[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: 42CFR431.55]



[Page 27-29]

 

                         TITLE 42--PUBLIC HEALTH

 

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

                  HEALTH AND HUMAN SERVICES (CONTINUED)

 

PART 431_STATE ORGANIZATION AND GENERAL ADMINISTRATION--Table of Contents

 

              Subpart B_General Administrative Requirements

 

Sec.  431.55  Waiver of other Medicaid requirements.



    (a) Statutory basis. Section 1915(b) of the Act authorizes the 

Secretary to waive most requirements of section 1902 of the Act to the 

extent he or she finds proposed improvements or specified practices in 

the provision of services under Medicaid to be cost effective, 

efficient, and consistent with the objectives of the Medicaid program. 

Sections 1915 (f) and (h) prescribe how such waivers are to be approved, 

continued, monitored, and terminated. Section 1902(p)(2) of the Act 

conditions FFP in payments to an entity under a section 1915(b)(1) 

waiver on the State's provision for exclusion of certain entities from 

participation.

    (b) General requirements. (1) General requirements for submittal of 

waiver requests, and the procedures that CMS follows for review and 

action on those requests are set forth in Sec.  430.25 of this chapter.



[[Page 28]]



    (2) In applying for a waiver to implement an approvable project 

under paragraph (c), (d), (e), or (f) of this section, a Medicaid agency 

must document in the waiver request and maintain data regarding:

    (i) The cost-effectiveness of the project;

    (ii) The effect of the project on the accessibility and quality of 

services;

    (iii) The anticipated impact of the project on the State's Medicaid 

program and;

    (iv) Assurances that the restrictions on free choice of providers do 

not apply to family planning services.

    (3) No waiver under this section may be granted for a period longer 

than 2 years, unless the agency requests a continuation of the waiver.

    (4) CMS monitors the implementation of waivers granted under this 

section to ensure that requirements for such waivers are being met.

    (i) If monitoring demonstrates that the agency is not in compliance 

with the requirements for a waiver under this section, CMS gives the 

agency notice and opportunity for a hearing.

    (ii) If, after a hearing, CMS finds an agency to be out of 

compliance with the requirements of a waiver, CMS terminates the waiver 

and gives the agency a specified date by which it must demonstrate that 

it meets the applicable requirements of section 1902 of the Act.

    (5) The requirements of section 1902(s) of the Act, with regard to 

adjustments in payments for inpatient hospital services furnished to 

infants who have not attained age 1 and to children who have not 

attained age 6 and who receive these services in disproportionate share 

hospitals, may not be waived under a section 1915(b) waiver.

    (c) Case-management system. (1) Waivers of appropriate requirements 

of section 1902 of the Act may be authorized for a State to implement a 

primary care case-management system or specialty physician services 

system.

    (i) Under a primary care case-management system the agency assures 

that a specific person or persons or agency will be responsible for 

locating, coordinating, and monitoring all primary care or primary care 

and other medical care and rehabilitative services on behalf of a 

recipient. The person or agency must comply with the requirements set 

forth in part 438 of this chapter for primary care case management 

contracts and systems.

    (ii) A specialty physician services system allows States to restrict 

recipients of specialty services to designated providers of such 

services, even in the absence of a primary care case-management system.

    (2) A waiver under this paragraph (c) may not be approved unless the 

State's request assures that the restrictions--

    (i) Do not apply in emergency situations; and

    (ii) Do not substantially impair access to medically necessary 

services of adequate quality.

    (d) Locality as central broker. Waivers of appropriate requirements 

of section 1902 of the Act may be authorized for a State to allow a 

locality to act as a central broker to assist recipients in selecting 

among competing health care plans. States must ensure that access to 

medically necessary services of adequate quality is not substantially 

impaired.

    (1) A locality is any defined jurisdiction, e.g., district, town, 

city, borough, county, parish, or State.

    (2) A locality may use any agency or agent, public or private, 

profit or nonprofit, to act on its behalf in carrying out its central 

broker function.

    (e) Sharing of cost savings. (1) Waivers of appropriate requirements 

of section 1902 of the Act may be authorized for a State to share with 

recipients the cost savings resulting from the recipients' use of more 

cost-effective medical care.

    (2) Sharing is through the provision of additional services, 

including--

    (i) Services furnished by a plan selected by the recipient; and

    (ii) Services expressly offered by the State as an inducement for 

recipients to participate in a primary care case-management system, a 

competing health care plan or other system that furnishes health care 

services in a more cost-effective manner.

    (f) Restriction of freedom of choice--(1) Waiver of appropriate 

requirements of section 1902 of the Act may be authorized for States to 

restrict recipients to obtaining services from (or through)



[[Page 29]]



qualified providers or practitioners that meet, accept, and comply with 

the State reimbursement, quality and utilization standards specified in 

the State's waiver request.

    (2) An agency may qualify for a waiver under this paragraph (f) only 

if its applicable State standards are consistent with access, quality 

and efficient and economic provision of covered care and services and 

the restrictions it imposes--

    (i) Do not apply to recipients residing at a long-term care facility 

when a restriction is imposed unless the State arranges for reasonable 

and adequate recipient transfer.

    (ii) Do not discriminate among classes of providers on grounds 

unrelated to their demonstrated effectiveness and efficiency in 

providing those services; and

    (iii) Do not apply in emergency circumstances.

    (3) Demonstrated effectiveness and efficiency refers to reducing 

costs or slowing the rate of cost increase and maximizing outputs or 

outcomes per unit of cost.

    (4) The agency must make payments to providers furnishing services 

under a freedom of choice waiver under this paragraph (f) in accordance 

with the timely claims payment standards specified in Sec.  447.45 of 

this chapter for health care practitioners participating in the Medicaid 

program.

    (g) [Reserved]

    (h) Waivers approved under section 1915(b)(1) of the Act--(1) Basic 

rules. (i) An agency must submit, as part of it's waiver request, 

assurance that the entities described in paragraph (h)(2) of this 

section will be excluded from participation under an approved waiver.

    (ii) FFP is available in payments to an entity that furnishes 

services under a section 1915(b)(1) waiver only if the agency excludes 

from participation any entity described in paragraph (h)(2) of this 

section.

    (2) Entities that must be excluded. The agency must exclude an 

entity that meets any of the following conditions:

    (i) Could be excluded under section 1128(b)(8) of the Act as being 

controlled by a sanctioned individual.

    (ii) Has a substantial contractual relationship (direct or indirect) 

with an individual convicted of certain crimes, as described in section 

1128(b)(8)(B) of the Act.

    (iii) Employs or contracts directly or indirectly with one of the 

following:

    (A) Any individual or entity that, under section 1128 or section 

1128A of the Act, is precluded from furnishing health care, utilization 

review, medical social services, or administrative services.

    (B) Any entity described in paragraph (h)(2)(i) of this section.

    (3) Definitions. As used in this section, substantial contractual 

relationship means any contractual relationship that provides for one or 

more of the following services:

    (i) The administration, management, or provision of medical 

services.

    (ii) The establishment of policies, or the provision of operational 

support, for the administration, management, or provision of medical 

services.



[56 FR 8847, Mar. 1, 1991, as amended at 59 FR 4599, Feb. 1, 1994; 59 FR 

36084, July 15, 1994; 67 FR 41094, June 14, 2002]