[Title 42 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2020 Edition]
[From the U.S. Government Publishing Office]
[[Page i]]
Title 42
Public Health
________________________
Parts 430 to 481
Revised as of October 1, 2020
Containing a codification of documents of general
applicability and future effect
As of October 1, 2020
Published by the Office of the Federal Register
National Archives and Records Administration as a
Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 42:
Chapter IV--Centers for Medicare & Medicaid
Services, Department of Health and Human Services
(Continued) 3
Finding Aids:
Table of CFR Titles and Chapters........................ 717
Alphabetical List of Agencies Appearing in the CFR...... 737
List of CFR Sections Affected........................... 747
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 42 CFR 430.0 refers
to title 42, part 430,
section 0.
----------------------------
[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
regulation. Each title is divided into chapters which usually bear the
name of the issuing agency. Each chapter is further subdivided into
parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
volume.
LEGAL STATUS
The contents of the Federal Register are required to be judicially
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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To determine whether a Code volume has been amended since its
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EFFECTIVE AND EXPIRATION DATES
Each volume of the Code contains amendments published in the Federal
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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PAST PROVISIONS OF THE CODE
Provisions of the Code that are no longer in force and effect as of
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What is a proper incorporation by reference? The Director of the
Federal Register will approve an incorporation by reference only when
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approval is based are:
(a) The incorporation will substantially reduce the volume of
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(b) The matter incorporated is in fact available to the extent
necessary to afford fairness and uniformity in the administrative
process.
(c) The incorporating document is drafted and submitted for
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What if the material incorporated by reference cannot be found? If
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that volume.
[[Page vii]]
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Oliver A. Potts,
Director,
Office of the Federal Register
October 1, 2020
[[Page ix]]
THIS TITLE
Title 42--Public Health is composed of five volumes. The parts in
these volumes are arranged in the following order: Parts 1-399, parts
400-413, parts 414-429, parts 430-481, and part 482 to end. The first
volume (parts 1-399) contains current regulations issued under chapter
I--Public Health Service (HHS). The second, third, and fourth volumes
(parts 400-413, parts 414-429, and parts 430-481) include regulations
issued under chapter IV--Centers for Medicare & Medicaid Services (HHS)
and the fifth volume (part 482 to end) contains the remaining
regulations in chapter IV and the regulations issued under chapter V by
the Office of Inspector General-Health Care (HHS). The contents of these
volumes represent all current regulations codified under this title of
the CFR as of October 1, 2020.
For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Stephen J. Frattini.
[[Page 1]]
TITLE 42--PUBLIC HEALTH
(This book contains parts 430 to 481)
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Part
chapter iv--Centers for Medicare & Medicaid Services,
Department of Health and Human Services (Continued)....... 430
[[Page 3]]
CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF
HEALTH AND HUMAN SERVICES (CONTINUED)
--------------------------------------------------------------------
Editorial Note: Nomenclature changes to chapter IV appear at 66 FR
39452, July 31, 2001; 67 FR 36540, May 24, 2002; 69 FR 18803, Apr. 9,
2004; and 77 FR 29028, July 16, 2012.
SUBCHAPTER C--MEDICAL ASSISTANCE PROGRAMS
Part Page
430 Grants to States for Medical Assistance
Programs................................ 5
431 State organization and general
administration.......................... 22
432 State personnel administration.............. 77
433 State fiscal administration................. 81
434 Contracts................................... 126
435 Eligibility in the States, District of
Columbia, the Northern Mariana Islands,
and American Samoa...................... 129
436 Eligibility in Guam, Puerto Rico, and the
Virgin Islands.......................... 215
438 Managed care................................ 249
440 Services: General provisions................ 332
441 Services: Requirements and limits applicable
to specific services.................... 365
442 Standards for payment to nursing facilities
and intermediate care facilities for
Individuals with Intellectual
Disabilities............................ 438
447 Payments for services....................... 444
455 Program integrity: Medicaid................. 499
[[Page 4]]
456 Utilization control......................... 521
SUBCHAPTER D--STATE CHILDREN'S HEALTH INSURANCE PROGRAMS (SCHIPS)
457 Allotments and grants to States............. 558
SUBCHAPTER E--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
460 Programs of all-inclusive care for the
elderly (PACE).......................... 634
SUBCHAPTER F--QUALITY IMPROVEMENT ORGANIZATIONS
475 Quality improvement organizations........... 674
476 Quality improvement organization review..... 677
478 Reconsiderations and appeals................ 696
480 Acquisition, protection, and disclosure of
quality improvement organization
information............................. 702
481
[Reserved]
[[Page 5]]
SUBCHAPTER C_MEDICAL ASSISTANCE PROGRAMS
PART 430_GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS-
-Table of Contents
Subpart A_Introduction; General Provisions
Sec.
430.0 Program description.
430.1 Scope of subchapter C.
430.2 Other applicable Federal regulations.
430.3 Appeals under Medicaid.
430.5 Definitions.
Subpart B_State Plans
430.10 The State plan.
430.12 Submittal of State plans and plan amendments.
430.14 Review of State plan material.
430.15 Basis and authority for action on State plan material.
430.16 Timing and notice of action on State plan material.
430.18 Administrative review of action on State plan material.
430.20 Effective dates of State plans and plan amendments.
430.25 Waivers of State plan requirements.
Subpart C_Grants; Reviews and Audits; Withholding for Failure To Comply;
Deferral and Disallowance of Claims; Reduction of Federal Medicaid
Payments
430.30 Grants procedures.
430.32 Program reviews.
430.33 Audits.
430.35 Withholding of payment for failure to comply with Federal
requirements.
430.38 Judicial review.
430.40 Deferral of claims for FFP.
430.42 Disallowance of claims for FFP.
430.45 Reduction of Federal Medicaid payments.
430.48 Repayment of Federal funds by installments.
Subpart D_Hearings on Conformity of State Medicaid Plans and Practice to
Federal Requirements
430.60 Scope.
430.62 Records to be public.
430.63 Filing and service of papers.
430.64 Suspension of rules.
430.66 Designation of presiding officer for hearing.
430.70 Notice of hearing or opportunity for hearing.
430.72 Time and place of hearing.
430.74 Issues at hearing.
430.76 Parties to the hearing.
430.80 Authority of the presiding officer.
430.83 Rights of parties.
430.86 Discovery.
430.88 Evidence.
430.90 Exclusion from hearing for misconduct.
430.92 Unsponsored written material.
430.94 Official transcript.
430.96 Record for decision.
430.100 Posthearing briefs.
430.102 Decisions following hearing.
430.104 Decisions that affect FFP.
Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
Source: 53 FR 36571, Sept. 21, 1988, unless otherwise noted.
Subpart A_Introduction; General Provisions
Sec. 430.0 Program description.
Title XIX of the Social Security Act, enacted in 1965, authorizes
Federal grants to States for medical assistance to low-income persons
who are age 65 or over, blind, disabled, or members of families with
dependent children or qualified pregnant women or children. The program
is jointly financed by the Federal and State governments and
administered by States. Within broad Federal rules, each State decides
eligible groups, types and range of services, payment levels for
services, and administrative and operating procedures. Payments for
services are made directly by the State to the individuals or entities
that furnish the services.
Sec. 430.1 Scope of subchapter C.
The regulations in subchapter C set forth State plan requirements,
standards, procedures, and conditions for obtaining Federal financial
participation (FFP). Each part (or subpart of section) in the subchapter
describes the specific statutory basis for the regulation. However,
where the basis is the Secretary's general authority to issue
regulations for any program under the Act (section 1102 of the Act), or
his general authority to prescribe State plan requirements needed for
proper and efficient administration of the
[[Page 6]]
plan (section 1902(a)(4)), those statutory provisions are simply cited
without further description.
Sec. 430.2 Other applicable Federal regulations.
Other regulations applicable to State Medicaid programs include the
following:
(a) 5 CFR part 900, subpart F, Administration of the Standards for a
Merit System of Personnel Administration.
(b) The following HHS Regulations in 45 CFR subtitle A:
Part 16--Procedures of the Departmental Appeals Board.
Part 75--Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for HHS Awards.
Part 80--Nondiscrimination Under Programs Receiving Federal Assistance
Through the Department of Health and Human Services: Effectuation of
Title VI of the Civil Rights Act of 1964.
Part 81--Practice and Procedure for Hearings Under 45 CFR part 80.
Part 84--Nondiscrimination on the Basis of Handicap in Programs and
Activities Receiving or Benefiting From Federal Financial Assistance.
Part 95--General Administration--grant programs (public assistance and
medical assistance).
[53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8845, Mar. 1, 1991; 81
FR 3011, Jan. 20, 2016]
Sec. 430.3 Appeals under Medicaid.
Three distinct types of disputes may arise under Medicaid.
(a) Compliance with Federal requirements. Disputes that pertain to
whether a State's plan or proposed plan amendments, or its practice
under the plan meet or continue to meet Federal requirements are subject
to the hearing provisions of subpart D of this part.
(b) FFP in Medicaid expenditures. Disputes that pertain to
disallowances of FFP in Medicaid expenditures (mandatory grants) are
heard by the Departmental Appeals Board (the Board) in accordance with
procedures set forth in 45 CFR part 16.
(c) Discretionary grants disputes. Disputes pertaining to
discretionary grants, such as grants for special demonstration projects
under sections 1110 and 1115 of the Act, which may be awarded to a
Medicaid agency, are also heard by the Board. 45 CFR part 16, appendix
A, lists all the types of disputes that the Board hears.
[53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8845, Mar. 1, 1991]
Sec. 430.5 Definitions.
As used in this subchapter, unless the context indicates otherwise--
Contractor means any entity that contracts with the State agency,
under the State plan, in return for a payment, to process claims, to
provide or pay for medical services, or to enhance the State agency's
capability for effective administration of the program.
Representative has the meaning given the term by each State
consistent with its laws, regulations, and policies.
[67 FR 41094, June 14, 2002]
Subpart B_State Plans
Sec. 430.10 The State plan.
The State plan is a comprehensive written statement submitted by the
agency describing the nature and scope of its Medicaid program and
giving assurance that it will be administered in conformity with the
specific requirements of title XIX, the regulations in this Chapter IV,
and other applicable official issuances of the Department. The State
plan contains all information necessary for CMS to determine whether the
plan can be approved to serve as a basis for Federal financial
participation (FFP) in the State program.
Sec. 430.12 Submittal of State plans and plan amendments.
(a) Format. A State plan for Medicaid consists of a standardized
template, issued and updated by CMS, that includes both basic
requirements and individualized content that reflects the
characteristics of the State's program. The Secretary will periodically
update the template and format specifications for State plans and plan
amendments through a process consistent with the requirements of the
Paperwork Reduction Act.
(b) Governor's review--(1) Basic rules. Except as provided in
paragraph (b)(2) of this section--
[[Page 7]]
(i) The Medicaid agency must submit the State plan and State plan
amendments to the State Governor or his designee for review and comment
before submitting them to the CMS regional office.
(ii) The plan must provide that the Governor will be given a
specific period of time to review State plan amendments, long-range
program planning projections, and other periodic reports on the Medicaid
program, excluding periodic statistical, budget and fiscal reports.
(iii) Any comments from the Governor must be submitted to CMS with
the plan or plan amendment.
(2) Exceptions. (i) Submission is not required if the Governor's
designee is the head of the Medicaid agency.
(ii) Governor's review is not required for preprinted plan
amendments that are developed by CMS if they provide absolutely no
options for the State.
(c) Plan amendments. (1) The plan must provide that it will be
amended whenever necessary to reflect--
(i) Changes in Federal law, regulations, policy interpretations, or
court decisions; or
(ii) Material changes in State law, organization, or policy, or in
the State's operation of the Medicaid program. For changes related to
advance directive requirements, amendments must be submitted as soon as
possible, but no later than 60 days from the effective date of the
change to State law concerning advance directives.
(2) Prompt submittal of amendments is necessary--
(i) So that CMS can determine whether the plan continues to meet the
requirements for approval; and
(ii) To ensure the availability of FFP in accordance with Sec.
430.20.
[53 FR 36571, Sept. 21, 1988, as amended at 60 FR 33293, June 27, 1995;
81 FR 86447, Nov. 30, 2016]
Sec. 430.14 Review of State plan material.
CMS regional staff reviews State plans and plan amendments,
discusses any issues with the Medicaid agency, and consults with central
office staff on questions regarding application of Federal policy.
Sec. 430.15 Basis and authority for action on State plan material.
(a) Basis for action. (1) Determinations as to whether State plans
(including plan amendments and administrative practice under the plans)
originally meet or continue to meet the requirements for approval are
based on relevant Federal statutes and regulations.
(2) Guidelines are furnished to assist in the interpretation of the
regulations.
(b) Approval authority. The Regional Administrator exercises
delegated authority to approve the State plan and plan amendments on the
basis of policy statements and precedents previously approved by the
Administrator.
(c) Disapproval authority. (1) The Administrator retains authority
for determining that proposed plan material is not approvable or that
previously approved material no longer meets the requirements for
approval.
(2) The Administrator does not make a final determination of
disapproval without first consulting the Secretary.
Sec. 430.16 Timing and notice of action on State plan material.
(a) Timing. (1) A State plan or plan amendment will be considered
approved unless CMS, within 90 days after receipt of the plan or plan
amendment in the regional office, sends the State--
(i) Written notice of disapproval; or
(ii) Written notice of any additional information it needs in order
to make a final determination.
(2) If CMS requests additional information, the 90-day period for
CMS action on the plan or plan amendment begins on the day it receives
that information.
(b) Notice of final determination. (1) The Regional Administrator or
the Administrator notifies the Medicaid agency of the approval of a
State plan or plan amendment.
(2) Only the Administrator gives notice of disapproval of a State
plan or plan amendment.
[[Page 8]]
Sec. 430.18 Administrative review of action on State plan material.
(a) Request for reconsideration. Any State dissatisfied with the
Administrator's action on plan material under Sec. 430.15 may, within
60 days after receipt of the notice provided under Sec. 430.16(b),
request that the Administrator reconsider the issue of whether the plan
or plan amendment conforms to the requirements for approval.
(b) Notice and timing of hearing. (1) Within 30 days after receipt
of the request, the Administrator notifies the State of the time and
place of the hearing.
(2) The hearing takes place not less than 30 days nor more than 60
days after the date of the notice, unless the State and the
Administrator agree in writing on an earlier or later date.
(c) Hearing procedures. The hearing procedures are set forth in
subpart D of this part.
(d) Decision. A decision affirming, modifying, or reversing the
Administrator's original determination is made in accordance with Sec.
430.102.
(e) Effect of hearing decision. (1) Denial of Federal funds, if
required by the Administrator's original determination, will not be
delayed pending a hearing decision.
(2) However, if the Administrator determines that his or her
original decision was incorrect, CMS pays the State a lump sum equal to
any funds incorrectly denied.
Sec. 430.20 Effective dates of State plans and plan amendments.
For purposes of FFP, the following rules apply:
(a) New plans. The effective date of a new plan--
(1) May not be earlier than the first day of the quarter in which an
approvable plan is submitted to the regional office; and
(2) With respect to expenditures for medical assistance, may not be
earlier than the first day on which the plan is in operation on a
statewide basis.
(b) Plan amendment. (1) For a plan amendment that provides
additional services to individuals eligible under the approved plan,
increases the payment amounts for services already included in the plan,
or makes additional groups eligible for services provided under the
approved plan, the effective date is determined in accordance with
paragraph (a) of this section.
(2) For a plan amendment that changes the State's payment method and
standards, the rules of Sec. 447.256 of this chapter apply.
(3) For other plan amendments, the effective date may be a date
requested by the State if CMS approves it.
[53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8845, Mar. 1, 1991]
Sec. 430.25 Waivers of State plan requirements.
(a) Scope of section. This section describes the purpose and effect
of waivers, identifies the requirements that may be waived and the other
regulations that apply to waivers, and sets forth the procedures that
CMS follows in reviewing and taking action on waiver requests.
(b) Purpose of waivers. Waivers are intended to provide the
flexibility needed to enable States to try new or different approaches
to the efficient and cost-effective delivery of health care services, or
to adapt their programs to the special needs of particular areas or
groups of beneficiaries. Waivers allow exceptions to State plan
requirements and permit a State to implement innovative programs or
activities on a time-limited basis, and subject to specific safeguards
for the protection of beneficiaries and the program. Detailed rules for
waivers are set forth in subpart B of part 431, subpart A of part 440,
and subpart G of part 441 of this chapter.
(c) Effect of waivers. (1) Waivers under section 1915(b) allow a
State to take the following actions:
(i) Implement a primary care case-management system or a specialty
physician system.
(ii) Designate a locality to act as central broker in assisting
Medicaid beneficiaries to choose among competing health care plans.
(iii) Share with beneficiaries (through provision of additional
services) cost-savings made possible through the beneficiaries' use of
more cost-effective medical care.
[[Page 9]]
(iv) Limit beneficiaries' choice of providers (except in emergency
situations and with respect to family planning services) to providers
that fully meet reimbursement, quality, and utilization standards, which
are established under the State plan and are consistent with access,
quality, and efficient and economical furnishing of care.
(2) A waiver under section 1915(c) of the Act allows a State to
include as ``medical assistance'' under its plan home and community
based services furnished to beneficiaries who would otherwise need
inpatient care that is furnished in a hospital, SNF, ICF, or ICF/IID,
and is reimbursable under the State plan.
(3) A waiver under section 1916 (a)(3) or (b)(3) of the Act allows a
State to impose a deduction, cost-sharing or similar charge of up to
twice the ``nominal charge'' established under the plan for outpatient
services, if--
(i) The outpatient services are received in a hospital emergency
room but are not emergency services; and
(ii) The State has shown that Medicaid beneficiaries have actually
available and accessible to them alternative services of nonemergency
outpatient services.
(d) Requirements that are waived. In order to permit the activities
described in paragraph (c) of this section, one or more of the title XIX
requirements must be waived, in whole or in part.
(1) Under section 1915(b) of the Act, and subject to certain
limitations, any of the State plan requirements of section 1902 of the
Act may be waived to achieve one of the purposes specified in that
section.
(2) Under section 1915(c) of the Act, the following requirements may
be waived:
(i) Statewideness--section 1902(a)(1).
(ii) Comparability of services--section 1902(a)(10)(B).
(iii) Income and resource rules--section 1902(a)(10)(C)(i)(III).
(3) Under section 1916 of the Act, paragraphs (a)(3) and (b)(3)
require that any cost-sharing imposed on beneficiaries be nominal in
amount, and provide an exception for nonemergency services furnished in
a hospital emergency room if the conditions of paragraph (c)(3) of this
section are met.
(e) Submittal of waiver request. The State Governor, the head of the
Medicaid agency, or an authorized designee may submit the waiver
request.
(f) Review of waiver requests. (1) This paragraph applies to initial
waiver requests and to requests for renewal or amendment of a previously
approved waiver.
(2) CMS regional and central office staff review waiver requests and
submit a recommendation to the Administrator, who--
(i) Has the authority to approve or deny waiver requests; and
(ii) Does not deny a request without first consulting the Secretary.
(3) A waiver request is considered approved unless, within 90 days
after the request is received by CMS, the Administrator denies the
request, or the Administrator or the Regional Administrator sends the
State a written request for additional information necessary to reach a
final decision. If additional information is requested, a new 90-day
period begins on the day the response to the additional information
request is received by the addressee.
(g) Basis for approval--(1) Waivers under section 1915 (b) and (c).
The Administrator approves waiver requests if the State's proposed
program or activity meets the requirements of the Act and the
regulations at Sec. 431.55 or subpart G of part 441 of this chapter.
(2) Waivers under section 1916. The Administrator approves a waiver
under section 1916 of the Act if the State shows, to CMS's satisfaction,
that the Medicaid beneficiaries have available and accessible to them
sources, other than a hospital emergency room, where they can obtain
necessary nonemergency outpatient services.
(h) Effective date and duration of waivers--(1) Effective date.
Waivers receive a prospective effective date determined, with State
input, by the Administrator. The effective date is specified in the
letter of approval to the State.
(2) Duration of waivers--(i) Home and community-based services under
section 1915(c) of the Act. (A) The initial waiver is for a period of 3
years and may be renewed thereafter for periods of 5 years.
[[Page 10]]
(B) For waivers that include individuals who are dually eligible for
Medicare and Medicaid, 5-year initial approval periods may be granted at
the discretion of the Secretary for waivers meeting all necessary
programmatic, financial and quality requirements, and in a manner
consistent with the interests of beneficiaries and the objectives of the
Medicaid program.
(ii) Waivers under section 1915(b) of the Act. (A) The initial
waiver is for a period of 2 years and may be renewed for additional
periods of up to 2 years as determined by the Administrator.
(B) For waivers that include individuals who are dually eligible for
Medicare and Medicaid, 5-year initial and renewal approval periods may
be granted at the discretion of the Secretary for waivers meeting all
necessary programmatic, financial and quality requirements, and in a
manner consistent with the interests of beneficiaries and the objectives
of the Medicaid program.
(iii) Waivers under section 1916 of the Act. The initial waiver is
for a period of 2 years and may be renewed for additional periods of up
to 2 years as determined by the Administrator.
(3) Renewal of waivers. (i) A renewal request must be submitted at
least 90 days (but not more than 120 days) before a currently approved
waiver expires, to provide adequate time for CMS review.
(ii) If a renewal request for a section 1915(c) waiver proposes a
change in services provided, eligible population, service area, or
statutory sections waived, the Administrator may consider it a new
waiver, and approve it for a period of three years.
[56 FR 8846, Mar. 1, 1991, as amended at 79 FR 3028, Jan. 16, 2014]
Subpart C_Grants; Reviews and Audits; Withholding for Failure To Comply;
Deferral and Disallowance of Claims; Reduction of Federal Medicaid
Payments
Sec. 430.30 Grants procedures.
(a) General provisions. (1) Once CMS has approved a State plan, it
makes quarterly grant awards to the State to cover the Federal share of
expenditures for services, training, and administration.
(2) The amount of the quarterly grant is determined on the basis of
information submitted by the State agency (in quarterly estimate and
quarterly expenditure reports) and other pertinent documents.
(b) Quarterly estimates. The Medicaid agency must submit Form CMS-37
(Medicaid Program Budget Report; Quarterly Distribution of Funding
Requirements) to the central office (with a copy to the regional office)
45 days before the beginning of each quarter.
(c) Expenditure reports. (1) The State must submit Form CMS-64
(Quarterly Medicaid Statement of Expenditures for the Medical Assistance
Program) to the central office (with a copy to the regional office) not
later than 30 days after the end of each quarter.
(2) This report is the State's accounting of actual recorded
expenditures. The disposition of Federal funds may not be reported on
the basis of estimates.
(d) Grant award--(1) Computation by CMS. Regional office staff
analyzes the State's estimates and sends a recommendation to the central
office. Central office staff considers the State's estimates, the
regional office recommendations and any other relevant information,
including any adjustments to be made under paragraph (d)(2) of this
section, and computes the grant.
(2) Content of award. The grant award computation form shows the
estimate of expenditures for the ensuring quarter, and the amounts by
which that estimate is increased or decreased because of an
underestimate or overestimate for prior quarters, or for any of the
following reasons:
(i) Penalty reductions imposed by law.
(ii) Accounting adjustments.
(iii) Deferrals or disallowances.
(iv) Interest assessments.
(v) Mandated adjustments such as those required by section 1914 of
the Act.
(3) Effect of award. The grant award authorizes the State to draw
Federal funds as needed to pay the Federal share of disbursements.
[[Page 11]]
(4) Drawing procedure. The draw is through a commercial bank and the
Federal Reserve system against a continuing letter of credit certified
to the Secretary of the Treasury in favor of the State payee. (The
letter of credit payment system was established in accordance with
Treasury Department regulations--Circular No. 1075.)
(e) General administrative requirements. With the following
exceptions, the provisions of 45 CFR 75, which establish uniform
administrative requirements and cost principles, apply to all grants
made to States under this subpart:
(1) Cost sharing or matching, 45 CFR 75.306; and
(2) Financial reporting, 45 CFR 75.341.
[53 FR 36571, Sept. 21, 1988, as amended at 77 FR 31507, May 29, 2012;
81 FR 3011, Jan. 20, 2016]
Sec. 430.32 Program reviews.
(a) Review of State and local administration. In order to determine
whether the State is complying with the Federal requirements and the
provisions of its plan, CMS reviews State and local administration
through analysis of the State's policies and procedures, on-site review
of selected aspects of agency operation, and examination of samples of
individual case records.
(b) Quality control program. The State itself is required to carry
out a continuing quality control program as set forth in part 431,
subpart P, of this chapter.
(c) Action on review findings. If Federal or State reviews reveal
serious problems with respect to compliance with any Federal
requirement, the State must correct its practice accordingly.
Sec. 430.33 Audits.
(a) Purpose. The Department's Office of Inspector General (OIG)
periodically audits State operations in order to determine whether--
(1) The program is being operated in a cost-efficient manner; and
(2) Funds are being properly expended for the purposes for which
they were appropriated under Federal and State law and regulations.
(b) Reports. (1) The OIG releases audit reports simultaneously to
State officials and the Department's program officials.
(2) The reports set forth OIG opinion and recommendations regarding
the practices it reviewed, and the allowability of the costs it audited.
(3) Cognizant officials of the Department make final determinations
on all audit findings.
(c) Action on audit exceptions--(1) Concurrence or clearance. The
State agency has the opportunity of concurring in the exceptions or
submitting additional facts that support clearance of the exceptions.
(2) Appeal. Any exceptions that are not disposed of under paragraph
(c)(1) of this section are included in a disallowance letter that
constitutes the Department's final decision unless the State requests
reconsideration by the Administrator or the Departmental Appeals Board.
(Specific rules are set forth in Sec. 430.42.)
(3) Adjustment. If the decision by the Board requires an adjustment
of FFP, either upward or downward, a subsequent grant award promptly
reflects the amount of increase or decrease.
[53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8846, Mar. 1, 1991; 77
FR 31507, May 29, 2012]
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
[[Page 12]]
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.
Sec. 430.38 Judicial review.
(a) Right to judicial review. Any State dissatisfied with the
Administrator's final determination on approvability of plan material
(Sec. 430.18) or compliance with Federal requirements (Sec. 430.35)
has a right to judicial review.
(b) Petition for review. (1) The State must file a petition for
review with the U.S. Court of Appeals for the circuit in which the State
is located, within 60 days after it is notified of the determination.
(2) The clerk of the court will file a copy of the petition with the
Administrator and the Administrator will file in the court the record of
the proceedings on which the determination was based.
(c) Court action. (1) The court is bound by the Administrator's
findings of fact if they are supported by substantial evidence.
(2) The court has jurisdiction to affirm the Administrator's
decision, to set it aside in whole or in part, or, for good cause, to
remand the case for additional evidence.
(d) Response to remand. (1) If the court remands the case, the
Administrator may make new or modified findings of fact and may modify
his or her previous determination.
(2) The Administrator will certify to the court the transcript and
record of the further proceedings.
(e) Review by the Supreme Court. The judgment of the appeals court
is subject to review by the U.S. Supreme Court upon certiorari or
certification, as provided in 28 U.S.C. 1254.
Sec. 430.40 Deferral of claims for FFP.
(a) Requirements for deferral. Payment of a claim or any portion of
a claim for FFP is deferred only if--
(1) The Administrator or current Designee questions its allowability
and needs additional information to resolve the question; and
(2) CMS takes action to defer the claim (by excluding the claimed
amount from the grant award) within 60 days after the receipt of a
Quarterly Statement of Expenditures (prepared in accordance with CMS
instructions) that includes that claim.
(b) Notice of deferral and State's responsibility. (1) Within 15
days of the action described in paragraph (a)(2) of this section, the
current Designee sends the State a written notice of deferral that--
(i) Identifies the type and amount of the deferred claim and
specifies the reason for deferral; and
(ii) Requests the State to make available all the documents and
materials the regional office then believes are necessary to determine
the allowability of the claim.
(2) It is the responsibility of the State to establish the
allowability of a deferred claim.
(c) Handling of documents and materials. (1) Within 60 days (or
within 120 days if the State requests an extension) after receipt of the
notice of deferral, the State must make available to the regional
office, in readily reviewable form, all requested documents and
materials except any that it identifies as not being available.
[[Page 13]]
(2) Regional office staff usually initiates review within 30 days
after receipt of the documents and materials.
(3) If the current Designee finds that the materials are not in
readily reviewable form or that additional information is needed, he or
she promptly notifies the State that it has 15 days to submit the
readily reviewable or additional materials.
(4) If the State does not provide the necessary materials within 15
days, the current Designee disallows the claim.
(5) The current Designee has 90 days, after all documentation is
available in readily reviewable form, to determine the allowability of
the claim.
(6) If the current Designee cannot complete review of the material
within 90 days, CMS pays the claim, subject to a later determination of
allowability.
(d) Effect of decision to pay a deferred claim. Payment of a
deferred claim under paragraph (c)(6) of this section does not preclude
a subsequent disallowance based on the results of an audit or financial
review. (If there is a subsequent disallowance, the State may request
reconsideration as provided in paragraph (e)(2) of this section.)
(e) Notice and effect of decision on allowability. (1) The
Administrator or current Designee gives the State written notice of his
or her decision to pay or disallow a deferred claim.
(2) If the decision is to disallow, the notice informs the State of
its right to reconsideration in accordance with 45 CFR part 16.
[53 FR 36571, Sept. 21, 1988, as amended at 77 FR 31507, May 29, 2012]
Sec. 430.42 Disallowance of claims for FFP.
(a) Notice of disallowance and of right to reconsideration. When the
Administrator or current Designee determines that a claim or portion of
claim is not allowable, he or she promptly sends the State a
disallowance letter that includes the following, as appropriate:
(1) The date or dates on which the State's claim for FFP was made.
(2) The time period during which the expenditures in question were
made or claimed to have been made.
(3) The date and amount of any payment or notice of deferral.
(4) A statement of the amount of FFP claimed, allowed, and
disallowed and the manner in which these amounts were computed.
(5) Findings of fact on which the disallowance determination is
based or a reference to other documents previously furnished to the
State or included with the notice (such as a report of a financial
review or audit) which contain the findings of fact on which the
disallowance determination is based.
(6) Pertinent citations to the law, regulations, guides and
instructions supporting the action taken.
(7) A request that the State make appropriate adjustment in a
subsequent expenditure report.
(8) Notice of the State's right to request reconsideration of the
disallowance and the time allowed to make the request.
(9) A statement indicating that the disallowance letter is the
Department's final decision unless the State requests reconsideration
under paragraph (b)(2) or (f)(2) of this section.
(b) Reconsideration of a disallowance. (1) The Administrator will
reconsider Medicaid disallowance determinations.
(2) To request reconsideration of a disallowance, a State must
complete the following:
(i) Submit the following within 60 days after receipt of the
disallowance letter:
(A) A written request to the Administrator that includes the
following:
(1) A copy of the disallowance letter.
(2) A statement of the amount in dispute.
(3) A brief statement of why the disallowance should be reversed or
revised, including any information to support the State's position with
respect to each issue.
(4) Additional information regarding factual matters or policy
considerations.
(B) A copy of the written request to the Regional Office.
(C) Send all requests for reconsideration via registered or
certified mail to establish the date the reconsideration was received by
CMS.
(ii) In all cases, the State has the burden of documenting the
allowability of its claims for FFP.
[[Page 14]]
(iii) Additional information regarding the legal authority for the
disallowance will not be reviewed in the reconsideration but may be
presented in any appeal to the Departmental Appeals Board under
paragraph (f)(2) of this section.
(3) A State may request to retain the FFP during the reconsideration
of the disallowance under section 1116(e) of the Act, in accordance with
Sec. 433.38 of this subchapter.
(4) The State is not required to request reconsideration before
seeking review from the Departmental Appeals Board.
(5) The State may also seek reconsideration, and following the
reconsideration decision, request a review from the Board.
(6) If the State elects reconsideration, the reconsideration process
must be completed or withdrawn before requesting review by the Board.
(c) Procedures for reconsideration of a disallowance. (1) Within 60
days after receipt of the disallowance letter, the State shall, in
accordance with (b)(2) of this section, submit in writing to the
Administrator any relevant evidence, documentation, or explanation and
shall simultaneously submit a copy thereof to the Regional Office.
(2) After consideration of the policies and factual matters
pertinent to the issues in question, the Administrator shall, within 60
days from the date of receipt of the request for reconsideration, issue
a written decision or a request for additional information as described
in paragraph (c)(3) of this section.
(3) At the Administrator's option, CMS may request from the State
any additional information or documents necessary to make a decision.
The request for additional information must be sent via registered or
certified mail to establish the date the request was sent by CMS and
received by the State.
(4) Within 30 days after receipt of the request for additional
information, the State must submit to the Administrator, with a copy to
the Regional Office in readily reviewable form, all requested documents
and materials.
(i) If the Administrator finds that the materials are not in readily
reviewable form or that additional information is needed, he or she
shall notify the State via registered or certified mail that it has 15
business days from the date of receipt of the notice to submit the
readily reviewable or additional materials.
(ii) If the State does not provide the necessary materials within 15
business days from the date of receipt of such notice, the Administrator
shall affirm the disallowance in a final reconsideration decision issued
within 15 days from the due date of additional information from the
State.
(5) If additional documentation is provided in readily reviewable
form under the paragraph (c)(4) of this section, the Administrator shall
issue a written decision, within 60 days from the due date of such
information.
(6) The final written decision shall constitute final CMS
administrative action on the reconsideration and shall be (within 15
business days of the decision) mailed to the State agency via registered
or certified mail to establish the date the reconsideration decision was
received by the State.
(7) If the Administrator does not issue a decision within 60 days
from the date of receipt of the request for reconsideration or the date
of receipt of the requested additional information, the disallowance
shall be deemed to be affirmed upon reconsideration.
(8) No section of this regulation shall be interpreted as waiving
the Department's right to assert any provision or exemption under the
Freedom of Information Act.
(d) Withdrawal of a request for reconsideration of a disallowance.
(1) A State may withdraw the request for reconsideration at any time
before the notice of the reconsideration decision is received by the
State without affecting its right to submit a notice of appeal to the
Board. The request for withdrawal must be in writing and sent to the
Administrator, with a copy to the Regional Office, via registered or
certified mail.
(2) Within 60 days after CMS' receipt of a State's withdrawal
request, a State may, in accordance with (f)(2) of this section, submit
a notice of appeal to the Board.
(e) Implementation of decisions for reconsideration of a
disallowance. (1) After
[[Page 15]]
undertaking a reconsideration, the Administrator may affirm, reverse, or
revise the disallowance and shall issue a final written reconsideration
decision to the State in accordance with paragraph (c)(4) of this
section.
(2) If the reconsideration decision requires an adjustment of FFP,
either upward or downward, a subsequent grant award will be issued in
the amount of such increase or decrease.
(3) Within 60 days after the receipt of a reconsideration decision
from CMS a State may, in accordance with paragraph (f)(2) of this
section, submit a notice of appeal to the Board.
(f) Appeal of Disallowance. (1) The Departmental Appeals Board
reviews disallowances of FFP under title XIX.
(2) A State that wishes to appeal a disallowance to the Board must:
(i) Submit a notice of appeal to the Board at the address given on
the Departmental Appeals Board's web site within 60 days after receipt
of the disallowance letter.
(A) If a reconsideration of a disallowance was requested, within 60
days after receipt of the reconsideration decision; or
(B) If reconsideration of a disallowance was requested and no
written decision was issued, within 60 days from the date the decision
on reconsideration of the disallowance was due to be issued by CMS.
(ii) Include all of the following:
(A) A copy of the disallowance letter.
(B) A statement of the amount in dispute.
(C) A brief statement of why the disallowance is wrong.
(3) The Board's decision of an appeal under paragraph (f)(2) of this
section shall be the final decision of the Secretary and shall be
subject to reconsideration by the Board only upon a motion by either
party that alleges a clear error of fact or law and is filed during the
60-day period that begins on the date of the Board's decision or to
judicial review in accordance with paragraph (f)(2)(i) of this section.
(g) Appeals procedures. The appeals procedures are those set forth
in 45 CFR part 16 for Medicaid and for many other programs administered
by the Department.
(1) In all cases, the State has the burden of documenting the
allowability of its claims for FFP.
(2) The Board shall conduct a thorough review of the issues, taking
into account all relevant evidence, including such documentation as the
State may submit and the Board may require.
(h) Implementation of decisions. (1) The Board may affirm the
disallowance, reverse the disallowance, modify the disallowance, or
remand the disallowance to CMS for further consideration.
(2) The Board will issue a final written decision to the State
consistent with 45 CFR part 16.
(3) If the appeal decision requires an adjustment of FFP, either
upward or downward, a subsequent grant award will be issued in the
amount of increase or decrease.
[53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8846, Mar. 1, 1991; 77
FR 31507, May 29, 2012]
Sec. 430.45 Reduction of Federal Medicaid payments.
(a) Methods of reduction. CMS may reduce Medicaid payments to a
State as required under the Act by reducing--
(1) The Federal Medical Assistance Percentage;
(2) The amount of State expenditures subject to FFP;
(3) The rates of FFP; or
(4) The amount otherwise payable to the State.
(b) Right to reconsideration. A state that receives written final
notice of a reduction under paragraph (a) of this section has a right to
reconsideration. The provisions of Sec. 430.42 (b) and (c) apply.
(c) Other applicable rules. Other rules regarding reduction of
Medicaid payments are set forth in parts 433 and 447 of this chapter.
Sec. 430.48 Repayment of Federal funds by installments.
(a) Basic conditions. When Federal payments have been made for
claims that are later found to be unallowable, the State may repay the
Federal funds by installments if all of the following conditions are
met:
(1) The amount to be repaid exceeds 0.25 percent of the estimated or
actual
[[Page 16]]
annual State share for the Medicaid program.
(2) The State has given the Regional Office written notice, before
total repayment was due, of its intent to repay by installments.
(b) Annual State share determination. CMS determines whether the
amount to be repaid exceeds 0.25 percent of the annual State share as
follows:
(1) If the Medicaid program is ongoing, CMS uses the annual
estimated State share of Medicaid expenditures for the current year, as
shown on the State's latest Medicaid Program Budget Report (CMS-37). The
current year is the year in which the State requests the repayment by
installments.
(2) If the Medicaid program has been terminated by Federal law or by
the State, CMS uses the actual State share that is shown on the State's
CMS-64 Quarterly Expense Report for the last four quarters filed.
(c) Standard Repayment amounts, schedules, and procedures--(1)
Repayment amount. The repayment amount may not include any amount
previously approved for installment repayment.
(2) Repayment schedule. The maximum number of quarters allowed for
the standard repayment schedule is 12 quarters (3 years), except as
provided in paragraphs (c)(4) and (e) of this section.
(3) Quarterly repayment amounts. (i) The quarterly repayment amounts
for each of the quarters in the repayment schedule will be the larger of
the repayment amount divided by 12 quarters or the minimum repayment
amount;
(ii) The minimum quarterly repayment amounts for each of the
quarters in the repayment schedule is 0.25 percent of the estimated
State share of the current annual expenditures for Medicaid;
(iii) The repayment period may be less than 12 quarters when the
minimum repayment amount is required.
(4) Extended schedule. (i) The repayment schedule may be extended
beyond 12 quarterly installments if the total repayment amount exceeds
100 percent of the estimated State share of the current annual
expenditures;
(ii) The quarterly repayment amount will be 8\1/3\ percent of the
estimated State share of the current annual expenditures until fully
repaid.
(5) Repayment process. (i) Repayment is accomplished through
deposits into the State's Payment Management System (PMS) account;
(ii) A State may choose to make payment by Automated Clearing House
(ACH) direct deposit, by check, or by Fedwire transfer.
(6) Reductions. If the State chooses to repay amounts representing
higher percentages during the early quarters, any corresponding
reduction in required minimum percentages is applied first to the last
scheduled payment, then to the next to the last payment, and so forth as
necessary.
(d) Alternate repayment amounts, schedules, and procedures for
States experiencing economic distress immediately prior to the repayment
period--(1) Repayment amount. The repayment amount may not include
amounts previously approved for installment repayment if a State
initially qualifies for the alternate repayment schedule at the onset of
an installment repayment period.
(2) Qualifying period of economic distress. (i) A State will qualify
to avail itself of the alternate repayment schedule if it demonstrates
the State is experiencing a period of economic distress;
(ii) A period of economic distress is one in which the State
demonstrates distress for at least each of the previous 6 months, ending
the month prior to the date of the State's written request for an
alternate repayment schedule, as determined by a negative percent change
in the monthly Philadelphia Federal Reserve Bank State coincident index.
(3) Repayment schedule. The maximum number of quarters allowed for
the alternate repayment schedule is 12 quarters (3 years), except as
provided in paragraph (d)(5) of this section.
(4) Quarterly repayment amounts. (i) The quarterly repayment amounts
for each of the first 8 quarters in the repayment schedule will be the
smaller of the repayment amount divided by 12 quarters or the maximum
quarterly repayment amount;
(ii) The maximum quarterly repayment amounts for each of the first 8
quarters in the repayment schedule is
[[Page 17]]
0.25 percent of the annual State share determination as defined in
paragraph (b) of this section;
(iii) For the remaining 4 quarters, the quarterly repayment amount
equals the remaining balance of the overpayment amount divided by the
remaining 4 quarters.
(5) Extended schedule. (i) For a State that initiated its repayment
under an alternate payment schedule for economic distress, the repayment
schedule may be extended beyond 12 quarterly installments if the total
repayment amount exceeds 100 percent of the estimated State share of
current annual expenditures;
(A) In these circumstances, paragraph (d)(3) of this section is
followed for repayment of the amount equal to 100 percent of the
estimated State share of current annual expenditures.
(B) The remaining amount of the repayment is in quarterly amounts
equal to 8\1/3\ percent of the estimated State share of current annual
expenditures until fully repaid.
(ii) Upon request by the State, the repayment schedule may be
extended beyond 12 quarterly installments if the State has qualifying
periods of economic distress in accordance with paragraph (d)(2) of this
section during the first 8 quarters of the alternate repayment schedule.
(A) To qualify for additional quarters, the States must demonstrate
a period of economic distress in accordance with paragraph (d)(2) of
this section for at least 1 month of a quarter during the first 8
quarters of the alternate repayment schedule.
(B) For each quarter (of the first 8 quarters of the alternate
payment schedule) identified as qualified period of economic distress,
one quarter will be added to the remaining 4 quarters of the original 12
quarter repayment period.
(C) The total number of quarters in the alternate repayment schedule
shall not exceed 20 quarters.
(6) Repayment process. (i) Repayment is accomplished through
deposits into the State's Payment Management System (PMS) account;
(ii) A State may choose to make payment by Automated Clearing House
(ACH) direct deposit, by check, or by Fedwire transfer.
(7) If the State chooses to repay amounts representing higher
percentages during the early quarters, any corresponding reduction in
required minimum percentages is applied first to the last scheduled
payment, then to the next to the last payment, and so forth as
necessary.
(e) Alternate repayment amounts, schedules, and procedures for
States entering into distress during a standard repayment schedule--(1)
Repayment amount. The repayment amount may include amounts previously
approved for installment repayment if a State enters into a qualifying
period of economic distress during an installment repayment period.
(2) Qualifying period of economic distress. (i) A State will qualify
to avail itself of the alternate repayment schedule if it demonstrates
the State is experiencing economic distress;
(ii) A period of economic distress is one in which the State
demonstrates distress for each of the previous 6 months, that begins on
the date of the State's request for an alternate repayment schedule, as
determined by a negative percent change in the monthly Philadelphia
Federal Reserve Bank State coincident index.
(3) Repayment schedule. The maximum number of quarters allowed for
the alternate repayment schedule is 12 quarters (3 years), except as
provided in paragraph (e)(5) of this section.
(4) Quarterly repayment amounts. (i) The quarterly repayment amounts
for each of the first 8 quarters in the repayment schedule will be the
smaller of the repayment amount divided by 12 quarters or the maximum
repayment amount;
(ii) The maximum quarterly repayment amounts for each of the first 8
quarters in the repayment schedule is 0.25 percent of the annual State
share determination as defined in paragraph (b) of this section;
(iii) For the remaining 4 quarters, the quarterly repayment amount
equals the remaining balance of the overpayment amount divided by the
remaining 4 quarters.
(5) Extended schedule. (i) For a State that initiated its repayment
under the
[[Page 18]]
standard payment schedule and later experienced periods of economic
distress and elected an alternate repayment schedule, the repayment
schedule may be extended beyond 12 quarterly installments if the total
repayment amount of the remaining balance of the standard schedule,
exceeds 100 percent of the estimated State share of the current annual
expenditures;
(ii) In these circumstances, paragraph (d)(3) of this section is
followed for repayment of the amount equal to 100 percent of the
estimated State share of current annual expenditures;
(iii) The remaining amount of the repayment is in quarterly amounts
equal to 8\1/3\ percent of the estimated State share of the current
annual expenditures until fully repaid.
(6) Repayment process. (i) Repayment is accomplished through
deposits into the State's Payment Management System (PMS) account;
(ii) A State may choose to make payment by Automated Clearing House
(ACH) direct deposit, by check, or by Fedwire transfer.
(7) If the State chooses to repay amounts representing higher
percentages during the early quarters, any corresponding reduction in
required minimum percentages is applied first to the last scheduled
payment, then to the next to the last payment, and so forth as
necessary.
[77 FR 31509, May 29, 2012]
Subpart D_Hearings on Conformity of State Medicaid Plans and Practice to
Federal Requirements
Sec. 430.60 Scope.
(a) This subpart sets forth the rules for hearings to States that
appeal a decision to disapprove State plan material (under Sec. 430.18)
or to withhold Federal funds (under Sec. 430.35), because the State
plan or State practice in the Medicaid program is not in compliance with
Federal requirements.
(b) Nothing in this subpart is intended to preclude or limit
negotiations between CMS and the State, whether before, during, or after
the hearing to resolve the issues that are, or otherwise would be,
considered at the hearing. Such negotiations and resolution of issues
are not part of the hearing, and are not governed by the rules in this
subpart except as expressly provided.
Sec. 430.62 Records to be public.
All pleadings, correspondence, exhibits, transcripts of testimony,
exceptions, briefs, decisions, and other documents filed in the docket
in any proceeding may be inspected and copied in the office of the CMS
Docket Clerk. Inquiries may be made to the Docket Clerk, Hearing Staff,
Bureau of Eligibility, Reimbursment and Coverage, 300 East High Rise,
6325 Security Boulevard, Baltimore, Maryland, 21207. Telephone: (301)
594-8261.
Sec. 430.63 Filing and service of papers.
(a) Filing. All papers in the proceedings are filed with the CMS
Docket Clerk, in an original and two copies. Originals only of exhibits
and transcripts of testimony need be filed.
(b) Service. All papers in the proceedings are served on all parties
by personal delivery or by mail. Service on the party's designated
attorney is considered service upon the party.
Sec. 430.64 Suspension of rules.
Upon notice to all parties, the Administrator or the presiding
officer may modify or waive any rule in this subpart upon determination
that no party will be unduly prejudiced and the ends of justice will
thereby be served.
Sec. 430.66 Designation of presiding officer for hearing.
(a) The presiding officer at a hearing is the Administrator or his
designee.
(b) The designation of the presiding officer is in writing. A copy
of the designation is served on all parties.
Sec. 430.70 Notice of hearing or opportunity for hearing.
The Administrator mails the State a notice of hearing or opportunity
for hearing that--
(a) Specifies the time and place for the hearing;
(b) Specifies the issues that will be considered;
(c) Identifies the presiding officer; and
[[Page 19]]
(d) Is published in the Federal Register.
Sec. 430.72 Time and place of hearing.
(a) Time. The hearing is scheduled not less than 30 nor more than 60
days after the date of notice to the State. The scheduled date may be
changed by written agreement between CMS and the State.
(b) Place. The hearing is conducted in the city in which the CMS
regional office is located or in another place fixed by the presiding
officer in light of the circumstances of the case, with due regard for
the convenience and necessity of the parties or their representatives.
Sec. 430.74 Issues at hearing.
The list of issues specified in the notice of hearing may be
augmented or reduced as provided in this section.
(a) Additional issues. (1) Before a hearing under Sec. 430.35, the
Administrator may send written notice to the State listing additional
issues to be considered at the hearing. That notice is published in the
Federal Register.
(2) If the notice of additional issues is furnished to the State
less than 20 days before the scheduled hearing date, postponement is
granted if requested by the State or any other party. The new date may
be 20 days after the date of the notice, or a later date agreed to by
the presiding officer.
(b) New or modified issues. If, as a result of negotiations between
CMS and the State, the submittal of plan amendment, a change in the
State program, or other actions by the State, any issue is resolved in
whole or in part, but new or modified issues are presented, as specified
by the presiding officer, the hearing proceeds on the new or modified
issues.
(c) Issues removed from consideration--(1) Basis for removal. If at
any time before, during, or after the hearing, the presiding officer
finds that the State has come into compliance with Federal requirements
on any issue or part of an issue, he or she removes the appropriate
issue or part of an issue from consideration. If all issues are removed,
the hearing is terminated.
(2) Notice to parties. Before removing any issue or part of an issue
from consideration, the presiding officer provides all parties other
than CMS and the State with--
(i) A statement of the intent to remove and the reasons for removal;
and
(ii) A copy of the proposed State plan provision on which CMS and
the State have agreed.
(3) Opportunity for written comment. The notified parties have 15
days to submit, for consideration by the presiding officer, and for the
record, their views as to, or any information bearing upon, the merits
of the proposed plan provision and the merits of the reasons for
removing the issue from consideration.
(d) Remaining issues. The issues considered at the hearing are
limited to those issues of which the State is notified as provided in
Sec. 430.70 and paragraph (a) of this section, and new or modified
issues described in paragraph (b) of this section. They do not include
issues or parts of issues removed in accordance with paragraph (c) of
this section.
Sec. 430.76 Parties to the hearing.
(a) CMS and the State. CMS and the State are parties to the hearing.
(b) Other individuals--(1) Basis for participation. Other
individuals or groups may be recognized as parties if the issues to be
considered at the hearing have caused them injury and their interest is
within the zone of interests to be protected by the governing Federal
statute.
(2) Petition for participation. Any individual or group wishing to
participate as a party must, within 15 days after notice of hearing is
published in the Federal Register, file with the CMS Docket Clerk, a
petition that concisely states--
(i) Petitioner's interest in the proceeding;
(ii) Who will appear for petitioner;
(iii) The issues on which petitioner wishes to participate; and
(iv) Whether petitioner intends to present witnesses.
The petitioner must also serve a copy of the petition on each party of
record at that time.
(3) Comments on petition. Any party may, within 5 days of receipt of
the copy of the petition, file comments on it.
[[Page 20]]
(4) Action on petition. (i) The presiding officer promptly
determines whether each petitioner has the requisite interest in the
proceedings and approves or denies participation accordingly.
(ii) If petitions are made by more than one individual or group with
common interests, the presiding officer may--
(A) Request all those petitioners to designate a single
representative; or
(B) Recognize one or more of those petitioners to represent all of
them.
(iii) The presiding officer gives each petitioner written notice of
the decision and, if the decision is to deny, briefly states the grounds
for denial.
(c) Amicus curiae (friend of the court)--(1) Petition for
participation. Any person or organization that wishes to participate as
amicus curiae must, before the hearing begins, file with the CMS Docket
Clerk, a petition that concisely states--
(i) The petitioners' interest in the hearing;
(ii) Who will represent the petitioner; and
(iii) The issues on which the petitioner intends to present
argument.
(2) Action on amicus curiae petition. The presiding officer may
grant the petition if he or she finds that the petitioner has a
legitimate interest in the proceedings, that such participation will not
unduly delay the outcome and may contribute materially to the proper
disposition of the issues.
(3) Nature of amicus participation. An amicus curiae is not a party
to the hearing but may participate by--
(i) Submitting a written statement of position to the presiding
officer before the beginning of the hearing;
(ii) Presenting a brief oral statement at the hearing, at the point
in the proceedings specified by the presiding officer; and
(iii) Submitting a brief or written statement when the parties
submit briefs.
The amicus curiae must serve copies of any briefs or written statements
on all parties.
Sec. 430.80 Authority of the presiding officer.
(a) The presiding officer has the duty to conduct a fair hearing, to
avoid delay, maintain order, and make a record of the proceedings. He or
she has the authority necessary to accomplish those ends, including but
not limited to authority to take the following actions:
(1) Change the date, time, and place of the hearing after due notice
to the parties. This includes authority to postpone or adjourn the
hearing in whole or in part. In a hearing on disapproval of a State
plan, or State plan amendments, changes in the date of the hearing are
subject to the time limits imposed by section 1116(a)(2) of the Act.
(2) Hold conferences to settle or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the issues.
(3) Regulate participation of parties and amici curiae and require
parties and amici curiae to state their position with respect to the
various issues in the proceeding.
(4) Administer oaths and affirmations.
(5) Rule on motions and other procedural items, including issuance
of protective orders or other relief to a party against whom discovery
is sought.
(6) Regulate the course of the hearing and conduct of counsel.
(7) Examine witnesses.
(8) Receive, rule on, exclude or limit evidence or discovery.
(9) Fix the time for filing motions, petitions, briefs, or other
items.
(10) If the presiding officer is the Administrator, make a final
decision.
(11) If the presiding officer is a designee of the Administrator,
certify the entire record including recommended findings and proposed
decision to the Administrator.
(12) Take any action authorized by the rules in this subpart or in
conformance with the provisions of 5 U.S.C. 551 through 559.
(b) The presiding officer does not have authority to compel by
subpoena the production of witnesses, papers, or other evidence.
(c) If the presiding officer is a designee of the Administrator, his
or her authority pertains to the issues of compliance by a State with
Federal requirements, and does not extend to the question of whether, in
case of any
[[Page 21]]
noncompliance, Federal payments will be denied in respect to the entire
State plan or only for certain categories under, or parts of, the State
plan affected by the noncompliance.
Sec. 430.83 Rights of parties.
All parties may:
(a) Appear by counsel or other authorized representative, in all
hearing proceedings.
(b) Participate in any prehearing conference held by the presiding
officer.
(c) Agree to stipulations as to facts which will be made a part of
the record.
(d) Make opening statements at the hearing.
(e) Present relevant evidence on the issues at the hearing.
(f) Present witnesses who then must be available for cross-
examination by all other parties.
(g) Present oral arguments at the hearing.
(h) Submit written briefs, proposed findings of fact, and proposed
conclusions of law, after the hearing.
Sec. 430.86 Discovery.
CMS and any party named in the notice issued under Sec. 430.70 has
the right to conduct discovery (including depositions) against opposing
parties. Rules 26-37 of the Federal Rules of Civil Procedures apply to
such proceedings; there will be no fixed rule on priority of discovery.
Upon written motion, the presiding officer promptly rules upon any
objection to discovery action initiated under this section. The
presiding officer also has the power to grant a protective order or
relief to any party against whom discovery is sought and to restrict or
control discovery so as to prevent undue delay in the conduct of the
hearing. Upon the failure of any party to make discovery, the presiding
officer may issue any order and impose any sanction (other than contempt
orders) authorized by Rule 37 of the Federal Rules of Civil Procedure.
Sec. 430.88 Evidence.
(a) Evidentiary purpose. The hearing is directed to receiving
factual evidence and expert opinion testimony related to the issues
involved in the proceeding. Argument is not received in evidence. It
must be presented in statements, memoranda, or briefs, as determined by
the presiding officer. Brief opening statements, concerning the party's
position and what he or she intends to prove, may be made at hearings.
(b) Testimony. Testimony is given orally under oath or affirmation
by witnesses at the hearing. Witnesses are available at the hearing for
cross-examination by all parties.
(c) Stipulations and exhibits. Two or more parties may agree to
stipulations of fact. Those stipulations, and any exhibit proposed by
any party, are exchanged before the hearing if the presiding officer so
requires.
(d) Rules of evidence. (1) Technical rules of evidence do not apply
to hearings conducted under this subpart. However, rules or principles
designed to ensure production of the most credible evidence available
and to subject testimony to test by cross-examination are applied by the
presiding officer when reasonably necessary.
(2) A witness may be cross-examined on any matter material to the
proceeding without regard to the scope of his or her direct examination.
(3) The presiding officer may exclude irrelevant, immaterial, or
unduly repetitious evidence.
(4) All documents and other evidence offered or taken for the record
are open to examination by the parties and an opportunity is given to
refute facts and arguments advanced on either side of the issues.
Sec. 430.90 Exclusion from hearing for misconduct.
The presiding officer may immediately exclude from the hearing any
person who--
(a) Uses disrespectful, disorderly, or contumacious language or
engages in contemptuous behavior;
(b) Refuses to comply with directions; or
(c) Uses dilatory tactics.
Sec. 430.92 Unsponsored written material.
Letters expressing views or urging action and other unsponsored
written material regarding matters in issue in
[[Page 22]]
a hearing are placed in the correspondence section of the docket of the
proceeding. These data are not considered part of the evidence or record
in the hearing.
Sec. 430.94 Official transcript.
(a) Filing. The official transcripts of testimony, together with any
stipulations, briefs, or memoranda of law, are filed with CMS.
(b) Availability of transcripts. CMS designates an official reporter
for each hearing. Transcripts of testimony in hearings may be obtained
from the official reporter by the parties and the public at rates not in
excess of the maximum rates fixed by the contract between CMS and the
reporter.
(c) Correction of transcript. Upon notice to all parties, the
presiding officer may authorize corrections that affect substantive
matters in the transcript.
Sec. 430.96 Record for decision.
The transcript of testimony, exhibits, and all papers and requests
filed in the proceedings, except the correspondence section of the
docket, including rulings and any recommended or initial decision
constitute the exclusive record for decision.
Sec. 430.100 Posthearing briefs.
The presiding officer fixes the time for filing posthearing briefs,
which may contain proposed findings of fact and conclusions of law. The
presiding officer may also permit reply briefs.
Sec. 430.102 Decisions following hearing.
(a) Administrator presides. If the presiding officer is the
Administrator, he or she issues the hearing decision within 60 days
after expiration of the period for submission of posthearing briefs.
(b) Administrator's designee presides. If the presiding officer is
other than the Administrator, the procedure is as follows:
(1) Upon expiration of the period allowed for submission of
posthearing briefs, the presiding officer certifies the entire record,
including his or her recommended findings and proposed decision, to the
Administrator. The Administrator serves a copy of the recommended
findings and proposed decision upon all parties and amici, if any.
(2) Any party may, within 20 days, file with the Administrator
exceptions to the recommended findings and proposed decision and a
supporting brief or statement.
(3) The Administrator reviews the recommended decision and, within
60 days of its issuance, issues his or her own decision.
(c) Effect of Administrator's decision. The decision of the
Administrator under this section is the final decision of the Secretary
and constitutes ``final agency action'' within the meaning of 5 U.S.C.
704 and a ``final determination'' within the meaning of section
1116(a)(3) of the Act and Sec. 430.38. The Administrator's decision is
promptly served on all parties and amici.
Sec. 430.104 Decisions that affect FFP.
(a) Scope of decisions. If the Administrator concludes that
withholding of FFP is necessary because a State is out of compliance
with Federal requirements, in accordance with Sec. 430.35, the decision
also specifies--
(1) Whether no further payments will be made to the State or whether
payments will be limited to parts of the program not affected by the
noncompliance; and
(2) The effective date of the decision to withhold.
(b) Consultation. The Administrator may ask the parties for
recommendations or briefs or may hold conferences of the parties on the
question of further payments to the State.
(c) Effective date of decision. The effective date of a decision to
withhold Federal funds will not be earlier than the date of the
Administrator's decision and will not be later than the first day of the
next calendar quarter. The provisions of this section may not be waived
under Sec. 430.64.
PART 431_STATE ORGANIZATION AND GENERAL ADMINISTRATION--Table of Contents
Sec.
431.1 Purpose.
Subpart A_Single State Agency
431.10 Single State agency.
431.11 Organization for administration.
431.12 Medical care advisory committee.
431.15 Methods of administration.
[[Page 23]]
431.16 Reports.
431.17 Maintenance of records.
431.18 Availability of agency program manuals.
431.20 Advance directives.
Subpart B_General Administrative Requirements
431.40 Basis and scope.
431.50 Statewide operation.
431.51 Free choice of providers.
431.52 Payments for services furnished out of State.
431.53 Assurance of transportation.
431.54 Exceptions to certain State plan requirements.
431.55 Waiver of other Medicaid requirements.
431.56 Special waiver provisions applicable to American Samoa and the
Northern Mariana Islands.
431.60 Beneficiary access to and exchange of data.
431.70 Access to published provider directory information.
Subpart C_Administrative Requirements: Provider Relations
431.105 Consultation to medical facilities.
431.107 Required provider agreement.
431.108 Effective date of provider agreements.
431.110 Participation by Indian Health Service facilities.
431.115 Disclosure of survey information and provider or contractor
evaluation.
431.120 State requirements with respect to nursing facilities.
Subpart D_Appeals Process for NFs and ICFs/IID
431.151 Scope and applicability.
431.152 State plan requirements.
431.153 Evidentiary hearing.
431.154 Informal reconsideration for ICFs/IID.
Subpart E_Fair Hearings for Applicants and Beneficiaries
General Provisions
431.200 Basis and purpose.
431.201 Definitions.
431.202 State plan requirements.
431.205 Provision of hearing system.
431.206 Informing applicants and beneficiaries.
Notice
431.210 Content of notice.
431.211 Advance notice.
431.213 Exceptions from advance notice.
431.214 Notice in cases of probable fraud.
Right to Hearing
431.220 When a hearing is required.
431.221 Request for hearing.
431.222 Group hearings.
431.223 Denial or dismissal of request for a hearing.
431.224 Expedited appeals.
Procedures
431.230 Maintaining services.
431.231 Reinstating services.
431.232 Adverse decision of local evidentiary hearing.
431.233 State agency hearing after adverse decision of local evidentiary
hearing.
431.240 Conducting the hearing.
431.241 Matters to be considered at the hearing.
431.242 Procedural rights of the applicant or beneficiary.
431.243 Parties in cases involving an eligibility determination.
431.244 Hearing decisions.
431.245 Notifying the applicant or beneficiary of a State agency
decision.
431.246 Corrective action.
Federal Financial Participation
431.250 Federal financial participation.
Subpart F_Safeguarding Information on Applicants and beneficiaries
431.300 Basis and purpose.
431.301 State plan requirements.
431.302 Purposes directly related to State plan administration.
431.303 State authority for safeguarding information.
431.304 Publicizing safeguarding requirements.
431.305 Types of information to be safeguarded.
431.306 Release of information.
431.307 Distribution of information materials.
Subpart G_Section 1115 Demonstrations
431.400 Basis and purpose.
431.404 Definitions.
431.408 State public notice process.
431.412 Application procedures.
431.416 Federal public notice and approval process.
431.420 Monitoring and compliance.
431.424 Evaluation requirements.
431.428 Reporting requirements.
Subparts H-L [Reserved]
Subpart M_Relations With Other Agencies
431.610 Relations with standard-setting and survey agencies.
[[Page 24]]
431.615 Relations with State health and vocational rehabilitation
agencies and title V grantees.
431.620 Agreement with State mental health authority or mental
institutions.
431.621 State requirements with respect to nursing facilities.
431.625 Coordination of Medicaid with Medicare part B.
431.630 Coordination of Medicaid with QIOs.
431.635 Coordination of Medicaid with Special Supplemental Food Program
for Women, Infants, and Children (WIC).
Subpart N_State Programs for Licensing Nursing Home Administrators
431.700 Basis and purpose.
431.701 Definitions.
431.702 State plan requirement.
431.703 Licensing requirement.
431.704 Nursing homes designated by other terms.
431.705 Licensing authority.
431.706 Composition of licensing board.
431.707 Standards.
431.708 Procedures for applying standards.
431.709 Issuance and revocation of license.
431.710 Provisional licenses.
431.711 Compliance with standards.
431.712 Failure to comply with standards.
431.713 Continuing study and investigation.
431.714 Waivers.
431.715 Federal financial participation.
Subpart O [Reserved]
Subpart P_Quality Control
Medicaid Eligibility Quality Control (MEQC) Program
431.800 Basis and scope.
431.804 Definitions.
431.806 State requirements.
431.808 Protection of beneficiary rights.
431.810 Basic elements of the Medicaid Eligibility Quality Control
(MEQC) Program.
431.812 Review procedures.
431.814 Pilot planning document.
431.816 Case review completion deadlines and submittal of reports.
431.818 Access to records.
431.820 Corrective action under the MEQC program.
Medicaid Quality Control (MQC) Claims Processing Assessment System
431.830 Basic elements of the Medicaid quality control (MQC) claims
processing assessment system.
431.832 Reporting requirements for claims processing assessment systems.
431.834 Access to records: Claims processing assessment systems.
431.836 Corrective action under the MQC claims processing assessment
systems.
Subpart Q_Requirements for Estimating Improper Payments in Medicaid and
CHIP
431.950 Purpose.
431.954 Basis and scope.
431.958 Definitions and use of terms.
431.960 Types of payment errors.
431.970 Information submission and systems access requirements.
431.972 Claims sampling procedures.
431.992 Corrective action plan.
431.998 Difference resolution and appeal process.
431.1002 Recoveries.
431.1010 Disallowance of Federal financial participation for erroneous
State payments (for PERM review years ending after July 1,
2020).
Authority: 42 U.S.C. 1302.
Source: 43 FR 45188, Sept. 29, 1978, unless otherwise noted.
Editorial Note: Nomenclature changes to part 431 appear at 75 FR
48852, Aug. 11, 2010.
Sec. 431.1 Purpose.
This part establishes State plan requirements for the designation,
organization, and general administrative activities of a State agency
responsible for operating the State Medicaid program, directly or
through supervision of local administering agencies.
Subpart A_Single State Agency
Sec. 431.10 Single State agency.
(a) Basis, purpose, and definitions. (1) This section implements
section 1902(a)(4) and (5) of the Act.
(2) For purposes of this part--
Appeals decision means a decision made by a hearing officer
adjudicating a fair hearing under subpart E of this part.
Exchange has the meaning given to the term in 45 CFR 155.20.
Exchange appeals entity has the meaning given to the term ``appeals
entity,'' as defined in 45 CFR 155.500.
Medicaid agency is the single State agency for the Medicaid program.
(b) Designation and certification. A State plan must--
(1) Specify a single State agency established or designated to
administer or supervise the administration of the plan; and
(2) Include a certification by the State Attorney General, citing
the
[[Page 25]]
legal authority for the single State agency to--
(i) Administer or supervise the administration of the plan; and
(ii) Make rules and regulations that it follows in administering the
plan or that are binding upon local agencies that administer the plan.
(3) The single State agency is responsible for determining
eligibility for all individuals applying for or receiving benefits in
accordance with regulations in part 435 of this chapter and for fair
hearings filed in accordance with subpart E of this part.
(c) Delegations. (1) Subject to the requirement in paragraph (c)(2)
of this section, the Medicaid agency--
(i)(A) May, in the approved state plan, delegate authority to
determine eligibility for all or a defined subset of individuals to--
(1) The single State agency for the financial assistance program
under title IV-A (in the 50 States or the District of Columbia), or
under title I or XVI (AABD), in Guam, Puerto Rico, or the Virgin
Islands;
(2) The Federal agency administering the supplemental security
income program under title XVI of the Act; or
(3) The Exchange.
(B) Must in the approved state plan specify to which agency, and the
individuals for which, authority to determine eligibility is delegated.
(ii) Delegate authority to conduct fair hearings under subpart E of
this part for denials of eligibility for individuals whose income
eligibility is determined based on the applicable modified adjusted
gross income standard described in Sec. 435.911(c) of this chapter, to
an Exchange or Exchange appeals entity, provided that individuals who
have requested a fair hearing of such a denial are given a choice to
have their fair hearing instead conducted by the Medicaid agency.
(2) The Medicaid agency may delegate authority to make eligibility
determinations or to conduct fair hearings under this section only to a
government agency which maintains personnel standards on a merit basis.
(3) The Medicaid agency--
(i) Must ensure that any agency to which eligibility determinations
or appeals decisions are delegated--
(A) Complies with all relevant Federal and State law, regulations
and policies, including, but not limited to, those related to the
eligibility criteria applied by the agency under part 435 of this
chapter; prohibitions against conflicts of interest and improper
incentives; and safeguarding confidentiality, including regulations set
forth at subpart F of this part.
(B) Informs applicants and beneficiaries how they can directly
contact and obtain information from the agency; and
(ii) Must exercise appropriate oversight over the eligibility
determinations and appeals decisions made by such agencies to ensure
compliance with paragraphs (c)(2) and (c)(3)(i) of this section and
institute corrective action as needed, including, but not limited to,
rescission of the authority delegated under this section.
(iii) If authority to conduct fair hearings is delegated to the
Exchange or Exchange appeals entity under paragraph (c)(1)(ii) of this
section, the agency may establish a review process whereby the agency
may review fair hearing decisions made under that delegation, but that
review will be limited to the proper application of federal and state
Medicaid law and regulations, including sub-regulatory guidance and
written interpretive policies, and must be conducted by an impartial
official not directly involved in the initial determination.
(d) Agreement with Federal, State or local entities making
eligibility determinations or appeals decisions. The plan must provide
for written agreements between the Medicaid agency and the Exchange or
any other State or local agency that has been delegated authority under
paragraph (c)(1)(i) of this section to determine Medicaid eligibility
and for written agreements between the agency and the Exchange or
Exchange appeals entity that has been delegated authority to conduct
Medicaid fair hearings under paragraph (c)(1)(ii) of this section. Such
agreements must be available to the Secretary upon request and must
include provisions for:
(1) The relationships and respective responsibilities of the
parties, including but not limited to the respective
[[Page 26]]
responsibilities to effectuate the fair hearing rules in subpart E of
this part;
(2) Quality control and oversight by the Medicaid agency, including
any reporting requirements needed to facilitate such control and
oversight;
(3) Assurances that the entity to which authority to determine
eligibility or conduct fair hearings will comply with the provisions set
forth in paragraph (c)(3) of this section.
(4) For appeals, procedures to ensure that individuals have notice
and a full opportunity to have their fair hearing conducted by either
the Exchange or Exchange appeals entity or the Medicaid agency.
(e) Authority of the single State agency. The Medicaid agency may
not delegate, to other than its own officials, the authority to
supervise the plan or to develop or issue policies, rules, and
regulations on program matters.
[44 FR 17930, Mar. 23, 1979, as amended at 77 FR 17202, Mar. 23, 2012;
78 FR 42300, July 15, 2013]
Sec. 431.11 Organization for administration.
(a) Basis and purpose. This section, based on section 1902(a)(4) of
the Act, prescribes the general organization and staffing requirements
for the Medicaid agency and the State plan.
(b) Description of organization. (1) The plan must include a
description of the organization and functions of the Medicaid agency.
(2) When submitting a state plan amendment related to the
designation, authority, organization or functions of the Medicaid
agency, the Medicaid agency must provide an organizational chart
reflecting the key components of the Medicaid agency and the functions
each performs.
(c) Eligibility determined or fair hearings decided by other
entities. If eligibility is determined or fair hearings decided by
Federal or State entities other than the Medicaid agency or by local
agencies under the supervision of other State agencies, the plan must
include a description of the staff designated by those other entities
and the functions they perform in carrying out their responsibilities.
[44 FR 17931, Mar. 23, 1979, as amended at 77 FR 17203, Mar. 23, 2012;
78 FR 42301, July 15, 2013]
Sec. 431.12 Medical care advisory committee.
(a) Basis and purpose. This section, based on section 1902(a)(4) of
the Act, prescribes State plan requirements for establishment of a
committee to advise the Medicaid agency about health and medical care
services.
(b) State plan requirement. A State plan must provide for a medical
care advisory committee meeting the requirements of this section to
advise the Medicaid agency director about health and medical care
services.
(c) Appointment of members. The agency director, or a higher State
authority, must appoint members to the advisory committee on a rotating
and continuous basis.
(d) Committee membership. The committee must include--
(1) Board-certified physicians and other representatives of the
health professions who are familiar with the medical needs of low-income
population groups and with the resources available and required for
their care;
(2) Members of consumers' groups, including Medicaid beneficiaries,
and consumer organizations such as labor unions, cooperatives, consumer-
sponsored prepaid group practice plans, and others; and
(3) The director of the public welfare department or the public
health department, whichever does not head the Medicaid agency.
(e) Committee participation. The committee must have opportunity for
participation in policy development and program administration,
including furthering the participation of beneficiary members in the
agency program.
(f) Committee staff assistance and financial help. The agency must
provide the committee with--
(1) Staff assistance from the agency and independent technical
assistance as needed to enable it to make effective recommendations; and
(2) Financial arrangements, if necessary, to make possible the
participation of beneficiary members.
[[Page 27]]
(g) Federal financial participation. FFP is available at 50 percent
in expenditures for the committee's activities.
Sec. 431.15 Methods of administration.
A State plan must provide for methods of administration that are
found by the Secretary to be necessary for the proper and efficient
operation of the plan.
(Sec. 1902(a)(4) of the Act)
[44 FR 17931, Mar. 23, 1979]
Sec. 431.16 Reports.
A State plan must provide that the Medicaid agency will--
(a) Submit all reports required by the Secretary;
(b) Follow the Secretary's instructions with regard to the form and
content of those reports; and
(c) Comply with any provisions that the Secretary finds necessary to
verify and assure the correctness of the reports.
[44 FR 17931, Mar. 23, 1979]
Sec. 431.17 Maintenance of records.
(a) Basis and purpose. This section, based on section 1902(a)(4) of
the Act, prescribes the kinds of records a Medicaid agency must
maintain, the retention period, and the conditions under which microfilm
copies may be substituted for original records.
(b) Content of records. A State plan must provide that the Medicaid
agency will maintain or supervise the maintenance of the records
necessary for the proper and efficient operation of the plan. The
records must include--
(1) Individual records on each applicant and beneficiary that
contain information on--
(i) Date of application;
(ii) Date of and basis for disposition;
(iii) Facts essential to determination of initial and continuing
eligibility;
(iv) Provision of medical assistance;
(v) Basis for discontinuing assistance;
(vi) The disposition of income and eligibility verification
information received under Sec. Sec. 435.940 through 435.960 of this
subchapter; and
(2) Statistical, fiscal, and other records necessary for reporting
and accountability as required by the Secretary.
(c) Retention of records. The plan must provide that the records
required under paragraph (b) of this section will be retained for the
periods required by the Secretary.
(d) Conditions for optional use of microfilm copies. The agency may
substitute certified microfilm copies for the originals of
substantiating documents required for Federal audit and review, if the
conditions in paragraphs (d)(1) through (4) of this section are met.
(1) The agency must make a study of its record storage and must show
that the use of microfilm is efficient and economical.
(2) The microfilm system must not hinder the agency's supervision
and control of the Medicaid program.
(3) The microfilm system must--
(i) Enable the State to audit the propriety of expenditures for
which FFP is claimed; and
(ii) Enable the HHS Audit Agency and CMS to properly discharge their
respective responsibilities for reviewing the manner in which the
Medicaid program is being administered.
(4) The agency must obtain approval from the CMS regional office
indicating--
(i) The system meets the conditions of paragraphs (d)(2) and (3) of
this section; and
(ii) The microfilming procedures are reliable and are supported by
an adequate retrieval system.
[44 FR 17931, Mar. 23, 1979, as amended at 51 FR 7210, Feb. 28, 1986]
Sec. 431.18 Availability of agency program manuals.
(a) Basis and purpose. This section, based on section 1902(a)(4) of
the Act, prescribes State plan requirements for facilitating access to
Medicaid rules and policies by individuals outside the State Medicaid
agency.
(b) State plan requirements. A State plan must provide that the
Medicaid agency meets the requirements of paragraphs (c) through (g) of
this section.
(c) Availability in agency offices. (1) The agency must maintain, in
all its offices, copies of its current rules and
[[Page 28]]
policies that affect the public, including those that govern
eligibility, provision of medical assistance, covered services, and
beneficiary rights and responsibilities.
(2) These documents must be available upon request for review,
study, and reproduction by individuals during regular working hours of
the agency.
(d) Availability through other entities. The agency must provide
copies of its current rules and policies to--
(1) Public and university libraries;
(2) The local or district offices of the Bureau of Indian Affairs;
(3) Welfare and legal services offices; and
(4) Other entities that--
(i) Request the material in order to make it accessible to the
public;
(ii) Are centrally located and accessible to a substantial number of
the beneficiary population they serve; and
(iii) Agree to accept responsibility for filing all amendments or
changes forwarded by the agency.
(e) Availability in relation to fair hearings. The agency must make
available to an applicant or beneficiary, or his representative, a copy
of the specific policy materials necessary--
(1) To determine whether to request a fair hearing; or
(2) To prepare for a fair hearing.
(f) Availability for other purposes. The agency must establish rules
for making program policy materials available to individuals who request
them for other purposes.
(g) Charges for reproduction. The agency must make copies of its
program policy materials available without charge or at a charge related
to the cost of reproduction.
[44 FR 17931, Mar. 23, 1979]
Sec. 431.20 Advance directives.
(a) Basis and purpose. This section, based on section 1902(a) (57)
and (58) of the Act, prescribes State plan requirements for the
development and distribution of a written description of State law
concerning advance directives.
(b) A State Plan must provide that the State, acting through a State
agency, association, or other private nonprofit entity, develop a
written description of the State law (whether statutory or as recognized
by the courts of the State) concerning advance directives, as defined in
Sec. 489.100 of this chapter, to be distributed by Medicaid providers
and health maintenance organizations (as specified in section
1903(m)(1)(A) of the Act) in accordance with the requirements under part
489, subpart I of this chapter. Revisions to the written descriptions as
a result of changes in State law must be incorporated in such
descriptions and distributed as soon as possible, but no later than 60
days from the effective date of the change in State law, to Medicaid
providers and health maintenance organizations.
[57 FR 8202, Mar. 6, 1992, as amended at 60 FR 33293, June 27, 1995]
Subpart B_General Administrative Requirements
Source: 56 FR 8847, Mar. 1, 1991, unless otherwise noted.
Sec. 431.40 Basis and scope.
(a) This subpart sets forth State plan requirements and exceptions
that pertain to the following administrative requirements and provisions
of the Act:
(1) Statewideness--section 1902(a)(1);
(2) Proper and efficient administration--section 1902(a)(4);
(3) Comparability of services--section 1902(a)(10) (B)-(E);
(4) Payment for services furnished outside the State--section
1902(a)(16);
(5) Free choice of providers--section 1902(a)(23);
(6) Special waiver provisions applicable to American Samoa and the
Northern Mariana Islands--section 1902(j); and
(7) Exceptions to, and waiver of, State plan requirements--sections
1915 (a)-(c) and 1916 (a)(3) and (b)(3).
(b) Other applicable regulations include the following:
(1) Section 430.25 Waivers of State plan requirements.
(2) Section 440.250 Limits on comparability of services.
Sec. 431.50 Statewide operation.
(a) Statutory basis. Section 1902(a)(1) of the Act requires a State
plan to be
[[Page 29]]
in effect throughout the State, and section 1915 permits certain
exceptions.
(b) State plan requirements. A State plan must provide that the
following requirements are met:
(1) The plan will be in operation statewide through a system of
local offices, under equitable standards for assistance and
administration that are mandatory throughout the State.
(2) If administered by political subdivisions of the State, the plan
will be mandatory on those subdivisions.
(3) The agency will ensure that the plan is continuously in
operation in all local offices or agencies through--
(i) Methods for informing staff of State policies, standards,
procedures, and instructions;
(ii) Systematic planned examination and evaluation of operations in
local offices by regularly assigned State staff who make regular visits;
and
(iii) Reports, controls, or other methods.
(c) Exceptions. (1) ``Statewide operation'' does not mean, for
example, that every source of service must furnish the service State-
wide. The requirement does not preclude the agency from contracting with
a comprehensive health care organization (such as an HMO or a rural
health clinic) that serves a specific area of the State, to furnish
services to Medicaid beneficiaries who live in that area and chose to
receive services from that HMO or rural health clinic. beneficiaries who
live in other parts of the State may receive their services from other
sources.
(2) Other allowable exceptions and waivers are set forth in
Sec. Sec. 431.54 and 431.55.
[56 FR 8847, Mar. 1, 1991; 56 FR 23022, May 20, 1991]
Sec. 431.51 Free choice of providers.
(a) Statutory basis. This section is based on sections 1902(a)(23),
1902(e)(2), and 1915(a) and (b) and 1932(a)(3) of the Act.
(1) Section 1902(a)(23) of the Act provides that beneficiaries may
obtain services from any qualified Medicaid provider that undertakes to
provide the services to them.
(2) Section 1915(a) of the Act provides that a State shall not be
found out of compliance with section 1902(a)(23) solely because it
imposes certain specified allowable restrictions on freedom of choice.
(3) Section 1915(b) of the Act authorizes waiver of the section
1902(a)(23) freedom of choice of providers requirement in certain
specified circumstances, but not with respect to providers of family
planning services.
(4) Section 1902(a)(23) of the Act provides that a beneficiary
enrolled in a primary care case management system or Medicaid managed
care organization (MCO) may not be denied freedom of choice of qualified
providers of family planning services.
(5) Section 1902(e)(2) of the Act provides that an enrollee who,
while completing a minimum enrollment period, is deemed eligible only
for services furnished by or through the MCO or PCCM, may, as an
exception to the deemed limitation, seek family planning services from
any qualified provider.
(6) Section 1932(a) of the Act permits a State to restrict the
freedom of choice required by section 1902(a)(23), under specified
circumstances, for all services except family planning services.
(b) State plan requirements. A State plan, except the plan for
Puerto Rico, the Virgin Islands, or Guam, must provide as follows:
(1) Except as provided under paragraph (c) of this section and part
438 of this chapter, a beneficiary may obtain Medicaid services from any
institution, agency, pharmacy, person, or organization that is--
(i) Qualified to furnish the services; and
(ii) Willing to furnish them to that particular beneficiary.
This includes an organization that furnishes, or arranges for the
furnishing of, Medicaid services on a prepayment basis.
(2) A beneficiary enrolled in a primary care case-management system,
a Medicaid MCO, or other similar entity will not be restricted in
freedom of choice of providers of family planning services.
(c) Exceptions. Paragraph (b) of this section does not prohibit the
agency from--
[[Page 30]]
(1) Establishing the fees it will pay providers for Medicaid
services;
(2) Setting reasonable standards relating to the qualifications of
providers; or
(3) Subject to paragraph (b)(2) of this section, restricting
beneficiaries' free choice of providers in accordance with one or more
of the exceptions set forth in Sec. 431.54, or under a waiver as
provided in Sec. 431.55; or
(4) Limiting the providers who are available to furnish targeted
case management services defined in Sec. 440.169 of this chapter to
target groups that consist solely of individuals with developmental
disabilities or with chronic mental illness. This limitation may only be
permitted so that the providers of case management services for eligible
individuals with developmental disabilities or with chronic mental
illness are capable of ensuring that those individuals receive needed
services.
(d) Certification requirement--(1) Content of certification. If a
State implements a project under one of the exceptions allowed under
Sec. 431.54 (d), (e) or (f), it must certify to CMS that the statutory
safeguards and requirements for an exception under section 1915(a) of
the Act are met.
(2) Timing of certification. (i) For an exception under Sec.
431.54(d), the State may not institute the project until after it has
submitted the certification and CMS has made the findings required under
the Act, and so notified the State.
(ii) For exceptions under Sec. 431.54 (e) or (f), the State must
submit the certificate by the end of the quarter in which it implements
the project.
[56 FR 8847, Mar. 1, 1991, as amended at 67 FR 41094, June 14, 2002; 72
FR 68091, Dec. 4, 2007]
Sec. 431.52 Payments for services furnished out of State.
(a) Statutory basis. Section 1902(a)(16) of the Act authorizes the
Secretary to prescribe State plan requirements for furnishing Medicaid
to State residents who are absent from the State.
(b) Payment for services. A State plan must provide that the State
will pay for services furnished in another State to the same extent that
it would pay for services furnished within its boundaries if the
services are furnished to a beneficiary who is a resident of the State,
and any of the following conditions is met:
(1) Medical services are needed because of a medical emergency;
(2) Medical services are needed and the beneficiary's health would
be endangered if he were required to travel to his State of residence;
(3) The State determines, on the basis of medical advice, that the
needed medical services, or necessary supplementary resources, are more
readily available in the other State;
(4) It is general practice for beneficiaries in a particular
locality to use medical resources in another State.
(c) Cooperation among States. The plan must provide that the State
will establish procedures to facilitate the furnishing of medical
services to individuals who are present in the State and are eligible
for Medicaid under another State's plan.
Sec. 431.53 Assurance of transportation.
A State plan must--
(a) Specify that the Medicaid agency will ensure necessary
transportation for beneficiaries to and from providers; and
(b) Describe the methods that the agency will use to meet this
requirement.
[74 FR 31195, June 30, 2009]
Sec. 431.54 Exceptions to certain State plan requirements.
(a) Statutory basis--(1) Section 1915(a) of the Act provides that a
State shall not be deemed to be out of compliance with the requirements
of sections 1902(a)(1), (10), or (23) of the Act solely because it has
elected any of the exceptions set forth in paragraphs (b) and (d)
through (f) of this section.
(2) Section 1915(g) of the Act provides that a State may provide, as
medical assistance, targeted case management services under the plan
without regard to the requirements of sections 1902(a)(1) and
1902(a)(10)(B) of the Act.
(3) Section 1915(i) of the Act provides that a State may provide, as
medical assistance, home and community-based services under an approved
State plan amendment that meets certain requirements, without regard to
the requirements of sections 1902(a)(10)(B) and
[[Page 31]]
1902(a)(10)(C)(i)(III) of the Act, with respect to such services.
(b) Additional services under a prepayment system. If the Medicaid
agency contracts on a prepayment basis with an organization that
provides services additional to those offered under the State plan, the
agency may restrict the provision of the additional services to
beneficiaries who live in the area served by the organization and wish
to obtain services from it.
(c) [Reserved]
(d) Special procedures for purchase of medical devices and
laboratory and X-ray tests. The Medicaid agency may establish special
procedures for the purchase of medical devices or laboratory and X-ray
tests (as defined in Sec. 440.30 of this chapter) through a competitive
bidding process or otherwise, if the State assures, in the certification
required under Sec. 431.51(d), and CMS finds, as follows:
(1) Adequate services or devices are available to beneficiaries
under the special procedures.
(2) Laboratory services are furnished through laboratories that meet
the following requirements:
(i) They are independent laboratories, or inpatient or outpatient
hospital laboratories that provide services for individuals who are not
hospital patients, or physician laboratories that process at least 100
specimens for other physicians during any calendar year.
(ii) They meet the requirements of subpart M of part 405 or part 482
of this chapter.
(iii) Laboratories that require an interstate license under 42 CFR
part 74 are licensed by CMS or receive an exemption from the licensing
requirement by the College of American Pathologists. (Hospital and
physician laboratories may participate in competitive bidding only with
regard to services to non-hospital patients and other physicians'
patients, respectively.)
(3) Any laboratory from which a State purchases services under this
section has no more than 75 percent of its charges based on services to
Medicare beneficiaries and Medicaid beneficiaries.
(e) Lock-in of beneficiaries who over-utilize Medicaid services. If
a Medicaid agency finds that a beneficiary has utilized Medicaid
services at a frequency or amount that is not medically necessary, as
determined in accordance with utilization guidelines established by the
State, the agency may restrict that beneficiary for a reasonable period
of time to obtain Medicaid services from designated providers only. The
agency may impose these restrictions only if the following conditions
are met:
(1) The agency gives the beneficiary notice and opportunity for a
hearing (in accordance with procedures established by the agency) before
imposing the restrictions.
(2) The agency ensures that the beneficiary has reasonable access
(taking into account geographic location and reasonable travel time) to
Medicaid services of adequate quality.
(3) The restrictions do not apply to emergency services furnished to
the beneficiary.
(f) Lock-out of providers. If a Medicaid agency finds that a
Medicaid provider has abused the Medicaid program, the agency may
restrict the provider, through suspension or otherwise, from
participating in the program for a reasonable period of time.
Before imposing any restriction, the agency must meet the following
conditions:
(1) Give the provider notice and opportunity for a hearing, in
accordance with procedures established by the agency.
(2) Find that in a significant number or proportion of cases, the
provider has:
(i) Furnished Medicaid services at a frequency or amount not
medically necessary, as determined in accordance with utilization
guidelines established by the agency; or
(ii) Furnished Medicaid services of a quality that does not meet
professionally recognized standards of health care.
(3) Notify CMS and the general public of the restriction and its
duration.
(4) Ensure that the restrictions do not result in denying
beneficiaries reasonable access (taking into account geographic
location: and reasonable travel time) to Medicaid services of adequate
quality, including emergency services.
[[Page 32]]
(g) Targeted case management services. The requirements of Sec.
431.50(b) relating to the statewide operation of a State plan and Sec.
440.240 of this chapter related to comparability of services do not
apply with respect to targeted case management services defined in Sec.
440.169 of this chapter.
(h) State plan home and community-based services. The requirements
of Sec. 440.240 of this chapter related to comparability of services do
not apply with respect to State plan home and community-based services
defined in Sec. 440.182 of this chapter.
[56 FR 8847, Mar. 1, 1991, as amended at 72 FR 68091, Dec. 4, 2007; 79
FR 3028, Jan. 16, 2014]
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.
(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
beneficiary. 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
beneficiaries 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--
[[Page 33]]
(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 beneficiaries 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
beneficiaries the cost savings resulting from the beneficiaries' 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 beneficiary; and
(ii) Services expressly offered by the State as an inducement for
beneficiaries 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 beneficiaries to obtaining services from (or through) 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 beneficiaries residing at a long-term care
facility when a restriction is imposed unless the State arranges for
reasonable and adequate beneficiary 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.
[[Page 34]]
(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]
Sec. 431.56 Special waiver provisions applicable to American Samoa
and the Northern Mariana Islands.
(a) Statutory basis. Section 1902(j) of the Act provides for waiver
of all but three of the title XIX requirements, in the case of American
Samoa and the Northern Mariana Islands.
(b) Waiver provisions. American Samoa or the Northern Mariana
Islands may request, and CMS may approve, a waiver of any of the title
XIX requirements except the following:
(1) The Federal medical assistance percentage specified in section
1903 of the Act and Sec. 433.10(b) of this chapter.
(2) The limit imposed by section 1108(c) of the Act on the amount of
Federal funds payable to American Samoa or the Northern Mariana Islands
for care and services that meet the section 1905(a) definition for
Medicaid assistance.
(3) The requirement that payment be made only with respect to
expenditure made by American Samoa or the Northern Mariana Islands for
care and services that meet the section 1905(a) definition of medical
assistance.
Sec. 431.60 Beneficiary access to and exchange of data.
(a) Application Programming Interface to support Medicaid
beneficiaries. A State must implement and maintain a standards-based
Application Programming Interface (API) that permits third-party
applications to retrieve, with the approval and at the direction of a
current beneficiary or the beneficiary's personal representative, data
specified in paragraph (b) of this section through the use of common
technologies and without special effort from the beneficiary.
(b) Accessible content. A State must make the following information
accessible to its current beneficiaries or the beneficiary's personal
representative through the API described in paragraph (a) of this
section:
(1) Data concerning adjudicated claims, including claims data for
payment decisions that may be appealed, were appealed, or are in the
process of appeal, and provider remittances and beneficiary cost-sharing
pertaining to such claims, no later than one (1) business day after a
claim is processed;
(2) Encounter data no later than one (1) business day after
receiving the data from providers, other than MCOs, PIHPs, and PAHPs,
compensated on the basis of capitation payments;
(3) Clinical data, including laboratory results, if the State
maintains any such data, no later than one (1) business day after the
data is received by the State; and
(4) Information about covered outpatient drugs and updates to such
information, including, where applicable, preferred drug list
information, no later than one (1) business day after the effective date
of any such information or updates to such information.
(c) Technical requirements. A State implementing an API under
paragraph (a) of this section:
(1) Must implement, maintain, and use API technology conformant with
45 CFR 170.215;
(2) Must conduct routine testing and monitoring, and update as
appropriate, to ensure the API functions properly, including assessments
to verify that the API is fully and successfully implementing privacy
and security features such as, but not limited to, those required to
comply with HIPAA privacy and security requirements in 45 CFR parts 160
and 164, 42 CFR parts 2 and 3, and other applicable law protecting the
privacy and security of individually identifiable data;
(3) Must comply with the content and vocabulary standards
requirements in paragraphs (c)(3)(i) and (ii) of this section, as
applicable to the data type or data element, unless alternate standards
are required by other applicable law:
[[Page 35]]
(i) Content and vocabulary standards at 45 CFR 170.213 where such
standards are applicable to the data type or element, as appropriate;
and
(ii) Content and vocabulary standards at 45 CFR part 162 and Sec.
423.160 of this chapter where required by law, or where such standards
are applicable to the data type or element, as appropriate.
(4) May use an updated version of any standard or all standards
required under paragraph (c)(1) or (3) of this section, where:
(i) Use of the updated version of the standard is required by other
applicable law, or
(ii) Use of the updated version of the standard is not prohibited
under other applicable law, provided that:
(A) For content and vocabulary standards other than those at 45 CFR
170.213, the Secretary has not prohibited use of the updated version of
a standard for purposes of this section or 45 CFR part 170;
(B) For standards at 45 CFR 170.213 and 45 CFR 170.215, the National
Coordinator has approved the updated version for use in the ONC Health
IT Certification Program; and
(C) Use of the updated version of a standard does not disrupt an end
user's ability to access the data described in paragraph (b) of this
section through the API described in paragraph (a) of this section.
(d) Documentation requirements for APIs. For each API implemented in
accordance with paragraph (a) of this section, a State must make
publicly accessible, by posting directly on its website or via publicly
accessible hyperlink(s), complete accompanying documentation that
contains, at a minimum the information listed in this paragraph. For the
purposes of this section, ``publicly accessible'' means that any person
using commonly available technology to browse the internet could access
the information without any preconditions or additional steps, such as a
fee for access to the documentation; a requirement to receive a copy of
the material via email; a requirement to register or create an account
to receive the documentation; or a requirement to read promotional
material or agree to receive future communications from the organization
making the documentation available;
(1) API syntax, function names, required and optional parameters
supported and their data types, return variables and their types/
structures, exceptions and exception handling methods and their returns;
(2) The software components and configurations an application must
use in order to successfully interact with the API and process its
response(s); and
(3) All applicable technical requirements and attributes necessary
for an application to be registered with any authorization server(s)
deployed in conjunction with the API.
(e) Denial or discontinuation of access to the API. A State may deny
or discontinue any third-party application's connection to the API
required under paragraph (a) of this section if the State:
(1) Reasonably determines, consistent with its security risk
analysis under 45 CFR part 164 subpart C, that allowing an application
to connect or remain connected to the API would present an unacceptable
level of risk to the security of protected health information on the
State's systems; and
(2) Makes this determination using objective, verifiable criteria
that are applied fairly and consistently across all applications and
developers through which beneficiaries seek to access their electronic
health information as defined at 45 CFR 171.102, including but not
limited to criteria that may rely on automated monitoring and risk
mitigation tools.
(f) Beneficiary resources regarding privacy and security. The State
must provide in an easily accessible location on its public website and
through other appropriate mechanisms through which it ordinarily
communicates with current and former beneficiaries seeking to access
their health information held by the State Medicaid agency, educational
resources in non-technical, simple and easy-to-understand language
explaining at a minimum:
(1) General information on steps the individual may consider taking
to help protect the privacy and security of their health information,
including factors to consider in selecting an application including
secondary uses of
[[Page 36]]
data, and the importance of understanding the security and privacy
practices of any application to which they will entrust their health
information; and
(2) An overview of which types of organizations or individuals are
and are not likely to be HIPAA covered entities, the oversight
responsibilities of the Office for Civil Rights (OCR) and the Federal
Trade Commission (FTC), and how to submit a complaint to:
(i) The HHS Office for Civil Rights (OCR); and
(ii) The Federal Trade Commission (FTC).
(g) Data availability. (1) The State must comply with the
requirements in paragraph (a) through (f) of this section beginning
January 1, 2021 with regard to data:
(i) With a date of service on or after January 1, 2016; and
(ii) That are maintained by the State.
(2) [Reserved]
[85 FR 25634, May 1, 2020]
Sec. 431.70 Access to published provider directory information.
(a) The State must implement and maintain a publicly accessible,
standards-based Application Programming Interface (API) that is
conformant with the technical requirements at Sec. 431.60(c), excluding
the security protocols related to user authentication and authorization
and any other protocols that restrict the availability of this
information to particular persons or organizations, the documentation
requirements at Sec. 431.60(d), and is accessible via a public-facing
digital endpoint on the State's website.
(b) The API must provide a complete and accurate directory of--
(1) The State's provider directory information specified in section
1902(a)(83) of the Act, updated no later than 30 calendar days after the
State receives provider directory information or updates to provider
directory information.
(2) [Reserved]
(c) This section is applicable beginning January 1, 2021.
[85 FR 25635, May 1, 2020]
Subpart C_Administrative Requirements: Provider Relations
Sec. 431.105 Consultation to medical facilities.
(a) Basis and purpose. This section implements section 1902(a)(24)
of the Act, which requires that the State plan provide for consultative
services by State agencies to certain institutions furnishing Medicaid
services.
(b) State plan requirements. A State plan must provide that health
agencies and other appropriate State agencies furnish consultative
services to hospitals, nursing homes, home health agencies, clinics, and
laboratories in order to assist these facilities to--
(1) Qualify for payments under the maternal and child health and
crippled children's program (title V of the Act), Medicaid or Medicare;
(2) Establish and maintain fiscal records necessary for the proper
and efficient administration of the Act; and
(3) Provide information needed to determine payments due under the
Act for services furnished to beneficiaries.
(c) State plan option: Consultation to other facilities. The plan
may provide that health agencies and other appropriate State agencies
furnish consultation to other types of facilities if those facilities
are specified in the plan and provide medical care to individuals
receiving services under the programs specified in paragraph (b) of this
section.
Sec. 431.107 Required provider agreement.
(a) Basis and purpose. This section sets forth State plan
requirements, based on sections 1902(a)(4), 1902(a)(27), 1902(a)(57),
and 1902(a)(58) of the Act, that relate to the keeping of records and
the furnishing of information by all providers of services (including
individual practitioners and groups of practitioners).
(b) Agreements. A State plan must provide for an agreement between
the Medicaid agency and each provider or organization furnishing
services under the plan in which the provider or organization agrees to:
(1) Keep any records necessary to disclose the extent of services
the provider furnishes to beneficiaries;
[[Page 37]]
(2) On request, furnish to the Medicaid agency, the Secretary, or
the State Medicaid fraud control unit (if such a unit has been approved
by the Secretary under Sec. 455.300 of this chapter), any information
maintained under paragraph (b)(1) of this section and any information
regarding payments claimed by the provider for furnishing services under
the plan;
(3) Comply with the disclosure requirements specified in part 455,
subpart B of this chapter; and
(4) Comply with the advance directives requirements for hospitals,
nursing facilities, providers of home health care and personal care
services, hospices, and HMOs specified in part 489, subpart I, and Sec.
417.436(d) of this chapter.
(5)(i) Furnish to the State agency its National Provider Identifier
(NPI) (if eligible for an NPI); and
(ii) Include its NPI on all claims submitted under the Medicaid
program.
[44 FR 41644, July 17, 1979, as amended at 57 FR 8202, Mar. 6, 1992; 75
FR 24449, May 5, 2010]
Sec. 431.108 Effective date of provider agreements.
(a) Applicability--(1) General rule. Except as provided in paragraph
(a)(2) of this section, this section applies to Medicaid provider
agreements with entities that, as a basis for participation in
Medicaid--
(i) Are subject to survey and certification by CMS or the State
survey agency; or
(ii) Are deemed to meet Federal requirements on the basis of
accreditation by an accrediting organization whose program has CMS
approval at the time of accreditation survey and accreditation decision.
(2) Exception. A Medicaid provider agreement with a laboratory is
effective only while the laboratory has in effect a valid CLIA
certificate issued under part 493 of this chapter, and only for the
specialty and subspecialty tests it is authorized to perform.
(b) All requirements are met on the date of survey. The agreement is
effective on the date the onsite survey (including the Life Safety Code
survey if applicable) is completed, if on that date the provider meets--
(1) All applicable Federal requirements as set forth in this
chapter; and
(2) Any other requirements imposed by the State for participation in
the Medicaid program. (If the provider has a time-limited agreement, the
new agreement is effective on the day following expiration of the
current agreement.)
(c) All requirements are not met on the date of survey. If on the
date the survey is completed the provider fails to meet any of the
requirements specified in paragraph (b) of this section, the following
rules apply:
(1) An NF provider agreement is effective on the date on which--
(i) The NF is found to be in substantial compliance as defined in
Sec. 488.301 of this chapter; and
(ii) CMS or the State survey agency receives from the NF, if
applicable, an approvable waiver request.
(2) For an agreement with any other provider, the effective date is
the earlier of the following:
(i) The date on which the provider meets all requirements.
(ii) The date on which a provider is found to meet all conditions of
participation but has lower level deficiencies, and CMS or the State
survey agency receives from the provider an acceptable plan of
correction for the lower level deficiencies, or an approvable waiver
request, or both. (The date of receipt is the effective date of the
agreement, regardless of when CMS approves the plan of correction or
waiver request, or both.)
(d) Accredited provider requests participation in the Medicaid
program--(1) General rule. If a provider is currently accredited by a
national accrediting organization whose program had CMS approval at the
time of accreditation survey and accreditation decision, and on the
basis of accreditation, CMS has deemed the provider to meet Federal
requirements, the effective date depends on whether the provider is
subject to requirements in addition to those included in the accrediting
organization's approved program.
(i) Provider subject to additional requirements. For a provider that
is subject to additional requirements, Federal or State, or both, the
effective date is the date on which the provider
[[Page 38]]
meets all requirements, including the additional requirements.
(ii) Provider not subject to additional requirements. For a provider
that is not subject to additional requirements, the effective date is
the date of the provider's initial request for participation if on that
date the provider met all Federal requirements.
(2) Special rule: Retroactive effective date. If the provider meets
the requirements of paragraphs (d)(1) and (d)(1)(i) or (d)(1)(ii) of
this section, the effective date may be retroactive for up to one year,
to encompass dates on which the provider furnished, to a Medicaid
beneficiary, covered services for which it has not been paid.
[62 FR 43935, Aug. 18, 1997]
Sec. 431.110 Participation by Indian Health Service facilities.
(a) Basis. This section is based on section 1902(a)(4) of the Act,
proper and efficient administration; 1902(a)(23), free choice of
provider; and 1911, reimbursement of Indian Health Service facilities.
(b) State plan requirements. A State plan must provide that an
Indian Health Service facility meeting State requirements for Medicaid
participation must be accepted as a Medicaid provider on the same basis
as any other qualified provider. However, when State licensure is
normally required, the facility need not obtain a license but must meet
all applicable standards for licensure. In determining whether a
facility meets these standards, a Medicaid agency or State licensing
authority may not take into account an absence of licensure of any staff
member of the facility.
Sec. 431.115 Disclosure of survey information and provider or
contractor evaluation.
(a) Basis and purpose. This section implements--
(1) Section 1902(a)(36) of the Act, which requires a State plan to
provide that the State survey agency will make publicly available the
findings from surveys of health care facilities, laboratories, agencies,
clinics, or organizations; and
(2) Section 1106(d) of the Act, which places certain restrictions on
the Medicaid agency's disclosure of contractor and provider evaluations.
(b) Definition of State survey agency. The State survey agency
referred to in this section means the agency specified under section
1902(a)(9) of the Act as responsible for establishing and maintaining
health standards for private or public institutions in which Medicaid
beneficiaries may receive services.
(c) State plan requirements. A State plan must provide that the
requirements of this section and Sec. 488.325 of this chapter are met.
(d) Disclosure procedure. The Medicaid agency must have a procedure
for disclosing pertinent findings obtained from surveys made by the
State survey agency to determine if a health care facility, laboratory,
agency, clinic or health care organization meets the requirements for
participation in the Medicaid program.
(e) Documents subject to disclosure. Documents subject to disclosure
include--
(1) Survey reports, except for Joint Commission on the Accreditation
of Hospitals reports prohibited from disclosure under Sec.
422.426(b)(2) of this chapter;
(2) Official notifications of findings based on survey reports:
(3) Pertinent parts of written documents furnished by the health
care provider to the survey agency that relate to the reports and
findings; and
(4) Ownership and contract information as specified in Sec. 455.104
of this subchapter.
(f) Availability for inspection and copy of statements listing
deficiencies. The disclosure procedure must provide that the State
survey agency will--
(1) Make statements of deficiencies based on the survey reports
available for inspection and copying in both the public assistance
office and the Social Security Administration district office serving
the area where the provider is located; and
(2) Submit to the Regional Medicaid Director, through the Medicaid
agency, a plan for making those findings available in other public
assistance offices in standard metropolitian statistical areas where
this information would be helpful to persons likely to use the health
care provider's services.
[[Page 39]]
(g) When documents must be made available. The disclosure procedure
must provide that the State survey agency will--
(1) Retain in the survey agency office and make available upon
request survey reports and current and accurate ownership information;
and
(2) Make available survey reports, findings, and deficiency
statements immediately upon determining that a health care provider is
eligible to begin or continue participation in the Medicaid program, or
within 90 days after completion of the survey, whichever occurs first.
(h) Evaluation reports on providers and contractors. (1) If the
Secretary sends the following reports to the Medicaid agency, the agency
must meet the requirements of paragraphs (h) (2) and (3) of this section
in releasing them:
(i) Individual contractor performance reviews and other formal
performance evaluations of carriers, intermediaries, and State agencies,
including the reports of followup reviews;
(ii) Comparative performance evaluations of those contractors,
including comparisons of either overall performance or of any particular
aspect of contractor operations; and
(iii) Program validation survey reports and other formal performance
evaluations of providers, including the reports of followup reviews.
(2) The agency must not make the reports public until--
(i) The contractor or provider has had a reasonable opportunity, not
to exceed 30 days, to comment on them; and
(ii) Those comments have been incorporated in the report.
(3) The agency must ensure that the reports contain no
identification of individual patients, individual health care
practitioners or other individuals.
[43 FR 45188, Sept. 29, 1978, as amended at 44 FR 41644, July 17, 1979;
59 FR 56232, Nov. 10, 1994]
Sec. 431.120 State requirements with respect to nursing facilities.
(a) State plan requirements. A State plan must--
(1) Provide that the requirements of subpart D of part 483 of this
chapter are met; and
(2) Specify the procedures and rules that the State follows in
carrying out the specified requirements, including review and approval
of State-operated programs.
(3) To an NF or ICF/IID that is dissatisfied with a determination as
to the effective date of its provider agreement.
(b) Basis and scope of requirements. The requirements set forth in
part 483 of this chapter pertain to the following aspects of nursing
facility services and are required by the indicated sections of the Act.
(1) Nurse aide training and competency programs, and evaluation of
nurse aide competency (1919(e)(1) of the Act).
(2) Nurse aide registry (1919(e)(2) of the Act).
[56 FR 48918, Sept. 26, 1991, as amended at 62 FR 43935, Aug. 18, 1997]
Subpart D_Appeals Process for NFs and ICFs/IID
Source: 44 FR 9753, Feb. 15, 1979, unless otherwise noted.
Sec. 431.151 Scope and applicability.
(a) General rules. This subpart sets forth the appeals procedures
that a State must make available as follows:
(1) To a nursing facility (NF) that is dissatisfied with a State's
finding of noncompliance that has resulted in one of the following
adverse actions:
(i) Denial or termination of its provider agreement.
(ii) Imposition of a civil money penalty or other alternative
remedy.
(2) To an intermediate care facility for Individuals with
Intellectual Disabilities (ICF/IID) that is dissatisfied with a State's
finding of noncompliance that has resulted in the denial, termination,
or nonrenewal of its provider agreement.
(3) To an NF or ICF/IID that is dissatisfied with a determination as
to the effective date of its provider agreement.
(b) Special rules. This subpart also sets forth the special rules
that apply
[[Page 40]]
in particular circumstances, the limitations on the grounds for appeal,
and the scope of review during a hearing.
[61 FR 32348, June 24, 1996, as amended at 62 FR 43935, Aug. 18, 1997]
Sec. 431.152 State plan requirements.
The State plan must provide for appeals procedures that, as a
minimum, satisfy the requirements of Sec. Sec. 431.153 and 431.154.
[59 FR 56232, Nov. 10, 1994, as amended at 61 FR 32348, June 24, 1996]
Sec. 431.153 Evidentiary hearing.
(a) Right to hearing. Except as provided in paragraph (b) of this
section, and subject to the provisions of paragraphs (c) through (j) of
this section, the State must give the facility a full evidentiary
hearing for any of the actions specified in Sec. 431.151.
(b) Limit on grounds for appeal. The following are not subject to
appeal:
(1) The choice of sanction or remedy.
(2) The State monitoring remedy.
(3) [Reserved]
(4) The level of noncompliance found by a State except when a
favorable final administrative review decision would affect the range of
civil money penalty amounts the State could collect.
(5) A State survey agency's decision as to when to conduct an
initial survey of a prospective provider.
(c) Notice of deficiencies and impending remedies. The State must
give the facility a written notice that includes:
(1) The basis for the decision; and
(2) A statement of the deficiencies on which the decision was based.
(d) Request for hearing. The facility or its legal representative or
other authorized official must file written request for hearing within
60 days of receipt of the notice of adverse action.
(e) Special rules: Denial, termination or nonrenewal of provider
agreement--(1) Appeal by an ICF/IID. If an ICF/IID requests a hearing on
denial, termination, or nonrenewal of its provider agreement--
(i) The evidentiary hearing must be completed either before, or
within 120 days after, the effective date of the adverse action; and
(ii) If the hearing is made available only after the effective date
of the action, the State must, before that date, offer the ICF/IID an
informal reconsideration that meets the requirements of Sec. 431.154.
(2) Appeal by an NF. If an NF requests a hearing on the denial or
termination of its provider agreement, the request does not delay the
adverse action and the hearing need not be completed before the
effective date of the action.
(f) Special rules: Imposition of remedies. If a State imposes a
civil money penalty or other remedies on an NF, the following rules
apply:
(1) Basic rule. Except as provided in paragraph (f)(2) of this
section (and notwithstanding any provision of State law), the State must
impose all remedies timely on the NF, even if the NF requests a hearing.
(2) Exception. The State may not collect a civil money penalty until
after the 60-day period for request of hearing has elapsed or, if the NF
requests a hearing, until issuance of a final administrative decision
that supports imposition of the penalty.
(g) Special rules: Dually participating facilities. If an NF is also
participating or seeking to participate in Medicare as an SNF, and the
basis for the State's denial or termination of participation in Medicaid
is also a basis for denial or termination of participation in Medicare,
the State must advise the facility that--
(1) The appeals procedures specified for Medicare facilities in part
498 of this chapter apply; and
(2) A final decision entered under the Medicare appeals procedures
is binding for both programs.
(h) Special rules: Adverse action by CMS. If CMS finds that an NF is
not in substantial compliance and either terminates the NF's Medicaid
provider agreement or imposes alternative remedies on the NF (because
CMS's findings and proposed remedies prevail over those of the State in
accordance with Sec. 488.452 of this chapter), the NF is entitled only
to the appeals procedures set forth in part 498 of this chapter, instead
of the procedures specified in this subpart.
[[Page 41]]
(i) Required elements of hearing. The hearing must include at least
the following:
(1) Opportunity for the facility--
(i) To appear before an impartial decision-maker to refute the
finding of noncompliance on which the adverse action was based;
(ii) To be represented by counsel or other representative; and
(iii) To be heard directly or through its representative, to call
witnesses, and to present documentary evidence.
(2) A written decision by the impartial decision-maker, setting
forth the reasons for the decision and the evidence on which the
decision is based.
(j) Limits on scope of review: Civil money penalty cases. In civil
money penalty cases--
(1) The State's finding as to a NF's level of noncompliance must be
upheld unless it is clearly erroneous; and
(2) The scope of review is as set forth in Sec. 488.438(e) of this
chapter.
[61 FR 32348, June 24, 1996, as amended at 62 FR 43935, Aug. 18, 1997;
64 FR 39937, July 23, 1999]
Sec. 431.154 Informal reconsideration for ICFs/IID.
The informal reconsideration must, at a minimum, include--
(a) Written notice to the facility of the denial, termination or
nonrenewal and the findings upon which it was based;
(b) A reasonable opportunity for the facility to refute those
findings in writing, and
(c) A written affirmation or reversal of the denial, termination, or
nonrenewal.
[44 FR 9753, Feb. 15, 1979, as amended at 59 FR 56233, Nov. 10, 1994; 61
FR 32349, June 24, 1996]
Subpart E_Fair Hearings for Applicants and Beneficiaries
Source: 44 FR 17932, Mar. 29, 1979, unless otherwise noted.
General Provisions
Sec. 431.200 Basis and scope.
This subpart--
(a) Implements section 1902(a)(3) of the Act, which requires that a
State plan provide an opportunity for a fair hearing to any person whose
claim for assistance is denied or not acted upon promptly;
(b) Prescribes procedures for an opportunity for a hearing if the
State agency or non-emergency transportation PAHP (as defined in Sec.
438.9(a) of this chapter) takes action, as stated in this subpart, to
suspend, terminate, or reduce services, or of an adverse benefit
determination by an MCO, PIHP or PAHP under subpart F of part 438 of
this chapter; and
(c) Implements sections 1919(f)(3) and 1919(e)(7)(F) of the Act by
providing an appeals process for any person who--
(1) Is subject to a proposed transfer or discharge from a nursing
facility; or
(2) Is adversely affected by the pre-admission screening or the
annual resident review that are required by section 1919(e)(7) of the
Act.
(d) Implements section 1943(b)(3) of the Act and section 1413 of the
Affordable Care Act to permit coordinated hearings and appeals among
insurance affordability programs.
[67 FR 41094, June 14, 2002, as amended at 81 FR 27852, May 6, 2016; 81
FR 86448, Nov. 30, 2016]
Sec. 431.201 Definitions.
For purposes of this subpart:
Action means a termination, suspension of, or reduction in covered
benefits or services, or a termination, suspension of, or reduction in
Medicaid eligibility or an increase in beneficiary liability, including
a determination that a beneficiary must incur a greater amount of
medical expenses in order to establish income eligibility in accordance
with Sec. 435.121(e)(4) or Sec. 435.831 of this chapter or is subject
to an increase in premiums or cost-sharing charges under subpart A of
part 447 of this chapter. It also means a determination by a skilled
nursing facility or nursing facility to transfer or discharge a resident
and an adverse determination by a State with regard to the preadmission
screening and resident review requirements of section 1919(e)(7) of the
Act.
Adverse determination means a determination made in accordance with
sections 1919(b)(3)(F) or 1919(e)(7)(B) of the Act that the individual
does not require the level of services provided by a
[[Page 42]]
nursing facility or that the individual does or does not require
specialized services.
Date of action means the intended date on which a termination,
suspension, reduction, transfer or discharge becomes effective. It also
means the date of the determination made by a State with regard to the
preadmission screening and annual resident review requirements of
section 1919(e)(7) of the Act.
De novo hearing means a hearing that starts over from the beginning.
Evidentiary hearing means a hearing conducted so that evidence may
be presented.
Joint fair hearing request means a request for a Medicaid fair
hearing which is included in an appeal request submitted to an Exchange
or Exchange appeals entity under 45 CFR 155.520 or other insurance
affordability program or appeals entity, in accordance with the signed
agreement between the agency and an Exchange or Exchange appeals entity
or other program or appeals entity described in Sec. 435.1200(b)(3) of
this chapter .
Local evidentiary hearing means a hearing held on the local or
county level serving a specified portion of the State.
Notice means a written statement that meets the requirements of
Sec. 431.210.
Request for a hearing means a clear expression by the applicant or
beneficiary, or his authorized representative, that he wants the
opportunity to present his case to a reviewing authority.
Send means deliver by mail or in electronic format consistent with
Sec. 435.918 of this chapter.
Service authorization request means a managed care enrollee's
request for the provision of a service.
[44 FR 17932, Mar. 29, 1979, as amended at 57 FR 56505, Nov. 30, 1992;
67 FR 41095, June 14, 2002; 78 FR 42301, July 15, 2013; 81 FR 86448,
Nov. 30, 2016]
Sec. 431.202 State plan requirements.
A State plan must provide that the requirements of Sec. Sec.
431.205 through 431.246 of this subpart are met.
Sec. 431.205 Provision of hearing system.
(a) The Medicaid agency must be responsible for maintaining a
hearing system that meets the requirements of this subpart.
(b) The State's hearing system must provide for--
(1) A hearing before--
(i) The Medicaid agency; or
(ii) For the denial of eligibility for individuals whose income
eligibility is determined based on the applicable modified adjusted
gross income standard described inSec. 435.911(c) of this chapter, the
Exchange or Exchange appeals entity to which authority to conduct fair
hearings has been delegated under Sec. 431.10(c)(1)(ii), provided that
individuals who have requested a fair hearing are given the choice to
have their fair hearing conducted instead by the Medicaid agency; at
state option the Exchange or Exchange appeals entity decision may be
subject to review by the Medicaid agency in accordance with Sec.
431.10(c)(3)(iii); or
(2) An evidentiary hearing at the local level, with a right of
appeal to the Medicaid agency.
(c) The agency may offer local hearings in some political
subdivisions and not in others.
(d) The hearing system must meet the due process standards set forth
in Goldberg v. Kelly, 397 U.S. 254 (1970), and any additional standards
specified in this subpart.
(e) The hearing system must be accessible to persons who are limited
English proficient and persons who have disabilities, consistent with
Sec. 435.905(b) of this chapter.
(f) The hearing system must comply with the United States
Constitution, the Social Security Act, title VI of the Civil Rights Act
of 1964, section 504 of the Rehabilitation Act of 1973, the Americans
with Disabilities Act of 1990, the Age Discrimination Act of 1975, and
section 1557 of the Affordable Care Act and implementing regulations.
[44 FR 17932, Mar. 29, 1979, as amended at 78 FR 42301, July 15, 2013;
81 FR 86448, Nov. 30, 2016]
[[Page 43]]
Sec. 431.206 Informing applicants and beneficiaries.
(a) The agency must issue and publicize its hearing procedures.
(b) The agency must, at the time specified in paragraph (c) of this
section, inform every applicant or beneficiary in writing--
(1) Of his or her right to a fair hearing and right to request an
expedited fair hearing;
(2) Of the method by which he may obtain a hearing;
(3) That he may represent himself or use legal counsel, a relative,
a friend, or other spokesman; and
(4) Of the time frames in which the agency must take final
administrative action, in accordance with Sec. 431.244(f).
(c) The agency must provide the information required in paragraph
(b) of this section--(1) At the time that the individual applies for
Medicaid;
(2) At the time the agency denies an individual's claim for
eligibility, benefits or services; or denies a request for exemption
from mandatory enrollment in an Alternative Benefit Plan; or takes other
action, as defined at Sec. 431.201; or whenever a hearing is otherwise
required in accordance with Sec. 431.220(a);
(3) At the time a skilled nursing facility or a nursing facility
notifies a resident in accordance with Sec. 483.15 of this chapter that
he or she is to be transferred or discharged; and
(4) At the time an individual receives an adverse determination by
the State with regard to the preadmission screening and annual resident
review requirements of section 1919(e)(7) of the Act.
(d) If, in accordance with Sec. 431.10(c)(1)(ii), the agency has
delegated authority to the Exchange or Exchange appeals entity to
conduct the fair hearing, the agency must inform the individual in
writing that--
(1) He or she has the right to have his or her hearing before the
agency, instead of the Exchange or the Exchange appeals entity; and
(2) The method by which the individual may make such election;
(e) The information required under this subpart must be accessible
to individuals who are limited English proficient and to individuals
with disabilities, consistent with Sec. 435.905(b) of this chapter, and
may be provided in electronic format in accordance with Sec. 435.918 of
this chapter.
[44 FR 17932, Mar. 29, 1979, as amended at 57 FR 56505, Nov. 30, 1992;
58 FR 25784, Apr. 28, 1993; 78 FR 42301, July 15, 2013; 81 FR 68847,
Oct. 4, 2016; 81 FR 86448, Nov. 30, 2016]
Notice
Sec. 431.210 Content of notice.
A notice required under Sec. 431.206 (c)(2), (c)(3), or (c)(4) of
this subpart must contain--
(a) A statement of what action the agency, skilled nursing facility,
or nursing facility intends to take and the effective date of such
action;
(b) A clear statement of the specific reasons supporting the
intended action;
(c) The specific regulations that support, or the change in Federal
or State law that requires, the action;
(d) An explanation of--
(1) The individual's right to request a local evidentiary hearing if
one is available, or a State agency hearing; or
(2) In cases of an action based on a change in law, the
circumstances under which a hearing will be granted; and
(e) An explanation of the circumstances under which Medicaid is
continued if a hearing is requested.
[44 FR 17932, Mar. 29, 1979, as amended at 57 FR 56505, Nov. 30, 1992;
81 FR 86448, Nov. 30, 2016]
Sec. 431.211 Advance notice.
The State or local agency must send a notice at least 10 days before
the date of action, except as permitted under Sec. Sec. 431.213 and
431.214.
[78 FR 42301, July 15, 2013]
Sec. 431.213 Exceptions from advance notice.
The agency may send a notice not later than the date of action if--
(a) The agency has factual information confirming the death of a
beneficiary;
(b) The agency receives a clear written statement signed by a
beneficiary that--
(1) He no longer wishes services; or
(2) Gives information that requires termination or reduction of
services and indicates that he understands that
[[Page 44]]
this must be the result of supplying that information;
(c) The beneficiary has been admitted to an institution where he is
ineligible under the plan for further services;
(d) The beneficiary's whereabouts are unknown and the post office
returns agency mail directed to him indicating no forwarding address
(See Sec. 431.231 (d) of this subpart for procedure if the
beneficiary's whereabouts become known);
(e) The agency establishes the fact that the beneficiary has been
accepted for Medicaid services by another local jurisdiction, State,
territory, or commonwealth;
(f) A change in the level of medical care is prescribed by the
beneficiary's physician;
(g) The notice involves an adverse determination made with regard to
the preadmission screening requirements of section 1919(e)(7) of the
Act; or
(h) The date of action will occur in less than 10 days, in
accordance with Sec. 483.15(b)(4)(ii) and (b)(8), which provides
exceptions to the 30 days notice requirements of Sec. 483.15(b)(4)(i)
of this chapter.
[44 FR 17932, Mar. 29, 1979, as amended at 57 FR 56505, Nov. 30, 1992;
58 FR 25784, Apr. 28, 1993; 78 FR 42301, July 15, 2013; 81 FR 68847,
Oct. 4, 2016]
Sec. 431.214 Notice in cases of probable fraud.
The agency may shorten the period of advance notice to 5 days before
the date of action if--
(a) The agency has facts indicating that action should be taken
because of probable fraud by the beneficiary; and
(b) The facts have been verified, if possible, through secondary
sources.
Right to Hearing
Sec. 431.220 When a hearing is required.
(a) The State agency must grant an opportunity for a hearing to the
following:
(1) Any individual who requests it because he or she believes the
agency has taken an action erroneously, denied his or her claim for
eligibility or for covered benefits or services, or issued a
determination of an individual's liability, or has not acted upon the
claim with reasonable promptness including, if applicable--
(i) An initial or subsequent decision regarding eligibility;
(ii) A determination of the amount of medical expenses that an
individual must incur in order to establish eligibility in accordance
with Sec. 435.121(e)(4) or Sec. 435.831 of this chapter; or
(iii) A determination of the amount of premiums and cost sharing
charges under subpart A of part 447 of this chapter;
(iv) A change in the amount or type of benefits or services; or
(v) A request for exemption from mandatory enrollment in an
Alternative Benefit Plan.
(2) Any resident who requests it because he or she believes a
skilled nursing facility or nursing facility has erroneously determined
that he or she must be transferred or discharged.
(3) Any individual who requests it because he or she believes the
State has made an erroneous determination with regard to the
preadmission and annual resident review requirements of section
1919(e)(7) of the Act.
(4) Any MCO, PIHP, or PAHP enrollee who is entitled to a hearing
under subpart F of part 438 of this chapter.
(5) Any enrollee in a non-emergency medical transportation PAHP (as
that term is defined in Sec. 438.9 of this chapter) who has an action
as stated in this subpart.
(6) Any enrollee who is entitled to a hearing under subpart B of
part 438 of this chapter.
(b) The agency need not grant a hearing if the sole issue is a
Federal or State law requiring an automatic change adversely affecting
some or all beneficiaries.
[44 FR 17932, Mar. 29, 1979, as amended at 57 FR 56505, Nov. 30, 1992;
67 FR 41095, June 14, 2002; 67 FR 65505, Oct. 25, 2002; 81 FR 27853, May
6, 2016; 81 FR 86448, Nov. 30, 2016]
Sec. 431.221 Request for hearing.
(a)(1) The agency must establish procedures that permit an
individual, or an authorized representative as defined at Sec. 435.923
of this chapter, to--
(i) Submit a hearing request via any of the modalities described in
Sec. 435.907(a) of this chapter, except that
[[Page 45]]
the requirement to establish procedures for submission of a fair hearing
request described in Sec. 435.907(a)(1), (2) and (5) of this chapter
(relating to submissions via Internet Web site, telephone and other
electronic means) is effective no later than the date described in Sec.
435.1200(i) of this chapter; and
(ii) Include in a hearing request submitted under paragraph
(a)(1)(i) of this section, a request for an expedited fair hearing.
(2) [Reserved]
(b) The agency may not limit or interfere with the applicant's or
beneficiary's freedom to make a request for a hearing.
(c) The agency may assist the applicant or beneficiary in submitting
and processing his request.
(d) The agency must allow the applicant or beneficiary a reasonable
time, not to exceed 90 days from the date that notice of action is
mailed, to request a hearings.
[44 FR 17932, Mar. 29, 1979, as amended at 81 FR 86448, Nov. 30, 2016]
Sec. 431.222 Group hearings.
The agency--
(a) May respond to a series of individual requests for hearing by
conducting a single group hearing;
(b) May consolidate hearings only in cases in which the sole issue
involved is one of Federal or State law or policy;
(c) Must follow the policies of this subpart and its own policies
governing hearings in all group hearings; and
(d) Must permit each person to present his own case or be
represented by his authorized representative.
Sec. 431.223 Denial or dismissal of request for a hearing.
The agency may deny or dismiss a request for a hearing if--
(a) The applicant or beneficiary withdraws the request. The agency
must accept withdrawal of a fair hearing request via any of the
modalities available per Sec. 431.221(a)(1)(i). For telephonic hearing
withdrawals, the agency must record the individual's statement and
telephonic signature. For telephonic, online and other electronic
withdrawals, the agency must send the affected individual written
confirmation, via regular mail or electronic notification in accordance
with the individual's election under Sec. 435.918(a) of this chapter.
(b) The applicant or beneficiary fails to appear at a scheduled
hearing without good cause.
[44 FR 17932, Mar. 29, 1979, as amended at 81 FR 86449, Nov. 30, 2016]
Sec. 431.224 Expedited appeals.
(a) General rule. (1) The agency must establish and maintain an
expedited fair hearing process for individuals to request an expedited
fair hearing, if the agency determines that the time otherwise permitted
for a hearing under Sec. 431.244(f)(1) could jeopardize the
individual's life, health or ability to attain, maintain, or regain
maximum function.
(2) The agency must take final administrative action within the
period of time permitted under Sec. 431.244(f)(3) if the agency
determines that the individual meets the criteria for an expedited fair
hearing in paragraph (a)(1) of this section.
(b) Notice. The agency must notify the individual whether the
request is granted or denied as expeditiously as possible. Such notice
must be provided orally or through electronic means in accordance with
Sec. 435.918 of this chapter, if consistent with the individual's
election under such section; if oral notice is provided, the agency must
follow up with written notice, which may be through electronic means if
consistent with the individual's election under Sec. 435.918.
[81 FR 86449, Nov. 30, 2016]
Procedures
Sec. 431.230 Maintaining services.
(a) If the agency sends the 10-day or 5-day notice as required under
Sec. 431.211 or Sec. 431.214 of this subpart, and the beneficiary
requests a hearing before the date of action, the agency may not
terminate or reduce services until a decision is rendered after the
hearing unless--
(1) It is determined at the hearing that the sole issue is one of
Federal or State law or policy; and
[[Page 46]]
(2) The agency promptly informs the beneficiary in writing that
services are to be terminated or reduced pending the hearing decision.
(b) If the agency's action is sustained by the hearing decision, the
agency may institute recovery procedures against the applicant or
beneficiary to recoup the cost of any services furnished the
beneficiary, to the extent they were furnished solely by reason of this
section.
[44 FR 17932, Mar. 29, 1979, as amended at 45 FR 24882, Apr. 11, 1980;
78 FR 42302, July 15, 2013]
Sec. 431.231 Reinstating services.
(a) The agency may reinstate services if a beneficiary requests a
hearing not more than 10 days after the date of action.
(b) The reinstated services must continue until a hearing decision
unless, at the hearing, it is determined that the sole issue is one of
Federal or State law or policy.
(c) The agency must reinstate and continue services until a decision
is rendered after a hearing if--
(1) Action is taken without the advance notice required under Sec.
431.211 or Sec. 431.214 of this subpart;
(2) The beneficiary requests a hearing within 10 days from the date
that the individual receives the notice of action. The date on which the
notice is received is considered to be 5 days after the date on the
notice, unless the beneficiary shows that he or she did not receive the
notice within the 5-day period; and
(3) The agency determines that the action resulted from other than
the application of Federal or State law or policy.
(d) If a beneficiary's whereabouts are unknown, as indicated by the
return of unforwardable agency mail directed to him, any discontinued
services must be reinstated if his whereabouts become known during the
time he is eligible for services.
[44 FR 17932, Mar. 29, 1979, as amended at 78 FR 42302, July 15, 2013]
Sec. 431.232 Adverse decision of local evidentiary hearing.
If the decision of a local evidentiary hearing is adverse to the
applicant or beneficiary, the agency must--
(a) Inform the applicant or beneficiary of the decision;
(b) Inform the applicant or beneficiary in writing that he or she
has a right to appeal the decision to the State agency within 10 days
after the individual receives the notice of the adverse decision. The
date on which the notice is received is considered to be 5 days after
the date on the notice, unless the individual shows that he or she did
not receive the notice within the 5-day period; and
(c) Inform the applicant or beneficiary of his right to request that
his appeal be a de novo hearing; and
(d) Discontinue services after the adverse decision.
[44 FR 17932, Mar. 29, 1979, as amended at 81 FR 86449, Nov. 30, 2016]
Sec. 431.233 State agency hearing after adverse decision of local
evidentiary hearing.
(a) Unless the applicant or beneficiary specifically requests a de
novo hearing, the State agency hearing may consist of a review by the
agency hearing officer of the record of the local evidentiary hearing to
determine whether the decision of the local hearing officer was
supported by substantial evidence in the record.
(b) A person who participates in the local decision being appealed
may not participate in the State agency hearing decision.
Sec. 431.240 Conducting the hearing.
(a) All hearings must be conducted--
(1) At a reasonable time, date, and place;
(2) Only after adequate written notice of the hearing; and
(3) By one or more impartial officials or other individuals who have
not been directly involved in the initial determination of the action in
question.
(b) If the hearing involves medical issues such as those concerning
a diagnosis, an examining physician's report, or a medical review team's
decision, and if the hearing officer considers it
[[Page 47]]
necessary to have a medical assessment other than that of the individual
involved in making the original decision, such a medical assessment must
be obtained at agency expense and made part of the record.
(c) A hearing officer must have access to agency information
necessary to issue a proper hearing decision, including information
concerning State policies and regulations.
[44 FR 17932, Mar. 29, 1979, as amended at 78 FR 42302, July 15, 2013]
Sec. 431.241 Matters to be considered at the hearing.
The hearing must cover--
(a) Any matter described in Sec. 431.220(a)(1) for which an
individual requests a fair hearing.
(b) A decision by a skilled nursing facility or nursing facility to
transfer or discharge a resident; and
(c) A State determination with regard to the preadmission screening
and annual resident review requirements of section 1919(e)(7) of the
Act.
[57 FR 56505, Nov. 30, 1992, as amended at 81 FR 86449, Nov. 30, 2016]]
Sec. 431.242 Procedural rights of the applicant or beneficiary.
The applicant or beneficiary, or his representative, must be given
an opportunity to--
(a) Examine at a reasonable time before the date of the hearing and
during the hearing:
(1) The content of the applicant's or beneficiary's case file and
electronic account, as defined in Sec. 435.4 of this chapter; and
(2) All documents and records to be used by the State or local
agency or the skilled nursing facility or nursing facility at the
hearing;
(b) Bring witnesses;
(c) Establish all pertinent facts and circumstances;
(d) Present an argument without undue interference; and
(e) Question or refute any testimony or evidence, including
opportunity to confront and cross-examine adverse witnesses.
(f) Request an expedited fair hearing.
[44 FR 17932, Mar. 29, 1979, as amended at 57 FR 56506, Nov. 30, 1992;
81 FR 86449, Nov. 30, 2016]
Sec. 431.243 Parties in cases involving an eligibility determination.
If the hearing involves an issue of eligibility and the Medicaid
agency is not responsible for eligibility determinations, the agency
that is responsible for determining eligibility must participate in the
hearing.
Sec. 431.244 Hearing decisions.
(a) Hearing recommendations or decisions must be based exclusively
on evidence introduced at the hearing.
(b) The record must consist only of--
(1) The transcript or recording of testimony and exhibits, or an
official report containing the substance of what happened at the
hearing;
(2) All papers and requests filed in the proceeding; and
(3) The recommendation or decision of the hearing officer.
(c) The applicant or beneficiary must have access to the record at a
convenient place and time.
(d) In any evidentiary hearing, the decision must be a written one
that--
(1) Summarizes the facts; and
(2) Identifies the regulations supporting the decision.
(e) In a de novo hearing, the decision must--
(1) Specify the reasons for the decision; and
(2) Identify the supporting evidence and regulations.
(f) The agency must take final administrative action as follows:
(1) Ordinarily, within 90 days from:
(i) The date the enrollee filed an MCO, PIHP, or PAHP appeal, not
including the number of days the enrollee took to subsequently file for
a State fair hearing; or
(ii) For all other fair hearings, the date the agency receives a
request for a fair hearing in accordance with Sec. 431.221(a)(1).
(2) As expeditiously as the enrollee's health condition requires,
but no later than 3 working days after the agency receives, from the
MCO, PIHP, or PAHP, the case file and information for any appeal of a
denial of a service
[[Page 48]]
that, as indicated by the MCO, PIHP, or PAHP--
(i) Meets the criteria for expedited resolution as set forth in
Sec. 438.410(a) of this chapter, but was not resolved within the
timeframe for expedited resolution; or
(ii) Was resolved within the timeframe for expedited resolution, but
reached a decision wholly or partially adverse to the enrollee.
(3) In the case of individuals granted an expedited fair hearing in
accordance with Sec. 431.224(a)--
(i) For a claim related to eligibility described in Sec.
431.220(a)(1), or any claim described in Sec. 431.220(a)(2) (relating
to a nursing facility) or Sec. 431.220(a)(3) (related to preadmission
and annual resident review), as expeditiously as possible and, effective
no later than the date described in Sec. 435.1200(i) of this chapter,
no later than 7 working days after the agency receives a request for
expedited fair hearing; or
(ii) For a claim related to services or benefits described in Sec.
431.220(a)(1) as expeditiously as possible and, effective no later than
the date described in Sec. 435.1200(i) of this chapter, within the time
frame in paragraph (f)(2) of this section.
(iii) For a claim related to services or benefits described in Sec.
431.220(a)(4), (5) or (6), in accordance with the time frame in
paragraph (f)(2) of this section.
(4)(i) The agency must take final administrative action on a fair
hearing request within the time limits set forth in this paragraph
except in unusual circumstances when--
(A) The agency cannot reach a decision because the appellant
requests a delay or fails to take a required action; or
(B) There is an administrative or other emergency beyond the
agency's control.
(ii) The agency must document the reasons for any delay in the
appellant's record.
(g) The public must have access to all agency hearing decisions,
subject to the requirements of subpart F of this part for safeguarding
of information.
[44 FR 17932, Mar. 29, 1979, as amended at 67 FR 41095, June 14, 2002;
81 FR 27853, May 6, 2016; 81 FR 86449, Nov. 30, 2016]
Sec. 431.245 Notifying the applicant or beneficiary of a State
agency decision.
The agency must notify the applicant or beneficiary in writing of--
(a) The decision; and
(b) His right to request a State agency hearing or seek judicial
review, to the extent that either is available to him.
Sec. 431.246 Corrective action.
The agency must promptly make corrective payments, retroactive to
the date an incorrect action was taken, and, if appropriate, provide for
admission or readmission of an individual to a facility if--
(a) The hearing decision is favorable to the applicant or
beneficiary; or
(b) The agency decides in the applicant's or beneficiary's favor
before the hearing.
[57 FR 56506, Nov. 30, 1992]
Federal Financial Participation
Sec. 431.250 Federal financial participation.
FFP is available in expenditures for--
(a) Payments for services continued pending a hearing decision;
(b) Payments made--
(1) To carry out hearing decisions; and
(2) For services provided within the scope of the Federal Medicaid
program and made under a court order.
(c) Payments made to take corrective action prior to a hearing;
(d) Payments made to extend the benefit of a hearing decision or
court order to individuals in the same situation as those directly
affected by the decision or order;
(e) Retroactive payments under paragraphs (b), (c), and (d) of this
section in accordance with applicable Federal policies on corrective
payments; and
(f) Administrative costs incurred by the agency for--
(1) Transportation for the applicant or beneficiary, his
representative, and witnesses to and from the hearing;
(2) Meeting other expenses of the applicant or beneficiary in
connection with the hearing;
[[Page 49]]
(3) Carrying out the hearing procedures, including expenses of
obtaining the additional medical assessment specified in Sec. 431.240
of this subpart; and
(4) Hearing procedures for Medicaid and non-Medicaid individuals
appealing transfers, discharges and determinations of preadmission
screening and annual resident reviews under part 483, subparts C and E
of this chapter.
[44 FR 17932, Mar. 29, 1979, as amended at 45 FR 24882, Apr. 11, 1980;
57 FR 56506, Nov. 30, 1992]
Subpart F_Safeguarding Information on Applicants and Beneficiaries
Source: 44 FR 17934, Mar. 29, 1979, unless otherwise noted.
Sec. 431.300 Basis and purpose.
(a) Section 1902(a)(7) of the Act requires that a State plan must
provide safeguards that restrict the use or disclosure of information
concerning applicants and beneficiaries to purposes directly connected
with the administration of the plan. This subpart specifies State plan
requirements, the types of information to be safeguarded, the conditions
for release of safeguarded information, and restrictions on the
distribution of other information.
(b) For purposes of this subpart, information concerning an
applicant or beneficiary includes information on a non-applicant, as
defined in Sec. 435.4 of this subchapter.
(c) Section 1137 of the Act, which requires agencies to exchange
information to verify the income and eligibility of applicants and
beneficiaries (see Sec. 435.940 through Sec. 435.965 of this
subchapter), requires State agencies to have adequate safeguards to
assure that--
(1) Information exchanged by the State agencies is made available
only to the extent necessary to assist in the valid administrative needs
of the program receiving the information, and information received under
section 6103(l)(7) of the Internal Revenue Code is exchanged only with
agencies authorized to receive that information under that section of
the Code; and
(2) The information is adequately stored and processed so that it is
protected against unauthorized disclosure for other purposes.
(d) Section 1943 of the Act and section 1413 of the Affordable Care
Act.
[51 FR 7210, Feb. 28, 1986, as amended at 77 FR 17203, Mar. 23, 2012]
Sec. 431.301 State plan requirements.
A State plan must provide, under a State statute that imposes legal
sanctions, safeguards meeting the requirements of this subpart that
restrict the use or disclosure of information concerning applicants and
beneficiaries to purposes directly connected with the administration of
the plan.
Sec. 431.302 Purposes directly related to State plan administration.
Purposes directly related to plan administration include--
(a) Establishing eligibility;
(b) Determining the amount of medical assistance;
(c) Providing services for beneficiaries; and
(d) Conducting or assisting an investigation, prosecution, or civil
or criminal proceeding related to the administration of the plan.
Sec. 431.303 State authority for safeguarding information.
The Medicaid agency must have authority to implement and enforce the
provisions specified in this subpart for safeguarding information about
applicants and beneficiaries.
Sec. 431.304 Publicizing safeguarding requirements.
(a) The agency must publicize provisions governing the confidential
nature of information about applicants and beneficiaries, including the
legal sanctions imposed for improper disclosure and use.
(b) The agency must provide copies of these provisions to applicants
and beneficiaries and to other persons and agencies to whom information
is disclosed.
Sec. 431.305 Types of information to be safeguarded.
(a) The agency must have criteria that govern the types of
information
[[Page 50]]
about applicants and beneficiaries that are safeguarded.
(b) This information must include at least--
(1) Names and addresses;
(2) Medical services provided;
(3) Social and economic conditions or circumstances;
(4) Agency evaluation of personal information;
(5) Medical data, including diagnosis and past history of disease or
disability; and
(6) Any information received for verifying income eligibility and
amount of medical assistance payments (see Sec. 435.940 through Sec.
435.965 of this subchapter). Income information received from SSA or the
Internal Revenue Service must be safeguarded according to the
requirements of the agency that furnished the data, including section
6103 of the Internal Revenue Code, as applicable.
(7) Any information received in connection with the identification
of legally liable third party resources under Sec. 433.138 of this
chapter.
(8) Social Security Numbers.
[44 FR 17934, Mar. 29, 1979, as amended at 51 FR 7210, Feb. 28, 1986; 52
FR 5975, Feb. 27, 1987; 77 FR 17203, Mar. 23, 2012]
Sec. 431.306 Release of information.
(a) The agency must have criteria specifying the conditions for
release and use of information about applicants and beneficiaries.
(b) Access to information concerning applicants or beneficiaries
must be restricted to persons or agency representatives who are subject
to standards of confidentiality that are comparable to those of the
agency.
(c) The agency must not publish names of applicants or
beneficiaries.
(d) The agency must obtain permission from a family or individual,
whenever possible, before responding to a request for information from
an outside source, unless the information is to be used to verify
income, eligibility and the amount of medical assistance payment under
section 1137 of this Act and Sec. Sec. 435.940 through 435.965 of this
chapter.
If, because of an emergency situation, time does not permit obtaining
consent before release, the agency must notify the family or individual
immediately after supplying the information.
(e) The agency's policies must apply to all requests for information
from outside sources, including governmental bodies, the courts, or law
enforcement officials.
(f) If a court issues a subpoena for a case record or for any agency
representative to testify concerning an applicant or beneficiary, the
agency must inform the court of the applicable statutory provisions,
policies, and regulations restricting disclosure of information.
(g) Before requesting information from, or releasing information to,
other agencies to verify income, eligibility and the amount of
assistance under Sec. 435.940 through Sec. 435.965 of this subchapter,
the agency must execute data exchange agreements with those agencies, as
specified in Sec. 435.945(i) of this subchapter.
(h) Before requesting information from, or releasing information to,
other agencies to identify legally liable third party resources under
Sec. 433.138(d) of this chapter, the agency must execute data exchanges
agreements, as specified in Sec. 433.138(h)(2) of this chapter.
[44 FR 17934, Mar. 29, 1979, as amended at 51 FR 7210, Feb. 28, 1986; 52
FR 5975, Feb. 27, 1987; 77 FR 17203, Mar. 23, 2012]
Sec. 431.307 Distribution of information materials.
(a) All materials distributed to applicants, beneficiaries, or
medical providers must--
(1) Directly relate to the administration of the Medicaid program;
(2) Have no political implications except to the extent required to
implement the National Voter Registration Act of 1993 (NVRA) Pub. L.
103-931; for States that are exempt from the requirements of NVRA, voter
registration may be a voluntary activity so long as the provisions of
section 7(a)(5) of NVRA are observed;
(3) Contain the names only of individuals directly connected with
the administration of the plan; and
(4) Identify those individuals only in their official capacity with
the State or local agency.
[[Page 51]]
(b) The agency must not distribute materials such as ``holiday''
greetings, general public announcements, partisan voting information and
alien registration notices.
(c) The agency may distribute materials directly related to the
health and welfare of applicants and beneficiaries, such as
announcements of free medical examinations, availability of surplus
food, and consumer protection information.
(d) Under NVRA, the agency must distribute voter information and
registration materials as specified in NVRA.
[44 FR 17934, Mar. 29, 1979, as amended at 61 FR 58143, Nov. 13, 1996]
Subpart G_Section 1115 Demonstrations
Source: 77 FR 11696, Feb. 27, 2012, unless otherwise noted.
Sec. 431.400 Basis and purpose.
(a) Basis. This subpart implements provisions in section 1115(d) of
the Act, which requires all of the following:
(1) The establishment of application requirements for Medicaid and
CHIP demonstration projects that provide for:
(i) A process for public notice and comment at the State level,
including public hearings, sufficient to ensure a meaningful level of
public input and that does not impose requirements that are in addition
to, or duplicative of, requirements imposed under the Administrative
Procedure Act, or requirements that are unreasonable or unnecessarily
burdensome with respect to State compliance.
(ii) Requirements relating to all of the following:
(A) The goals of the program to be implemented or renewed under the
demonstration project.
(B) Expected State and Federal costs and coverage projections of the
State demonstration project.
(C) Specific plans of the State to ensure the demonstration project
will be in compliance with titles XIX or XXI of the Act.
(2) A process for public notice and comment after a demonstration
application is received by the Secretary that is sufficient to ensure a
meaningful level of public input.
(3) A process for the submission of reports to the Secretary by a
State relating to the implementation of a demonstration project.
(4) Periodic evaluation of demonstration projects by the Secretary.
(b) Purpose. This subpart sets forth a process for application and
review of Medicaid and CHIP demonstration projects that provides for
transparency and public participation.
Sec. 431.404 Definitions.
For the purposes of this subpart:
Demonstration means any experimental, pilot, or demonstration
project which the Secretary approves under the authority of section 1115
of the Act because, in the judgment of the Secretary, it is likely to
assist in promoting the statutory objectives of the Medicaid or CHIP
program.
Indian Health Program means a program as defined at section 4(12) of
the Indian Health Care Improvement Act, (Pub. L. 94-437).
Public notice means a notice issued by a government agency or
legislative body that contains sufficient detail to notify the public at
large of a proposed action, consistent with the provisions of Sec.
431.408 of this subpart.
Sec. 431.408 State public notice process.
(a) General. A State must provide at least a 30-day public notice
and comment period regarding applications for a demonstration project,
or an extension of an existing demonstration project that the State
intends to submit to CMS for review and consideration.
(1) Public notice and comment period. Prior to submitting an
application to CMS for a new demonstration project or an extension of a
previously approved demonstration project, the State must provide at
least a 30-day public notice and comment period, and the public notice
shall include all of the following information:
(i) A comprehensive description of the demonstration application or
extension to be submitted to CMS that contains a sufficient level of
detail to
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ensure meaningful input from the public, including:
(A) The program description, goals, and objectives to be implemented
or extended under the demonstration project, including a description of
the current or new beneficiaries who will be impacted by the
demonstration.
(B) To the extent applicable, the proposed health care delivery
system and the eligibility requirements, benefit coverage and cost
sharing (premiums, co-payments, and deductibles) required of individuals
that will be impacted by the demonstration, and how such provisions vary
from the State's current program features.
(C) An estimate of the expected increase or decrease in annual
enrollment, and in annual aggregate expenditures, including historic
enrollment or budgetary data, if applicable. This includes a financial
analysis of any changes to the demonstration requested by the State in
its extension request.
(D) The hypothesis and evaluation parameters of the demonstration.
(E) The specific waiver and expenditure authorities that the State
believes to be necessary to authorize the demonstration.
(ii) The locations and Internet address where copies of the
demonstration application are available for public review and comment.
(iii) Postal and Internet email addresses where written comments may
be sent and reviewed by the public, and the minimum 30-day time period
in which comments will be accepted.
(iv) The location, date, and time of at least two public hearings
convened by the State to seek public input on the demonstration
application.
(2) Statement of public notice and public input procedures. (i) The
State shall publish its public notice process, public input process,
planned hearings, the demonstration application(s), and a link to the
relevant Medicaid demonstration page(s) on the CMS Web site in a
prominent location on either the main page of the public Web site of the
State agency responsible for making applications for demonstrations or
on a demonstration-specific Web page that is linked in a readily
identifiable way to the main page of the State agency's Web site. The
State must maintain and keep current the public Web site throughout the
entire public comment and review process.
(ii) The State shall also publish an abbreviated public notice which
must include a summary description of the demonstration, the location
and times of the two or more public hearings, and an active link to the
full public notice document on the State's Web site in the State's
administrative record in accordance with the State's Administrative
Procedure Act, provided that such notice is provided at least 30 days
prior to the submission of the demonstration application to CMS or in
the newspapers of widest circulation in each city with a population of
100,000, or more, provided that such notice is provided at least 30 days
prior to the submission of the demonstration application to CMS, or
both.
(iii) The State must also utilize additional mechanisms, such as an
electronic mailing list, to notify interested parties of the
demonstration application(s).
(3) Public hearings. At least 20 days prior to submitting an
application for a new demonstration project or extension of an existing
demonstration project to CMS for review, the State must have conducted
at least two public hearings, on separate dates and at separate
locations, regarding the State's demonstration application at which
members of the public throughout the State have an opportunity to
provide comments. The State must use telephonic and/or Web conference
capabilities for at least one of the two required public hearings to
ensure statewide accessibility to the public hearing unless it can
document it has afforded the public throughout the State the opportunity
to provide comment, such as holding the two public hearings in
geographically distinct areas of the State. The State must use at least
two of the following public forums:
(i) The Medical Care Advisory Committee that operates in accordance
with Sec. 431.12 of this subpart; or
(ii) A commission or other similar process, where meetings are open
to members of the public; or
(iii) A State legislative process, which would afford an interested
party
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the opportunity to learn about the contents of the demonstration
application, and to comment on its contents; or
(iv) Any other similar process for public input that would afford an
interested party the opportunity to learn about the contents of the
demonstration application, and to comment on its contents.
(b) Tribal consultation and seeking advice from Indian health
providers and urban Indian organizations. A State with Federally-
recognized Indian tribes, Indian health programs, and/or urban Indian
health organizations shall include a process to consult with the Indian
tribes, and seek advice from Indian Health programs and urban Indian
health organizations in the State, prior to submission of an application
to CMS for a new demonstration project, or an extension of a previously
approved demonstration project, that has or would have a direct effect
on Indians, tribes, on Indian health programs, or on urban Indian health
organizations.
(1) For initial applications and applications extending existing
demonstration projects that have a direct effect on Indians, tribes,
Indian health programs, and urban Indian health organizations in the
State, the State must demonstrate that it has conducted consultation
activities with tribes and sought advice from Indian health programs and
urban Indian health organizations prior to submission of such
application.
(2) Consultation with Federally-recognized Indian tribes and
solicitation of advice from affected Indian health providers and urban
Indian organizations must be conducted in accordance with the
consultation process outlined in the July 17, 2001 letter or the State's
formal tribal consultation agreement or process and the process for
seeking advice from Indian Health providers must be conducted as
outlined in the State's approved Medicaid State Plan.
(3) Documentation of the State's consultation activities must be
included in the demonstration application, which must describe the
notification process, the entities involved in the consultation(s), the
date(s) and location(s) of the consultation(s), issues raised, and the
potential resolution for such issues.
Sec. 431.412 Application procedures.
(a) Initial demonstration application content. (1) Applications for
initial approval of a demonstration will not be considered complete
unless they comply with the public notice process set forth in Sec.
431.408(a) of this subpart, and include the following:
(i) A comprehensive program description of the demonstration,
including the goals and objectives to be implemented under the
demonstration project.
(ii) A description of the proposed health care delivery system,
eligibility requirements, benefit coverage and cost sharing (premiums,
copayments, and deductibles) required of individuals who will be
impacted by the demonstration to the extent such provisions would vary
from the State's current program features and the requirements of the
Act.
(iii) An estimate of the expected increase or decrease in annual
enrollment, and in annual aggregate expenditures, including historic
enrollment or budgetary data, if applicable.
(iv) Current enrollment data, if applicable, and enrollment
projections expected over the term of the demonstration for each
category of beneficiary whose health care coverage is impacted by the
demonstration.
(v) Other program features that the demonstration would modify in
the State's Medicaid and CHIP programs.
(vi) The specific waiver and expenditure authorities that the State
believes to be necessary to authorize the demonstration.
(vii) The research hypotheses that are related to the
demonstration's proposed changes, goals, and objectives, a plan for
testing the hypotheses in the context of an evaluation, and, if a
quantitative evaluation design is feasible, the identification of
appropriate evaluation indicators.
(viii) Written documentation of the State's compliance with the
public notice requirements set forth in Sec. 431.408 of this subpart,
with a report of the issues raised by the public during the comment
period, which shall be no less than 30 days, and how the State
considered those comments when developing the demonstration application.
[[Page 54]]
(2) CMS may request, or the State may propose application
modifications, as well as additional information to aid in the review of
the application. If an application modification substantially changes
the original demonstration design, CMS may, at its discretion, direct an
additional 30-day public comment period.
(3) This section does not preclude a State from submitting to CMS a
pre-application concept paper or from conferring with CMS about its
intent to seek a demonstration prior to submitting a completed
application.
(b) Demonstration application procedures. A State application for
approval of a new demonstration project or an extension of an existing
demonstration project must be submitted to CMS as both printed and
electronic documents. Electronic documents must be submitted in a format
that will be accessible to individuals with disabilities.
(1) Consistent with Sec. 431.416(a) of this subpart, within 15 days
of receipt of a complete application, CMS will send the State a written
notice informing the State of receipt of the submitted application, the
date in which the Secretary received the State's demonstration
application and the start date of the 30-day Federal public notice
process set forth in Sec. 431.416 of this subpart. The written notice--
(i) Is provided for purposes of initiating the Federal-level public
comment period and does not preclude a determination that, based on
further review, further information is required to supplement or support
the application, or that the application cannot be approved because a
required element is missing or insufficient.
(ii) Does not prevent a State from modifying its application or
submitting any supplementary information it determines necessary to
support CMS' review of its application.
(2) Within 15 days of receipt of a demonstration application that
CMS determines is incomplete, CMS will send the State a written notice
of the elements missing from the application.
(3) CMS will publish on its Web site at regular intervals the status
of all State submissions, including information received from the State
while the State works with CMS to meet the demonstration application
process set forth in this section.
(c) Demonstration extension request. A request to extend an existing
demonstration under sections 1115(a), (e), and (f) of the Act will be
considered only if it is submitted at least 12 months prior to the
expiration date of the demonstration when requesting an extension under
section 1115(e) of the Act or 6 months prior to the expiration date of
the demonstration when requesting an extension under section 1115(a) or
(f) of the Act, unless a longer time frame is specified in the Special
Terms and Conditions for the original demonstration. An extension
application, including an extension for the purpose of phasing out a
demonstration, must be sent from the Governor of the State to the
Secretary.
(1) Changes to existing demonstration. If an extension application
includes substantial changes to the existing demonstration, CMS may, at
its discretion, treat the application as an application for a new
demonstration.
(2) Demonstration extension application. An application to extend an
existing demonstration will be considered complete, for purposes of
initiating the Federal-level public notice period, when the State
provides the following:
(i) A historical narrative summary of the demonstration project,
which includes the objectives set forth at the time the demonstration
was approved, evidence of how these objectives have or have not been
met, and the future goals of the program.
(ii) If changes are requested, a narrative of the changes being
requested along with the objective of the change and the desired
outcomes.
(iii) A list and programmatic description of the waivers and
expenditure authorities that are being requested for the extension
period, or a statement that the State is requesting the same waiver and
expenditure authorities as those approved in the current demonstration.
(iv) Summaries of External Quality Review Organization (EQRO)
reports, managed care organization (MCO) and State quality assurance
monitoring, and any other documentation of the quality of and access to
care provided
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under the demonstration, such as the CMS Form 416 EPSDT/CHIP report.
(v) Financial data demonstrating the State's historical and
projected expenditures for the requested period of the extension, as
well as cumulatively over the lifetime of the demonstration. This
includes a financial analysis of changes to the demonstration requested
by the State.
(vi) An evaluation report of the demonstration, inclusive of
evaluation activities and findings to date, plans for evaluation
activities during the extension period, and if changes are requested,
identification of research hypotheses related to the changes and an
evaluation design for addressing the proposed revisions.
(vii) Documentation of the State's compliance with the public notice
process set forth in Sec. 431.408 of this subpart, including the post-
award public input process described in Sec. 431.420(c) of this
subpart, with a report of the issues raised by the public during the
comment period and how the State considered the comments when developing
the demonstration extension application.
(3) CMS may request, or the State may propose application
modifications, as well as additional information to aid in the review of
an application to extend a demonstration. If an application modification
substantially changes the original demonstration design, CMS may, at its
discretion, direct an additional 30-day public comment period.
(4) Upon application from the State, the Secretary may extend
existing demonstration projects on a temporary basis for the period
during which a successor demonstration is under review, without regard
to the date when the application was submitted.
(d) Approvals. Approval of a new demonstration or a demonstration
extension will generally be prospective only and Federal Financial
Participation (FFP) will not be available for changes to the
demonstration that have not been approved by CMS.
Sec. 431.416 Federal public notice and approval process.
(a) General. Within 15 days of receipt of a complete application
from the State for a new demonstration project or an extension of a
previously approved demonstration project, CMS will:
(1) Send the State a written notice informing the State of receipt
of the demonstration application, the date in which the Secretary
received the State's demonstration application, the start dates of the
30-day Federal public notice process, and the end date of the 45-day
minimum Federal decision-making period.
(2) Publish the written notice acknowledging receipt of the State's
completed application on its Web site within the same 15-day timeframe.
(b) Public comment period. Upon notifying a State of a completed
application, CMS will solicit public comment regarding such
demonstration application for 30 days by doing the following:
(1) Publishing the following on the CMS Web site:
(i) The written notice of CMS receipt of the State's complete
demonstration application.
(ii) Demonstration applications, including supporting information
submitted by the State as part of the complete application, and
associated concept papers, as applicable.
(iii) The proposed effective date of the demonstration.
(iv) Addresses to which inquiries and comments from the public may
be directed to CMS by mail or email.
(2) Notifying interested parties through a mechanism, such an
electronic mailing list, that CMS will create for this purpose.
(c) Public disclosure. CMS will publish on its Web site, at regular
intervals, appropriate information, which may include, but is not
limited to the following:
(1) Relevant status update(s);
(2) A listing of the issues raised through the public notice
process.
(d) Publishing of comments. (1) CMS will publish written comments
electronically through its Web site or an alternative Web site.
(2) CMS will review and consider all comments received by the
deadline, but will not provide written responses to public comments.
While comments may be submitted after the deadline, CMS cannot assure
that these comments will be considered.
[[Page 56]]
(e) Approval of a demonstration application. (1) CMS will not render
a final decision on a demonstration application until at least 45 days
after notice of receipt of a completed application, to receive and
consider public comments.
(2) CMS may expedite this process under the exception to the normal
public notice process provisions in Sec. 431.416(g) of this subpart.
(f) Administrative record. (1) CMS will maintain, and publish on its
public Web site, an administrative record that may include, but is not
limited to the following:
(i) The demonstration application from the State.
(ii) The State's disaster exemption request and CMS' response, if
applicable.
(iii) Written public comments sent to the CMS and any CMS responses.
(iv) If an application is approved, the final special terms and
conditions, waivers, expenditure authorities, and award letter sent to
the State.
(v) If an application is denied, the disapproval letter sent to the
State.
(vi) The State acceptance letter, as applicable.
(vii) Specific requirements related to the approved and agreed upon
terms and conditions, such as implementation reviews, evaluation design,
quarterly progress reports, annual reports, and interim and/or final
evaluation reports.
(viii) Notice of the demonstration's suspension or termination, if
applicable.
(2) To ensure that the public has access to all documentation
related to the demonstration project, including the aforementioned
items, we will also provide a link to the State's public Web site.
(g) Exemption from the normal public notice process. (1) CMS may
waive, in whole or in part, the Federal and State public notice
procedures to expedite a decision on a proposed demonstration or
demonstration extension request that addresses a natural disaster,
public health emergency, or other sudden emergency threats to human
lives.
(2) The Secretary may exempt a State from the normal public notice
process or the required time constraints imposed in this section or
Sec. 431.408(a) of this subpart when the State demonstrates to CMS the
existence of unforeseen circumstances resulting from a natural disaster,
public health emergency, or other sudden emergency that directly
threatens human lives that warrant an exception to the normal public
notice process.
(i) The State is expected to discharge its basic responsibilities in
submitting demonstration applications to the Secretary as required in
Sec. 431.412 of this subpart.
(ii) Such applications will be posted on the CMS Web site.
(3) A State must establish (or meet) all of the following criteria
to obtain such an exemption from the normal public notice process
requirements:
(i) The State acted in good faith, and in a diligent, timely, and
prudent manner.
(ii) The circumstances constitute an emergency and could not have
been reasonably foreseen.
(iii) Delay would undermine or compromise the purpose of the
demonstration and be contrary to the interests of beneficiaries.
(4) CMS will publish on its Web site any disaster exemption
determinations within 15 days of approval, as well as the revised
timeline for public comment or post-award processes, if applicable.
Sec. 431.420 Monitoring and compliance.
(a) General. (1) Any provision of the Social Security Act that is
not expressly waived by CMS in its approval of the demonstration project
are not waived, and States may not stop compliance with any of these
provisions not expressly waived. Waivers may be limited in scope to the
extent necessary to achieve a particular purpose or to the extent of a
particular regulatory requirement implementing the statutory provision.
(2) States must comply with the terms and conditions of the
agreement between the Secretary and the State to implement a State
demonstration project.
(b) Implementation reviews. (1) The terms and conditions will
provide that the State will perform periodic reviews
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of the implementation of the demonstration.
(2) CMS will review documented complaints that a State is failing to
comply with requirements specified in the special terms and conditions
and implementing waivers of any approved demonstration.
(3) CMS will promptly share with the State complaints that CMS has
received and will also provide notification of any applicable monitoring
and compliance issues.
(c) Post award. Within 6 months after the implementation date of the
demonstration and annually thereafter, the State must hold a public
forum--
(1) To solicit comments on the progress of a demonstration project.
(2) At which members of the public have an opportunity to provide
comments and in such time as to include a summary of the forum in the
quarterly report associated with the quarter in which the forum was
held, as well as in its annual report to CMS.
(3) The public forum to solicit feedback on the progress of a
demonstration project must occur using one of the following:
(i) A Medical Care Advisory Committee that operates in accordance
with Sec. 431.412 of this subpart.
(ii) A commission or other similar process, where meetings are open
to members of the public, and would afford an interested party the
opportunity to learn about the demonstration's progress.
(iii) The State must publish the date, time, and location of the
public forum in a prominent location on the State's public Web site, at
least 30 days prior to the date of the planned public forum.
(4) [Reserved]
(d) Terminations and suspensions. (1) The Secretary may suspend or
terminate a demonstration in whole or in part, any time before the date
of expiration, whenever it determines that the State has materially
failed to comply with the terms of the demonstration project.
(2) The Secretary may also withdraw waivers or expenditure
authorities based on a finding that the demonstration project is not
likely to achieve the statutory purposes.
(3) The terms and conditions for the demonstration will detail any
notice and appeal rights for the State for a termination, suspension or
withdrawal of waivers or expenditure authorities.
(e) Closeout costs. When a demonstration is terminated, suspended,
or if waivers or expenditure authority are withdrawn, Federal funding is
limited to normal closeout costs associated with an orderly termination
of the demonstration or expenditure authority, including service costs
during any approved transition period, and administrative costs of
disenrolling participants.
(f) Federal evaluators. (1) The State must fully cooperate with CMS
or an independent evaluator selected by CMS to undertake an independent
evaluation of any component of the demonstration.
(2) The State must submit all requested data and information to CMS
or the independent evaluator.
Sec. 431.424 Evaluation requirements.
(a) General. States are permitted and encouraged to use a range of
appropriate evaluation strategies (including experimental and other
quantitative and qualitative designs) in the application of evaluation
techniques with the approval of CMS.
(b) Demonstration evaluations. Demonstration evaluations will
include the following:
(1) Quantitative research methods. (i) These methods involve the
empirical investigation of the impact of key programmatic features of
the demonstration.
(ii) CMS will consider alternative evaluation designs when
quantitative designs are technically infeasible or not well suited to
the change made by the demonstration.
(2) Approaches that minimize beneficiary impact. The evaluation
process must minimize burden on beneficiaries and protect their privacy
in terms of implementing and operating the policy approach to be
demonstrated while ensuring the impact of the demonstration is measured.
(c) Evaluation design plan. (1) The State will submit and receive
CMS approval of a design for an evaluation of the demonstration project
and publish
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this document to the State's public Web site within 30 days of CMS
approval.
(2) The draft demonstration evaluation design must include all of
the following:
(i) A discussion of the demonstration hypotheses that are being
tested including monitoring and reporting on the progress towards the
expected outcomes.
(ii) The data that will be utilized and the baseline value for each
measure.
(iii) The methods of data collection.
(iv) A description of how the effects of the demonstration will be
isolated from those other changes occurring in the State at the same
time through the use of comparison or control groups to identify the
impact of significant aspects of the demonstration.
(v) A proposed date by which a final report on findings from
evaluation activities conducted under the evaluation plan must be
submitted to CMS.
(vi) Any other information pertinent to the State's research on the
policy operations of the demonstration operations.
(d) Evaluations for demonstration extensions. (1) In the event that
the State requests to extend the demonstration beyond the current
approval period under the authority of section 1115(a), (e), or (f) of
the Act, the State must submit an interim evaluation report as part of
the State's request for a subsequent renewal of the demonstration.
(2) State evaluations must be published on the State's public Web
site within 30 days of submission to CMS.
(e) Approved evaluation designs. The State must publish the CMS-
approved demonstration evaluation design on the State's public Web site
within 30 days of CMS approval.
(f) Federal evaluations. The State must comply with all requirements
set forth in this subpart.
(g) Federal public notice. CMS will post, or provide a link to the
State's public Web site, all evaluation materials, including research
and data collection, on its Web site for purposes of sharing findings
with the public within 30 days of receipt of materials.
Sec. 431.428 Reporting requirements.
(a) Annual reports. The State must submit an annual report to CMS
documenting all of the following:
(1) Any policy or administrative difficulties in the operation of
the demonstration.
(2) The status of the health care delivery system under the
demonstration with respect to issues and/or complaints identified by
beneficiaries.
(3) The impact of the demonstration in providing insurance coverage
to beneficiaries and uninsured populations.
(4) Outcomes of care, quality of care, cost of care and access to
care for demonstration populations.
(5) The results of beneficiary satisfaction surveys, if conducted
during the reporting year, grievances and appeals.
(6) The existence or results of any audits, investigations or
lawsuits that impact the demonstration.
(7) The financial performance of the demonstration.
(8) The status of the evaluation and information regarding progress
in achieving demonstration evaluation criteria.
(9) Any State legislative developments that may impact the
demonstration.
(10) The results/impact of any demonstration programmatic area
defined by CMS that is unique to the demonstration design or evaluation
hypothesis.
(11) A summary of the annual post-award public forum, including all
public comments received regarding the progress of the demonstration
project.
(b) Submitting and publishing annual reports. States must submit a
draft annual report to CMS no later than 90 days after the end of each
demonstration year, or as specified in the demonstration's STCs. The
State must publish its draft annual report on its public Web site within
30 days of submission to CMS.
(1) Within 60 days of receipt of comments from CMS, the State must
submit to CMS the final annual report for the demonstration year.
(2) The final annual report is to be published on the State's public
Web site within 30 days of approval by CMS.
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Subparts H-L [Reserved]
Subpart M_Relations With Other Agencies
Sec. 431.610 Relations with standard-setting and survey agencies.
(a) Basis and purpose. This section implements--
(1) Section 1902(a)(9) of the Act, concerning the designation of
State authorities to be responsible for establishing and maintaining
health and other standards for institutions participating in Medicaid;
and
(2) Section 1902(a)(33) of the Act, concerning the designation of
the State licensing agency to be responsible for determining whether
institutions and agencies meet requirements for participation in the
State's Medicaid program.
(3) Section 1919(g)(1)(A) of the Act, concerning responsibilities of
the State for certifying the compliance of non-State operated NFs with
requirements of participation in the State's Medicaid program.
(b) Designated agency responsible for health standards. A State plan
must designate, as the State authority responsible for establishing and
maintaining health standards for private or public institutions that
provide services to Medicaid beneficiaries, the same State agency that
is used by the Secretary to determine qualifications of institutions and
suppliers of services to participate in Medicare (see 42 CFR 405.1902).
The requirement for establishing and maintaining standards does not
apply with respect to religious nonmedical institutions as defined in
Sec. 440.170(b) of this chapter.
(c) Designated agency responsible for standards other than health
standards. The plan must designate the Medicaid agency or other
appropriate State authority or authorities to be responsible for
establishing and maintaining standards, other than those relating to
health, for private or public institutions that provide services to
Medicaid beneficiaries.
(d) Description and retention of standards. (1) The plan must
describe the standards established under paragraphs (b) and (c) of this
section.
(2) The plan must provide that the Medicaid agency keeps these
standards on file and makes them available to the Administrator upon
request.
(e) Designation of survey agency. The plan must provide that--
(1) The agency designated in paragraph (b) of this section, or
another State agency responsible for licensing health institutions in
the State, determines for the Medicaid agency whether institutions and
agencies meet the requirements for participation in the Medicaid
program; and
(2) The agency staff making the determination under paragraph (e)(1)
of this section is the same staff responsible for making similar
determinations for institutions or agencies participating under
Medicare; and
(3) The agency designated in paragraph (e)(1) of this section makes
recommendations regarding the effective dates of provider agreements, as
determined under Sec. 431.108.
(f) Written agreement required. The plan must provide for a written
agreement (or formal written intra-agency arrangement) between the
Medicaid agency and the survey agency designated under paragraph (e) of
this section, covering the activities of the survey agency in carrying
out its responsibilities. The agreement must specify that--
(1) Federal requirements and the forms, methods and procedures that
the Administrator designates will be used to determine provider
eligibility and certification under Medicaid;
(2) Inspectors surveying the premises of a provider will--
(i) Complete inspection reports;
(ii) Note on completed reports whether or not each requirement for
which an inspection is made is satisfied; and
(iii) Document deficiencies in reports;
(3) The survey agency will keep on file all information and reports
used in determining whether participating facilities meet Federal
requirements; and
(4) The survey agency will make the information and reports required
under paragraph (f)(3) of this section readily accessible to HHS and the
Medicaid agency as necessary--
(i) For meeting other requirements under the plan; and
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(ii) For purposes consistent with the Medicaid agency's effective
administration of the program.
(g) Responsibilities of survey agency. The plan must provide that,
in certifying NFs, HHAs, and ICF-IIDs, the survey agency designated
under paragraph (e) of this section will --
(1) Review and evaluate medical and independent professional review
team reports obtained under part 456 of this subchapter as they relate
to health and safety requirements;
(2) Have qualified personnel perform on-site inspections
periodically as appropriate based on the timeframes in the correction
plan and--
(i) At least once during each certification period or more
frequently if there is a compliance question; and
(ii) For non-State operated NFs, within the timeframes specified in
Sec. 488.308 of this chapter.
(3) Have qualified personnel perform on-site inspections--
(i) At least once during each certification period or more
frequently if there is a compliance question; and
(ii) For intermediate care facilities with deficiencies as described
in Sec. Sec. 442.112 and 442.113 of this subchapter, within 6 months
after initial correction plan approval and every 6 months thereafter as
required under those sections.
(h) FFP for survey responsibilities. (1) FFP is available in
expenditures that the survey agency makes to carry out its survey and
certification responsibilities under the agreement specified in
paragraph (f) of this section.
(2) FFP is not available in any expenditures that the survey agency
makes that are attributable to the State's overall responsibilities
under State law and regulations for establishing and maintaining
standards.
[43 FR 45188, Sept. 29, 1978, as amended at 45 FR 24883, Apr. 11, 1980;
53 FR 20494, June 3, 1988; 57 FR 43923, Sept. 23, 1992; 59 FR 56233,
Nov. 10, 1994; 62 FR 43936, Aug. 18, 1997; 64 FR 67052, Nov. 30, 1999;
78 FR 72320, Dec. 2, 2013]
Sec. 431.615 Relations with State health and vocational
rehabilitation agencies and title V grantees.
(a) Basis and purpose. This section implements section 1902(a)(11)
and (22)(C) of the Act, by setting forth State plan requirements for
arrangements and agreements between the Medicaid agency and--
(1) State health agencies;
(2) State vocational rehabilitation agencies; and
(3) Grantees under title V of the Act, Maternal and Child Health and
Crippled Children's Services.
(b) Definitions. For purposes of this section--
``Title V grantee'' means the agency, institution, or organization
receiving Federal payments for part or all of the cost of any service
program or project authorized by title V of the Act, including--
(1) Maternal and child health services;
(2) Crippled children's services;
(3) Maternal and infant care projects;
(4) Children and youth projects; and
(5) Projects for the dental health of children.
(c) State plan requirements. A state plan must--
(1) Describe cooperative arrangements with the State agencies that
administer, or supervise the administration of, health services and
vocational rehabilitation services designed to make maximum use of these
services;
(2) Provide for arrangements with title V grantees, under which the
Medicaid agency will utilize the grantee to furnish services that are
included in the State plan;
(3) Provide that all arrangements under this section meet the
requirements of paragraph (d) of this section; and
(4) Provide, if requested by the title V grantee in accordance with
the arrangements made under this section, that the Medicaid agency
reimburse the grantee or the provider for the cost of services furnished
beneficiaries by or through the grantee.
(d) Content of arrangements. The arrangements referred to in
paragraph (c) must specify, as appropriate--
(1) The mutual objectives and responsibilities or each party to the
arrangement;
(2) The services each party offers and in what circumstances;
(3) The cooperative and collaborative relationships at the State
level;
[[Page 61]]
(4) The kinds of services to be provided by local agencies; and
(5) Methods for--
(i) Early identification of individuals under 21 in need of medical
or remedial services;
(ii) Reciprocal referrals;
(iii) Coordinating plans for health services provided or arranged
for beneficiaries;
(iv) Payment or reimbursement;
(v) Exchange of reports of services furnished to beneficiaries;
(vi) Periodic review and joint planning for changes in the
agreements;
(vii) Continuous liaison between the parties, including designation
of State and local liaison staff; and
(viii) Joint evaluation of policies that affect the cooperative work
of the parties.
(e) Federal financial participation. FFP is available in
expenditures for Medicaid services provided to beneficiaries through an
arrangement under this section.
Sec. 431.620 Agreement with State mental health authority or mental
institutions.
(a) Basis and purpose. This section implements section
1902(a)(20)(A) of the Act, for States offering Medicaid services in
institutions for mental diseases for beneficiaries aged 65 or older, by
specifying the terms of the agreement those States must have with other
State authorities and institutions. (See part 441, subpart C of this
chapter for regulations implementing section 1902(a)(20) (B) and (C).)
(b) Definition. For purposes of this section, an ``institution for
mental diseases'' means an institution primarily engaged in providing
diagnosis, treatment, or care of persons with mental diseases. This
includes medical attention, nursing care, and related services.
(c) State plan requirement. A State plan that includes Medicaid for
persons aged 65 or older in institutions for mental diseases must
provide that the Medicaid agency has in effect a written agreement
with--
(1) The State authority or authorities concerned with mental
diseases; and
(2) Any institution for mental diseases that is not under the
jurisdiction of those State authorities, and that provides services
under Medicaid to beneficiaries aged 65 or older.
(d) Provisions required in an agreement. The agreement must specify
the respective responsibilities of the agency and the authority or
institution, including arrangements for--
(1) Joint planning between the parties to the agreement;
(2) Development of alternative methods of care;
(3) Immediate readmission to an institution when needed by a
beneficiary who is in alternative care;
(4) Access by the agency to the institution, the beneficiary, and
the beneficiary's records when necessary to carry out the agency's
responsibilities;
(5) Recording, reporting, and exchanging medical and social
information about beneficiaries; and
(6) Other procedures needed to carry out the agreement.
[44 FR 17935, Mar. 23, 1979]
Sec. 431.621 State requirements with respect to nursing facilities.
(a) Basis and purpose. This section implements sections
1919(b)(3)(F) and 1919(e)(7) of the Act by specifying the terms of the
agreement the State must have with the State mental health and
Intellectual Disability authorities concerning the operation of the
State's preadmission screening and annual resident review (PASARR)
program.
(b) State plan requirement. The State plan must provide that the
Medicaid agency has in effect a written agreement with the State mental
health and Intellectual Disability authorities that meets the
requirements specified in paragraph (c) of this section.
(c) Provisions required in an agreement. The agreement must specify
the respective responsibilities of the agency and the State mental
health and Intellectual Disability authorities, including arrangements
for--(1) Joint planning between the parties to the agreement;
(2) Access by the agency to the State mental health and Intellectual
Disability authorities' records when necessary to carry out the agency's
responsibilities;
[[Page 62]]
(3) Recording, reporting, and exchanging medical and social
information about individuals subject to PASARR;
(4) Ensuring that preadmission screenings and annual resident
reviews are performed timely in accordance with Sec. Sec. 483.112(c)
and 483.114(c) of this part;
(5) Ensuring that, if the State mental health and Intellectual
Disability authorities delegate their respective responsibilities, these
delegations comply with Sec. 483.106(e) of this part;
(6) Ensuring that PASARR determinations made by the State mental
health and Intellectual Disability authorities are not countermanded by
the State Medicaid agency, except through the appeals process, but that
the State mental health and Intellectual Disability authorities do not
use criteria which are inconsistent with those adopted by the State
Medicaid agency under its approved State plan;
(7) Designating the independent person or entity who performs the
PASARR evaluations for individuals with MI; and
(8) Ensuring that all requirements of Sec. Sec. 483.100 through
483.136 are met.
[57 FR 56506, Nov. 30, 1992; 58 FR 25784, Apr. 28, 1993]
Sec. 431.625 Coordination of Medicaid with Medicare part B.
(a) Basis and purpose. (1) Section 1843(a) of the Act requires the
Secretary to have entered into an agreement with any State that
requested that agreement before January 1, 1970, or during calendar year
1981, under which the State could enroll certain Medicare-eligible
beneficiaries under Medicare Part B and agree to pay their premiums.
(2) Section 1902(a)(10) of the Act (in clause (II) following
subparagraph (D)), allows the State to pay the premium, deductibles,
cost sharing, and other charges for beneficiaries enrolled under
Medicare Part B without obligating itself to provide the range of Part B
benefits to other beneficiaries; and
(3) Section 1903 (a)(1) and (b) of the Act authorizes FFP for State
payment of Medicare Part B premiums for certain beneficiaries.
(4) This section--
(i) Specifies the exception, relating to Part B coverage, from the
requirement to provide comparable services to all beneficiaries; and
(ii) Prescribes FFP rules concerning State payment for Medicare
premiums and for services that could have been covered under Medicare.
(5) Section 1902(a)(15) of the Act requires that if a State chooses
to pay only a portion of deductibles, cost sharing or other charges for
beneficiaries enrolled under Medicare Part B, the portion that is to be
paid by a Medicaid beneficiary must be reasonably related to the
beneficiary's income and resources.
(b) Exception from obligation to provide comparable services; State
plan requirement. (1) The State's payment of premiums, deductibles, cost
sharing, or similar charges under Part B does not obligate it to provide
the full range of Part B services to beneficiaries not covered by
Medicare.
(2) The State plan must specify this exception if it applies.
(c) Effect of payment of premiums on State liability for cost
sharing. (1) State payment of Part B premiums on behalf of a Medicaid
beneficiary does not obligate it to pay on the beneficiary's behalf the
Part B deductible and coinsurance amounts for those Medicare Part B
services not covered in the Medicaid State plan.
(2) If a State pays on a beneficiary's behalf any portion of the
deductible or cost sharing amounts under Medicare Part B, the portion
paid by a State must be reasonably related to the beneficiary's income
and resources.
(d) Federal financial participation: Medicare Part B premiums--(1)
Basic rule. Except as provided in paragraph (d)(2) of this section, FFP
is not available in State expenditures for Medicare Part B premiums for
Medicaid beneficiaries unless the beneficiaries receive money payments
under title I, IV-A, X, XIV, XVI (AABD or SSI) of the Act, or State
supplements as permitted under section 1616(a) of the Act, or as
required by section 212 of Pub. L. 93-66.
(2) Exception. FFP is available in expenditures for Medicare Part B
premiums for the following groups:
[[Page 63]]
(i) AFDC families required to be covered under Sec. Sec. 435.112
and 436.116 of this subchapter, those eligible for continued Medicaid
coverage despite increased income from employment;
(ii) Beneficiaries required to be covered under Sec. Sec. 435.114,
435.134, and 436.112 of this subchapter, those eligible for continued
Medicaid coverage despite increased income from monthly insurance
benefits under title II of the Act;
(iii) Beneficiaries required to be covered under Sec. 435.135 of
this subchapter, those eligible for continued Medicaid coverage despite
increased income from cost-of-living increases under title II of the
Act;
(iv) Beneficiaries of foster care maintenance payments or adoption
assistance payments who, under Part E of title IV of the Act are
considered as receiving AFDC;
(v) Individuals required to be covered under Sec. 435.120 of this
chapter, that is, blind or disabled individuals who, under section
1619(b) of the Act, are considered to be receiving SSI;
(vi) Individuals who, in accordance with Sec. Sec. 435.115 and
436.114 of this chapter are, for purposes of Medicaid eligibility,
considered to be receiving AFDC. These are participants in a work
supplementation program, or individuals denied AFDC because the payment
would be less than $10;
(vii) Certain beneficiaries of Veterans Administration pensions
during the limited time they are, under section 310(b) of Pub. L. 96-
272, considered as receiving SSI, mandatory State supplements, or AFDC;
(viii) Disabled children living at home to whom the State provides
Medicaid under section 1902(e)(3) of the Act;
(ix) Individuals who become ineligible for AFDC because of the
collection or increased collection of child or spousal support, but, in
accordance with section 406(h) of the Act, remain eligible for Medicaid
for four more months; and
(x) Individuals who become ineligible for AFDC because they are no
longer eligible for the disregard of earnings of $30 or of $30 plus one-
third of the remainder, but, in accordance with section 402(a)(37) of
the Act, are considered as receiving AFDC for a period of 9 to 15
months.
(3) No FFP is available in State Medicaid expenditures that could
have been paid for under Medicare Part B but were not because the person
was not enrolled in Part B. This limit applies to all beneficiaries
eligible for enrollment under Part B, whether individually or through an
agreement under section 1843(a) of the Act. However, FFP is available in
expenditures required by Sec. Sec. 435.914 and 436.901 of this
subchapter for retroactive coverage of beneficiaries.
[43 FR 45188, Sept. 29, 1978, as amended at 44 FR 17935, Mar. 23, 1979;
52 FR 47933, Dec. 17, 1987; 53 FR 657, Jan. 11, 1988]
Sec. 431.630 Coordination of Medicaid with QIOs.
(a) The State plan may provide for the review of Medicaid services
through a contract with a QIO designated under part 462 of this chapter.
Medicaid requirements for medical and utilization review are deemed to
be met for those services or providers subject to review under the
contract.
(b) The State plan must provide that the contract with the QIO--
(1) Meets the requirements of Sec. 434.6(a) of this part;
(2) Includes a monitoring and evaluation plan by which the State
ensures satisfactory performance by the QIO;
(3) Identifies the services and providers subject to QIO review;
(4) Ensures that the review activities performed by the QIO are not
inconsistent with QIO review activities of Medicare services and
includes a description of whether and to what extent QIO determinations
will be considered conclusive for Medicaid payment purposes.
[50 FR 15327, Apr. 17, 1985]
Sec. 431.635 Coordination of Medicaid with Special Supplemental
Food Program for Women, Infants, and Children (WIC).
(a) Basis. This section implements sections 1902(a)(11)(C) and
1902(a) (53) of the Act, which provide for coordination of Medicaid with
the Special Supplemental Food Program for Women, Infants, and Children
(WIC) under section 17 of the Child Nutrition Act of 1966.
(b) Definitions. As used in this section, the terms breastfeeding
women,
[[Page 64]]
postpartum women, and pregnant women mean women as defined in section 17
of the Child Nutrition Act of 1966 (42 U.S.C. 1786(b)).
(c) State plan requirements. A State Plan must provide for--
(1) Coordinating operation of the Medicaid program with the State's
operation of the Special Supplemental Food Program for Women, Infants,
and Children;
(2) Providing timely written notice of the availability of WIC
benefits to all individuals in the State who are determined to be
eligible (including presumptively eligible) for Medicaid and who are:
(i) Pregnant women;
(ii) Postpartum women;
(iii) Breastfeeding women; and
(iv) Children under the age of 5.
(3) Referring individuals described under paragraphs (c)(2) (i)
through (iv) of this section to the local agency responsible for
administering the WIC program.
(d) Notification requirements. (1) The agency must give the written
notice required under paragraph (c) of this section as soon as the
agency identifies the individual (e.g., at the time of an eligibility
determination for Medicaid) or immediately thereafter (e.g., at the time
of notice of eligibility).
(2) The agency, no less frequently than annually, must also provide
written notice of the availability of WIC benefits, including the
location and telephone number of the local WIC agency or instructions
for obtaining further information about the WIC program, to all Medicaid
beneficiaries (including those found to be presumptively eligible) who
are under age 5 or who are women who might be pregnant, postpartum, or
breastfeeding as described in paragraphs (c)(2) (i) through (iv) of this
section.
(3) The agency must effectively inform those individuals who are
blind or deaf or who cannot read or understand the English language.
[57 FR 28103, June 24, 1992]
Subpart N_State Programs for Licensing Nursing Home Administrators
Sec. 431.700 Basis and purpose.
This subpart implements sections 1903(a)(29) and 1908 of the Act
which require that the State plan include a State program for licensing
nursing home administrators.
Sec. 431.701 Definitions.
Unless otherwise indicated, the following definitions apply for
purposes of this subpart:
Agency means the State agency responsible for licensing individual
practitioners under the State's healing arts licensing act.
Board means an appointed State board established to carry out a
State program for licensing administrators of nursing homes, in a State
that does not have a healing arts licensing act or an agency as defined
in this section.
Licensed means certified by a State agency or board as meeting all
of the requirements for a licensed nursing home administrator specified
in this subpart.
Nursing home means any institution, facility, or distinct part of a
hospital that is licensed or formally recognized as meeting nursing home
standards established under State law, or that is determined under Sec.
431.704 to be included under the requirements of this subpart. The term
does not include--
(a) A religious nonmedical institution as defined in Sec.
440.170(b) of this chapter; or
(b) A distinct part of a hospital, if the hospital meets the
definition in Sec. 440.10 or Sec. 440.140 of this subchapter, and the
distinct part is not licensed separately or formally approved as a
nursing home by the State even though it is designated or certified as a
skilled nursing facility.
Nursing home administrator means any person who is in charge of the
general administration of a nursing home whether or not the person--
(a) Has an ownership interest in the home; or
[[Page 65]]
(b) Shares his functions and duties with one or more other persons.
[43 FR 45188, Sept. 29, 1978, as amended at 64 FR 67052, Nov. 30, 1999]
Sec. 431.702 State plan requirement.
A State plan must provide that the State has a program for licensing
administrators of nursing homes that meets the requirements of
Sec. Sec. 431.703 through 431.713 of this subpart.
Sec. 431.703 Licensing requirement.
The State licensing program must provide that only nursing homes
supervised by an administrator licensed in accordance with the
requirements of this subpart may operate in the State.
Sec. 431.704 Nursing homes designated by other terms.
If a State licensing law does not use the term ``nursing home,'' the
CMS Administrator will determine the term or terms equivalent to
``nursing home'' for purposes of applying the requirements of this
subpart. To obtain this determination, the Medicaid agency must submit
to the Regional Medicaid Director copies of current State laws that
define institutional health care facilities for licensing purposes.
Sec. 431.705 Licensing authority.
(a) The State licensing program must provide for licensing of
nursing home administrators by--
(1) The agency designated under the healing arts act of the State;
or
(2) A State licensing board.
(b) The State agency or board must perform the functions and duties
specified in Sec. Sec. 431.707 through 431.713 and the board must meet
the membership requirements specified in Sec. 431.706 of this subpart.
Sec. 431.706 Composition of licensing board.
(a) The board must be composed of persons representing professions
and institutions concerned with the care and treatment of chronically
ill or infirm elderly patients. However--
(1) A majority of the board members may not be representative of a
single profession or category of institution; and
(2) Members not representative of institutions may not have a direct
financial interest in any nursing home.
(b) For purposes of this section, nursing home administrators are
considered representatives of institutions.
Sec. 431.707 Standards.
(a) The agency or board must develop, impose, and enforce standards
that must be met by individuals in order to be licensed as a nursing
home administrator.
(b) The standards must be designed to insure that nursing home
administrators are--
(1) Of good character;
(2) Otherwise suitable; and
(3) Qualified to serve because of training or experience in
institutional administration.
Sec. 431.708 Procedures for applying standards.
The agency or board must develop and apply appropriate procedures
and techniques, including examinations and investigations, for
determining if a person meets the licensing standards.
Sec. 431.709 Issuance and revocation of license.
Except as provided in Sec. 431.714 of this subpart, the agency or
board must--
(a) Issue licenses to persons who meet the agency's or board's
standards; and
(b) Revoke or suspend a license if the agency or board determines
that the person holding the license substantially fails to meet the
standards.
Sec. 431.710 Provisional licenses.
To fill a position of nursing home administrator that unexpectedly
becomes vacant, the agency or board may issue one provisional license,
for a single period not to exceed 6 months. The license may be issued to
a person who does not meet all of the licensing requirements established
under Sec. 431.707 but who--
(a) Is of good character and otherwise suitable; and
(b) Meets any other standards established for provisional licensure
by the agency or board.
[[Page 66]]
Sec. 431.711 Compliance with standards.
The agency or board must establish and carry out procedures to
insure that licensed administrators comply with the standards in this
subpart when they serve as nursing home administrators.
Sec. 431.712 Failure to comply with standards.
The agency or board must investigate and act on all complaints it
receives of violations of standards.
Sec. 431.713 Continuing study and investigation.
The agency or board must conduct a continuing study of nursing homes
and administrators within the State to improve--
(a) Licensing standards; and
(b) The procedures and methods for enforcing the standards.
Sec. 431.714 Waivers.
The agency or board may waive any standards developed under Sec.
431.707 of this subpart for any person who has served in the capacity of
a nursing home administrator during all of the 3 calendar years
immediately preceding the calendar year in which the State first meets
the requirements in this subpart.
Sec. 431.715 Federal financial participation.
No FFP is available in expenditures by the licensing board for
establishing and maintaining standards for the licensing of nursing home
administrators.
Subpart O [Reserved]
Subpart P_Quality Control
Medicaid Eligibility Quality Control (MEQC) Program
Source: Sections 431.800 through 431.808 appear at 55 FR 22166, May
31, 1990, unless otherwise noted.
Sec. 431.800 Basis and scope.
This subpart establishes State requirements for the Medicaid
Eligibility Quality Control (MEQC) Program designed to reduce erroneous
expenditures by monitoring eligibility determinations and a claims
processing assessment that monitors claims processing operations. MEQC
will work in conjunction with the Payment Error Rate Measurement (PERM)
Program established in subpart Q of this part. In years in which the
State is required to participate in PERM, as stated in subpart Q of this
part, it will only participate in the PERM program and will not be
required to conduct a MEQC pilot. In the 2 years between PERM cycles,
the State is required to conduct a MEQC pilot, as set forth in this
subpart.
[82 FR 31182, July 5, 2017]
Sec. 431.804 Definitions.
As used in this subpart--
Active case means an individual determined to be currently
authorized as eligible for Medicaid or CHIP by the State.
Corrective action means action(s) to be taken by the State to reduce
major error causes, trends in errors or other vulnerabilities for the
purpose of reducing improper payments in Medicaid and CHIP.
Deficiency means a finding in processing identified through active
case review or negative case review that does not meet the definition of
an eligibility error.
Eligibility means meeting the State's categorical and financial
criteria for receipt of benefits under the Medicaid or CHIP programs.
Eligibility error is an error resulting from the States' improper
application of Federal rules and the State's documented policies and
procedures that causes a beneficiary to be determined eligible when he
or she is ineligible for Medicaid or CHIP, causes a beneficiary to be
determined eligible for the incorrect type of assistance, causes
applications for Medicaid or CHIP to be improperly denied by the State,
or causes existing cases to be improperly terminated from Medicaid or
CHIP by the State. An eligibility error may also be caused when a
redetermination did not occur timely or a required element of the
eligibility determination process (for example income) cannot be
verified as being performed/completed by the state.
[[Page 67]]
Medicaid Eligibility Quality Control (MEQC) means a program designed
to reduce erroneous expenditures by monitoring eligibility
determinations and work in conjunction with the PERM program established
in subpart Q of this part.
MEQC pilot refers to the process used to implement the MEQC Program.
MEQC review period is the 12-month timespan from which the State
will sample and review cases.
Negative case means an individual denied or terminated eligibility
for Medicaid or CHIP by the State.
Off-years are the scheduled 2-year period of time between a States'
designated PERM years.
Payment Error Rate Measurement (PERM) Program means the program set
forth at subpart Q of this part utilized to calculate a national
improper payment rate for Medicaid and CHIP.
PERM year is the scheduled and designated year for a State to
participate in, and be measured by, the PERM Program set forth at
subpart Q of this part.
[82 FR 31182, July 5, 2017]
Sec. 431.806 State requirements.
(a) General requirements. (1) In a State's PERM year, the PERM
measurement will meet the requirements of section 1903(u) of the Act.
(2) In the 2 years between each State's PERM year, the State is
required to conduct one MEQC pilot, which will span parts of both off
years.
(i) The MEQC pilot review period will span 12 months of a calendar
year, beginning the January 1 following the end of the State's PERM year
through December 31.
(ii) The MEQC pilot planning document described in Sec. 431.814 is
due no later than the first November 1 following the end of the State's
PERM year.
(iii) A State must submit its MEQC pilot findings and its plan for
corrective action(s) by the August 1 following the end of its MEQC pilot
review period.
(b) PERM measurement. Requirements for the State PERM review process
are set forth in subpart Q of this part.
(c) MEQC pilots. MEQC pilot requirements are specified in Sec. Sec.
431.812 through 431.820.
(d) Claims processing assessment system. Except in a State that has
an approved Medicaid Management Information System (MMIS) under subpart
C of part 433 of this subchapter, a State plan must provide for
operating a Medicaid quality control claims processing assessment system
that meets the requirements of Sec. Sec. 431.830 through 431.836.
[82 FR 31182, July 5, 2017]
Sec. 431.808 Protection of beneficiary rights.
Any individual performing activities under the MEQC program or the
claims processing assessment system specified in this subpart must do so
in a manner that is consistent with the provisions of Sec. Sec. 435.902
and 436.901 of this subchapter concerning the rights of beneficiaries.
Sec. 431.810 Basic elements of the Medicaid Eligibility Quality
Control (MEQC) Program.
(a) General requirements. The State must operate the MEQC pilot in
accordance with this section and Sec. Sec. 431.812 through 431.820, as
well as other instructions established by CMS.
(b) Review requirements. The State must conduct reviews for the MEQC
pilot in accordance with the requirements specified in Sec. 431.812 and
other instructions established by CMS.
(c) Pilot planning requirements. The State must develop a MEQC pilot
planning proposal in accordance with requirements specified in Sec.
431.814 and other instructions established by CMS.
(d) Reporting requirements. The State must report the finding of the
MEQC pilots in accordance with the requirements specified in Sec.
431.816 and other instructions established by CMS.
(e) Corrective action requirements. The State must conduct
corrective actions based on the findings of the MEQC pilots in
accordance with the requirements specified in Sec. 431.820 and other
instructions established by CMS.
[82 FR 31183, July 5, 2017]
[[Page 68]]
Sec. 431.812 Review procedures.
(a) General requirements. Each State is required to conduct a MEQC
pilot during the 2 years between required PERM cycles in accordance with
the approved pilot planning document specified in Sec. 431.814, as well
as other instructions established by CMS. The agency and personnel
responsible for the development, direction, implementation, and
evaluation of the MEQC reviews and associated activities, must be
functionally and physically separate from the State agencies and
personnel that are responsible for Medicaid and CHIP policy and
operations, including eligibility determinations.
(b) Active case reviews. (1) The State must review all active cases
selected from the universe of cases, as established in the State's
approved MEQC pilot planning document, under Sec. 431.814 to determine
if the cases were eligible for services, as well as to identify
deficiencies in processing subject to corrective actions.
(2) The State must select and review, at a minimum, 400 active cases
in total from the Medicaid and CHIP universe.
(i) The State must review at least 200 Medicaid cases.
(ii) The State will identify in the pilot planning document at Sec.
431.814 the sample size per program.
(iii) The State may sample more than 400 cases.
(3) The State may propose to focus the active case reviews on recent
changes to eligibility policies and processes, areas where the state
suspects vulnerabilities, or proven error prone areas.
(i) Unless otherwise directed by CMS, the State must propose its
active case review approach in the pilot planning document described at
Sec. 431.814 or perform a comprehensive review.
(ii) When the State has a PERM eligibility improper payment rate
that exceeds the 3 percent national standard for two consecutive PERM
cycles, the State must follow CMS direction for its active case reviews.
CMS guidance will be provided to any state meeting this criteria.
(c) Negative case reviews. (1) As established in the State's
approved MEQC pilot planning document under Sec. 431.814, the State
must review negative cases selected from the State's universe of cases
that are denied or terminated in the review month to determine if the
denial, or termination, was correct, as well as to identify deficiencies
in processing subject to corrective actions.
(2) The State must review, at a minimum, 200 negative cases from
Medicaid and 200 negative cases from CHIP.
(i) The State may sample more than 200 cases from Medicaid and/or
more than 200 cases from CHIP.
(ii) [Reserved]
(d) Error definition. (1) An active case error is an error resulting
from the State's improper application of Federal rules and the State's
documented policies and procedures that causes a beneficiary to be
determined eligible when he or she is ineligible for Medicaid or CHIP,
causes a beneficiary to be determined eligible for the incorrect type of
assistance, or when a determination did not occur timely or cannot be
verified.
(2) Negative case errors are errors, based on the State's documented
policies and procedures, resulting from either of the following:
(i) Applications for Medicaid or CHIP that are improperly denied by
the State.
(ii) Existing cases that are improperly terminated from Medicaid or
CHIP by the State.
(e) Active case payment reviews. In accordance with instructions
established by CMS, the State must also conduct payment reviews to
identify payments for active case errors, as well as identify the
individual's understated or overstated liability, and report payment
findings as specified in Sec. 431.816.
[82 FR 31183, July 5, 2017]
Sec. 431.814 Pilot planning document.
(a) Plan approval. For each MEQC pilot, the State must submit a MEQC
pilot planning document that meets the requirements of this section to
CMS for approval by the first November 1 following the end of the
State's PERM year. The State must receive approval for a plan before the
plan can be implemented.
(b) Plan requirements. The State must have an approved pilot
planning document in effect for each MEQC pilot
[[Page 69]]
that must be in accordance with instructions established by CMS and that
includes, at a minimum, the following for--
(1) Active case reviews. (i) Focus of the active case reviews in
accordance with Sec. 431.812(b)(3) and justification for focus.
(ii) Universe development process.
(iii) Sample size per program.
(iv) Sample selection procedure.
(v) Case review process.
(2) Negative case reviews. (i) Universe development process.
(ii) Sample size per program.
(iii) Sample selection procedure.
(iv) Case review process.
[82 FR 31183, July 5, 2017]
Sec. 431.816 Case review completion deadlines and submittal of
reports.
(a) The State must complete case reviews and submit reports of
findings to CMS as specified in paragraph (b) of this section in the
form and at the time specified by CMS.
(b) In addition to the reporting requirements specified in Sec.
431.814 relating to the MEQC pilot planning document, the State must
complete case reviews and submit reports of findings to CMS in
accordance with paragraphs (b)(1) and (2) of this section.
(1) For all active and negative cases reviewed, the State must
submit a detailed case-level report in a format provided by CMS.
(2) All case-level findings will be due by August 1 following the
end of the MEQC review period.
[82 FR 31183, July 5, 2017]
Sec. 431.818 Access to records.
The State, upon written request, must submit to the HHS staff, or
other designated entity, all records, including complete local agency
eligibility case files or legible copies and all other documents
pertaining to its MEQC reviews to which the State has access, including
information available under part 435, subpart I of this chapter.
[82 FR 31184, July 5, 2017]
Sec. 431.820 Corrective action under the MEQC program.
The State must--
(a) Take action to correct any active or negative case errors,
including deficiencies, found in the MEQC pilot sampled cases in
accordance with instructions established by CMS;
(b) By the August 1 following the MEQC review period, submit to CMS
a report that--
(1) Identifies the root cause and any trends found in the case
review findings.
(2) Offers corrective actions for each unique error and deficiency
finding based on the analysis provided in paragraph (b)(1) of this
section.
(c) In the corrective action report, the State must provide updates
on corrective actions reported for the previous MEQC pilot.
[82 FR 31184, July 5, 2017]
Medicaid Quality Control (MQC) Claims Processing Assessment System
Source: Sections 431.830 through 431.836 appear at 55 FR 22170, May
31, 1990, unless otherwise noted.
Sec. 431.830 Basic elements of the Medicaid quality control (MQC)
claims processing assessment system.
An agency must--
(a) Operate the MQC claims processing assessment system in
accordance with the policies, sampling methodology, review procedures,
reporting forms, requirements, and other instructions established by
CMS.
(b) Identify deficiencies in the claims processing operations.
(c) Measure cost of deficiencies;
(d) Provide data to determine appropriate corrective action;
(e) Provide an assessment of the State's claims processing or that
of its fiscal agent;
(f) Provide for a claim-by-claim review where justifiable by data;
and
(g) Produce an audit trail that can be reviewed by CMS or an outside
auditor.
Sec. 431.832 Reporting requirements for claims processing assessment
systems.
(a) The agency must submit reports and data specified in paragraph
(b) of this section to CMS, in the form and at the time specified by
CMS.
[[Page 70]]
(b) Except when CMS authorizes less stringent reporting, States must
submit:
(1) A monthly report on claims processing reviews sampled and or
claims processing reviews completed during the month;
(2) A summary report on findings for all reviews in the 6-month
sample to be submitted by the end of the 3rd month following the
scheduled completion of reviews for that 6 month period; and
(3) Other data and reports as required by CMS.
Sec. 431.834 Access to records: Claims processing assessment systems.
The agency, upon written request, must provide HHS staff with access
to all records pertaining to its MQC claims processing assessment system
reviews to which the State has access, including information available
under part 435, subpart J, of this chapter.
Sec. 431.836 Corrective action under the MQC claims processing
assessment system.
The agency must--
(a) Take action to correct those errors identified through the
claims processing assessment system review and, if cost effective, to
recover those funds erroneously spent;
(b) Take administrative action to prevent and reduce the incidence
of those errors; and
(c) By August 31 of each year, submit to CMS a report of its error
analysis and a corrective action plan on the reviews conducted since the
cut-off-date of the previous corrective action plan.
Subpart Q_Requirements for Estimating Improper Payments in Medicaid and
CHIP
Source: 71 FR 51081, Aug. 28, 2006, unless otherwise noted.
Sec. 431.950 Purpose.
This subpart requires States and providers to submit information and
provide support to Federal contractors as necessary to enable the
Secretary to produce national improper payment estimates for Medicaid
and the Children's Health Insurance Program (CHIP).
[82 FR 31184, July 5, 2017]
Sec. 431.954 Basis and scope.
(a) Basis. The statutory bases for this subpart are as follows:
(1) Sections 1102, 1902(a)(6), and 2107(b)(1) of the Act, which
contain the Secretary's general rulemaking authority and obligate States
to provide information, as the Secretary may require, to monitor program
performance.
(2) The Improper Payments Information Act of 2002 (Pub. L. 107-300),
which requires Federal agencies to review and identify annually those
programs and activities that may be susceptible to significant erroneous
payments, estimate the amount of improper payments, report such
estimates to the Congress, and submit a report on actions the agency is
taking to reduce erroneous payments.
(3) Section 1902(a)(27)(B) of the Act requires States to require
providers to agree to furnish the State Medicaid agencies and the
Secretary with information regarding payments claimed by Medicaid
providers for furnishing Medicaid services.
(4) Section 601 of the Children's Health Insurance Program
Reauthorization Act of 2009 (CHIPRA) (Pub. L. 111-3) which requires that
the new PERM regulations include the following: Clearly defined criteria
for errors for both States and providers; Clearly defined processes for
appealing error determinations; clearly defined responsibilities and
deadlines for States in implementing any corrective action plans;
requirements for State verification of an applicant's self-declaration
or self-certification of eligibility for, and correct amount of, medical
assistance under Medicaid or child health assistance under CHIP; and
State-specific sample sizes for application of the PERM requirements.
(b) Scope. (1) This subpart requires States under the statutory
provisions cited in paragraph (a) of this section to submit information
as set forth in Sec. 431.970 for, among other purposes, estimating
improper payments in the fee-for-service (FFS) and managed care
components of the Medicaid and CHIP
[[Page 71]]
programs and to determine whether eligibility was correctly determined.
This subpart also requires providers to submit to the Secretary any
medical records and other information necessary to disclose the extent
of services provided to individuals receiving assistance, and to furnish
information regarding any payments claimed by the provider for
furnishing such services, as requested by the Secretary.
(2) All information must be furnished in accordance with section
1902(a)(7)(A) of the Act, regarding confidentiality.
(3) This subpart does not apply with respect to Puerto Rico, Guam,
the Virgin Islands, the Northern Mariana Islands or American Samoa.
[71 FR 51081, Aug. 28, 2006, as amended at 75 FR 48847, Aug. 11, 2010]
Sec. 431.958 Definitions and use of terms.
Adjudication date means either the date on which money was obligated
to pay a claim or the date the decision was made to deny a claim.
Annual sample size means the number of fee-for-service claims,
managed care payments, or eligibility cases that will be sampled for
review in a given PERM cycle.
Appeals means a process that allows the State to dispute the PERM
Review Contractor and Eligibility Review Contractor findings with CMS
after the difference resolution process has been exhausted.
Beneficiary means an applicant for, or beneficiary of, Medicaid or
CHIP program benefits.
Children's Health Insurance Program (CHIP) means the program
authorized and funded under Title XXI of the Act.
Corrective action means actions to be taken by the State to reduce
errors or other vulnerabilities for the purpose of reducing improper
payments in Medicaid and CHIP.
Deficiency means a finding in which a claim or payment had a
medical, data processing, and/or eligibility error that did not result
in federal and/or state improper payment.
Difference resolution means a process that allows the State to
dispute the PERM Review Contractor and Eligibility Review Contractor
findings directly with the contractor.
Disallowance means the percentage of Federal medical assistance
funds the State is required to return to CMS in accordance with section
1903(u) of the Act.
Eligibility means meeting the State's categorical and financial
criteria for receipt of benefits under the Medicaid or CHIP programs.
Eligibility Review Contractor (ERC) means the CMS contractor
responsible for conducting state eligibility reviews for the PERM
Program.
Federal contractor means the ERC, RC, or SC which support CMS in
executing the requirements of the PERM program.
Federally Facilitated Exchange (FFE) means the health insurance
exchange established by the Federal government with responsibilities
that include making Medicaid and CHIP determinations for states that
delegate authority to the FFE.
Federally Facilitated Exchange--Determination (FFE-D) means cases
determined by the FFE in states that have delegated the authority to
make Medicaid/CHIP eligibility determinations to the FFE.
Federal financial participation means the Federal Government's share
of the State's expenditures under the Medicaid program and CHIP.
Finding means errors and/or deficiencies identified through the
medical, data processing, and eligibility reviews.
Improper payment means any payment that should not have been made or
that was made in an incorrect amount (including overpayments and
underpayments) under statutory, contractual, administrative, or other
legally applicable requirements; and includes any payment to an
ineligible beneficiary, any duplicate payment, any payment for services
not received, any payment incorrectly denied, and any payment that does
not account for credits or applicable discounts.
Improper payment rate means an annual estimate of improper payments
made under Medicaid and CHIP equal to the sum of the overpayments and
underpayments in the sample, that is, the absolute value of such
payments, expressed as a percentage of total payments made in the
sample.
[[Page 72]]
Lower limit means the lower bound of the 95-percent confidence
interval for the State's eligibility improper payment rate.
Medicaid means the joint Federal and State program, authorized and
funded under Title XIX of the Act, that provides medical care to people
with low incomes and limited resources.
Payment means any payment to a provider, insurer, or managed care
organization for a Medicaid or CHIP beneficiary for which there is
Medicaid or CHIP Federal financial participation. It may also mean a
direct payment to a Medicaid or CHIP beneficiary in limited
circumstances permitted by CMS regulation or policy.
Payment error means any claim or payment where federal and/or state
dollars were paid improperly based on medical, data processing, and/or
eligibility reviews.
PERM means the Payment Error Rate Measurement process to measure
improper payment in Medicaid and CHIP.
PERM review period means the timeframe in which claims and
eligibility are reviewed for national annual improper payment rate
calculation purposes, July through June.
Provider means any qualified provider recognized under Medicaid and
CHIP statute and regulations.
Provider error includes, but is not limited to, medical review
errors as described in Sec. 431.960(c) of this subpart, as determined
in accordance with documented State or Federal policies or both.
Recoveries mean those monies for which the State is responsible to
pay back to CMS based on the identification of Federal improper
payments.
Review Contractor (RC) means the CMS contractor responsible for
conducting state data processing and medical record reviews for the PERM
Program.
Review year means the year being analyzed for improper payments
under the PERM Program.
State eligibility system means any system, within the State or with
a state-delegated contractor, that is used by the state to determine
Medicaid and/or CHIP eligibility and/or that maintains documentation
related to Medicaid and/or CHIP eligibility determinations.
State error includes, but is not limited to, dataprocessing errors
and eligibility errors as described in Sec. 431.960(b) and (d), as
determined in accordance with documented State and Federal policies.
State errors do not include the errors described in paragraph Sec.
431.960(e)(2).
State payment system means any system within the State or with a
state-delegated contractor that is used to adjudicate and pay Medicaid
and/or CHIP FFS claims and/or managed care payments.
State-specific sample size means the sample size determined by CMS
that is required from each individual State to support national improper
payment rate precision requirements.
Statistical Contractor (SC) means the contractor responsible for
collecting and sampling fee-for-service claims and managed care
capitation payment data, as well as calculating Medicaid and CHIP state
and national improper payment rates.
States means the 50 States and the District of Columbia.
[71 FR 51081, Aug. 28, 2006, as amended at 75 FR 48847, Aug. 11, 2010;
82 FR 31184, July 5, 2017]
Sec. 431.960 Types of payment errors.
(a) General rule. Errors identified for the Medicaid and CHIP
improper payments measurement under the Improper Payments Information
Act of 2002 must affect payment under applicable Federal or State
policy, or both.
(b) Data processing errors. (1) A data processing error is an error
resulting in an overpayment or underpayment that is determined from a
review of the claim and other information available in the State's
Medicaid Management Information System, related systems, or outside
sources of provider verification resulting in Federal and/or State
improper payments.
(2) The difference in payment between what the State paid (as
adjusted within improper payment measurement guidelines) and what the
State should have paid, in accordance with federal and state documented
policies, is the dollar measure of the payment error.
[[Page 73]]
(3) Data processing errors include, but are not limited to, the
following:
(i) Payment for duplicate items.
(ii) Payment for non-covered services.
(iii) Payment for fee-for-service claims for managed care services.
(iv) Payment for services that should have been paid by a third
party but were inappropriately paid by Medicaid or CHIP.
(v) Pricing errors.
(vi) Logic edit errors.
(vii) Data entry errors.
(viii) Managed care rate cell errors.
(ix) Managed care payment errors.
(c) Medical review errors. (1) A medical review error is an error
resulting in an overpayment or underpayment that is determined from a
review of the provider's medical record or other documentation
supporting the service(s) claimed, Code of Federal Regulations that are
applicable to conditions of payment, the State's written policies, and a
comparison between the documentation and written policies and the
information presented on the claim resulting in Federal and/or State
improper payments.
(2) The difference in payment between what the State paid (as
adjusted within improper payment measurement guidelines) and what the
State should have paid, in accordance with the applicable conditions of
payment per 42 CFR parts 440 through 484, this part (431), and in
accordance with the State's documented policies, is the dollar measure
of the payment error.
(3) Medical review errors include, but are not limited to, the
following:
(i) Lack of documentation.
(ii) Insufficient documentation.
(iii) Procedure coding errors.
(iv) Diagnosis coding errors.
(v) Unbundling.
(vi) Number of unit errors.
(vii) Medically unnecessary services.
(viii) Policy violations.
(ix) Administrative errors.
(d) Eligibility errors. (1) An eligibility error is an error
resulting in an overpayment or underpayment that is determined from a
review of a beneficiary's eligibility determination, in comparison to
the documentation used to establish a beneficiary's eligibility and
applicable federal and state regulations and policies, resulting in
Federal and/or State improper payments.
(2) Eligibility errors include, but are not limited to, the
following:
(i) Ineligible individual, but authorized as eligible when he or she
received services.
(ii) Eligible individual for the program, but was ineligible for
certain services he or she received.
(iii) Lacked or had insufficient documentation in his or her case
record, in accordance with the State's documented policies and
procedures, to make a definitive review decision of eligibility or
ineligibility.
(iv) Was ineligible for managed care but enrolled in managed care.
(3) The dollars paid in error due to an eligibility error is the
measure of the payment error.
(4) A State eligibility error does not result from the State's
verification of an applicant's self-declaration or self-certification of
eligibility for, and the correct amount of, medical assistance or child
health assistance, if the State process for verifying an applicant's
self-declaration or self-certification satisfies the requirements in
Federal law or guidance, or, if applicable, has the Secretary's
approval.
(e) Errors for purposes of determining the national improper payment
rates. (1) The Medicaid and CHIP national improper payment rates
include, but are not limited to, the errors described in paragraphs (b)
through (d) of this section.
(2) Eligibility errors resulting solely from determinations of
Medicaid or CHIP eligibility delegated to, and made by, the Federally
Facilitated Exchange will be included in the national improper payment
rate.
(f) Errors for purposes of determining the State improper payment
rates. The Medicaid and CHIP State improper payment rates include, but
are not limited to, the errors described in paragraphs (b) through (d)
of this section, and do not include the errors described in paragraph
(e)(2) of this section.
(g) Error codes. CMS will define different types of errors within
the above categories for analysis and reporting purposes. Only Federal
and/or State
[[Page 74]]
dollars in error will factor into the State's PERM improper payment
rate.
[82 FR 31185, July 5, 2017]
Sec. 431.970 Information submission and systems access requirements.
(a) The State must submit information to the Secretary for, among
other purposes, estimating improper payments in Medicaid and CHIP, that
include, but are not limited to--
(1) Adjudicated fee-for-service or managed care claims information,
or both, on a quarterly basis, from the review year;
(2) Upon request from CMS, provider contact information that has
been verified by the State as current;
(3) All medical, eligibility, and other related policies in effect,
and any quarterly policy updates;
(4) Current managed care contracts, rate information, and any
quarterly updates applicable to the review year;
(5) Data processing systems manuals;
(6) Repricing information for claims that are determined during the
review to have been improperly paid;
(7) Information on claims that were selected as part of the sample,
but changed in substance after selection, for example, successful
provider appeals;
(8) Adjustments made within 60 days of the adjudication dates for
the original claims or line items, with sufficient information to
indicate the nature of the adjustments and to match the adjustments to
the original claims or line items;
(9) Case documentation to support the eligibility review, as
requested by CMS;
(10) A corrective action plan for purposes of reducing erroneous
payments in FFS, managed care, and eligibility; and
(11) Other information that the Secretary determines is necessary
for, among other purposes, estimating improper payments and determining
improper payment rates in Medicaid and CHIP.
(b) Providers must submit information to the Secretary for, among
other purposes, estimating improper payments in Medicaid and CHIP, which
include but are not limited to Medicaid and CHIP beneficiary medical
records, within 75 calendar days of the date the request is made by CMS.
If CMS determines that the documentation is insufficient, providers must
respond to the request for additional documentation within 14 calendar
days of the date the request is made by CMS.
(c) The State must provide the Federal contractor(s) with access to
all payment system(s) necessary to conduct the medical and data
processing review, including the Medicaid Management Information System
(MMIS), any systems that include beneficiary demographic and/or provider
enrollment information, and any document imaging systems that store
paper claims.
(d) The State must provide the Federal contractor(s) with access to
all eligibility system(s) necessary to conduct the eligibility review,
including any eligibility systems of record, any electronic document
management system(s) that house case file information, and systems that
house the results of third party data matches.
[82 FR 31185, July 5, 2017]
Sec. 431.972 Claims sampling procedures.
(a) General requirements. The State will submit quarterly FFS claims
and managed care payments, as identified in Sec. 431.970(a), to allow
federal contractors to conduct data processing, medical record, and
eligibility reviews to meet the requirements of the PERM measurement.
(b) Claims universe. (1) The PERM claims universe includes payments
that were originally paid (paid claims) and for which payment was
requested but denied (denied claims) during the PERM review period, and
for which there is FFP (or would have been if the claim had not been
denied) through Title XIX (Medicaid) or Title XXI (CHIP).
(2) The State must establish controls to ensure FFS and managed care
universes are accurate and complete, including comparing the FFS and
managed care universes to the Form CMS-64 and Form CMS-21 as
appropriate.
(c) Sample size. CMS estimates each State's annual sample size for
the PERM review at the beginning of the PERM cycle.
[[Page 75]]
(1) Precision and confidence levels. The national annual sample size
will be estimated to achieve at least a minimum National-level improper
payment rate with a 90 percent confidence interval of plus or minus 2.5
percent of the total amount of all payments for Medicaid and CHIP.
(2) State-specific sample sizes. CMS will develop State-specific
sample sizes for each State. CMS may take into consideration the
following factors in determining each State's annual state-specific
sample size for the current PERM cycle:
(i) State-level precision goals for the current PERM cycle;
(ii) The improper payment rate and precision of that improper
payment rate from the State's previous PERM cycle;
(iii) The State's overall Medicaid and CHIP expenditures; and
(iv) Other relevant factors as determined by CMS.
[82 FR 31186, July 5, 2017]
Sec. 431.992 Corrective action plan.
(a) The State must develop a separate corrective action plan for
Medicaid and CHIP for each improper payment rate measurement, designed
to reduce improper payments in each program based on its analysis of the
improper payment causes in the FFS, managed care, and eligibility
components.
(1) The corrective action plan must address all errors that are
included in the State improper payment rate defined at Sec.
431.960(f)(1) and all deficiencies.
(2) For eligibility, the corrective action plan must include an
evaluation of whether actions the State takes to reduce eligibility
errors will also avoid increases in improper denials.
(b) In developing a corrective action plan, the State must take the
following actions:
(1) Error analysis. The State must conduct analysis such as
reviewing causes, characteristics, and frequency of errors that are
associated with improper payments. The State must review the findings of
the analysis to determine specific programmatic causes to which errors
are attributed (for example, provider lack of understanding of the
requirement to provide documentation), if any, and to identify root
improper payment causes.
(2) Corrective action planning. The State must determine the
corrective actions to be implemented that address the root improper
payment causes and prevent that same improper payment from occurring
again.
(3) Implementation and monitoring. (i) The State must develop an
implementation schedule for each corrective action and implement those
actions in accordance with the schedule.
(ii) The implementation schedule must identify all of the following
for each action:
(A) The specific corrective action.
(B) Status.
(C) Scheduled or actual implementation date.
(D) Key personnel responsible for each activity.
(E) A monitoring plan for monitoring the effectiveness of the
action.
(4) Evaluation. The State must submit an evaluation of the
corrective action plan from the previous measurement. The State must
evaluate the effectiveness of the corrective action(s) by assessing all
of the following:
(i) Improvements in operations.
(ii) Efficiencies.
(iii) Number of errors.
(iv) Improper payments.
(v) Ability to meet the PERM improper payment rate targets assigned
by CMS.
(c) The State must submit to CMS and implement the corrective action
plan for the fiscal year it was reviewed no later than 90 calendar days
after the date on which the State's Medicaid or CHIP improper payment
rates are posted on the CMS contractor's Web site.
(d) The State must provide updates on corrective action plan
implementation progress annually and upon request by CMS.
(e) In addition to paragraphs (a) through (d) of this section, each
State that has an eligibility improper payment rates over the allowable
threshold of 3 percent for consecutive PERM years, must submit updates
on the status of corrective action implementation to CMS every other
month. Status updates must include, but are not limited to the
following:
[[Page 76]]
(1) Details on any setbacks along with an alternate corrective
action or workaround.
(2) Actual examples of how the corrective actions have led to
improvements in operations, and explanations for how the improvements
will lead to a reduction in the number of errors, as well as the State's
next PERM eligibility improper payment rate.
(3) An overall summary on the status of corrective actions,
planning, and implementation, which demonstrates how the corrective
actions will provide the State with the ability to meet the 3 percent
threshold.
[82 FR 31186, July 5, 2017]
Sec. 431.998 Difference resolution and appeal process. Difference
resolution and appeal process.
(a) The State may file, in writing, a request with the relevant
Federal contractor to resolve differences in the Federal contractor's
findings based on medical, data processing, or eligibility reviews in
Medicaid or CHIP.
(b) The State must file requests to resolve differences based on the
medical, data processing, or eligibility reviews within 25 business days
after the report of review findings is shared with the State.
(c) To file a difference resolution request, the State must be able
to demonstrate all of the following:
(1) Have a factual basis for filing the request.
(2) Provide the appropriate Federal contractor with valid evidence
directly related to the finding(s) to support the State's position.
(d) For a finding in which the State and the Federal contractor
cannot resolve the difference in findings, the State may appeal to CMS
for final resolution by filing an appeal within 15 business days from
the date the relevant Federal contractor's finding as a result of the
difference resolution is shared with the State. There is no minimum
dollar threshold required to appeal a difference in findings.
(e) To file an appeal request, the State must be able to demonstrate
all of the following:
(1) Have a factual basis for filing the request.
(2) Provide CMS with valid evidence directly related to the
finding(s) to support the State's position.
(f) All differences, including those pending in CMS for final
decision that are not overturned in time for improper payment rate
calculation, will be considered as errors in the improper payment rate
calculation in order to meet the reporting requirements of the IPIA.
[82 FR 31187, July 5, 2017]
Sec. 431.1002 Recoveries.
(a) Medicaid. States must return to CMS the Federal share of
overpayments based on medical and processing errors in accordance with
section 1903(d)(2) of the Act and related regulations at part 433,
subpart F of this chapter. Payments based on erroneous Medicaid
eligibility determinations are addressed under section 1903(u) of the
Act and related regulations at part 431, subpart P of this chapter.
(b) CHIP. Quarterly Federal payments to the States under Title XXI
of the Act must be reduced in accordance with section 2105(e) of the Act
and related regulations at part 457, subpart B of this chapter.
Sec. 431.1010 Disallowance of Federal financial participation for
erroneous State payments (for PERM review years ending after
July 1, 2020).
(a) Purpose. (1) This section establishes rules and procedures for
disallowing Federal financial participation (FFP) in erroneous medical
assistance payments due to eligibility improper payment errors, as
detected through the PERM program required under this subpart, in effect
on and after July 1, 2020.
(2) After the State's eligibility improper rate has been established
for each PERM review period, CMS will compute the amount of the
disallowance, removing any underpayments due to eligibility errors, and
adjust the FFP payable to each State. The disallowance or withholding is
only applicable to the State's PERM year.
(3) CMS will compute the amount to be withheld or disallowed as
follows:
(i) Subtract the 3 percent allowable threshold from the lower limit
of the State's eligibility improper payment
[[Page 77]]
rate percentage excluding underpayments.
(ii) If the difference is greater than zero, the Federal medical
assistance funds for the period, are multiplied by that percentage. This
product is the amount of the disallowance or withholding.
(b) Notice to States and showing of good faith. (1) If CMS is
satisfied that the State did not meet the 3 percent allowable threshold
despite a good faith effort, CMS will reduce the funds being disallowed
in whole.
(2) CMS may find that a State did not meet the 3 percent allowable
threshold despite a good faith effort if the State has taken the action
it believed was needed to meet the threshold, but the threshold was not
met. CMS will grant a good faith waiver only if the State both:
(i) Participates in the MEQC pilot program in accordance with
Sec. Sec. 431.800 through 431.820, and
(ii) Implements PERM CAPs in accordance with Sec. 431.992.
(3) Each State that has an eligibility improper payment rate above
the allowable threshold will be notified by CMS of the amount of the
disallowance.
(c) Disallowance subject to appeal. If the State does not agree with
a disallowance imposed under paragraph (e) of this section, it may
appeal to the Departmental Appeals Board within 30 days from the date of
the final disallowance notice from CMS. The regular procedures for an
appeal of a disallowance will apply, including review by the Appeals
Board under 45 CFR part 16.
[82 FR 31187, July 5, 2017]
PART 432_STATE PERSONNEL ADMINISTRATION--Table of Contents
Subpart A_General Provisions
Sec.
432.1 Basis and purpose.
432.2 Definitions.
432.10 Standards of personnel administration.
Subpart B_Training Programs; Subprofessional and Volunteer Programs
432.30 Training programs: General requirements.
432.31 Training and use of subprofessional staff.
432.32 Training and use of volunteers.
Subpart C_Staffing and Training Expenditures
432.45 Applicability of provisions in subpart.
432.50 FFP: Staffing and training costs.
432.55 Reporting training and administrative costs.
Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).
Source: 43 FR 45199, Sept. 29, 1978, unless otherwise noted.
Subpart A_General Provisions
Sec. 432.1 Basis and purpose.
This part prescribes regulations to implement section 1902(a)(4) of
the Act, which relates to a merit system of State personnel
administration and training and use of subprofessional staff and
volunteers in State Medicaid programs, and section 1903(a), rates of FFP
for Medicaid staffing and training costs. It also prescribes
regulations, based on the general administrative authority in section
1902(a)(4), for State training programs for all staff.
Sec. 432.2 Definitions.
As used in this part--
Community service aides means subprofessional staff, employed in a
variety of positions, whose duties are an integral part of the agency's
responsibility for planning, administration, and for delivery of health
services.
Directly supporting staff means secretarial, stenographic, and
copying personnel and file and records clerks who provide clerical
services that directly support the responsibilities of skilled
professional medical personnel, who are directly supervised by the
skilled professional medical personnel, and who are in an employer-
employee relationship with the Medicaid agency.
Fringe benefits means the employer's share of premiums for workmen's
compensation, employees' retirement, unemployment compensation, health
insurance, and similar expenses.
[[Page 78]]
Full-time training means training that requires employees to be
relieved of all responsibility for performance of current agency work to
participate in a training program.
Part-time training means training that allows employees to continue
full-time in their agency jobs or requires only partial reduction of
work activities to participate in the training activity.
Skilled professional medical personnel means physicians, dentists,
nurses, and other specialized personnel who have professional education
and training in the field of medical care or appropriate medical
practice and who are in an employer-employee relationship with the
Medicaid agency. It does not include other nonmedical health
professionals such as public administrators, medical analysts,
lobbyists, senior managers or administrators of public assistance
programs or the Medicaid program.
Staff of other public agencies means skilled professional medical
personnel and directly supporting staff who are employed in State or
local agencies other than the Medicaid agency who perform duties that
directly relate to the administration of the Medicaid program.
Subprofessional staff means persons performing tasks that demand
little or no formal education; a high school diploma; or less than 4
years of college.
Supporting staff means secretarial, stenographic, clerical, and
other subprofessional staff whose activities are directly necessary to
the carrying out of the functions which are the responsibility of
skilled professional medical personnel, as defined in this section.
Training program means a program of educational activities based on
the agency's training needs and aimed at insuring that agency staff
acquire the knowledge and skills necessary to perform their jobs.
Volunteer means a person who contributes personal service to the
community through the agency's program but is not a replacement or
substitute for paid staff.
[43 FR 45199, Sept. 29, 1978, as amended at 50 FR 46663, Nov. 12, 1985;
50 FR 49389, Dec. 2, 1985]
Sec. 432.10 Standards of personnel administration.
(a) State plan requirement. A State plan must provide that the
requirements of paragraphs (c) through (h) of this section are met.
(b) Terms. In this section, ``standards'' refer to those specified
in paragraph (c) of this section.
(c) Methods of personnel administration. Methods of personnel
administration must be established and maintained, in the Medicaid
agency and in local agencies administering the propgram, in conformity
with:
(1) [Reserved]
(2) 5 CFR part 900, subpart F, Administration of the Standards for
Merit System of Personnel Administration.
(d) Compliance of local jurisdictions. The Medicaid agency must have
in effect methods to assure compliance with the standards by local
jurisdictions included in the plan.
(e) Review and adequacy of State laws, regulations, and policies.
The agency must--
(1) Assure that the U.S. Civil Service Commission has determined the
adequacy of current State laws, regulations, and policy statements that
effect methods of personnel administration in conformity with the
standards, and
(2) Submit any changes in them to the Commission for review.
(f) Statements of acceptance by local agencies. If the Medicaid
agency changes from a State-administered to a State-supervised, locally
administered program, it must obtain statements of acceptance of the
standards from the local agencies.
(g) Affirmative action plan. The Medicaid agency must have in effect
an affirmative action plan for equal employment opportunity, that
includes specific action steps and timetables to assure that
opportunity, and meets all other requirements of 45 CFR 70.4. \1\
---------------------------------------------------------------------------
\1\ Editorial Note: The regulations formerly contained in 45 CFR
70.4 were revised and reissued by the Office of Personnel Management at
5 CFR part 900, (subpart F).
---------------------------------------------------------------------------
(h) Submittal of requested materials. The Medicaid agency must
submit to HHS, upon request, copies of the affirmative action plan and
of the State
[[Page 79]]
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and local materials that assure compliance with the standards.
[43 FR 45199, Sept. 29, 1978, as amended at 45 FR 24883, Apr. 11, 1980]
Subpart B_Training Programs; Subprofessional and Volunteer Programs
Sec. 432.30 Training programs: General requirements.
(a) A State plan must provide for a program of training for Medicaid
agency personnel. (See also Sec. Sec. 432.31 and 432.32 for training
programs for subprofessional staff and for volunteers.)
(b) The program must--
(1) Include initial inservice training for newly appointed staff,
and continuing training opportunities to improve the operation of the
program;
(2) Be related to job duties performed or to be performed by the
persons trained; and
(3) Be consistent with the program objectives of the agency.
Sec. 432.31 Training and use of subprofessional staff.
(a) State plan requirement. A State plan must provide for the
training and effective use of subprofessional staff as community service
aides, in accordance with the requirements of this section.
(b) Recruitment and selection. The Medicaid agency must have methods
of recruitment and selection that afford opportunity for full-time or
part-time employment of persons of low income, including:
(1) Young, middle-aged, and older persons;
(2) Physically and mentally disabled; and
(3) Beneficiaries.
(c) Merit system. Subprofessional positions must be subject to merit
system requirements except where special exemption is approved on the
basis of a State alternative plan for employment of disadvantaged
persons.
(d) Staffing plan. The agency staffing plan must include the kinds
of jobs that subprofessional staff can perform.
(e) Career service. The agency must have a career service program
that allows persons:
(1) To enter employment at the subprofessional level; and
(2) To progress to positions of increasing responsibility and
reward:
(i) In accordance with their abilities; and
(ii) Through work experience and pre-service and in-service
training.
(f) Training, supervision and supportive services. The agency must
have an organized training program, supervision, and supportive services
for subprofessional staff.
(g) Progressive expansion. The agency must provide for annual
increase in the number of subprofessional staff until:
(1) An appropriate ratio of subprofessional and professional staff
has been achieved; and
(2) There is maximum use of subprofessional staff as community aides
in the operation of the program.
Sec. 432.32 Training and use of volunteers.
(a) State plan requirement. A State plan must provide for the
training and use of non-paid or partially paid volunteers in accordance
with the requirements of this section.
(b) Functions of volunteers. The Medicaid agency must make use of
volunteers in:
(1) Providing services to applicants and beneficiaries; and
(2) Assisting any advisory committees established by the agency.
As used in this paragraph, ``partially paid volunteers'' means
volunteers who are reimbursed only for actual expenses incurred in
giving service, without regard to the value of the service or the time
required to provide it.
(c) Staffing. The agency must designate a position whose incumbent
is responsible for:
(1) The development, organization, and administration of the
volunteer program; and
(2) Coordination of the program with related functions.
(d) Recruitment, selection, training, and supervision. The agency
must have:
(1) Methods of recruitment and selection that assure participation
of volunteers of all income levels, in planning capacities and service
provision; and
(2) A program of organized training and supervision of volunteers.
[[Page 80]]
(e) Reimbursement of expenses. The agency must--
(1) Reimburse volunteers for actual expenses incurred in providing
services; and
(2) Assure that no volunteer is deprived of the opportunity to serve
because of the expenses involved.
(f) Progressive expansion. The agency must provide for annual
increase in the number of volunteers used until the volunteer program is
adequate for the achievement of the agency's service goals.
Subpart C_Staffing and Training Expenditures
Sec. 432.45 Applicability of provisions in subpart.
The rates of FFP specified in this subpart C do not apply to State
personnel who conduct survey activities and certify facilities for
participation in Medicaid, as provided for under section 1902(a)(33)(B)
of the Act.
[50 FR 46663, Nov. 12, 1985; 50 FR 49389, Dec. 2, 1985]
Sec. 432.50 FFP: Staffing and training costs.
(a) Availability of FFP. FFP is available in expenditures for salary
or other compensation, fringe benefits, travel, per diem, and training,
at rates determined on the basis of the individual's position, as
specified in paragraph (b) of this section.
(b) Rates of FFP. (1) For skilled professional medical personnel and
directly supporting staff of the Medicaid agency or of other public
agencies (as defined in Sec. 432.2), the rate is 75 percent.
(2) For personnel engaged directly in the operation of mechanized
claims processing and information retrieval systems, the rate is 75
percent.
(3) For personnel engaged in the design, development, or
installation of mechanized claims processing and information retrieval
systems, the rate is 50 percent for training and 90 percent for all
other costs specified in paragraph (a) of this section.
(4) [Reserved]
(5) For personnel administering family planning services and
supplies, the rate is 90 percent.
(6) For all other staff of the Medicaid agency or other public
agencies providing services to the Medicaid agency, and for training and
other expenses of volunteers, the rate is 50 percent.
(c) Application of rates. (1) FFP is prorated for staff time that is
split among functions reimbursed at different rates.
(2) Rates of FFP in excess of 50 percent apply only to those
portions of the individual's working time that are spent carrying out
duties in the specified areas for which the higher rate is authorized.
(3) The allocation of personnel and staff costs must be based on
either the actual percentages of time spent carrying out duties in the
specified areas, or another methodology approved by CMS.
(d) Other limitations for FFP rate for skilled professional medical
personnel and directly supporting staff--(1) Medicaid agency personnel
and staff. The rate of 75 percent FFP is available for skilled
professional medical personnel and directly supporting staff of the
Medicaid agency if the following criteria, as applicable, are met:
(i) The expenditures are for activities that are directly related to
the administration of the Medicaid program, and as such do not include
expenditures for medical assistance;
(ii) The skilled professional medical personnel have professional
education and training in the field of medical care or appropriate
medical practice. ``Professional education and training'' means the
completion of a 2-year or longer program leading to an academic degree
or certificate in a medically related profession. This is demonstrated
by possession of a medical license, certificate, or other document
issued by a recognized National or State medical licensure or certifying
organization or a degree in a medical field issued by a college or
university certified by a professional medical organization. Experience
in the administration, direction, or implementation of the Medicaid
program is not considered the equivalent of professional training in a
field of medical care.
(iii) The skilled professional medical personnel are in positions
that have duties and responsibilities that require
[[Page 81]]
those professional medical knowledge and skills.
(iv) A State-documented employer-employee relationship exists
between the Medicaid agency and the skilled professional medical
personnel and directly supporting staff; and
(v) The directly supporting staff are secretarial, stenographic, and
copying personnel and file and records clerks who provide clerical
services that are directly necessary for the completion of the
professional medical responsibilities and functions of the skilled
professional medical staff. The skilled professional medical staff must
directly supervise the supporting staff and the performance of the
supporting staff's work.
(2) Staff of other public agencies. The rate of 75 percent FFP is
available for staff of other public agencies if the requirements
specified in paragraph (d)(1) of this section are met and the public
agency has a written agreement with the Medicaid agency to verify that
these requirements are met.
(e) Limitations on FFP rates for staff in mechanized claims
processing and information retrieval systems. The special matching rates
for persons working on mechanized claims processing and information
retrieval systems (paragraphs (b)(2) and (3) of this section) are
applicable only if the design, development and installation, or the
operation, have been approved by the Administrator in accordance with
part 433, subchapter C, of this chapter.
[43 FR 45199, Sept. 29, 1978, as amended at 46 FR 48566, Oct. 1, 1981;
50 FR 46663, Nov. 12, 1985]
Sec. 432.55 Reporting training and administrative costs.
(a) Scope. This section identifies activities and costs to be
reported as training or administrative costs on quarterly estimate and
expenditure reports to CMS.
(b) Activities and costs to be reported on training expenditures.
(1) For fulltime training (with no assigned agency duties): Salaries,
fringe benefits, dependency allowances, travel, tuition, books, and
educational supplies.
(2) For part-time training: Travel, per diem, tuition, books and
educational supplies.
(3) For State and local Medicaid agency staff development personnel
(including supporting staff) assigned fulltime training functions:
Salaries, fringe benefits, travel, and per diem. Costs for staff
spending less than full time on training for the Medicaid program must
be allocated between training and administration in accordance with
Sec. 433.34 of this subchapter.
(4) For experts engaged to develop or conduct special programs:
Salary, fringe benefits, travel, and per diem.
(5) For agency training activities directly related to the program:
Use of space, postage, teaching supplies, and purchase or development of
teaching materials and equipment, for example, books and audiovisual
aids.
(6) For field instruction in Medicaid: Instructors' salaries and
fringe benefits, rental of space, travel, clerical assistance, teaching
materials and equipment such as books and audiovisual aids.
(c) Activities and costs not to be reported as training
expenditures. The following activities are to be reported as
administrative costs:
(1) Salaries of supervisors (day-to-day supervision of staff is not
a training activity); and
(2) Cost of employing students on a temporary basis, for instance,
during summer vacation.
[43 FR 45199, Sept. 29, 1978, as amended at 44 FR 17935, Mar. 23, 1979]
PART 433_STATE FISCAL ADMINISTRATION--Table of Contents
Sec.
433.1 Purpose.
Subpart A_Federal Matching and General Administration Provisions
433.8 [Reserved]
433.10 Rates of FFP for program services.
433.11 Enhanced FMAP rate for children.
433.15 Rates of FFP for administration.
433.32 Fiscal policies and accountability.
433.34 Cost allocation.
433.35 Equipment--Federal financial participation.
433.36 Liens and recoveries.
433.37 Reporting provider payments to Internal Revenue Service.
433.38 Interest charge on disallowed claims for FFP.
[[Page 82]]
433.40 Treatment of uncashed or cancelled (voided) Medicaid checks.
Subpart B_General Administrative Requirements State Financial
Participation
433.50 Basis, scope, and applicability.
433.51 Funds from units of government as the State share of financial
participation.
433.52 General definitions.
433.53 State plan requirements.
433.54 Bona fide donations.
433.55 Health care-related taxes defined.
433.56 Classes of health care services and providers defined.
433.57 General rules regarding revenues from provider-related donations
and health care-related taxes.
433.58-433.60 [Reserved]
433.66 Permissible provider-related donations.
433.67 Limitations on level of FFP for permissible provider-related
donations.
433.68 Permissible health care-related taxes.
433.70 Limitation on level of FFP for revenues from health care-related
taxes.
433.72 Waiver provisions applicable to health care-related taxes.
433.74 Reporting requirements.
Subpart C_Mechanized Claims Processing and Information Retrieval Systems
433.110 Basis, purpose, and applicability.
433.111 Definitions.
433.112 FFP for design, development, installation or enhancement of
mechanized processing and information retrieval systems.
433.114 Procedures for obtaining initial approval; notice of decision.
433.116 FFP for operation of mechanized claims processing and
information retrieval systems.
433.117 Initial approval of replacement systems.
433.119 Conditions for reapproval; notice of decision.
433.120 Procedures for reduction of FFP after reapproval review.
433.121 Reconsideration of the decision to reduce FFP after reapproval
review.
433.122 Reapproval of a disapproved system.
433.123 Notification of changes in system requirements, performance
standards or other conditions for approval or reapproval.
433.127 Termination of FFP for failure to provide access to claims
processing and information retrieval systems.
433.131 Waiver for noncompliance with conditions of approval and
reapproval.
Subpart D_Third Party Liability
433.135 Basis and purpose.
433.136 Definitions.
433.137 State plan requirements.
433.138 Identifying liable third parties.
433.139 Payment of claims.
433.140 FFP and repayment of Federal share.
Assignment of Rights to Benefits
433.145 Assignment of rights to benefits--State plan requirements.
433.146 Rights assigned; assignment method.
433.147 Cooperation in establishing the identity of a child's parents
and in obtaining medical support and payments and in
identifying and providing information to assist in pursuing
third parties who may be liable to pay.
433.148 Denial or termination of eligibility.
Cooperative Agreements and Incentive Payments
433.151 Cooperative agreements and incentive payments--State plan
requirements.
433.152 Requirements for cooperative agreements for third party
collections.
433.153 Incentive payments to States and political subdivisions.
433.154 Distribution of collections.
Subpart E_Methodologies for Determining Federal Share of Medicaid
Expenditures for Adult Eligibility Group
433.202 Scope.
433.204 Definitions.
433.206 Threshold methodology.
Subpart F_Refunding of Federal Share of Medicaid Overpayment to
Providers
433.300 Basis.
433.302 Scope of subpart.
433.304 Definitions.
433.310 Applicability of requirements.
433.312 Basic requirements for refunds.
433.316 When discovery of overpayment occurs and its significance.
433.318 Overpayments involving providers who are bankrupt or out of
business.
433.320 Procedures for refunds to CMS.
433.322 Maintenance of records.
Authority: Sec. 1102 of the Social Security Act, (42 U.S.C. 1302).
Source: 43 FR 45201, Sept. 29, 1978, unless otherwise noted.
Sec. 433.1 Purpose.
This part specifies the rates of FFP for services and
administration, and prescribes requirements, prohibitions, and FFP
conditions relating to State fiscal activities.
[[Page 83]]
Subpart A_Federal Matching and General Administration Provisions
Sec. 433.8 [Reserved]
Sec. 433.10 Rates of FFP for program services.
(a) Basis. Sections 1903(a)(1), 1903(g), 1905(b), 1905(y), and
1905(z) provide for payments to States, on the basis of a Federal
medical assistance percentage, for part of their expenditures for
services under an approved State plan.
(b) Federal medical assistance percentage (FMAP)--Computations. The
FMAP is determined by the formula described in section 1905(b) of the
Act. Under the formula, if a State's per capita income is equal to the
national average per capita income, the Federal share is 55 percent. If
a State's per capita income exceeds the national average, the Federal
share is lower, with a statutory minimum of 50 percent. If a State's per
capita income is lower than the national average, the Federal share is
increased, with a statutory maximum of 83 percent. The formula used in
determining the State and Federal share is as follows:
State Share = [(State per capita income) \2\/(National per capita
income) \2\] x 45 percent
Federal share = 100 percent minus the State share (with a minimum of 50
percent and a maximum of 83 percent)
The formula provides for squaring both the State and national average
per capita incomes; this procedure magnifies any difference between the
State's income and the national average. Consequently, Federal matching
to lower income States is increased, and Federal matching to higher
income States is decreased, within the statutory 50-83 percent limits.
The FMAP for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana
Islands, and American Samoa is set by statute at 50 percent and is
subject to dollar limitations specified in section 1108 of the Act.
(c) Special provisions. (1) Under section 1903(a)(5) of the Act, the
Federal share of State expenditures for family planning services is 90
percent.
(2) Under section 1905(b), the Federal share of State expenditures
for services provided through Indian Health Service facilities is 100
percent.
(3) Under section 1903(g), the FMAP is reduced if the State does not
have an effective program to control use of institutional services.
(4) Under section 1905(b) of the Social Security Act, the Federal
share of State expenditures described in Sec. 433.11(a) for services
provided to children, is the enhanced FMAP rate determined in accordance
with Sec. 457.622(b) of this chapter, subject to the conditions
explained in Sec. 433.11(b).
(5)(i) Under section 1933(d) of the Act, the Federal share of State
expenditures for Medicare Part B premiums described in section
1905(p)(3)(A)(ii) of the Act on behalf of Qualifying Individuals
described in section 1902(a)(10)(E)(iv) of the Act, is 100 percent, to
the extent that the assistance does not exceed the State's allocation
under paragraph (c)(5)(ii) of this section. To the extent that the
assistance exceeds that allocation, the Federal share is 0 percent.
(ii) Under section 1933(c)(2) of the Act and subject to paragraph
(c)(5)(iii) of this section, the allocation to each State is equal to
the total allocation specified in section 1933(g) of the Act multiplied
by the Secretary's estimate of the ratio of the total number of
individuals described in section 1902(a)(10)(E)(iv) of the Act in the
State to the total number of individuals described in section
1902(a)(10)(E)(iv) of the Act for all eligible States. In estimating
that ratio, the Secretary will use data from the U.S. Census Bureau.
(iii) If, based on projected expenditures for a fiscal year, or for
a shorter period for which funding is available under section 1933 of
the Act, the Secretary determines that the expenditures described in
paragraph (c)(5)(i) of this section for one or more States are projected
to exceed the allocation made to the State, the Secretary may adjust
each State's fiscal year allocation, as follows:
(A) The Secretary will compare each State's projected total
expenditures for the expenses described in paragraph (c)(5)(i) of this
section to the State's initial allocation determined under paragraph
(c)(5)(ii) of this section, to determine the extent of each State's
projected surplus or deficit.
[[Page 84]]
(B) The surplus of each State with a projected surplus, as
determined in accordance with paragraph (c)(5)(iii)(A) of this section
will be added together to arrive at the Total Projected Surplus.
(C) The deficit of each State with a projected deficit, as
determined in accordance with paragraph (c)(5)(iii)(A) of this section
will be added together to arrive at the Total Projected Deficit.
(D) Each State with a projected deficit will receive an additional
allocation equal to the amount of its projected deficit, or a prorated
amount of such deficit, if the Total Projected Deficit is greater than
the Total Projected Surplus. Except as described in paragraph
(c)(5)(iii)(E) of this section, the amount to be reallocated from each
State with a projected surplus will be equal to A x B, where A equals
the Total Projected Deficit and B equals the amount of the State's
projected surplus as a percentage of the Total Projected Surplus.
(E) If the Total Projected Deficit determined under paragraph
(c)(5)(iii)(C) of this section is greater than the Total Projected
Surplus determined under paragraph (c)(5)(iii)(B) of this section, each
State with a projected deficit will receive an additional allocation
amount equal to the amount of the Total Projected Surplus multiplied by
the amount of the projected deficit for such State as a percentage of
the Total Projected Deficit. The amount to be reallocated from each
State with a projected surplus will be equal to the amount of the
projected surplus.
(iv) CMS will notify States of any changes in allotments resulting
from any reallocations.
(v) The provisions in paragraph (c)(5) of this section will be in
effect through the end of the period for which funding authority is
available under section 1933 of the Act.
(6)(i) Newly eligible FMAP. Beginning January 1, 2014, under section
1905(y) of the Act, the FMAP for a State that is one of the 50 States or
the District of Columbia, including a State that meets the definition of
expansion State in Sec. 433.204(b), for amounts expended by such State
for medical assistance for newly eligible individuals, as defined in
Sec. 433.204(a)(1), will be an increased FMAP equal to:
(A) 100 percent, for calendar quarters in calendar years (CYs) 2014
through 2016;
(B) 95 percent, for calendar quarters in CY 2017;
(C) 94 percent, for calendar quarters in CY 2018;
(D) 93 percent, for calendar quarters in CY 2019;
(E) 90 percent, for calendar quarters in CY 2020 and all subsequent
calendar years.
(ii) The FMAP specified in paragraph (c)(6)(i) of this section will
apply to amounts expended by a State for medical assistance for newly
eligible individuals in accordance with the requirements of the
methodology applied by the State under Sec. 433.206.
(7)(i) Temporary FMAP increase. During the period January 1, 2014,
through December 31, 2015, under section 1905(z)(1) of the Act for a
State described in paragraph (c)(7)(ii) of this section, the FMAP
determined under paragraph (b) of this section will be increased by 2.2
percentage points.
(ii) A State qualifies for the targeted increase in the FMAP under
paragraph (c)(7)(i) of this section, if the State:
(A) Is an expansion State, as described in Sec. 433.204(b) of this
section;
(B) Does not qualify for any payments on the basis of the increased
FMAP under paragraph (c)(6) of this section, as determined by the
Secretary; and
(C) Has not been approved by the Secretary to divert a portion of
the disproportionate share hospital allotment for the State under
section 1923(f) of the Act to the costs of providing medical assistance
or other health benefits coverage under a demonstration that is in
effect on July 1, 2009.
(iii) The increased FMAP under paragraph (c)(7)(i) of this section
is available for amounts expended by the State for medical assistance
for individuals that are not newly eligible as defined in Sec.
433.204(a)(1).
(8) Expansion State FMAP. Beginning January 1, 2014, under section
1905(z)(2) of the Act, the FMAP for an expansion State defined in Sec.
433.204(b), for amounts expended by such State for
[[Page 85]]
medical assistance for individuals described in Sec. 435.119 of this
chapter who are not newly eligible as defined in Sec. 433.204(a)(1),
and who are nonpregnant childless adults with respect to whom the State
may require enrollment in benchmark coverage under section 1937 of the
Act, will be determined in accordance with the expansion State FMAP
formula in paragraph (c)(8)(i).
[GRAPHIC] [TIFF OMITTED] TR02AP13.029
(i) Expansion State FMAP.
(ii) Transition percentage. For purposes of paragraph (c)(8)(i) of
this section, the transition percentage is equal to:
(A) 50 percent, for calendar quarters in CY 2014;
(B) 60 percent, for calendar quarters in CY 2015;
(C) 70 percent, for calendar quarters in CY 2016;
(D) 80 percent, for calendar quarters in CY 2017;
(E) 90 percent, for calendar quarters in CY 2018; and
(F) 100 percent, for calendar quarters in CY 2019 and all subsequent
calendar years.
(Sections 1902(a)(10), 1933 of the Social Security Act (42 U.S.C.
1396a), and Pub. L. 105-33)
[43 FR 45201, Sept. 29, 1978, as amended at 46 FR 48559, Oct. 1, 1981;
51 FR 41350, Nov. 14, 1986; 54 FR 21066, May 16, 1989; 66 FR 2666, Jan.
11, 2001; 70 FR 50220, Aug. 26, 2005; 71 FR 25092, Apr. 28, 2006; 73 FR
70893, Nov. 24, 2008; 78 FR 19942, Apr. 2, 2013]
Sec. 433.11 Enhanced FMAP rate for children.
(a) Subject to the conditions in paragraph (b) of this section, the
enhanced FMAP determined in accordance with Sec. 457.622 of this
chapter will be used to determine the Federal share of State
expenditures, except any expenditures pursuant to section 1923 of the
Act for payments to disproportionate share hospitals for--
(1) Services provided to optional targeted low-income children
described in Sec. 435.4 or Sec. 436.3 of this chapter; and
(2) Services provided to children born before October 1, 1983, with
or without group health coverage or other health insurance coverage, who
would be described in section 1902(l)(1)(D) of the Act (poverty-level-
related children's groups) if--
(i) They had been born on or after that date; and
(ii) They would not qualify for medical assistance under the State
plan in effect on March 31, 1997.
(b) Enhanced FMAP is not available if--
(1) A State adopts income and resource standards and methodologies
for purposes of determining a child's eligibility under the Medicaid
State plan that are more restrictive than those applied under policies
of the State plan (as described in the definition of optional targeted
low-income children at Sec. 435.4 of this chapter) in effect on June 1,
1997; or
(2) No funds are available in the State's title XXI allotment, as
determined under part 457, subpart F of this chapter for the quarter
enhanced FMAP is claimed; or
(3) The State fails to maintain a valid method of identifying
services
[[Page 86]]
provided on behalf of children listed in paragraph (a) of this section.
[66 FR 2666, Jan. 11, 2001]
Sec. 433.15 Rates of FFP for administration.
(a) Basis. Section 1903(a) (2) through (5) and (7) of the Act
provide for payments to States, on the basis of specified percentages,
for part of their expenditures for administration of an approved State
plan.
(b) Activities and rates. (1) [Reserved]
(2) Administration of family planning services: 90 percent. (Section
1903 (a)(5); 42 CFR 432.50(b)(5).)
(3) Design, development, or installation of mechanized claims
processing and information retrieval systems: 90 percent. (Section
1903(a)(3)(A)(i); 42 CFR part 433, subpart C, and Sec. 432.50 (b)(3).)
(4) Operation of mechanized claims processing and information
retrieval systems: 75 percent. (Section 1903(a) (3)(B); 42 CFR part 433,
subpart C and Sec. 432.50(b)(2).)
(5) Compensation and training of skilled professional medical
personnel and staff directly supporting those personnel if the criteria
specified in Sec. 432.50 (c) and (d) are met: 75 percent. (Section
1903(a)(2); 42 CFR 432.50(b)(1).)
(6)(i) Funds expended for the performance of medical and utilization
review by a QIO under a contract entered into under section 1902(d) of
the Act: 75 percent (section 1903(a)(3)(C) of the Act).
(ii) If a State contracts for medical and utilization review with
any individual or organization not designated under Part B of Title XI
of the Act, funds expended for such review will be reimbursed as
provided in paragraph (b)(7) of this section.
(7) All other activities the Secretary finds necessary for proper
and efficient administration of the State plan: 50 percent. (Section
1903(a)(7).) (See also Sec. 455.300 of this subchapter for FFP at 90
percent for State Medicaid fraud control units under section
1903(a)(6).)
(8) Nurse aide training and competency evaluation programs and
competency evaluation programs described in 1919(e)(1) of the Act: for
calendar quarters beginning on or after July 1, 1988 and before July 1,
1990: The lesser of 90% or the Federal medical assistance percentage
plus 25 percentage points; for calendar quarters beginning on or after
October 1, 1990: 50%. (Section 1903(a)(2)(B) of the Act.)
(9) Preadmission screening and annual resident review (PASARR)
activities conducted by the State: 75 percent. (Sections 1903(a)(2)(C)
and 1919(e)(7); 42 CFR part 483, subparts C and E.)
(10) Funds expended for the performance of external quality review
or the related activities described in Sec. 438.358 of this chapter
consistent with Sec. 438.370(a) of this chapter: 75 percent; consistent
with Sec. 438.370(b): 50 percent.
[43 FR 45201, Sept. 29, 1978, as amended at 46 FR 48566, Oct. 1, 1981;
46 FR 54744, Nov. 4, 1981; 50 FR 15327, Apr. 17, 1985; 50 FR 46664, Nov.
12, 1985; 56 FR 48918, Sept. 26, 1991; 57 FR 56506, Nov. 30, 1992; 68 FR
3635, Jan. 24, 2003; 81 FR 27853, May 6, 2016]
Sec. 433.32 Fiscal policies and accountability.
A State plan must provide that the Medicaid agency and, where
applicable, local agencies administering the plan will--
(a) Maintain an accounting system and supporting fiscal records to
assure that claims for Federal funds are in accord with applicable
Federal requirements;
(b) Retain records for 3 years from date of submission of a final
expenditure report;
(c) Retain records beyond the 3-year period if audit findings have
not been resolved; and
(d) Retain records for nonexpendable property acquired under a
Federal grant for 3 years from the date of final disposition of that
property.
[44 FR 17935, Mar. 23, 1979]
Sec. 433.34 Cost allocation.
A State plan under Title XIX of the Social Security Act must provide
that the single or appropriate Agency will have an approved cost
allocation plan on file with the Department in accordance with the
requirements contained in subpart E of 45 CFR part 95. Subpart E also
sets forth the effect on FFP if the requirements contained in that
subpart are not met.
[47 FR 17490, Apr. 23, 1982]
[[Page 87]]
Sec. 433.35 Equipment--Federal financial participation.
Claims for Federal financial participation in the cost of equipment
under the Medicaid Program are determined in accordance with subpart G
of 45 CFR part 95. Requirements concerning the management and
disposition of equipment under the Medicaid Program are also prescribed
in subpart G of 45 CFR part 95.
[47 FR 41564, Sept. 21, 1982]
Sec. 433.36 Liens and recoveries.
(a) Basis and purpose. This section implements sections 1902(a)(18)
and 1917(a) and (b) of the Act, which describe the conditions under
which an agency may impose a lien against a beneficiary's property, and
when an agency may make an adjustment or recover funds in satisfaction
of the claim against the individual's estate or real property.
(b) Definition of property. For purposes of this section,
``property'' includes the homestead and all other personal and real
property in which the beneficiary has a legal interest.
(c) State plan requirement. If a State chooses to impose a lien
against an individual's real property (or as provided in paragraph
(g)(1) of this section, personal property), the State plan must provide
that the provisions of paragraphs (d) through (i) of this section are
met.
(d) Procedures. The State plan must specify the process by which the
State will determine that an institutionalized individual cannot
reasonably be expected to be discharged from the medical institution and
return home as provided in paragraph (g)(2)(ii) of this section. The
description of the process must include the type of notice to be given
the individual, the process by which the individual will be given the
opportunity for a hearing, the hearing procedures, and by whom and on
what basis the determination that the individual cannot reasonably be
expected to be discharged from the institution will be made. The notice
to the individual must explain what is meant by the term lien, and that
imposing a lien does not mean that the individual will lose ownership of
the home.
(e) Definitions. The State plan must define the following terms used
in this section:
(1) Individual's home.
(2) Equity interest in home.
(3) Residing in the home for at least 1 (or 2) year(s).
(4) On a continuing basis.
(5) Discharge from the medical institution and return home.
(6) Lawfully residing.
(f) Exception. The State plan must specify the criteria by which a
son or daughter can establish to the agency's satisfaction that he or
she has been providing care which permitted the individual to reside at
home rather than in an institution, as provided in paragraph
(h)(2)(iii)(B) of this section.
(g) Lien provisions--(1) Incorrect payments. The agency may place a
lien against an individual's property, both personal and real, before
his or her death because of Medicaid claims paid or to be paid on behalf
of that individual following a court judgement which determined that
benefits were incorrectly paid for that individual.
(2) Correct payments. Except as provided in paragraph (g)(3) of this
section, the agency may place a lien against the real property of an
individual at any age before his or her death because of Medicaid claims
paid or to be paid for that individual when--
(i) An individual is an inpatient of a medical institution and must,
as a condition of receiving services in the institution under the State
plan, apply his or her income to the cost of care as provided in
Sec. Sec. 435.725, 435.832 and 436.832; and
(ii) The agency determines that he or she cannot reasonably be
expected to be discharged and return home. The agency must notify the
individual of its intention to make that determination and provide an
opportunity for a hearing in accordance with State established
procedures before the determination is made. The notice to an individual
must include an explanation of liens and the effect on an individual's
ownership of property.
(3) Restrictions on placing liens. The agency may not place a lien
on an individual's home under paragraph (g)(2) of
[[Page 88]]
this section if any of the following individuals is lawfully residing in
the home:
(i) The spouse;
(ii) The individual's child who is under age 21 or blind or disabled
as defined in the State plan; or
(iii) The individual's sibling (who has an equity interest in the
home, and who was residing in the individual's home for at least one
year immediately before the date the individual was admitted to the
medical institution).
(4) Termination of lien. Any lien imposed on an individual's real
property under paragraph (g)(2) of this section will dissolve when that
individual is discharged from the medical institution and returns home.
(h) Adjustments and recoveries. (1) The agency may make an
adjustment or recover funds for Medicaid claims correctly paid for an
individual as follows:
(i) From the estate of any individual who was 65 years of age or
older when he or she received Medicaid; and
(ii) From the estate or upon sale of the property subject to a lien
when the individual is institutionalized as described in paragraph
(g)(2) of this section.
(2) The agency may make an adjustment or recovery under paragraph
(h)(1) of this section only:
(i) After the death of the individual's surviving spouse; and
(ii) When the individual has no surviving child under age 21 or
blind or disabled as defined in the State plan; and
(iii) In the case of liens placed on an individual's home under
paragraph (g)(2) of this section, when there is no--
(A) Sibling of the individual residing in the home, who has resided
there for at least one year immediately before the date of the
individual's admission to the institution, and has resided there on a
continuous basis since that time; or
(B) Son or daughter of the individual residing in the home, who has
resided there for at least two years immediately before the date of the
individual's admission to the institution, has resided there on a
continuous basis since that time, and can establish to the agency's
satisfaction that he or she has been providing care which permitted the
individual to reside at home rather than in an institution.
(i) Prohibition of reduction of money payments. No money payment
under another program may be reduced as a means of recovering Medicaid
claims incorrectly paid.
[43 FR 45201, Sept. 29, 1978, as amended at 47 FR 43647, Oct. 1, 1982;
47 FR 49847, Nov. 3, 1982]
Sec. 433.37 Reporting provider payments to Internal Revenue Service.
(a) Basis and purpose. This section, based on section 1902(a)(4) of
the Act, prescribes requirements concerning--
(1) Identification of providers; and
(2) Compliance with the information reporting requirements of the
Internal Revenue Code.
(b) Identification of providers. A State plan must provide for the
identification of providers by--
(1) Social security number if--
(i) The provider is in solo practice; or
(ii) The provider is not in solo practice but billing is by the
individual practitioner; or
(2) Employer identification number for all other providers.
(c) Compliance with section 6041 of the Internal Revenue Code. The
plan must provide that the Medicaid agency complies with the information
reporting requirements of section 6041 of the Internal Revenue Code (26
U.S.C. 6041). Section 6041 requires the filing of annual information
returns showing amounts paid to providers, who are identified by name,
address, and social security number or employer identification number.
Sec. 433.38 Interest charge on disallowed claims for FFP.
(a) Basis and scope. This section is based on section 1903(d)(5) of
the Act, which requires that the Secretary charge a State interest on
the Federal share of claims that have been disallowed but have been
retained by the State during the administrative appeals process under
section 1116(e) of the Act and the Secretary later recovers after the
administrative appeals process has been completed. This section does not
apply to--
(1) Claims that have been deferred by the Secretary and disallowed
within
[[Page 89]]
the time limits of Sec. 430.40 of this chapter. Deferral of claims for
FFP; or
(2) Claims for expenditures that have never been paid on a grant
award; or
(3) Disallowances of any claims for services furnished before
October 1, 1980, regardless of the date of the claim submitted to CMS.
(b) General principles. (1) CMS will charge the State interest on
FFP when--
(i) CMS has notified the Medicaid agency under Sec. 430.42 of this
subpart that a State's claim for FFP is not allowable;
(ii) The agency has requested a reconsideration of the disallowance
to the Administrator under Sec. 430.42 of this chapter and has chosen
to retain the FFP during the administrative reconsideration process in
accordance with paragraph (c)(2) of this section;
(iii)(A) CMS has made a final determination upholding part or all of
the disallowance;
(B) The agency has withdrawn its request for administrative
reconsideration on all or part of the disallowance; or
(C) The agency has reversed its decision to retain the funds without
withdrawing its request for administrative reconsideration and CMS
upholds all or part of the disallowance.
(iv) The agency has appealed the disallowance to the Departmental
Appeals Board under 45 CFR part 16 and has chosen to retain the FFP
during the administrative appeals process in accordance with paragraph
(c)(2) of this section.
(v)(A)The Board has made a final determination upholding part or all
of the disallowance;
(B) The agency has withdrawn its appeal on all or part of the
disallowance; or
(C) The agency has reversed its decision to retain the funds without
withdrawing its appeal and the Board upholds all or part of the
disallowance.
(2) If the courts overturn, in whole or in part, a Board decision
that has sustained a disallowance, CMS will return the principal and the
interest collected on the funds that were disallowed, upon the
completion of all judicial appeals.
(3) Unless an agency decides to withdraw its request for
administrative reconsideration or appeal on part of the disallowance and
therefore returns only that part of the funds on which it has withdrawn
its request for administrative reconsideration or appeal, any decision
to retain or return disallowed funds must apply to the entire amount in
dispute.
(4) If the agency elects to have CMS recover the disputed amount, it
may not reverse that election.
(c) State procedures. (1) If the Medicaid agency has requested
administrative reconsideration to CMS or appeal of a disallowance to the
Board and wishes to retain the disallowed funds until CMS or the Board
issues a final determination, the agency must notify the CMS Regional
Office in writing of its decision to do so.
(2) The agency must mail its notice to the CMS Regional Office
within 60 days of the date of receipt of the notice of the disallowance,
as established by the certified mail receipt accompanying the notice.
(3) If the agency withdraws its decision to retain the FFP or its
request for administrative reconsideration or appeal on all or part of
the FFP, the agency must notify CMS in writing.
(d) Amount of interest charged. (1) If the agency retains funds that
later become subject to an interest charge under paragraph (b) of this
section, CMS will offset from the next Medicaid grant award to the State
the amount of the funds subject to the interest charge, plus interest on
that amount.
(2) The interest charge is at the rate CMS determines to be the
average of the bond equivalent of the weekly 90-day Treasury bill
auction rates during the period for which interest will be charged.
(e) Duration of interest. (1) The interest charge on the amount of
disallowed FFP retained by the agency will begin on the date of the
disallowance notice and end--
(i) On the date of the final determination by CMS of the
administrative reconsideration if the State elects not to appeal to the
Board, or final determination by the Board;
[[Page 90]]
(ii) On the date CMS receives written notice from the State that it
is withdrawing its request for administrative reconsideration and elects
not to appeal to the Board, or withdraws its appeal to the Board on all
of the disallowed funds; or
(iii) If the agency withdraws its request for administrative
reconsideration on part of the funds on--
(A) The date CMS receives written notice from the agency that it is
withdrawing its request for administrative reconsideration on a
specified part of the disallowed funds for the part on which the agency
withdraws its request for administrative reconsideration; and
(B) The date of the final determination by CMS on the part for which
the agency pursues its administrative reconsideration; or
(iv) If the agency withdraws its appeal on part of the funds, on--
(A) The date CMS receives written notice from the agency that it is
withdrawing its appeal on a specified part of the disallowed funds for
the part on which the agency withdraws its appeal; and
(B) The date of the final determination by the Board on the part for
which the agency pursues its appeal; or
(v) If the agency has given CMS written notice of its intent to
repay by installment, in the quarter in which the final installment is
paid. Interest during the repayment of Federal funds by installments
will be at the Current Value of Funds Rate (CVFR); or
(vi) The date CMS receives written notice from the agency that it no
longer chooses to retain the funds.
(2) CMS will not charge interest on FFP retained by an agency for
more than 12 months for disallowances of FFP made between October 1,
1980 and August 13, 1981.
[48 FR 29485, June 27, 1983, as amended at 77 FR 31510, May 29, 2012]
Sec. 433.40 Treatment of uncashed or cancelled (voided) Medicaid checks.
(a) Purpose. This section provides the rules to ensure that States
refund the Federal portion of uncashed or cancelled (voided) checks
under title XIX.
(b) Definitions. As used in this section--
Cancelled (voided) check means a Medicaid check issued by a State or
fiscal agent which prior to its being cashed is cancelled (voided) by
the State or fiscal agent, thus preventing disbursement of funds.
Check means a check or warrant that a State or local agency uses to
make a payment.
Fiscal agent means an entity that processes or pays vendor claims
for the Medicaid State agency.
Uncashed check means a Medicaid check issued by a State or fiscal
agent which has not been cashed by the payee.
Warrant means an order by which the State agency or local agency
without the authority to issue checks recognizes a claim. Presentation
of a warrant by the payee to a State officer with authority to issue
checks will result in release of funds due.
(c) Refund of Federal financial participation (FFP) for uncashed
checks--(1) General provisions. If a check remains uncashed beyond a
period of 180 days from the date it was issued; i.e., the date of the
check, it will no longer be regarded as an allowable program
expenditure. If the State has claimed and received FFP for the amount of
the uncashed check, it must refund the amount of FFP received.
(2) Report of refund. At the end of each calendar quarter, the State
must identify those checks which remain uncashed beyond a period of 180
days after issuance. The State agency must refund all FFP that it
received for uncashed checks by adjusting the Quarterly Statement of
Expenditures for that quarter. If an uncashed check is cashed after the
refund is made, the State may file a claim. The claim will be considered
to be an adjustment to the costs for the quarter in which the check was
originally claimed. This claim will be paid if otherwise allowed by the
Act and the regulations issued pursuant to the Act.
(3) If the State does not refund the appropriate amount as specified
in paragraph (c)(2) of this section, the amount will be disallowed.
(d) Refund of FFP for cancelled (voided) checks--(1) General
provision. If the State has claimed and received FFP for the amount of a
cancelled (voided)
[[Page 91]]
check, it must refund the amount of FFP received.
(2) Report of refund. At the end of each calendar quarter, the State
agency must identify those checks which were cancelled (voided). The
State must refund all FFP that it received for cancelled (voided) checks
by adjusting the Quarterly Statement of Expenditures for that quarter.
(3) If the State does not refund the appropriate amount as specified
in paragraph (d)(2) of this section, the amount will be disallowed.
[51 FR 36227, Oct. 9, 1986]
Subpart B_General Administrative Requirements State Financial
Participation
Source: 57 FR 55138, Nov. 24, 1992, unless otherwise noted.
Sec. 433.50 Basis, scope, and applicability.
(a) Basis. This subpart interprets and implements--(1) Section
1902(a)(2) of the Act which requires States to share in the cost of
medical assistance expenditures and permit both State and local
governments to participate in the financing of the non-Federal portion
of medical assistance expenditures.
(2) Section 1903(a) of the Act, which requires the Secretary to pay
each State an amount equal to the Federal medical assistance percentage
of the total amount expended as medical assistance under the State's
plan.
(3) Section 1903(w) of the Act, which specifies the treatment of
revenues from provider-related donations and health care-related taxes
in determining a State's medical assistance expenditures for which
Federal financial participation (FFP) is available under the Medicaid
program.
(b) Scope. This subpart--
(1) Specifies State plan requirements for State financial
participation in expenditures for medical assistance.
(2) Defines provider-related donations and health care-related taxes
that may be received without a reduction in FFP.
(3) Specifies rules for revenues received from provider-related
donations and health care-related taxes during a transition period.
(4) Establishes limitations on FFP when States receive funds from
provider-related donations and revenues generated by health care-related
taxes.
(c) Applicability. The provisions of this subpart apply to the 50
States and the District of Columbia, but not to any State whose entire
Medicaid program is operated under a waiver granted under section 1115
of the Act.
[57 FR 55138, Nov. 24, 1992; 58 FR 6095, Jan. 26, 1993; 72 FR 29832, May
29, 2007; 72 FR 29832, May 29, 2007; 75 FR 73975, Nov. 30, 2010]
Sec. 433.51 Public Funds as the State share of financial participation.
(a) Public Funds may be considered as the State's share in claiming
FFP if they meet the conditions specified in paragraphs (b) and (c) of
this section.
(b) The public funds are appropriated directly to the State or local
Medicaid agency, or are transferred from other public agencies
(including Indian tribes) to the State or local agency and under its
administrative control, or certified by the contributing public agency
as representing expenditures eligible for FFP under this section.
(c) The public funds are not Federal funds, or are Federal funds
authorized by Federal law to be used to match other Federal funds.
[75 FR 73975, Nov. 30, 2010]
Sec. 433.52 General definitions.
As used in this subpart--
Entity related to a health care provider means--
(1) An organization, association, corporation, or partnership formed
by or on behalf of a health care provider;
(2) An individual with an ownership or control interest in the
provider, as defined in section 1124(a)(3) of the Act;
(3) An employee, spouse, parent, child, or sibling of the provider,
or of a person with an ownership or control interest in the provider, as
defined in section 1124(a)(3) of the Act; or
(4) A supplier of health care items or services or a supplier to
providers of health care items or services.
Health care provider means the individual or entity that receives
any payment or payments for health care items or services provided.
Provider-related donation means a donation or other voluntary
payment (in
[[Page 92]]
cash or in kind) made directly or indirectly to a State or unit of local
government by or on behalf of a health care provider, an entity related
to such a health care provider, or an entity providing goods or services
to the State for administration of the State's Medicaid plan.
(1) Donations made by a health care provider to an organization,
which in turn donates money to the State, may be considered to be a
donation made indirectly to the State by a health care provider.
(2) When an organization receives less than 25 percent of its
revenues from providers and/or provider-related entities, its donations
will not generally be presumed to be provider-related donations. Under
these circumstances, a provider-related donation to an organization will
not be considered a donation made indirectly to the State. However, if
the donations from providers to an organization are subsequently
determined to be indirect donations to the State or unit of local
government for administration of the State's Medicaid program, then such
donations will be considered to be health care related.
(3) When the organization receives more than 25 percent of its
revenue from donations from providers or provider-related entities, the
organization always will be considered as acting on behalf of health
care providers if it makes a donation to the State. The amount of the
organization's donation to the State, in a State fiscal year, that will
be considered health care related, will be based on the percentage of
donations the organization received from the providers during that
period.
Sec. 433.53 State plan requirements.
A State plan must provide that--
(a) State (as distinguished from local) funds will be used both for
medical assistance and administration;
(b) State funds will be used to pay at least 40 percent of the non-
Federal share of total expenditures under the plan; and
(c) State and Federal funds will be apportioned among the political
subdivisions of the State on a basis that assures that--
(1) Individuals in similar circumstances will be treated similarly
throughout the State; and
(2) If there is local financial participation, lack of funds from
local sources will not result in lowering the amount, duration, scope,
or quality of services or level of administration under the plan in any
part of the State.
[57 FR 55138, Nov. 24, 1992; 58 FR 6095, Jan. 26, 1993]
Sec. 433.54 Bona fide donations.
(a) A bona fide donation means a provider-related donation, as
defined in Sec. 433.52, made to the State or unit of local government,
that has no direct or indirect relationship, as described in paragraph
(b) of this section, to Medicaid payments made to--
(1) The health care provider;
(2) Any related entity providing health care items and services; or
(3) Other providers furnishing the same class of items or services
as the provider or entity.
(b) Provider-related donations will be determined to have no direct
or indirect relationship to Medicaid payments if those donations are not
returned to the individual provider, the provider class, or related
entity under a hold harmless provision or practice, as described in
paragraph (c) of this section.
(c) A hold harmless practice exists if any of the following applies:
(1) The State (or other unit of government) provides for a direct or
indirect non-Medicaid payment to those providers or others making, or
responsible for, the donation, and the payment amount is positively
correlated to the donation. A positive correlation includes any positive
relationship between these variables, even if not consistent over time.
(2) All or any portion of the Medicaid payment to the donor,
provider class, or related entity, varies based only on the amount of
the donation, including where Medicaid payment is conditional on receipt
of the donation.
(3) The State (or other unit of government) receiving the donation
provides for any direct or indirect payment, offset, or waiver such that
the provision of that payment, offset, or
[[Page 93]]
waiver directly or indirectly guarantees to return any portion of the
donation to the provider (or other parties responsible for the
donation).
(d) CMS will presume provider-related donations to be bona fide if
the voluntary payments, including, but not limited to, gifts,
contributions, presentations or awards, made by or on behalf of
individual health care providers to the State, county, or any other unit
of local government does not exceed--
(1) $5,000 per year in the case of an individual provider donation;
or
(2) $50,000 per year in the case of a donation from any health care
organizational entity.
(e) To the extent that a donation presumed to be bona fide contains
a hold harmless provision, as described in paragraph (c) of this
section, it will not be considered a bona fide donation. When provider-
related donations are not bona fide, CMS will deduct this amount from
the State's medical assistance expenditures before calculating FFP. This
offset will apply to all years the State received such donations and any
subsequent fiscal year in which a similar donation is received.
[57 FR 55138, Nov. 24, 1992, as amended at 73 FR 9698, Feb. 22, 2008]
Sec. 433.55 Health care-related taxes defined.
(a) A health care-related tax is a licensing fee, assessment, or
other mandatory payment that is related to--
(1) Health care items or services;
(2) The provision of, or the authority to provide, the health care
items or services; or
(3) The payment for the health care items or services.
(b) A tax will be considered to be related to health care items or
services under paragraph (a)(1) of this section if at least 85 percent
of the burden of the tax revenue falls on health care providers.
(c) A tax is considered to be health care related if the tax is not
limited to health care items or services, but the treatment of
individuals or entities providing or paying for those health care items
or services is different than the tax treatment provided to other
individuals or entities.
(d) A health care-related tax does not include payment of a criminal
or civil fine or penalty, unless the fine or penalty was imposed instead
of a tax.
(e) Health care insurance premiums and health maintenance
organization premiums paid by an individual or group to ensure coverage
or enrollment are not considered to be payments for health care items
and services for purposes of determining whether a health care-related
tax exists.
Sec. 433.56 Classes of health care services and providers defined.
(a) For purposes of this subpart, each of the following will be
considered as a separate class of health care items or services:
(1) Inpatient hospital services;
(2) Outpatient hospital services;
(3) Nursing facility services (other than services of intermediate
care facilities for individuals with intellectual disabilities);
(4) Intermediate care facility services for individuals with
intellectual disabilities, and similar services furnished by community-
based residences for individuals with intellectual disabilities, under a
waiver under section 1915(c) of the Act, in a State in which, as of
December 24, 1992, at least 85 percent of such facilities were
classified as ICF/IIDs prior to the grant of the waiver;
(5) Physician services;
(6) Home health care services;
(7) Outpatient prescription drugs;
(8) Services of managed care organizations (including health
maintenance organizations, preferred provider organizations);
(9) Ambulatory surgical center services, as described for purposes
of the Medicare program in section 1832(a)(2)(F)(i) of the Social
Security Act. These services are defined to include facility services
only and do not include surgical procedures;
(10) Dental services;
(11) Podiatric services;
(12) Chiropractic services;
(13) Optometric/optician services;
(14) Psychological services;
(15) Therapist services, defined to include physical therapy, speech
therapy, occupational therapy, respiratory therapy, audiological
services, and rehabilitative specialist services;
[[Page 94]]
(16) Nursing services, defined to include all nursing services,
including services of nurse midwives, nurse practitioners, and private
duty nurses;
(17) Laboratory and x-ray services, defined as services provided in
a licensed, free-standing laboratory or x-ray facility. This definition
does not include laboratory or x-ray services provided in a physician's
office, hospital inpatient department, or hospital outpatient
department;
(18) Emergency ambulance services; and
(19) Other health care items or services not listed above on which
the State has enacted a licensing or certification fee, subject to the
following:
(i) The fee must be broad based and uniform or the State must
receive a waiver of these requirements;
(ii) The payer of the fee cannot be held harmless; and
(iii) The aggregate amount of the fee cannot exceed the State's
estimated cost of operating the licensing or certification program.
(b) Taxes that pertain to each class must apply to all items and
services within the class, regardless of whether the items and services
are furnished by or through a Medicaid-certified or licensed provider.
[57 FR 55138, Nov. 24, 1992, as amended at 58 FR 43180, Aug. 13, 1993;
73 FR 9698, Feb. 22, 2008]
Sec. 433.57 General rules regarding revenues from provider-related
donations and health care-related taxes.
Effective January 1, 1992, CMS will deduct from a State's
expenditures for medical assistance, before calculating FFP, funds from
provider-related donations and revenues generated by health care-related
taxes received by a State or unit of local government, in accordance
with the requirements, conditions, and limitations of this subpart, if
the donations and taxes are not--
(a) Permissible provider-related donations, as specified in Sec.
433.66(b); or
(b) Health care-related taxes, as specified in Sec. 433.68(b).
[57 FR 55138, Nov. 24, 1992, as amended at 73 FR 9698, Feb. 22, 2008]
Sec. Sec. 433.58-433.60 [Reserved]
Sec. 433.66 Permissible provider-related donations.
(a) General rule. (1) Except as specified in paragraph (a)(2) of
this section, a State may receive revenues from provider-related
donations without a reduction in FFP, only in accordance with the
requirements of this section.
(2) The provisions of this section relating to provider-related
donations for outstationed eligibility workers are effective on October
1, 1992.
(b) Permissible donations. Subject to the limitations specified in
Sec. 433.67, a State may receive, without a reduction in FFP, provider-
related donations that meet at least one of the following requirements:
(1) The donations must be bona fide donations, as defined in Sec.
433.54; or
(2) The donations are made by a hospital, clinic, or similar entity
(such as a Federally-qualified health center) for the direct costs of
State or local agency personnel who are stationed at the facility to
determine the eligibility (including eligibility redeterminations) of
individuals for Medicaid or to provide outreach services to eligible (or
potentially eligible) Medicaid individuals. Direct costs of outstationed
eligibility workers refers to the costs of training, salaries and fringe
benefits associated with each outstationed worker and similar allocated
costs of State or local agency support staff, and a prorated cost of
outreach activities applicable to the outstationed workers at these
sites. The prorated costs of outreach activities will be calculated
taking the percent of State outstationed eligibility workers at a
facility to total outstationed eligibility workers in the State, and
multiplying the percent by the total cost of outreach activities in the
State. Costs for such items as State agency overhead and provider office
space are not allowable for this purpose.
[57 FR 55138, Nov. 24, 1992, as amended at 58 FR 43180, Aug. 13, 1993;
73 FR 9698, Feb. 22, 2008]
[[Page 95]]
Sec. 433.67 Limitations on level of FFP for permissible
provider-related donations.
(a)(1) Limitations on bona fide donations. There are no limitations
on the amount of bona fide provider-related donations that a State may
receive without a reduction in FFP, as long as the bona fide donations
meet the requirements of Sec. 433.66(b)(1).
(2) Limitations on donations for outstationed eligibility workers.
Effective October 1, 1992, the maximum amount of provider-related
donations for outstationed eligibility workers, as described in Sec.
433.66(b)(2), that a State may receive without a reduction in FFP may
not exceed 10 percent of a State's medical assistance administrative
costs (both the Federal and State share), excluding the costs of family
planning activities. The 10 percent limit for provider-related donations
for outstationed eligibility workers is not included in the limit in
effect through September 30, 1995, for health care-related taxes as
described in Sec. 433.70.
(b) Calculation of FFP. CMS will deduct from a State's quarterly
medical assistance expenditures, before calculating FFP, any provider-
related donations received in that quarter that do not meet the
requirements of Sec. 433.66(b)(1) and provider donations for
outstationed eligibility workers in excess of the limits specified under
paragraph (a)(2) of this section.
[57 FR 55138, Nov. 24, 1992, as amended at 58 FR 43180, Aug. 13, 1993;
73 FR 9698, Feb. 22, 2008]
Sec. 433.68 Permissible health care-related taxes.
(a) General rule. A State may receive health care-related taxes,
without a reduction in FFP, only in accordance with the requirements of
this section.
(b) Permissible health care-related taxes. Subject to the
limitations specified in Sec. 433.70, a State may receive, without a
reduction in FFP, health care-related taxes if all of the following are
met:
(1) The taxes are broad based, as specified in paragraph (c) of this
section;
(2) The taxes are uniformly imposed throughout a jurisdiction, as
specified in paragraph (d) of this section; and
(3) The tax program does not violate the hold harmless provisions
specified in paragraph (f) of this section.
(c) Broad based health care-related taxes. (1) A health care-related
tax will be considered to be broad based if the tax is imposed on at
least all health care items or services in the class or providers of
such items or services furnished by all non-Federal, non-public
providers in the State, and is imposed uniformly, as specified in
paragraph (d) of this section.
(2) If a health care-related tax is imposed by a unit of local
government, the tax must extend to all items or services or providers
(or to all providers in a class) in the area over which the unit of
government has jurisdiction.
(3) A State may request a waiver from CMS of the requirement that a
tax program be broad based, in accordance with the procedures specified
in Sec. 433.72. Waivers from the uniform and broad-based requirements
will automatically be granted in cases of variations in licensing and
certification fees for providers if the amount of such fees is not more
than $1,000 annually per provider and the total amount raised by the
State from the fees is used in the administration of the licensing or
certification program.
(d) Uniformly imposed health care-related taxes. A health care-
related tax will be considered to be imposed uniformly even if it
excludes Medicaid or Medicare payments (in whole or in part), or both;
or, in the case of a health care-related tax based on revenues or
receipts with respect to a class of items or services (or providers of
items or services), if it excludes either Medicaid or Medicare revenues
with respect to a class of items or services, or both. The exclusion of
Medicaid revenues must be applied uniformly to all providers being
taxed.
(1) A health care-related tax will be considered to be imposed
uniformly if it meets any one of the following criteria:
(i) If the tax is a licensing fee or similar tax imposed on a class
of health care services (or providers of those health care items or
services), the tax is the same amount for every
[[Page 96]]
provider furnishing those items or services within the class.
(ii) If the tax is a licensing fee or similar tax imposed on a class
of health care items or services (or providers of those items or
services) on the basis of the number of beds (licensed or otherwise) of
the provider, the amount of the tax is the same for each bed of each
provider of those items or services in the class.
(iii) If the tax is imposed on provider revenue or receipts with
respect to a class of items or services (or providers of those health
care items or services), the tax is imposed at a uniform rate for all
services (or providers of those items or services) in the class on all
the gross revenues or receipts, or on net operating revenues relating to
the provision of all items or services in the State, unit, or
jurisdiction. Net operating revenue means gross charges of facilities
less any deducted amounts for bad debts, charity care, and payer
discounts.
(iv) The tax is imposed on items or services on a basis other than
those specified in paragraphs (d)(1) (i) through (iii) of this section,
e.g., an admission tax, and the State establishes to the satisfaction of
the Secretary that the amount of the tax is the same for each provider
of such items or services in the class.
(2) A tax imposed with respect to a class of health care items or
services will not be considered to be imposed uniformly if it meets
either one of the following two criteria:
(i) The tax provides for credits, exclusions, or deductions which
have as its purpose, or results in, the return to providers of all, or a
portion, of the tax paid, and it results, directly or indirectly, in a
tax program in which--
(A) The net impact of the tax and payments is not generally
redistributive, as specified in paragraph (e) of this section; and
(B) The amount of the tax is directly correlated to payments under
the Medicaid program.
(ii) The tax holds taxpayers harmless for the cost of the tax, as
described in paragraph (f) of this section.
(3) If a tax does not meet the criteria specified in paragraphs
(d)(1)(i) through (iv) of this section, but the State establishes that
the tax is imposed uniformly in accordance with the procedures for a
waiver specified in Sec. 433.72, the tax will be treated as a uniform
tax.
(e) Generally redistributive. A tax will be considered to be
generally redistributive if it meets the requirements of this paragraph.
If the State desires waiver of only the broad-based tax requirement, it
must demonstrate compliance with paragraph (e)(1) of this section. If
the State desires waiver of the uniform tax requirement, whether or not
the tax is broad-based, it must demonstrate compliance with paragraph
(e)(2) of this section.
(1) Waiver of broad-based requirement only. This test is applied on
a per class basis to a tax that is imposed on all revenues but excludes
certain providers. For example, a tax that is imposed on all revenues
(including Medicare and Medicaid) but excludes teaching hospitals would
have to meet this test. This test cannot be used when a State excludes
any or all Medicaid revenue from its tax in addition to the exclusion of
providers, since the test compares the proportion of Medicaid revenue
being taxed under the proposed tax with the proportion of Medicaid
revenue being taxed under a broad-based tax.
(i) A State seeking waiver of the broad-based tax requirement only
must demonstrate that its proposed tax plan meets the requirement that
its plan is generally redistributive by:
(A) Calculating the proportion of the tax revenue applicable to
Medicaid if the tax were broad based and applied to all providers or
activities within the class (called P1);
(B) Calculating the proportion of the tax revenue applicable to
Medicaid under the tax program for which the State seeks a waiver
(called P2); and
(C) Calculating the value of P1/P2.
(ii) If the State demonstrates to the Secretary's satisfaction that
the value of P1/P2 is at least 1, CMS will automatically approve the
waiver request.
(iii) If a tax is enacted and in effect prior to August 13, 1993,
and the State demonstrates to the Secretary's satisfaction that the
value of P1/P2 is at least 0.90, CMS will review the waiver request.
Such a waiver will be approved
[[Page 97]]
only if the following two criteria are met:
(A) The value of P1/P2 is at least 0.90; and
(B) The tax excludes or provides credits or deductions only to one
or more of the following providers of items and services within the
class to be taxed:
(1) Providers that furnish no services within the class in the
State;
(2) Providers that do not charge for services within the class;
(3) Rural hospitals (defined as any hospital located outside of an
urban area as defined in Sec. 412.62(f)(1)(ii) of this chapter);
(4) Sole community hospitals as defined in Sec. 412.92(a) of this
chapter;
(5) Physicians practicing primarily in medically underserved areas
as defined in section 1302(7) of the Public Health Service Act;
(6) Financially distressed hospitals if:
(i) A financially distressed hospital is defined by the State law;
(ii) The State law specifies reasonable standards for determining
financially distressed hospitals, and these standards are applied
uniformly to all hospitals in the State; and
(iii) No more than 10 percent of nonpublic hospitals in the State
are exempt from the tax;
(7) Psychiatric hospitals; or
(8) Hospitals owned and operated by HMOs.
(iv) If a tax is enacted and in effect after August 13, 1993, and
the State demonstrates to the Secretary's satisfaction that the value of
P1/P2 is at least 0.95, CMS will review the waiver request. Such a
waiver request will be approved only if the following two criteria are
met:
(A) The value of P1/P2 is at least 0.95; and
(B) The tax complies with the provisions of Sec.
433.68(e)(1)(iii)(B).
(2) Waiver of uniform tax requirement. This test is applied on a per
class basis to all taxes that are not uniform. This includes those taxes
that are neither broad based (as specified in Sec. 433.68(c)) nor
uniform (as specified in Sec. 433.68(d)).
(i) A State seeking waiver of the uniform tax requirement (whether
or not the tax is broad based) must demonstrate that its proposed tax
plan meets the requirement that its plan is generally redistributive by:
(A) Calculating, using ordinary least squares, the slope (designated
as (B) (that is. the value of the x coefficient) of two linear
regressions, in which the dependent variable is each provider's
percentage share of the total tax paid by all taxpayers during a 12-
month period, and the independent variable is the taxpayer's ``Medicaid
Statistic''. The term ``Medicaid Statistic'' means the number of the
provider's taxable units applicable to the Medicaid program during a 12-
month period. If, for example, the State imposed a tax based on provider
charges, the amount of a provider's Medicaid charges paid during a 12-
month period would be its ``Medicaid Statistic''. If the tax were based
on provider inpatient days, the number of the provider's Medicaid days
during a 12-month period would be its ``Medicaid Statistic''. For the
purpose of this test, it is not relevant that a tax program exempts
Medicaid from the tax.
(B) Calculating the slope (designated as B1) of the linear
regression, as described in paragraph (e)(2)(i) of this section, for the
State's tax program, if it were broad based and uniform.
(C) Calculating the slope (designated as B2) of the linear
regression, as described in paragraph (e)(2)(i) of this section, for the
State's tax program, as proposed.
(ii) If the State demonstrates to the Secretary's satisfaction that
the value of B1/B2 is at least 1, CMS will automatically approve the
waiver request.
(iii) If the State demonstrates to the Secretary's satisfaction that
the value of B1/B2 is at least 0.95, CMS will review the waiver request.
Such a waiver will be approved only if the following two criteria are
met:
(A) The value of B1/B2 is at least 0.95; and
(B) The tax excludes or provides credits or deductions only to one
or more of the following providers of items and services within the
class to be taxes:
(1) Providers that furnish no services within the class in the
State;
(2) Providers that do not charge for services within the class;
(3) Rural hospitals (defined as any hospital located outside of an
urban
[[Page 98]]
area as defined in Sec. 412.62(f)(1)(ii) of this chapter;
(4) Sole community hospitals as defined in Sec. 412.92(a) of this
chapter;
(5) Physicians practicing primarily in medically underserved areas
as defined in section 1302(7) of the Public Health Service Act;
(6) Financially distressed hospitals if:
(i) A financially distressed hospital is defined by the State law;
(ii) The State law specifies reasonable standards for determining
financially distressed hospitals, and these standards are applied
uniformly to all hospitals in the State; and
(iii) No more than 10 percent of nonpublic hospitals in the State
are exempt from the tax;
(7) Psychiatric hospitals; or
(8) Providers or payers with tax rates that vary based exclusively
on regions, but only if the regional variations are coterminous with
preexisting political (and not special purpose) boundaries. Taxes within
each regional boundary must meet the broad-based and uniformity
requirements as specified in paragraphs (c) and (d) of this section.
(iv) A B1/B2 value of 0.70 will be applied to taxes that vary based
exclusively on regional variations, and enacted and in effect prior to
November 24, 1992, to permit such variations.
(f) Hold harmless. A taxpayer will be considered to be held harmless
under a tax program if any of the following conditions applies:
(1) The State (or other unit of government) imposing the tax
provides for a direct or indirect non-Medicaid payment to those
providers or others paying the tax and the payment amount is positively
correlated to either the tax amount or to the difference between the
Medicaid payment and the tax amount. A positive correlation includes any
positive relationship between these variables, even if not consistent
over time.
(2) All or any portion of the Medicaid payment to the taxpayer
varies based only on the tax amount, including where Medicaid payment is
conditional on receipt of the tax amount.
(3) The State (or other unit of government) imposing the tax
provides for any direct or indirect payment, offset, or waiver such that
the provision of that payment, offset, or waiver directly or indirectly
guarantees to hold taxpayers harmless for all or any portion of the tax
amount.
(i)(A) An indirect guarantee will be determined to exist under a two
prong ``guarantee'' test. If the health care-related tax or taxes on
each health care class are applied at a rate that produces revenues less
than or equal to 6 percent of the revenues received by the taxpayer, the
tax or taxes are permissible under this test. The phrase ``revenues
received by the taxpayer'' refers to the net patient revenue
attributable to the assessed permissible class of health care items or
services. However, for the period of January 1, 2008 through September
30, 2011, the applicable percentage of net patient service revenue is
5.5 percent. Compliance in State fiscal year 2008 will be evaluated from
January 1, 2008 through the last day of State fiscal year 2008.
Beginning with State fiscal year 2009 the 5.5 percent tax collection
will be measured on an annual State fiscal year basis.
(B) When the tax or taxes produce revenues in excess of the
applicable percentage of the revenue received by the taxpayer, CMS will
consider an indirect hold harmless provision to exist if 75 percent or
more of the taxpayers in the class receive 75 percent or more of their
total tax costs back in enhanced Medicaid payments or other State
payments. The second prong of the indirect hold harmless test is applied
in the aggregate to all health care taxes applied to each class. If this
standard is violated, the amount of tax revenue to be offset from
medical assistance expenditures is the total amount of the taxpayers'
revenues received by the State.
(ii) [Reserved]
[57 FR 55138, Nov. 24, 1992, as amended at 58 FR 43181, Aug. 13, 1993;
62 FR 53572, Oct. 15, 1997; 73 FR 9698, Feb. 22, 2008]
Sec. 433.70 Limitation on level of FFP for revenues from health
care-related taxes.
(a) Limitations. Beginning October 1, 1995, there is no limitation
on the amount of health care-related taxes that a State may receive
without a reduction in FFP, as long as the health
[[Page 99]]
care-related taxes meet the requirements specified in Sec. 433.68.
(b) Calculation of FFP. CMS will deduct from a State's medical
assistance expenditures, before calculating FFP, revenues from health
care-related taxes that do not meet the requirements of Sec. 433.68 and
any health care-related taxes in excess of the limits specified in
paragraph (a)(1) of this section.
[57 FR 55138, Nov. 24, 1992, as amended at 73 FR 9699, Feb. 22, 2008]
Sec. 433.72 Waiver provisions applicable to health care-related taxes.
(a) Bases for requesting waiver. (1) A State may submit to CMS a
request for a waiver if a health care-related tax does not meet any or
all of the following:
(i) The tax does not meet the broad based criteria specified in
Sec. 433.68c); and/or
(ii) The tax is not imposed uniformly but meets the criteria
specified in Sec. 433.68(d)(2) or (d)(3).
(2) When a tax that meets the criteria specified in paragraph (a)(1)
of this section is imposed on more than one class of health care items
or services, a separate waiver must be obtained for each class of health
care items and services subject to the tax.
(b) Waiver conditions. In order for CMS to approve a waiver request
that would permit a State to receive tax revenue (within specified
limitations) without a reduction in FFP, the State must demonstrate, to
CMS's satisfaction, that its tax program meets all of the following
requirements:
(1) The net impact of the tax and any payments made to the provider
by the State under the Medicaid program is generally redistributive, as
described in Sec. 433.68(e);
(2) The amount of the tax is not directly correlated to Medicaid
payments; and
(3) The tax program does not fall within the hold harmless
provisions specified in Sec. 433.68(f).
(c) Effective date. A waiver will be effective:
(1) The date of enactment of the tax for programs in existence prior
to August 13, 1993 or;
(2) For tax programs commencing on or after August 13, 1993, on the
first day in the quarter in which the waiver is received by CMS.
[57 FR 55138, Nov. 24, 1992, as amended at 58 FR 43182, Aug. 13, 1993]
Sec. 433.74 Reporting requirements.
(a) Beginning with the first quarter of Federal fiscal year 1993,
each State must submit to CMS quarterly summary information on the
source and use of all provider-related donations (including all bona
fide and presumed-to-be bona fide donations) received by the State or
unit of local government, and health care-related taxes collected. Each
State must also provide any additional information requested by the
Secretary related to any other donations made by, or any taxes imposed
on, health care providers. States' reports must present a complete,
accurate, and full disclosure of all of their donation and tax programs
and expenditures.
(b) Each State must provide the summary information specified in
paragraph (a) of this section on a quarterly basis in accordance with
procedures established by CMS.
(c) Each State must maintain, in readily reviewable form, supporting
documentation that provides a detailed description and legal basis for
each donation and tax program being reported, as well as the source and
use of all donations received and taxes collected. This information must
be made available to Federal reviewers upon request.
(d) If a State fails to comply with the reporting requirements
contained in this section, future grant awards will be reduced by the
amount of FFP CMS estimates is attributable to the sums raised by tax
and donation programs as to which the State has not reported properly,
until such time as the State complies with the reporting requirements.
Deferrals and/or disallowances of equivalent amounts may also be imposed
with respect to quarters for which the State has failed to report
properly. Unless otherwise prohibited by law, FFP for those expenditures
will be released when the State complies with all reporting
requirements.
[[Page 100]]
Subpart C_Mechanized Claims Processing and Information Retrieval Systems
Sec. 433.110 Basis, purpose, and applicability.
(a) This subpart implements the following sections of the Act:
(1) Section 1903(a)(3) of the Act, which provides for FFP in State
expenditures for the design, development, or installation of mechanized
claims processing and information retrieval systems and for the
operation of certain systems. Additional HHS regulations and CMS
procedures for implementing these regulations are in 45 CFR part 75, 45
CFR part 95, subpart F, and part 11, State Medicaid Manual; and
(2) Section 1903(r) of the Act, which imposes certain standards and
conditions on mechanized claims processing and information retrieval
systems (including eligibility determination systems) in order for these
systems to be eligible for Federal funding under section 1903(a) of the
Act.
(b) [Reserved]
[50 FR 30846, July 30, 1985, as amended at 54 FR 41973, Oct. 13, 1989;
76 FR 21973, Apr. 19, 2011; 80 FR 75841, Dec. 4, 2015]
Sec. 433.111 Definitions.
For purposes of this section:
(a) The following terms are defined at 45 CFR part 95, subpart F
Sec. 95.605:
``Advance Planning Document''; ``Design'' or ``System Design'';
``Development''; ``Enhancement''; ``Hardware''; ``Installation'';
``Operation''; and, ``Software''.
(b) ``Mechanized claims processing and information retrieval
system'' means:
(1) ``Mechanized claims processing and information retrieval
system'' means the system of software and/or hardware used to process
claims for medical assistance and to retrieve and produce service
utilization and management information required by the Medicaid single
state agency and Federal government for program administration and audit
purposes. It may include modules of hardware, software, and other
technical capabilities that are used by the Medicaid Single State Agency
to manage, monitor, and administer the Medicaid enterprise, including
transaction processing, information management, and reporting and data
analytics.
(2) ``Mechanized claims processing and information retrieval
system'' includes a ``System of Systems.'' Under this definition all
modules or systems developed to support a Medicaid Management
Information System (MMIS) and Eligibility and Enrollment (E&E) may be
implemented as discrete, independent, interoperable elements. Use of a
System of Systems requires interoperability between the systems.
(i) The system consists of--
(A) Required modules specified by the Secretary.
(B) Required changes to the system or required module that are
specified by the Secretary.
(C) Approved enhancements to the system or module.
(ii) A ``Mechanized claims processing and information retrieval
system'' include--s--
(A) An Eligibility and Enrollment (E&E) System which is used to
process applications from Medicaid or CHIP applicants and beneficiaries
to determine eligibility for enrollment in the Medicaid or CHIP
programs, as well as change in circumstance updates and renewals; and
(B) A Medicaid Management Information System (MMIS) which is used to
process claims for Medicaid payment from providers of medical care and
services furnished to beneficiaries under the medical assistance program
and to perform other functions necessary for economic and efficient
operations, management, monitoring, and administration of the Medicaid
program. The pertinent business areas are those included in the MMIS
Certification Toolkit, and they may be applicable to Fee-For-Service,
Managed Care, or an Administrative Services Organization (ASO) model.
(c) ``Medicaid Information Technology Architecture (MITA)'' is
defined at Sec. 495.302 of this chapter.
(d) ``Open source'' means software that can be used freely, changed,
and shared (in modified or unmodified form) by anyone. Open source
software is distributed under Open Source Initiative-approved licenses
that comply
[[Page 101]]
with an open source framework that allows for free redistribution,
provision of the source code, allowance for modifications and derived
works, free and open distribution of licenses without restrictions and
licenses that are technology-neutral.
(e) ``Proprietary'' means a closed source product licensed under
exclusive legal right of the copyright holder with the intent that the
licensee is given the right to use the software only under certain
conditions, and restricted from other uses, such as modification,
sharing, studying, redistribution, or reverse engineering.
(f) ``Service'' means a self-contained unit of functionality that is
a discretely invokable operation. Services can be combined to provide
the functionality of a large software application.
(g) ``Shared Service'' means the use of a service, including SaaS,
by one part of an organization or group, including states, where that
service is also made available to other entities of the organization,
group or states. Thus the funding and resourcing of the service is
shared and the providing department effectively becomes an internal
service provider.
(h) ``Module'' means a packaged, functional business process or set
of processes implemented through software, data, and interoperable
interfaces that are enabled through design principles in which functions
of a complex system are partitioned into discrete, scalable, reusable
components.
(i) ``Commercial Off the Shelf'' (COTS) software means specialized
software (which could be a system, subsystem or module) designed for
specific applications that is available for sale or lease to other users
in the commercial marketplace, and that can be used with little or no
modification.
(j) ``Software-as-a-Service'' (SaaS) means a software delivery model
in which software is managed and licensed by its vendor-owner on a pay-
for-use or subscription basis, centrally hosted, on-demand, and common
to all users.
[51 FR 45330, Dec. 18, 1986, as amended at 54 FR 41973, Oct. 13, 1989;
76 FR 21973, Apr. 19, 2011; 80 FR 75841, Dec. 4, 2015]
Sec. 433.112 FFP for design, development, installation or enhancement
of mechanized processing and information retrieval systems.
(a) Subject to paragraph (c) of this section, FFP is available at
the 90 percent rate in State expenditures for the design, development,
installation, or enhancement of a mechanized claims processing and
information retrieval system only if the APD is approved by CMS prior to
the State's expenditure of funds for these purposes.
(b) CMS will approve the E&E or claims system described in an APD if
certain conditions are met. The conditions that a system must meet are:
(1) CMS determines the system is likely to provide more efficient,
economical, and effective administration of the State plan.
(2) The system meets the system requirements, standards and
conditions, and performance standards in Part 11 of the State Medicaid
Manual, as periodically amended.
(3) The system is compatible with the claims processing and
information retrieval systems used in the administration of Medicare for
prompt eligibility verification and for processing claims for persons
eligible for both programs.
(4) The system supports the data requirements of quality improvement
organizations established under Part B of title XI of the Act.
(5) The State owns any software that is designed, developed,
installed or improved with 90 percent FFP.
(6) The Department has a royalty free, non-exclusive, and
irrevocable license to reproduce, publish, or otherwise use and
authorize others to use, for Federal Government purposes, software,
modifications to software, and documentation that is designed,
developed, installed or enhanced with 90 percent FFP.
(7) The costs of the system are determined in accordance with 45 CFR
75, subpart E.
(8) The Medicaid agency agrees in writing to use the system for the
period of time specified in the advance planning document approved by
CMS or for any shorter period of time that CMS determines justifies the
Federal funds invested.
[[Page 102]]
(9) The agency agrees in writing that the information in the system
will be safeguarded in accordance with subpart F, part 431 of this
subchapter.
(10) Use a modular, flexible approach to systems development,
including the use of open interfaces and exposed application programming
interfaces; the separation of business rules from core programming,
available in both human and machine readable formats.
(11) Align to, and advance increasingly, in MITA maturity for
business, architecture, and data.
(12) The agency ensures alignment with, and incorporation of,
industry standards adopted by the Office of the National Coordinator for
Health IT in accordance with 45 CFR part 170, subpart B: The HIPAA
privacy, security and transaction standards; accessibility standards
established under section 508 of the Rehabilitation Act, or standards
that provide greater accessibility for individuals with disabilities,
and compliance with Federal civil rights laws; standards adopted by the
Secretary under section 1104 of the Affordable Care Act; and standards
and protocols adopted by the Secretary under section 1561 of the
Affordable Care Act.
(13) Promote sharing, leverage, and reuse of Medicaid technologies
and systems within and among States.
(14) Support accurate and timely processing and adjudications/
eligibility determinations and effective communications with providers,
beneficiaries, and the public.
(15) Produce transaction data, reports, and performance information
that would contribute to program evaluation, continuous improvement in
business operations, and transparency and accountability.
(16) The system supports seamless coordination and integration with
the Marketplace, the Federal Data Services Hub, and allows
interoperability with health information exchanges, public health
agencies, human services programs, and community organizations providing
outreach and enrollment assistance services as applicable.
(17) For E&E systems, the State must have delivered acceptable MAGI-
based system functionality, demonstrated by performance testing and
results based on critical success factors, with limited mitigations and
workarounds.
(18) The State must submit plans that contain strategies for
reducing the operational consequences of failure to meet applicable
requirements for all major milestones and functionality.
(19) The agency, in writing through the APD, must identify key state
personnel by name, type and time commitment assigned to each project.
(20) Systems and modules developed, installed or improved with 90
percent match must include documentation of components and procedures
such that the systems could be operated by a variety of contractors or
other users.
(21) For software systems and modules developed, installed or
improved with 90 percent match, the State must consider strategies to
minimize the costs and difficulty of operating the software on alternate
hardware or operating systems.
(22) Other conditions for compliance with existing statutory and
regulatory requirements, issued through formal guidance procedures,
determined by the Secretary to be necessary to update and ensure proper
implementation of those existing requirements.
(c)(1) FFP is available at 90 percent of a State's expenditures for
the design, development, installation or enhancement of an E&E system
that meets the requirements of this subpart and only for costs incurred
for goods and services provided on or after April 19, 2011.
(2) Design, development, installation, or enhancement costs include
costs for initial licensing of commercial off the shelf (COTS) software,
and the minimum necessary costs to analyze the suitability of COTS
software, install, configure and integrate the COTS software, and modify
non-COTS software to ensure coordination of operations. The nature and
extent of such costs must be expressly described in the approved APD.
[43 FR 45201, Sept. 29, 1978, as amended at 44 FR 17937, Mar. 23, 1979;
45 FR 14213, Mar. 5, 1980; 50 FR 30846, July 30, 1985; 51 FR 45330, Dec.
18, 1986; 54 FR 41973, Oct. 13, 1989; 55 FR 1820, Jan. 19, 1990; 55 FR
4375, Feb. 7, 1990; 76 FR 21973, Apr. 19, 2011; 80 FR 75842, Dec. 4,
2015; 81 FR 3011, Jan. 20, 2016]
[[Page 103]]
Sec. 433.114 Procedures for obtaining initial approval; notice of decision.
(a) To obtain initial approval, the Medicaid agency must inform CMS
in writing that the system meets the conditions specified in Sec.
433.116(c) through (i).
(b) If CMS disapproves the system, the notice will include all of
the following information:
(1) The findings of fact upon which the determination was made.
(2) The procedures for appeal of the determination in the context of
a reconsideration of the resulting disallowance to the Departmental
Appeals Board.
[50 FR 30847, July 30, 1985, as amended at 54 FR 41973, Oct. 13, 1989;
76 FR 21974, Apr. 19, 2011]
Sec. 433.116 FFP for operation of mechanized claims processing
and information retrieval systems.
(a) Subject to paragraph (j) of this section, FFP is available at 75
percent of expenditures for operation of a mechanized claims processing
and information retrieval system approved by CMS, from the first day of
the calendar quarter after the date the system met the conditions of
initial approval, as established by CMS (including a retroactive
adjustment of FFP if necessary to provide the 75 percent rate beginning
on the first day of that calendar quarter). Subject to 45 CFR 95.611(a),
the State shall obtain prior written approval from CMS when it plans to
acquire ADP equipment or services, when it anticipates the total
acquisition costs will exceed thresholds, and meets other conditions of
the subpart.
(b) CMS will approve enhanced FFP for system operations if the
conditions specified in paragraphs (c) through (i) of this section are
met.
(c) The conditions of Sec. 433.112(b)(1) through (22) must be met
at the time of approval.
(d) The system must have been operating continuously during the
period for which FFP is claimed.
(e) The system must provide individual notices, within 45 days of
the payment of claims, to all or a sample group of the persons who
received services under the plan.
(f) The notice required by paragraph (e) of this section--
(1) Must specify--
(i) The service furnished;
(ii) The name of the provider furnishing the service;
(iii) The date on which the service was furnished; and
(iv) The amount of the payment made under the plan for the service;
and
(2) Must not specify confidential services (as defined by the State)
and must not be sent if the only service furnished was confidential.
(g) The system must provide both patient and provider profiles for
program management and utilization review purposes.
(h) If the State has a Medicaid fraud control unit certified under
section 1903(q) of the Act and Sec. 455.300 of this chapter, the
Medicaid agency must have procedures to assure that information on
probable fraud or abuse that is obtained from, or developed by, the
system is made available to that unit. (See Sec. 455.21 of this chapter
for State plan requirements.)
(i) The standards and conditions of Sec. 433.112(b)(10) through
(b)(16) of this subpart must be met.
(j) Beginning, and no earlier than, April 19, 2011, FFP is available
at 75 percent of a State's expenditures for the operation of an E&E
system that meets the requirements of this subpart. FFP is not available
for E&E systems that do not meet the standards and conditions.
[45 FR 14213, Mar. 5, 1980. Redesignated and amended at 50 FR 30847,
July 30, 1985; 55 FR 4375, Feb. 7, 1990; 76 FR 21974, Apr. 19, 2011; 80
FR 75842, Dec. 4, 2015]
Sec. 433.117 Initial approval of replacement systems.
(a) A replacement system must meet all standards and conditions of
initial approval of a mechanized claims processing and information
retrieval system.
(b) The agency must submit a APD that includes--
(1) The date the replacement system will be in operation; and
(2) A plan for orderly transition from the system being replaced to
the replacement system.
[[Page 104]]
(c) FFP is available at--
(1) 90 percent in expenditures for design, development, and
installation in accordance with the provisions of Sec. 433.112; and
(2) 75 percent in expenditures for operation of an approved
replacement system in accordance with the provisions of Sec. 433.116(b)
through (j), from the date that the system met the conditions of initial
approval, as established by CMS.
(d) FFP is available at 75 percent in expenditures for the operation
of an approved system that is being replaced (or at a reduced rate
determined under Sec. 433.120 of this subpart for a system that has
been disapproved) until the replacement system is in operation and
approved.
[50 FR 30847, July 30, 1985, as amended at 76 FR 21974, Apr. 19, 2011]
Sec. 433.119 Conditions for reapproval; notice of decision.
(a) CMS periodically reviews each system operation initially
approved under Sec. 433.114 of this subpart and reapproves it for FFP
at 75 percent of expenditures if the following standards and conditions
are met:
(1) The system meets the requirements of Sec. 433.112(b)(1), (3),
(4), and (7) through (22).
(2) The system meets the conditions of Sec. 433.116 (d) through
(j).
(3) The system meets the standards, conditions, and performance
standards for reapproval and the system requirements in part 11 of the
State Medicaid Manual as periodically amended.
(4) A State system must meet all of the requirements of this subpart
within the appropriate period CMS determines should apply as required by
Sec. 433.123(b) of this subpart.
(b) CMS may review an entire system operation or focus its review on
parts of the operation. However, at a minimum, CMS will review
standards, system requirements and other conditions of reapproval that
have demonstrated weakness in a previous review or reviews.
(c) After performing the review under paragraph (a) of this section,
CMS will issue to the Medicaid agency a written notice informing the
agency whether the system is reapproved or disapproved. If the system is
disapproved, the notice will include the following information:
(1) CMS's decision to reduce FFP for system operations from 75
percent to 50 percent of expenditures, beginning with the first day of
the first calendar quarter after CMS issues the written notice to the
State.
(2) The findings of fact upon which the determination was made.
(3) A statement that State claims in excess of the reduced FFP rate
will be disallowed and that any such disallowance will be appealable to
the Departmental Appeals Board.
[54 FR 41973, Oct. 13, 1989; 55 FR 1820, Jan. 19, 1990; 76 FR 21974,
Apr. 19, 2011; 80 FR 75843, Dec. 4, 2015]
Sec. 433.120 Procedures for reduction of FFP after reapproval review.
(a) If CMS determines after the reapproval review that the system no
longer meets the conditions for reapproval in Sec. 433.119, CMS may
reduce FFP for certain expenditures for system operations.
(b) CMS may reduce FFP from 75 percent to 50 percent for
expenditures related to the operations of non-compliant functionality or
system components.
[80 FR 75843, Dec. 4, 2015]
Sec. 433.121 Reconsideration of the decision to reduce FFP after
reapproval review.
(a) The State Medicaid agency may appeal (to the Departmental
Appeals Board under 45 CFR part 16) a disallowance concerning a
reduction in FFP claimed for system operations caused by a disapproval
of the State's system.
(b) The decisions concerning whether to restore any FFP
retroactively and the actual number of quarters for which FFP will be
restored under Sec. 433.122 of this subpart are not subject to
administrative appeal to the Departmental Appeals Board under 45 CFR
part 16.
(c) An agency's request for a reconsideration before the Board under
paragraph (a) of this section does not delay implementation of the
reduction in FFP. However, any reduction is subject to retroactive
adjustment if required
[[Page 105]]
by the Board's determination on reconsideration.
[50 FR 30848, July 30, 1985, as amended at 54 FR 41974, Oct. 13, 1989;
55 FR 1820, Jan. 19, 1990; 76 FR 21974, Apr. 19, 2011]
Sec. 433.122 Reapproval of a disapproved system.
When FFP has been reduced under Sec. 433.120(a), and CMS determines
upon subsequent review that the system meets all current performance
standards, system requirements and other conditions of reapproval, the
following provisions apply:
(a) CMS will resume FFP in expenditures for system operations at the
75 percent level beginning with the quarter following the review
determination that the system again meets conditions of reapproval.
(b) CMS may retroactively waive a reduction of FFP in expenditures
for system operations if CMS determines that the waiver could improve
the administration of the State Medicaid plan. However, CMS cannot waive
this reduction for any quarter before the fourth quarter immediately
preceding the quarter in which CMS issues the determination (as part of
the review process) stating that the system is reapproved.
[54 FR 41974, Oct. 13, 1989]
Sec. 433.123 Notification of changes in system requirements,
performance standards or other conditions for approval or reapproval.
(a) Whenever CMS modifies system requirements or other conditions
for approval under Sec. 433.112 or Sec. 433.116, CMS will--
(1) Publish a notice in the Federal Register making available the
proposed changes for public comment;
(2) Respond in a subsequent Federal Register notice to comments
received; and
(3) Issue the new or modified requirements or conditions in the
State Medicaid Manual.
(b) For changes in system requirements or other conditions for
approval, CMS will allow an appropriate period for Medicaid agencies to
meet the requirement determining this period on the basis of the
requirement's complexity and other relevant factors.
(c) Whenever CMS modifies performance standards and other conditions
for reapproval under Sec. 433.119, CMS will notify Medicaid agencies at
least one calendar quarter before the review period to which the new or
modified standards or conditions apply.
[57 FR 38782, Aug. 27, 1992]
Sec. 433.127 Termination of FFP for failure to provide access to
claims processing and information retrieval systems.
CMS will terminate FFP at any time if the Medicaid agency fails to
provide State and Federal representatives with full access to the
system, including on-site inspection. CMS may request such access at any
time to determine whether the conditions in this subpart are being met.
[43 FR 45201, Sept. 29, 1978. Redesignated and amended at 50 FR 30847
and 30848, July 30, 1985]
Sec. 433.131 Waiver for noncompliance with conditions of approval
and reapproval.
If a State is unable to comply with the conditions of approval or of
reapproval and the noncompliance will cause a percentum reduction in
FFP, CMS will waive the FFP reduction in the following circumstances:
(a) Good cause. If CMS determines that good cause existed, CMS will
waive the FFP reduction attributable to those items for which the good
cause existed. A waiver of FFP consequences of the failure to meet the
conditions of approval or reapproval based upon good cause will not
extend beyond two consecutive quarters.
(b) Circumstances beyond the control of a State. The State must
satisfactorily explain the circumstances that are beyond its control.
When CMS grants the waiver, CMS will also defer all other system
deadlines for the same length of time that the waiver applies.
(c) Waiver of deadline. In no case will CMS waive the December 31,
2015 deadlines referenced in Sec. 433.112(c) and Sec. 433.116(j).
[50 FR 30848, July 30, 1985, as amended at 54 FR 41974, Oct. 13, 1989;
76 FR 21975, Apr. 19, 2011]
[[Page 106]]
Subpart D_Third Party Liability
Source: 45 FR 8984, Feb. 11, 1980, unless otherwise noted.
Sec. 433.135 Basis and purpose.
This subpart implements sections 1902(a)(25), 1902(a)(45),
1903(d)(2), 1903(o), 1903(p), and 1912 of the Act by setting forth State
plan requirements concerning--
(a) The legal liability of third parties to pay for services
provided under the plan;
(b) Assignment to the State of an individual's rights to third party
payments; and
(c) Cooperative agreements between the Medicaid agency and other
entities for obtaining third party payments.
[50 FR 46664, Nov. 12, 1985]
Sec. 433.136 Definitions.
For purposes of this subpart--
Private insurer means:
(1) Any commercial insurance company offering health or casualty
insurance to individuals or groups (including both experience-rated
insurance contracts and indemnity contracts);
(2) Any profit or nonprofit prepaid plan offering either medical
services or full or partial payment for services included in the State
plan; and
(3) Any organization administering health or casualty insurance
plans for professional associations, unions, fraternal groups, employer-
employee benefit plans, and any similar organization offering these
payments or services, including self-insured and self-funded plans.
Third party means any individual, entity or program that is or may
be liable to pay all or part of the expenditures for medical assistance
furnished under a State plan.
Title IV-D agency means the organizational unit in the State that
has the responsibility for administering or supervising the
administration of a State plan for child support enforcement under title
IV-D of the Act.
[49 FR 8984, Feb. 11, 1980, as amended at 50 FR 46664, Nov. 12, 1985; 50
FR 49389, Dec. 2, 1985]
Sec. 433.137 State plan requirements.
(a) A State plan must provide that the requirements of Sec. Sec.
433.138 and 433.139 are met for identifying third parties liable for
payment of services under the plan and for payment of claims involving
third parties.
(b) A State plan must provide that--
(1) The requirements of Sec. Sec. 433.145 through 433.148 are met
for assignment of rights to benefits, cooperation with the agency in
obtaining medical support or payments, and cooperation in identifying
and providing information to assist the State in pursuing any liable
third parties; and
(2) The requirements of Sec. Sec. 433.151 through 433.154 are met
for cooperative agreements and incentive payments for third party
collections.
(c) The requirements of paragraph (b)(1) of this section relating to
assignment of rights to benefits and cooperation in obtaining medical
support or payments and paragraph (b)(2) of this section are effective
for medical assistance furnished on or after October 1, 1984. The
requirements of paragraph (b)(1) of this section relating to cooperation
in identifying and providing information to assist the State in pursuing
liable third parties are effective for medical assistance furnished on
or after July 1, 1986.
[50 FR 46665, Nov. 12, 1985, as amended at 55 FR 48606, Nov. 21, 1990;
55 FR 52130, Dec. 19, 1990; 60 FR 35502, July 10, 1995]
Sec. 433.138 Identifying liable third parties.
(a) Basic provisions. The agency must take reasonable measures to
determine the legal liability of the third parties who are liable to pay
for services furnished under the plan. At a minimum, such measures must
include the requirements specified in paragraphs (b) through (k) of this
section, unless waived under paragraph (l) of this section.
(b) Obtaining health insurance information: Initial application and
redetermination processes for Medicaid eligibility. (1) If the Medicaid
agency determines eligibility for Medicaid, it must, during the initial
application and each redetermination process, obtain from the applicant
or beneficiary such health insurance information as would be useful
[[Page 107]]
in identifying legally liable third party resources so that the agency
may process claims under the third party liability payment procedures
specified in Sec. 433.139 (b) through (f). Health insurance information
may include, but is not limited to, the name of the policy holder, his
or her relationship to the applicant or beneficiary, the social security
number (SSN) of the policy holder, and the name and address of insurance
company and policy number.
(2) If Medicaid eligibility is determined by the Federal agency
administering the supplemental security income program under title XVI
in accordance with a written agreement under section 1634 of the Act,
the Medicaid agency must take the following action. It must enter into
an agreement with CMS or must have, prior to February 1, 1985, executed
a modified section 1634 agreement that is still in effect to provide
for--
(i) Collection, from the applicant or beneficiary during the initial
application and each redetermination process, of health insurance
information in the form and manner specified by the Secretary; and
(ii) Transmittal of the information to the Medicaid agency.
(3) If Medicaid eligibility is determined by any other agency in
accordance with a written agreement, the Medicaid agency must modify the
agreement to provide for--
(i) Collection, from the applicant or beneficiary during the initial
application and each redetermination process, of such health insurance
information as would be useful in identifying legally liable third party
resources so that the Medicaid agency may process claims under the third
party liability payment procedures specified in Sec. 433.139 (b)
through (f). Health insurance information may include, but is not
limited to, those elements described in paragraph (b)(1) of this
section; and
(ii) Transmittal of the information to the Medicaid agency.
(c) Obtaining other information. Except as provided in paragraph (l)
of this section, the agency must, for the purpose of implementing the
requirements in paragraphs (d)(1)(ii) and (d)(4)(i) of this section,
incorporate into the eligibility case file the names and SSNs of absent
or custodial parents of Medicaid beneficiaries to the extent such
information is available.
(d) Exchange of data. Except as provided in paragraph (l) of this
section, to obtain and use information for the purpose of determining
the legal liability of the third parties so that the agency may process
claims under the third party liability payment procedures specified in
Sec. 433.139(b) through (f), the agency must take the following
actions:
(1) Except as specified in paragraph (d)(2) of this section, as part
of the data exchange requirements under Sec. 435.945 of this chapter,
from the State wage information collection agency (SWICA) defined in
Sec. 435.4 of this chapter and from the SSA wage and earnings files
data as specified in Sec. 435.948(a)(1) of this chapter, the agency
must--
(i) Use the information that identifies Medicaid beneficiaries that
are employed and their employer(s); and
(ii) Obtain and use, if their names and SSNs are available to the
agency under paragraph (c) of this section, information that identifies
employed absent or custodial parents of beneficiaries and their
employer(s).
(2) If the agency can demonstrate to CMS that it has an alternate
source of information that furnishes information as timely, complete and
useful as the SWICA and SSA wage and earnings files in determining the
legal liability of third parties, the requirements of paragraph (d)(1)
of this section are deemed to be met.
(3) The agency must request, as required under Sec. 435.948(a)(2)
of this chapter, from the State title IV-A agency, information not
previously reported that identifies those Medicaid beneficiaries who are
employed and their employer(s).
(4) Except as specified in paragraph (d)(5) of this section, the
agency must attempt to secure agreements (to the extent permitted by
State law) to provide for obtaining--
(i) From State Workers' Compensation or Industrial Accident
Commission files, information that identifies Medicaid beneficiaries
and, (if their names and SSNs were available to the
[[Page 108]]
agency under paragraph (c) of this section) absent or custodial parents
of Medicaid beneficiaries with employment-related injuries or illnesses;
and
(ii) From State Motor Vehicle accident report files, information
that identifies those Medicaid beneficiaries injured in motor vehicle
accidents, whether injured as pedestrians, drivers, passengers, or
bicyclists.
(5) If unable to secure agreements as specified in paragraph (d)(4)
of this section, the agency must submit documentation to the regional
office that demonstrates the agency made a reasonable attempt to secure
these agreements. If CMS determines that a reasonable attempt was made,
the requirements of paragraph (d)(4) of this section are deemed to be
met.
(e) Diagnosis and trauma code edits. Except as specified under
paragraph (l) of this section, the agency must take action to identify
those paid claims for Medicaid beneficiaries that contain diagnosis
codes that are indicative of trauma, or injury, poisoning, and other
consequences of external causes, for the purpose of determining the
legal liability of third parties so that the agency may process claims
under the third party liability payment procedures specified in Sec.
433.139(b) through (f).
(f) Data exchanges and trauma code edits: Frequency. Except as
provided in paragraph (l) of this section, the agency must conduct the
data exchanges required in paragraphs (d)(1) and (3) of this section,
and diagnosis and trauma edits required in paragraphs (d)(4) and (e) of
this section on a routine and timely basis. The State plan must specify
the frequency of these activities.
(g) Followup procedures for identifying legally liable third party
resources. Except as provided in paragraph (l) of this section, the
State must meet the requirements of this paragraph.
(1) SWICA, SSA wage and earnings files, and title IV-A data
exchanges. With respect to information obtained under paragraphs (d)(1)
through (d)(3) of this section--
(i) Within 45 days, the agency must follow up (if appropriate) on
such information to identify legally liable third party resources and
incorporate such information into the eligibility case file and into its
third party data base and third party recovery unit so the agency may
process claims under the third party liability payment procedures
specified in Sec. 433.139 (b) through (f); and
(ii) The State plan must describe the methods the agency uses for
meeting the requirements of paragraph (g)(1)(i) of this section.
(2) Health insurance information and workers' compensation data
exchanges. With respect to information obtained under paragraphs (b) and
(d)(4)(i) of this section--
(i) Within 60 days, the agency must followup on such information (if
appropriate) in order to identify legally liable third party resources
and incorporate such information into the eligibility case file and into
its third party data base and third party recovery unit so the agency
may process claims under the third party liability payment procedures
specified in Sec. 433.139 (b) through (f); and
(ii) The State plan must describe the methods the agency uses for
meeting the requirements of paragraph (g)(2)(i) of this section.
(3) State motor vehicle accident report file data exchanges. With
respect to information obtained under paragraph (d)(4)(ii) of this
section--
(i) The State plan must describe the methods the agency uses for
following up on such information in order to identify legally liable
third party resources so the agency may process claims under the third
party liability payment procedures specified in Sec. 433.139 (b)
through (f);
(ii) After followup, the agency must incorporate all information
that identifies legally liable third party resources into the
eligibility case file and into its third party data base and third party
recovery unit; and
(iii) The State plan must specify timeframes for incorporation of
the information.
(4) Diagnosis and trauma code edits. With respect to the paid claims
identified under paragraph (e) of this section--
(i) The State plan must describe the methods the agency uses to
follow up
[[Page 109]]
on such claims in order to identify legally liable third party resources
so the agency may process claims under the third party liability payment
procedures specified in Sec. 433.139 (b) through (f) (Methods must
include a procedure for periodically identifying those trauma codes that
yield the highest third party collections and giving priority to
following up on those codes.);
(ii) After followup, the agency must incorporate all information
that identifies legally liable third party resources into the
eligibility case file and into its third party data base and third party
recovery unit; and
(iii) The State plan must specify the timeframes for incorporation
of the information.
(h) Obtaining other information and data exchanges: Safeguarding
information. (1) The agency must safeguard information obtained from and
exchanged under this section with other agencies in accordance with the
requirements set forth in part 431, subpart F of this chapter.
(2) Before requesting information from, or releasing information to
other agencies to identify legally liable third party resources under
paragraph (d) of this section the agency must execute data exchange
agreements with those agencies. The agreements, at a minimum, must
specify--
(i) The information to be exchanged;
(ii) The titles of all agency officials with the authority to
request third party information;
(iii) The methods, including the formats to be used, and the timing
for requesting and providing the information;
(iv) The safeguards limiting the use and disclosure of the
information as required by Federal or State law or regulations; and
(v) The method the agency will use to reimburse reasonable costs of
furnishing the information if payment is requested.
(i) Reimbursement. The agency must, upon request, reimburse an
agency for the reasonable costs incurred in furnishing information under
this section to the Medicaid agency.
(j) Reports. The agency must provide such reports with respect to
the data exchanges and trauma code edits set forth in paragraphs (d)(1)
through (d)(4) and paragraph (e) of this section, respectively, as the
Secretary prescribes for the purpose of determining compliance under
Sec. 433.138 and evaluating the effectiveness of the third party
liability identification system. However, if the State is not meeting
the provisions of paragraph (e) of this section because it has been
granted a waiver of those provisions under paragraph (l) of this
section, it is not required to provide the reports required in this
paragraph.
(k) Integration with the State mechanized claims processing and
information retrieval system. Basic requirement--Development of an
action plan. (1) If a State has a mechanized claims processing and
information retrieval system approved by CMS under subpart C of this
part, the agency must have an action plan for pursuing third party
liability claims and the action plan must be integrated with the
mechanized claims processing and information retrieval system.
(2) The action plan must describe the actions and methodologies the
State will follow to--
(i) Identify third parties;
(ii) Determine the liability of third parties;
(iii) Avoid payment of third party claims as required in Sec.
433.139;
(iv) Recover reimbursement from third parties after Medicaid claims
payment as required in Sec. 433.139; and,
(v) Record information and actions relating to the action plan.
(3) The action plan must be consistent with the conditions for
reapproval set forth in Sec. 433.119. The portion of the plan which is
integrated with MMIS is monitored in accordance with those conditions
and if the conditions are not met; it is subject to FFP reduction in
accordance with procedures set forth in Sec. 433.120. The State is not
subject to any other penalty as a result of other monitoring, quality
control, or auditing requirements for those items in the action plan.
(4) The agency must submit its action plan to the CMS Regional
Office within 120 days from the date CMS issues implementing
instructions for the State Medicaid Manual. If a State does not have an
approved MMIS on
[[Page 110]]
the date of issuance of the State Medicaid Manual but subsequently
implements an MMIS, the State must submit its action plan within 90 days
from the date the system is operational. The CMS Regional Office
approves or disapproves the action plan.
(l) Waiver of requirements. (1) The agency may request initial and
continuing waiver of the requirements to determine third party liability
found in paragraphs (c), (d)(4), (d)(5), (e), (f), (g)(1), (g)(2),
(g)(3), and (g)(4) of this section if the State determines the activity
to be not cost-effective. An activity would not be cost-effective if the
cost of the required activity exceeds the third party liability
recoupment and the required activity accomplishes, at the same or at a
higher cost, the same objective as another activity that is being
performed by the State.
(i) The agency must submit a request for waiver of the requirement
in writing to the CMS regional office.
(ii) The request must contain adequate documentation to establish
that to meet a requirement specified by the agency is not cost-
effective. Examples of documentation are claims recovery data and a
State analysis documenting a cost-effective alternative that
accomplished the same task.
(iii) The agency must agree, if a waiver is granted, to notify CMS
of any event that occurs that changes the conditions upon which the
waiver was approved.
(2) CMS will review a State's request to have a requirement
specified under paragraph (l)(1) of this section waived and will request
additional information from the State, if necessary. CMS will notify the
State of its approval or disapproval determination within 30 days of
receipt of a properly documented request.
(3) CMS may rescind a waiver at any time that it determines that the
agency no longer meets the criteria for approving the waiver. If the
waiver is rescinded, the agency has 6 months from the date of the
rescission notice to meet the requirement that had been waived.
[52 FR 5975, Feb. 27, 1987, as amended at 54 FR 8741, Mar. 2, 1989; 55
FR 1432, Jan. 16, 1990; 55 FR 5118, Feb. 13, 1990; 60 FR 35502, July 10,
1995; 81 FR 27853, May 6, 2016; 81 FR 86449, Nov. 30, 2016]
Sec. 433.139 Payment of claims.
(a) Basic provisions. (1) For claims involving third party liability
that are processed on or after May 12, 1986, the agency must use the
procedures specified in paragraphs (b) through (f) of this section.
(2) The agency must submit documentation of the methods (e.g., cost
avoidance, pay and recover later) it uses for payment of claims
involving third party liability to the CMS Regional Office.
(b) Probable liability is established at the time claim is filed.
Except as provided in paragraph (e) of this section--
(1) If the agency has established the probable existence of third
party liability at the time the claim is filed, the agency must reject
the claim and return it to the provider for a determination of the
amount of liability. The establishment of third party liability takes
place when the agency receives confirmation from the provider or a third
party resource indicating the extent of third party liability. When the
amount of liability is determined, the agency must then pay the claim to
the extent that payment allowed under the agency's payment schedule
exceeds the amount of the third party's payment.
(2) The agency may pay the full amount allowed under the agency's
payment schedule for the claim and then seek reimbursement from any
liable third party to the limit of legal liability if the claim is for
labor and delivery and postpartum care. (Costs associated with the
inpatient hospital stay for labor and delivery and postpartum care must
be cost-avoided.)
(3) The agency must pay the full amount allowed under the agency's
payment schedule for the claim and seek reimbursement from any liable
third party to the limit of legal liability (and for purposes of
paragraph (b)(3)(ii) of this section, from a third
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party, if the third party liability is derived from an absent parent
whose obligation to pay support is being enforced by the State title IV-
D agency), consistent with paragraph (f) of this section if--
(i) The claim is prenatal care for pregnant women, or preventive
pediatric services (including early and periodic screening, diagnosis
and treatment services provided for under part 441, subpart B of this
chapter), that is covered under the State plan; or
(ii) The claim is for a service covered under the State plan that is
provided to an individual on whose behalf child support enforcement is
being carried out by the State title IV-D agency. The agency prior to
making any payment under this section must assure that the following
requirements are met:
(A) The State plan specifies whether or not providers are required
to bill the third party.
(B) The provider certifies that before billing Medicaid, if the
provider has billed a third party, the provider has waited 30 days from
the date of the service and has not received payment from the third
party.
(C) The State plan specifies the method used in determining the
provider's compliance with the billing requirements.
(c) Probable liability is not established or benefits are not
available at the time claim is filed. If the probable existence of third
party liability cannot be established or third party benefits are not
available to pay the beneficiary's medical expenses at the time the
claim is filed, the agency must pay the full amount allowed under the
agency's payment schedule.
(d) Recovery of reimbursement. (1) If the agency has an approved
waiver under paragraph (e) of this section to pay a claim in which the
probable existence of third party liability has been established and
then seek reimbursement, the agency must seek recovery of reimbursement
from the third party to the limit of legal liability within 60 days
after the end of the month in which payment is made unless the agency
has a waiver of the 60-day requirement under paragraph (e) of this
section.
(2) Except as provided in paragraph (e) of this section, if the
agency learns of the existence of a liable third party after a claim is
paid, or benefits become available from a third party after a claim is
paid, the agency must seek recovery of reimbursement within 60 days
after the end of the month it learns of the existence of the liable
third party or benefits become available.
(3) Reimbursement must be sought unless the agency determines that
recovery would not be cost effective in accordance with paragraph (f) of
this section.
(e) Waiver of requirements. (1) The agency may request initial and
continuing waiver of the requirements in paragraphs (b)(1), (d)(1), and
(d)(2) of this section, if it determines that the requirement is not
cost-effective. An activity would not be cost-effective if the cost of
the required activity exceeds the third party liability recoupment and
the required activity accomplishes, at the same or at a higher cost, the
same objective as another activity that is being performed by the State.
(i) The agency must submit a request for waiver of the requirement
in writing to the CMS regional office.
(ii) The request must contain adequate documentation to establish
that to meet a requirement specified by the agency is not cost-
effective. Examples of documentation are costs associated with billing,
claims recovery data, and a State analysis documenting a cost-effective
alternative that accomplishes the same task.
(iii) The agency must agree, if a waiver is granted, to notify CMS
of any event that occurs that changes the conditions upon which the
waiver was approved.
(2) CMS will review a State's request to have a requirement
specified under paragraph (e)(1) of this section waived and will request
additional information from the State, if necessary. CMS will notify the
State of its approval or disapproval determination within 30 days of
receipt of a properly documented request.
(3) CMS may rescind the waiver at any time that it determines that
the State no longer meets the criteria for
[[Page 112]]
approving the waiver. If the waiver is rescinded, the agency has 6
months from the date of the rescission notice to meet the requirement
that had been waived.
(4) An agency requesting a waiver of the requirements specifically
concerning either the 60-day limit in paragraph (d)(1) or (d)(2) of this
section must submit documentation of written agreement between the
agency and the third party, including Medicare fiscal intermediaries and
carriers, that extension of the billing requirement is agreeable to all
parties.
(f) Suspension or termination of recovery of reimbursement. (1) An
agency must seek reimbursement from a liable third party on all claims
for which it determines that the amount it reasonably expects to recover
will be greater than the cost of recovery. Recovery efforts may be
suspended or terminated only if they are not cost effective.
(2) The State plan must specify the threshold amount or other
guideline that the agency uses in determining whether to seek recovery
of reimbursement from a liable third party, or describe the process by
which the agency determines that seeking recovery of reimbursement would
not be cost effective.
(3) The State plan must also specify the dollar amount or period of
time for which it will accumulate billings with respect to a particular
liable third party in making the decision whether to seek recovery of
reimbursement.
[50 FR 46665, Nov. 12, 1985, as amended at 51 FR 16319, May 2, 1986; 60
FR 35503, July 10, 1995; 62 FR 23140, Apr. 29, 1997]