[Code of Federal Regulations]

[Title 42, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR430.35]



[Page 11]

 

                         TITLE 42--PUBLIC HEALTH

 

  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 

                  HEALTH AND HUMAN SERVICES (CONTINUED)

 

PART 430_GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS--Table of 

 

Subpart C_Grants; Reviews and Audits; Withholding for Failure To Comply; 

   Deferral and Disallowance of Claims; Reduction of Federal Medicaid 

                                Payments

 

Sec.  430.35  Withholding of payment for failure to comply with Federal 



requirements.



    (a) Basis for withholding. CMS withholds payments to the State, in 

whole or in part, only if, after giving the agency reasonable notice and 

opportunity for a hearing in accordance with subpart D of this part, the 

Administrator finds--

    (1) That the plan no longer complies with the provisions of section 

1902 of the Act; or

    (2) That in the administration of the plan there is failure to 

comply substantially with any of those provisions.



(Hearings under subpart D are generally not called until a reasonable 

effort has been made to resolve the issues through conferences and 

discussions. These may be continued even if a date and place have been 

set for the hearing.)

    (b) Noncompliance of the plan. A question of noncompliance of a 

State plan may arise from an unapprovable change in the approved State 

plan or the failure of the State to change its approved plan to conform 

to a new Federal requirement for approval of State plans.

    (c) Noncompliance in practice. A question of noncompliance in 

practice may arise from the State's failure to actually comply with a 

Federal requirement, regardless of whether the plan itself complies with 

that requirement.

    (d) Notice and implementation of withholding. If the Administrator 

makes a finding of noncompliance under paragraph (a) of this section, 

the following rules apply:

    (1) The Administrator notifies the State:

    (i) That no further payments will be made to the State (or that 

payments will be made only for those portions or aspects of the program 

that are not affected by the noncompliance); and

    (ii) That the total or partial withholding will continue until the 

Administrator is satisfied that the State's plan and practice are, and 

will continue to be, in compliance with Federal requirements.

    (2) CMS withholds payments, in whole or in part, until the 

Administrator is satisfied regarding the State's compliance.