-disabled, non-aged, and non-blind
populations, they would be able to offer individuals and families
different types of plans consistent with their needs and available
delivery systems.

[[Page 9723]]

Estimated Annual State Savings Discounted at 0%, 3% and 7%--From FY 2006 to FY 2010
[In millions]
----------------------------------------------------------------------------------------------------------------
Total 2006-
Discount rate 2006 2007 2008 2009 2010 2010
----------------------------------------------------------------------------------------------------------------
0%.................................................... $50 $210 $350 $500 $610 $1,720
3%.................................................... 49 198 320 444 526 1,537
7%.................................................... 47 183 286 381 435 1,332
----------------------------------------------------------------------------------------------------------------

The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $30.5 million in any 1 year. Individuals and States are
not included in the definition of a small entity. We have determined,
and the Secretary certifies, that this provision applies to States only
and would not affect small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Core-Based
Statistical Area and has fewer than 100 beds. We have determined, and
the Secretary certifies, that this proposed rule would not have a
significant impact on the operations of a substantial number of small
rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4) also requires that agencies assess anticipated costs and
benefits before issuing any rule that may result in expenditures in any
1 year by State, local, or tribal governments, in the aggregate, or by
the private sector, of $100 million, updated annually for inflation.
That threshold level is currently approximately $127 million. Because
this rule does not mandate State participation in using these benchmark
plans, there is no obligation for the State to make any change to their
Medicaid program. Therefore, there is no mandate for the State.
We believe this proposed rule would not mandate expenditures in
that amount.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This proposed rule would not impose direct cost on States
or local government or preempt State law. The rule would provide States
the option to implement alternative Medicaid benefits through a
Medicaid State plan amendment.

B. Anticipated Effects

Before section 6044 of the DRA became effective on March 31, 2006,
State Medicaid programs generally were required to offer at minimum the
same standard benefit package to each recipient, regardless of income,
eligibility category, or geographic location. Some States offered
alternative benefit packages to certain recipients under section 1115
demonstration waivers approved by the Centers for Medicare & Medicaid
Services. This provision allows for similar program alternatives under
the State plan without the constraints of a waiver. Moreover, Medicaid
families would gain continuity in coverage as family members move
together from Medicaid and the State Children's Health Insurance
Program (SCHIP) to, eventually, private coverage. Today, because of the
lack of flexibility in Medicaid, one child may be receiving Medicaid,
another in SCHIP, and the parent has access to private coverage. With
benefit flexibility in State Medicaid programs, families could enroll
under the same plan, with the same providers and one set of
administrative rules. Administrative simplification can help families
maintain health insurance coverage and give them experience with
private insurance coverage that would become important when their
income rises above Medicaid and SCHIP eligibility levels and to
mitigate the need for dependence. States with strong employer-based
coverage may emphasize family coverage premium assistance. States may
form larger pools by combining Medicaid recipients with their public
employees.

C. Alternatives Considered

This rule proposes requirements for States to elect alternative
Medicaid benefit programs through the adoption of a Medicaid State plan
amendment. The proposed requirements in this rule were designed to
maximize State flexibility while assuring that beneficiaries will get
quality care that meets their needs. Under this rule, we would permit
States to define the alternative benefit packages only by reference to
the benchmark or benchmark-equivalent standard (with the exception of
the EPSDT wrap-around benefits). We would also permit States to combine
an alternative benefit package with alternative benefit delivery
methods, such as through managed care, employer-based coverage, or
selective contracting. An alternative might have been to require the
State to document any deviation from otherwise applicable State plan
requirements, much as is required under section 1115 demonstration
waivers, 1915(b) waivers, 1915(c) waivers, or any combination thereof.
We have not elected this alternative because it would be cumbersome for
States, it would not be consistent with the statutory use of benchmark
and benchmark-equivalent coverage as reference points for permissible
benefit packages, and it would not improve the clarity of the State
plan. Another alternative might have been to limit State flexibility
under this provision to variation in the amount, duration and scope of
benefits without providing authority for an integrated approach
combining alternative benefits with alternative benefit delivery
methods. We have not elected this alternative because an integrated
approach allows greater State flexibility to tailor both benefits and
delivery methods to the eligible groups of individuals being served.

D. Accounting Statement

As required by OMB Circular A-4 (available at ), http://
www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 15 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this proposed rule. This
table provides our best estimate of the decrease in Medicaid payments
as a result of the changes presented in this

[[Page 9724]]

proposed rule. All savings are classified as transfers to the Federal
Government, as well as to States.

Table.--Accounting Statement: Classification of Estimated Savings, From FY 2006 to FY 2010
[In $ millions]
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Year Dollar Units Discount Rate Period Covered
----------------------------------------------------------------------
Annualized Monetized Transfers........... ........... 7% 3% 0% .................
----------------------------------------------------------------------
2006 -$430.8 -$445.0 -$456.0 2006-2010
----------------------------------------------------------------------------------------------------------------
From Whom To Whom?....................... Federal Government to Beneficiaries, Providers
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Year..................................... 2006 2007 2008 2009 2010
----------------------------------------------------------------------
Annualized Monetized Transfers........... -$70 -$280 -$460 -$660 -$810
----------------------------------------------------------------------------------------------------------------
From Whom To Whom?....................... Federal Government to Beneficiaries, Providers
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Year Dollar Units Discount Rate Period Covered
----------------------------------------------------------------------
Annualized Monetized Transfers........... ........... 7% 3% 0% .................
----------------------------------------------------------------------
2006 -$324.9 -$335.7 -$344.0 2006-2010
----------------------------------------------------------------------------------------------------------------
From Whom to Whom?....................... State Governments to Beneficiaries, Providers
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Year..................................... 2006 2007 2008 2009 2010
----------------------------------------------------------------------
Annualized Monetized Transfers........... -$50 -$210 -$350 -$500 -$610
----------------------------------------------------------------------------------------------------------------
From Whom to Whom?....................... State Governments to Beneficiaries, Providers
----------------------------------------------------------------------------------------------------------------

Column 1: Category--Contains the description of the different
impacts of the rule; it could include monetized, quantitative but not
monetized, or qualitative but not quantitative or monetized impacts; it
also may contain unit of measurement (such as, dollars). In this case,
the only impact is the Federal annualized monetized impact of the rule.
Column 2: Primary Estimate--Contains the quantitative or
qualitative impact of the rule for the respective category of impact.
Monetized amounts are generally shown in real dollar terms. In this
case, the federalized annualized monetized primary estimate represents
the equivalent amount that, if paid (saved) each year over the period
covered, would result in the same net present value of the stream of
costs (savings) estimated over the period covered.
Column 3: Year Dollar--Contains the year to which dollars are
normalized; that is, the first year that dollars are discounted in the
estimate.
Column 4: Unit Discount Rate--Contains the discount rate or rates
used to estimate the annualized monetized impacts. In this case, three
rates are used: 7 percent; 3 percent; 0 percent.
Column 5: Period Covered--Contains the years for which the estimate
was made.
Rows: The rows contain the estimates associated with each specific
impact and each discount rate used.
``From Whom to Whom?''--In the case of a transfer (as opposed to a
change in aggregate social welfare as described in the OMB Circular),
this section describes the parties involved in the transfer of costs.
In this case, the costs represent a reduction in Federal Government
spending on behalf of beneficiaries. The table may also contain minimum
and maximum estimates and sources cited. In this case, there is only a
primary estimate and there are no additional sources for the estimate.
Estimated Savings--The following table shows the discounted costs
(savings) for each discount rate and for each year over the period
covered. ``Total'' represents the net present value of the impact in
the year the rule takes effect. These numbers represent the anticipated
annual reduction in Federal Medicaid spending under this rule.

E. Conclusion

We project that the use of benchmark plans under this rule will
save $2.3 billion from 2006-2010. These savings would arise as States
use the plans described by this rule to manage the costs of their
Medicaid program by modifying plan benefits for targeted beneficiaries.
The actual savings will heavily depend on the number of States that
ultimately implement these plans, the number of beneficiaries States
cover with these plans, and the specific design and selection of
benchmark plans.
For reasons stated above, we are not preparing analyses for either
the RFA or section 1102(b) of the Act because we have determined that
this rule would not have a significant economic impact on a substantial
number of small entities or a significant impact on the operations of a
substantial number of small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.

[[Page 9725]]

List of Subjects in 42 CFR Part 440

Grant programs--health, Medicaid.

For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:

PART 440--SERVICES: GENERAL PROVISIONS

1. The authority citation for part 440 continues to read as
follows:

Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).

2. A new subpart C, consisting of Sec. 440.300 through Sec.
440.390, is added to part 440 to read as follows:
Subpart C--Benchmark Benefit and Benchmark-Equivalent Coverage
Sec.
440.300 Basis.
440.305 Scope.
440.310 Applicability.
440.315 Exempt individuals.
440.320 State plan requirements: Optional enrollment for exempt
individuals.
440.325 State plan requirements: Coverage and benefits.
440.330 Benchmark health benefits coverage.
440.335 Benchmark-equivalent health benefits coverage.
440.340 Actuarial report for benchmark-equivalent coverage.
440.345 EPSDT services requirement.
440.350 Employer-sponsored insurance health plans.
440.355 Payment of premiums.
440.360 State plan requirement for providing additional wrap-around
services.
440.365 Coverage of rural health clinic and federally qualified
health center (FQHC) services.
440.370 Cost-effectiveness.
440.375 Comparability.
440.380 Statewideness.
440.385 Freedom of choice.
440.390 Assurance of Transportation.

Subpart C--Benchmark Benefit and Benchmark-Equivalent Coverage

Sec. 440.300 Basis.

This subpart implements section 1937 of the Act, which authorizes
States to provide for medical assistance to one or more groups of
Medicaid-eligible recipients specified by the State under an approved
State plan amendment through enrollment in coverage that provides
benchmark or benchmark-equivalent health care benefit coverage.

Sec. 440.305 Scope.

(a) General. This subpart sets out requirements for States that
elect to provide medical assistance to certain Medicaid eligible
recipients within one or more groups of individuals specified by the
State, through enrollment of the recipients in coverage, identified as
``benchmark'' or ``benchmark-equivalent.''
(b) Limitations. A State may only apply the option in paragraph (a)
of this section for an individual whose eligibility is based on an
eligibility category under section 1905(a) of the Act that would have
been covered under the State's plan on or before February 8, 2006.
(c) A State may not require but may offer enrollment in benchmark
or benchmark-equivalent coverage to the Medicaid eligible individuals
listed in Sec. 440.315. States allowing individuals to opt in must be
in compliance with the rules specified at Sec. 440.320.

Sec. 440.310 Applicability.

(a) Enrollment. The State may require ``full benefit eligible''
recipients not excluded in Sec. 440.315 to enroll in benchmark or
benchmark-equivalent coverage.
(b) Full benefit eligible. A recipient is full benefit eligible if
determined by the State to be eligible to receive the standard full
Medicaid benefit package under the approved Medicaid State plan if not
for the application of the option available under this subpart, but
does not include individuals determined eligible as medically needy
individuals, or eligible because of a reduction of income based on
costs incurred for medical or other remedial care under section 1902(f)
of the Act or otherwise based on incurred medical costs.

Sec. 440.315 Exempt individuals.

For recipients within one (or more) of the following categories,
the State plan may offer, but may not require under Sec. 440.310, the
opportunity to obtain benefits through enrollment in benchmark or
benchmark-equivalent coverage:
(a) The recipient is a pregnant woman who is required to be covered
under the State plan under section 1902(a)(10)(A)(i) of the Act.
(b) The recipient qualifies for medical assistance under the State
plan on the basis of being blind or disabled (or being treated as being
blind or disabled) without regard to whether the individual is eligible
for Supplemental Security Income benefits under title XVI on the basis
of being blind or disabled and including an individual who is eligible
for medical assistance on the basis of section 1902(e)(3) of the Act.
(c) The recipient is entitled to benefits under any part of
Medicare.
(d) The recipient is terminally ill and is receiving benefits for
hospice care under title XIX.
(e) The recipient is an inpatient in a hospital, nursing facility,
intermediate care facility for the mentally retarded, or other medical
institution, and is required, as a condition of receiving services in
that institution under the State plan, to spend for costs of medical
care all but a minimal amount of the individual's income required for
personal needs.
(f) The recipient is medically frail or otherwise an individual
with special medical needs. For these purposes, individuals with
special needs are those individuals described in Sec. 438.50(d)(1) and
Sec. 438.50(d)(3) of this chapter.
(g) The recipient qualifies based on medical condition for medical
assistance for long-term care services described in section
1917(c)(1)(C) of the Act.
(h) The recipient is an individual with respect to whom aid or
assistance is made available under part B of title IV to children in
foster care and individuals with respect to whom adoption or foster
care assistance is made available under part E of title IV, without
regard to age.
(i) The recipient qualifies for medical assistance on the basis of
eligibility to receive assistance under a State plan funded under part
A of title IV (as in effect on or after welfare reform effective date
defined in section 1931(i) of the Act). This provision relates to those
individuals who qualify for Medicaid solely on the basis of
qualification under the State's TANF rules.
(j) The recipient is a woman who is receiving medical assistance by
virtue of the application of sections 1902(a)(10)(ii)(XVIII) and
1902(a) of the Act.
(k) The recipient qualifies for medical assistance on the basis of
section 1902(a)(10)(A)(ii)(XII) of the Act.
(l) The recipient is not a qualified alien (as defined in section
431 of the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996) and receives care and services necessary for the treatment
of an emergency medical condition in accordance with section 1903(v) of
the Act.

Sec. 440.320 State plan requirements: Optional enrollment for exempt
individuals.

(a) General rule. A State plan that offers exempt individuals as
defined in Sec. 440.315 the option to enroll in benchmark or
benchmark-equivalent

[[Page 9726]]

coverage must identify in its State plan the exempt groups for which
this coverage is available, and must comply with the following
provisions:
(1) In any case in which the State offers an exempt individual the
option to obtain coverage in a benchmark or benchmark-equivalent
benefit package, the State must inform the individuals that the
enrollment is voluntary and that the individual may opt out of the
benchmark or benchmark-equivalent coverage at any time and regain
immediate access to standard full Medicaid coverage under the State
plan.
(2) The State must inform the exempt recipient of the benefits
available under the benchmark or benchmark-equivalent benefit package
and provide a comparison of how they differ from the benefits available
under the standard full Medicaid program.
(3) The State must document in the exempt recipient's eligibility
file that the recipient was informed in accordance with this section
and voluntarily chose to enroll in the benchmark or benchmark-
equivalent benefit package.
(b) [Reserved]

Sec. 440.325 State plan requirements: Coverage and benefits.

Subject to requirements in Sec. 440.345 and Sec. 440.365, States
may elect to provide any of the following of types of health benefits
coverage:
(a) Benchmark coverage in accordance with Sec. 440.330.
(b) Benchmark-equivalent coverage in accordance with Sec. 440.335.

Sec. 440.330 Benchmark health benefits coverage.

Benchmark coverage is health benefits coverage that is equal to the
coverage under one or more of the following benefit plans:
(a) Federal Employees Health Benefit Plan Equivalent Coverage
(FEHBP--Equivalent Health Insurance Coverage). A benefit plan
equivalent to the standard Blue Cross/Blue Shield preferred provider
option service benefit plan that is described in and offered to Federal
employees under 5 U.S.C. 8903(1).
(b) State employee coverage. Health benefits coverage that is
offered and generally available to State employees in the State.
(c) Health Maintenance Organization (HMO) plan. A health insurance
plan that is offered through an HMO, (as defined in section 2791(b)(3)
of the Public Health Service Act) that has the largest insured
commercial, non-Medicaid enrollment in the State.
(d) Secretary approved coverage. Any other health benefits coverage
that the Secretary determines, upon application by a State, provides
appropriate coverage for the population proposed to be provided such
coverage. States wishing to opt for Secretarial approved coverage
should submit a full description of the proposed coverage, (including a
benefit-by-benefit comparison of the proposed plan to one or more of
the three other benchmark plans specified above or to the State's
standard full Medicaid coverage package under section 1905(a) of the
Act), and of the population to which the coverage would be offered. In
addition, the State should submit any other information that would be
relevant to a determination that the proposed health benefits coverage
would be appropriate for the proposed population. The scope of a
Secretary-approved health benefits package will be limited to benefits
within the scope of the categories available under a benchmark coverage
package or the standard full Medicaid coverage package under section
1905(a) of the Act.

Sec. 440.335 Benchmark-equivalent health benefits coverage.

(a) Aggregate actuarial value. Benchmark-equivalent coverage is
health benefits coverage that has an aggregate actuarial value, as
determined in Sec. 440.340 that is at least actuarially equivalent to
the coverage under one of the benchmark benefit packages described in
Sec. 440.330 for the identified Medicaid population to which it will
be offered.
(b) Required coverage. Benchmark-equivalent health benefits
coverage must include coverage for the following categories of
services:
(1) Inpatient and outpatient hospital services.
(2) Physicians' surgical and medical services.
(3) Laboratory and x-ray services.
(4) Well-baby and well-child care, including age-appropriate
immunizations.
(5) Other appropriate preventive services, such as emergency
services as designated by the Secretary.
(c) Additional coverage. (1) In addition to the categories of
services of this section, benchmark-equivalent coverage may include
coverage for any additional services in a category included in the
benchmark plan or described in section 1905(a) of the Act.
(2) If the benchmark coverage package used by the State for
purposes of comparison in establishing the aggregate actuarial value of
the benchmark-equivalent package includes any of the following four
categories of services: Prescription drugs; mental health services;
vision services; and hearing services; then the actuarial value of the
coverage for each of these categories of service in the benchmark-
equivalent coverage package must be at least 75 percent of the
actuarial value of the coverage for that category of service in the
benchmark plan used for comparison by the State.
(3) If the benchmark coverage package does not cover one of the
four categories of services in paragraph (c)(2) of this section, then
the benchmark-equivalent coverage package may, but is not required to,
include coverage for that category of service.

Sec. 440.340 Actuarial report for benchmark-equivalent coverage.

(a) A State plan amendment that would provide for benchmark-
equivalent health benefits coverage described in Sec. 440.335, must
include an actuarial report. The actuarial report must contain an
actuarial opinion that the benchmark equivalent health benefits
coverage meets the actuarial requirements set forth in Sec. 440.335.
The report must also specify the benchmark coverage used for
comparison.
(b) The actuarial report must state that it was prepared according
to the following requirements:
(1) By an individual who is a member of the American Academy of
Actuaries (AAA).
(2) Using generally accepted actuarial principles and methodologies
of the AAA.
(3) Using a standardized set of utilization and price factors.
(4) Using a standardized population that is representative of the
population involved.
(5) Applying the same principles and factors in comparing the value
of different coverage (or categories of services).
(6) Without taking into account any differences in coverage based
on the method of delivery or means of cost control or utilization used.
(7) Taking into account the ability of the State to reduce benefits
by taking into account the increase in actuarial value of health
benefits coverage offered under the State plan that results from the
limitations on cost sharing (with the exception of premiums) under that
coverage.
(c) The actuary preparing the opinion must select and specify the
standardized set of factors and the standardized population to be used
in paragraphs (b)(3) and (b)(4) of this section.
(d) The State must provide sufficient detail to explain the basis
of the methodologies used to estimate the actuarial value or, if
requested by CMS, to replicate the State's result.

[[Page 9727]]

Sec. 440.345 EPSDT services requirement.

(a) The State must assure access to early and periodic screening,
diagnostic and treatment (EPSDT) services through benchmark or
benchmark-equivalent plan benefits or as wrap-around benefits to those
plans for any child under 19 years of age eligible in a category under
the State plan.
(1) Sufficiency: Any wrap-around EPSDT benefits must be sufficient
so that, in combination with the benchmark or benchmark-equivalent
benefits plan, these individuals have access to the full EPSDT benefit.
(2) State Plan requirement: The State must include a description of
how the wrap-around benefits will be provided to ensure that these
recipients have access to the full EPSDT benefit.
(b) Individuals must first seek coverage of EPSDT services through
the benchmark or benchmark equivalent plan before seeking coverage of
such through wrap-around benefits.

Sec. 440.350 Employer-sponsored insurance health plans.

(a) A State may provide benchmark or benchmark-equivalent coverage
by obtaining employer sponsored health plans (either alone or with the
addition of wrap-around services covered separately under Medicaid) for
individuals with access to private health insurance.
(b) The State must assure that employer sponsored plans meet the
requirements of benchmark or benchmark-equivalent coverage, including
the cost-effectiveness requirements at Sec. 440.370.
(c) A State may provide benchmark or benchmark-equivalent coverage
through a combination of employer sponsored health plans and additional
benefit coverage provided by the State that wraps around the employer
sponsored health plan which, in the aggregate, results in benchmark or
benchmark-equivalent level of coverage for those recipients.

Sec. 440.355 Payment of premiums.

Payment of premiums by the State, net of beneficiary contributions,
to obtain benchmark or benchmark-equivalent benefit coverage on behalf
of beneficiaries under this section will be treated as medical
assistance under section 1905(a) of the Act.

Sec. 440.360 State plan requirement for providing additional wrap-
around services.

If the State opts to provide additional or wrap-around coverage to
individuals enrolled in benchmark or benchmark-equivalent plans, the
State plan must describe the populations covered and the payment
methodology for these services. Additional or wrap-around services must
be in categories that are within the scope of the benchmark coverage,
or are described in section 1905(a) of the Act.

Sec. 440.365 Coverage of rural health clinic and federally qualified
health center (FQHC) services.

If a State provides benchmark or benchmark-equivalent coverage to
individuals, it must assure that the individual has access, through
that coverage or otherwise, to rural health clinic services and FQHC
services as defined in subparagraphs (B) and (C) of section 1905(a)(2)
of the Act. Payment for these services must be made in accordance with
the payment provisions of section 1902(bb) of the Act.

Sec. 440.370 Cost-effectiveness.

Benchmark and benchmark-equivalent coverage and any additional
benefits must be provided in accordance with Federal upper payment
limits, procurement requirements and other economy and efficiency
principles that would otherwise be applicable to the services or
delivery system through which the coverage and benefits are obtained.

Sec. 440.375 Comparability.

States have the option to amend their State plan to provide
benchmark or benchmark-equivalent coverage to recipients without regard
to comparability.

Sec. 440.380 Statewideness.

States have the option to amend their State plan to provide
benchmark or benchmark-equivalent coverage to recipients without regard
to statewideness.

Sec. 440.385 Freedom of choice.

(a) States have the option to amend their State plan to provide
benchmark or benchmark-equivalent coverage to recipients without regard
to the requirements for free choice of provider in Sec. 431.51 of this
chapter.
(b) States may restrict recipients to obtaining services from (or
through) selectively procured provider plans or practitioners that
meet, accept, and comply with reimbursement, quality and utilization
standards under the State Plan, to the extent that the restrictions
imposed meet the following requirements:
(1) Do not discriminate among classes of providers on grounds
unrelated to their demonstrated effectiveness and efficiency in
providing the benchmark benefit package.
(2) Do not apply in emergency circumstances.
(3) Require that all provider plans are paid on a timely basis in
the same manner as health care practitioners must be paid under Sec.
447.45 of the chapter.

Sec. 440.390 Assurance of Transportation.

A State may at its option amend its State plan to provide benchmark
or benchmark-equivalent coverage to recipients without regard to the
assurance of transportation to medically necessary services requirement
specified in Sec. 431.53 of this chapter.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)

Dated: October 11, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: November 1, 2007.
Michael O. Leavitt,
Secretary.

Editorial Note: This document was received at the Office of the
Federal Register on February 15, 2008.
[FR Doc. E8-3206 Filed 2-21-08; 8:45 am]

BILLING CODE 4120-01-P