[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23279]


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[Federal Register: September 23, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 435 and 436

[MB-52-IFC]
RIN 0938-AF69

 

Medicaid Program: Outstation Intake Locations for Certain Low-
Income Pregnant Women, Infants, and Children Under Age 19

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule interprets the statutory requirement 
that State Medicaid agencies must provide for receiving and initially 
processing Medicaid applications by certain low-income pregnant women, 
infants, and children under age 19 at locations other than those used 
for the receipt and processing of applications for Aid to Families with 
Dependent Children (AFDC). The statutory requirement also provides that 
the application form for these individuals must be different from the 
application form used for AFDC.
    The basis for the rule is section 1902(a)(55) of the Social 
Security Act, as added by section 4602(a)(3) of the Omnibus Budget 
Reconciliation Act of 1990.

DATES: Effective Date. This interim final rule is effective on October 
24, 1994.
    Comment Date. Comments will be considered if received at the 
appropriate address, as provided in the ``ADDRESSES'' section below, no 
later than 5:00 p.m. on November 22, 1994.

ADDRESSES: Mail comments (original and three copies) to the following 
address: Health Care Financing Administration, Department of Health and 
Human Services, Attention: MB-52-IFC, P.O. Box 7518, Baltimore, Md. 
21207-0518.
    Please address a copy of comments on information collection 
requirements to: Office of Information and Regulatory Affairs, 
Attention: Laura Oliven, Office of Management and Budget, Room 3002, 
New Executive Office Building, Washington, DC 20503.
    If you prefer, you may deliver your comments (original and three 
copies) to one of the following addresses: Room 309-G, Hubert H. 
Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, 
or Room 132, East High Rise Building, 6325 Security Boulevard, 
Baltimore, Maryland 21207.
    Because of staffing and resource limitations, we cannot accept 
comments of facsimile (FAX) transmission.
    In commenting, please refer to file code MB-52-IFC. Timely comments 
will be available for public inspection as they are received, beginning 
approximately three weeks after publication of this document, in room 
309-G of the Department's offices at 200 Independence Avenue, SW., 
Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 
5:00 p.m. (telephone: (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Robert Tomlinson, (410) 966-4463.

SUPPLEMENTARY INFORMATION:

I. Background

    Generally, sections 1902(a)(10)(A) and (C) of the Social Security 
Act (the Act) specify the groups of individuals who may be eligible for 
Medicaid. Among these groups are low-income pregnant women, infants, 
and children under age 19 who have incomes that are a specified 
percentage of the Federal poverty level. Because Medicaid eligibility 
for many of the eligibility groups specified under section 
1902(a)(10)(A) is associated with eligibility for or receipt of Aid to 
Families With Dependent Children (AFDC), many State Medicaid agencies 
provide for the receipt and processing of Medicaid applications at 
welfare offices, either concurrent with or separate from application 
for AFDC or other cash assistance. In most cases in which an individual 
is determined to be eligible for AFDC on the basis of an AFDC 
application, Medicaid eligibility is automatic without a separate 
Medicaid application. For other eligibility groups, such as low-income 
pregnant women, infants, and children under age 19 with incomes related 
to the Federal poverty level, eligibility for Medicaid is not 
associated with AFDC eligibility.
    In an effort to make the Medicaid application process more 
accessible to low-income pregnant women, infants, and children under 
age 19, Congress enacted section 4602 of the Omnibus Budget 
Reconciliation Act of 1990 (OBRA '90), Public Law 101-508, on November 
5, 1990. Section 4602(a)(3) amended the Social Security Act to add a 
new Medicaid State plan requirement under section 1902(a)(55) relating 
to the application process for these eligibility groups. The new 
section 1902(a)(55) requires that a State Medicaid plan provide for 
receipt and initial processing of Medicaid applications from the 
following groups of individuals at locations other than those used for 
processing applications for AFDC and for using at these locations an 
application form for Medicaid that is not the AFDC application form:
     Individuals specified under section 1902(a)(10)(A)(i)(IV) 
of the Act (the mandatory eligibility group of pregnant women or 
infants with incomes up to 133 percent of the Federal poverty level);
     Individuals specified under section 1902(a)(10)(A)(i)(VI) 
of the Act (the mandatory eligibility group of children age 1 up to age 
6 with incomes at 133 percent of the Federal poverty level);
     Individuals specified under section 1902(a)(10)(A)(i)(VII) 
of the Act (the mandatory eligibility group of children age 6 up to age 
19 born after September 30, 1983, with incomes up to 100 percent of the 
Federal poverty level);
     Individuals specified under section 1902(a)(10)(A)(ii)(IX) 
of the Act (the optional eligibility groups of pregnant women or 
infants, children age 1 up to age 6, and children age 6 up to age 19, 
who are not eligible as a mandatory group, with incomes up to 185 
percent of the Federal poverty level).
    Section 1902(a)(55) provides that the outstation locations for 
receipt and initial processing of applications for these individuals 
must include facilities defined as disproportionate share hospitals 
under section 1923(a)(1)(A) of the Act and Federally-qualified health 
centers described in section 1905(1)(2)(B) of the Act.
    The provisions of section 1902(a)(55) apply to Medicaid payments 
for calendar quarters beginning on or after July 1, 1991, without 
regard to whether final regulations to carry out the provisions have 
been promulgated by that date.

II. Provisions of the Regulations

    We are amending the Medicaid regulations under 42 CFR parts 435 and 
436 to incorporate the provisions of section 1902(a)(55) of the Act. 
Specifically--
1. Outstation Locations
    We have added a new Sec. 435.904 to require that the State Medicaid 
agency provide an opportunity for the designated groups of low-income 
pregnant women, infants, and children under age 19 to apply for 
Medicaid and have their application initially processed at locations 
other than those at which AFDC applications are received and processed. 
The statutory language of section 1902(a)(55) of the Act, as added by 
section 4602 of OBRA '90, requires that States provide an opportunity 
to apply for Medicaid at locations other than welfare offices, 
including Federally-qualified health centers and disproportionate share 
hospitals. By specifying that certain types of facilities be among the 
outstation locations, Congress clearly intended that, at a minimum, 
Federally qualified health centers and disproportionate share hospitals 
would be among the outstation locations.
    We consulted extensively with States and related organizations and 
agencies before developing these interim final regulations. During this 
consultation, we considered the option of requiring States to 
outstation staff at every site operated by each Federally-qualified 
health center and disproportionate share hospital. However, we rejected 
this requirement because we believe that it would be burdensome on the 
States. Therefore, to provide States with as much flexibility as 
possible, especially in this era of restricted resources, we have 
chosen to offer States two choices for implementing the outstationing 
requirement. A State may establish outstation locations at each 
Federally-qualified health center and each disproportionate share 
hospital participating in the State's Medicaid program and providing 
services to Medicaid-eligible pregnant women and to children, but not 
at every site operated by these entities. As an alternative, a State 
may submit a plan that provides for outstation locations which include 
at least some Federally-qualified health centers and disproportionate 
share hospitals, but not all such entities that provide services to the 
target populations. For the alternative plan to be approved by HCFA, 
the State must demonstrate that it is equally or more effective in 
outreach than a plan that would meet the general requirement, including 
the same level of staffing and funding by the State as the State would 
be required to commit to implement outstationing under the general 
requirement.
    We are requiring that the outstations include Indian health clinics 
operated by a tribe or tribal organization, as these clinics are 
specifically included in the definition of Federally-qualified health 
centers under section 1905(1)(2)(B) of the Act, and included in the 
definition of rural health clinics under 42 CFR part 491, subpart A. If 
a Federally-qualified health center or disproportionate share hospital 
has more than one site, the State must ensure that applications for 
Medicaid can be taken at an outstation location.
    In addition to placing outstationed eligibility workers at 
Federally-qualified health centers and disproportionate share hospitals 
(or locations under an approved alternative plan) that provide services 
to Medicaid-eligible pregnant women and to children, States may 
consider other locations that are frequently visited by the targeted 
populations. For example, States may consider family support centers or 
school-linked service centers in addition to other sites operated by 
Federally-qualified health centers as suitable outstation locations.
    To permit additional flexibility, we are allowing a State, at its 
option, to enter into reciprocal agreements with adjoining States to 
ensure that the population living in border areas of a State have the 
opportunity to apply for Medicaid at the health care locations they 
normally frequent when those facilities are in another State 
(Sec. 435.904(c)(4)).
2. Initial Processing
    Section 1902(a)(55) provides for ``initial processing'' of 
applications for the designated low-income pregnant women, infant, and 
children groups. However, the phrase ``initial processing'' is 
ambiguous and is not defined in the statute. The House Report 
accompanying OBRA '90 states that the ``entire application process 
would be conducted at [an outstation],'' and that the final eligibility 
determination could also be made there. The language of the House 
Report goes further to state that ``even if the eligibility worker were 
an employee of the hospital or clinic, the pregnant woman or child 
would not be required to go to the welfare office for a face-to-face 
interview in order to complete the eligibility determination process. 
Instead, the simplified application form, along with necessary 
documentation, would then be forwarded to the welfare office for final 
determination.'' (H. Rept. No. 881, 101st Cong., 2d Sess. 105 (1990)). 
We are, therefore, defining ``initial processing'' to mean taking 
applications, assisting applicants in completing the application, 
providing information and referrals, obtaining required documentation 
to complete processing of the application, assuring that the 
information contained on the application form is complete, and 
conducting any necessary interviews. Initial processing does not 
include evaluating the information contained on the application and the 
supporting documentation nor making a determination of eligibility or 
ineligibility Sec. 435.904(d)(2). Even though the phrase ``initial 
processing'' is not defined to include determinations of eligibility or 
ineligibility, State eligibility workers who are assigned to outstation 
locations may perform these tasks if they are authorized to do so in 
the regular Medicaid agency intake office, as discussed in detail 
below. If we were to define initial processing to include making a 
determination of eligibility, the definition would conflict with the 
requirement of section 1902(a)(5) of the Act. Under section 1902(a)(5), 
the plan must be administered by a single State agency and 
determination of eligibility is restricted by this section to the 
Medicaid agency, the title IV-A agency, or SSA when administering the 
SSI program.
3. Staffing
    The State must assure HCFA that staff are available at each 
outstation location to accept applications and assist applicants with 
the application process during the hours that the regular State 
Medicaid offices are normally open (Sec. 435.904(e)). In addition, we 
are providing an exception to this requirement for staffing, and hours 
when staff are available, at locations that are infrequently used by 
the designated groups of low-income pregnant women, infants, and 
children. To fulfill the spirit of this legislation, we also encourage 
States to make outstation workers available at additional hours in the 
evening or on weekends beyond the minimum staffing requirement set 
forth in these regulations, thereby making access and the opportunity 
to apply for Medicaid as easy as possible for the designated groups.
    In order to provide the States with as much flexibility as 
possible, we are allowing States to target and conserve their resources 
while complying with the requirement on availability of staff. We are 
not requiring outstation intake workers to be employees of the State 
Medicaid agency, which is consistent with our regulations under 42 CFR 
Part 432. However, all staff that perform this function must be trained 
to assist applicants in filing applications and to accurately answer 
questions that applicants may have or to refer such questions to the 
State agency's regular office for answers. At a minimum, staff must be 
available at all Federally-qualified health centers and 
disproportionate share hospitals that provide services to Medicaid-
eligible pregnant women and to children. Proper application forms must 
be on hand at all locations.
    We are permitting States to staff outstation locations with State 
employees, provider or contractor employees, or volunteers under 
certain conditions and limitations. When a State places staff at 
outstation locations, the State may schedule persons to either work at 
a specific location or rotate among several locations. State employees 
who are placed at outstation locations may perform any tasks in 
connection with the receipt of, and processing of, an application for 
Medicaid at the outstation location that the employee would be 
authorized to perform at the State agency office, including the 
eligibility determination. Provider or contractor employees at these 
locations may only perform initial processing. This includes taking all 
actions in receiving and processing applications and excludes 
evaluating information provided on applications and supporting 
documentation and making eligibility determinations. If contractor or 
provider employees, including provider contractors, are used, the State 
must ensure, whether by contract or other means, that these employees 
adhere to State and Federal confidentiality of information provisions 
concerning applicant and recipient information as specified in 42 CFR 
431.300 through 431.307, to the prohibition on reassignment of provider 
claims, as specified in 42 CFR 447.10, and to all State and Federal 
laws concerning conflicts of interest. Volunteers may be used in the 
same manner as provider or contractor employees, with the same 
requirements for adherence to confidentiality of information and 
conflict of interest prohibitions. These provisions are consistent with 
our regulations at 42 CFR 431.10 (c) and (e) which specify the entities 
authorized to make determinations of eligibility for Medicaid and the 
authority of the single State agency.
    At locations that are infrequently used by low-income pregnant 
women, infants, and children under 19, States may use volunteers, 
provider or contractor employees, or State agency staff, or telephone 
assistance. At these locations, the State must display a notice in a 
prominent place advising potential applicants about when outstation 
intake staff will be available. The notification methods must take into 
account the needs and characteristics of the population served. The 
notice must provide a telephone number that applicants may call for 
assistance with initial processing of an application when staff are not 
available. The notice also must comply with Federal and State laws and 
regulations concerning the provision of adequate notice to persons who 
are blind or deaf or who cannot read or understand the English 
language. The notice must adequately inform these people of the 
opportunity to apply for Medicaid at locations other than the welfare 
office.
4. Application Forms
    Section 1902(a)(55)(B) specifies that the application form that is 
to be used by the designated groups of low-income pregnant women, 
infants, and children under 19 at the Medicaid outstation locations 
must be an application other than that used to apply for AFDC. The 
legislative history for OBRA '90 states that the House Committee bill 
would require States to provide for the use of applications for 
Medicaid-only coverage at outreach locations. It also states that 
``States would develop application forms for use at designated 
hospitals, health centers, and other outreach locations. These 
simplified forms would contain only those information requirements 
necessary to determine eligibility for Medicaid.'' (Emphasis added.) H. 
Rept. No. 881, 101st Cong., 2d. Sess. 105 (1990). The legislative 
history language further lists the items which should appear on the 
application form.
    To permit as much flexibility as possible within the scope of the 
statutory language, we are specifying in Sec. 435.907(c) that the 
application form, including any computerized application form, used at 
outstation locations be an application designed for the designated 
groups of low-income pregnant women, infants, and children under age 
19, an application already used by Medicaid for applicants seeking 
Medicaid only, or a multiple-program application form in which only 
that information appropriate for the Medicaid program is obtained from 
the designated low-income eligibility groups. The application form used 
may not be the application form used to apply for AFDC. In response to 
expressed concerns, we are permitting States to continue to use an 
application form that is designed to accommodate all assistance 
programs under certain circumstances. States may continue to use a 
multiple-program application form if the form contains Medicaid-only 
application sections or parts and it is clear to Medicaid applicants 
that they can choose to complete only those sections or parts of the 
application relating to Medicaid information requirements. The person 
assisting the applicant at the outstation location must make it clear 
to the applicant before the application is completed that only the 
information pertinent to Medicaid eligibility for the groups described 
in section 1902(a)(55) needs to be completed.

III. Federal Financial Participation

    Federal financial participation (FFP) is available for costs 
associated with the outstation locations, regardless of who provides 
the services. However, effective October l, 1992, under the provisions 
of section l903(w) (as added by section 2(a) of the Medicaid Voluntary 
Contribution and Provider Specific Tax Amendments of 1991, Public Law 
102-234, December 12, 1991), FFP is limited if a State receives 
donations for outstationed eligibility workers made by a hospital, 
clinic, or similar entity for the direct costs of State or local agency 
personnel who are stationed at a facility to determine Medicaid 
eligibility or to provide outreach services to eligible (or potentially 
eligible) individuals. Direct costs include salaries and fringe 
benefits for outstationed workers and the cost of pamphlets and 
materials distributed by outstationed eligibility workers at the site. 
These donations may not exceed 10 percent of the State's total Medicaid 
administrative costs, excluding costs for family planning services. 
Donations in excess of this 10-percent limit will be deducted from the 
State's medical assistance expenditures prior to calculation of FFP. 
Outstationed worker donations are also included in an overall 
limitation (computed in accordance with a formula specified in section 
1903(w) of the Act) on permissible donations that a State may receive.
    The administrative functions of taking and processing applications 
are reimbursed at the 50 percent rate under the provisions of section 
1903(a)(7) of the Act as costs found necessary by the Secretary for the 
proper and efficient administration of the State plan. Subject to the 
limitations for outstationed eligibility worker donations discussed 
above, this rate includes costs incurred by the State to implement and 
provide outstationing of intake workers who are State employees, 
provider employees, volunteers, or provider contractors. FFP is 
available for necessary administrative costs such as salaries, fringe 
benefits, travel, training, equipment, and space directly attributable 
to the outstationing of intake workers.
    Existing regulations under Secs. 432.50, 433.15, and 435.1001 
already contain provisions for FFP for staffing and training costs and 
for administrative costs that States incur in determining and 
redetermining Medicaid eligibility.

IV. Application of Rules in Territories

    The requirements of section 1902(a)(55) are applicable in Guam, 
Puerto Rico, and the Virgin Islands. Our existing regulations on 
eligibility determinations in the Territories cross-refer to the 
regulations under Part 435. Therefore, no further major changes in the 
regulations are necessary to make these interim final regulations 
applicable in the Territories. We have made a minor conforming change 
to Sec. 436.2.

V. Waiver of Proposed Rulemaking

    The statutory effective date of section 1902(a)(55) of the Act (as 
added by section 4602(a)(3) of OBRA '90) is July 1, 1991, without 
regard to whether regulations have been promulgated. Section 4207(k) of 
OBRA '90 gives the Secretary authority to issue regulations on an 
interim or other basis as may be necessary to implement the amendments 
made by the provisions of OBRA '90. Thus, we are utilizing the 
authority given by section 4207(k) and publishing this rule as an 
interim final rule. As stated earlier in this preamble, we have had 
extensive consultation with States and related organizations and 
agencies in developing the regulations. We are also providing a 60-day 
comment period for public comments on this interim final rule.

VI. Response to Public Comments

    Because of the large number of items of correspondence we normally 
receive on a rule, we are not able to acknowledge or respond to them 
individually. However, we will consider all comments that we receive by 
the date specified in the ``Comment Period'' section of this preamble 
and respond to them in the preamble to any subsequent rule that we 
issue.

VII. Paperwork Burden

    Section 435.907(c) of these interim final regulations with comment 
period contains a revised information collection requirement that is 
subject to review by the Office of Management and Budget under the 
Paperwork Reduction Act of 1980 (44 U.S.C. Chapter 35). State agencies 
may be required to develop a separate Medicaid-only application form 
for the designated groups of low-income pregnant women, infants, and 
children who may apply for Medicaid at outstation locations if a 
Medicaid-only application is not currently available, or to amend their 
existing multiple-program application form to conform it to the 
requirement that there must be a clearly identified Medicaid-only 
application section. We estimate that the burden hours for States to 
develop or revise this application format will be 20 hours.
    We do not anticipate any additional reporting burden hours on 
applicants in the designated groups, as they are required under 
currently approved reporting requirements to complete a Medicaid 
application form for a determination of eligibility for Medicaid.
    We do, however, anticipate an increased reporting burden for those 
States that choose the option of submitting an alternate plan for the 
establishment of outstation location sites under Sec. 435.904(c). These 
States will have to demonstrate that the alternate plan compares 
favorably to a plan to establish outstation locations at each 
disproportionate share hospital and each Federally-qualified health 
center. The State must demonstrate that the alternative plan, at a 
minimum, is equally effective and commits an equal amount of staffing 
and funding. We estimate that it will require a minimum of 40 
additional hours to develop an alternative plan.
    We will publish a notice in the Federal Register when the approval 
of the information collection requirements is obtained.

VIII. Regulatory Impact Statement

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), unless the Secretary certifies that a final regulation 
will not have a significant economic impact on a substantial number of 
small entities. For purposes of the RFA, individuals and States are not 
included in the definition of a small entity.
    We do not believe that this interim final rule will have a 
significant effect on a substantial number of small entities. The 
statutory changes increase Medicaid program expenditures independently 
of the promulgation of this rule and are effective on the statutory 
established date, regardless of whether we have issued final 
regulations. Costs associated with the interim final rule are the 
result of legislation or due to interpretation of statutory changes 
already in effect. We estimate that the Federal Medicaid costs 
associated with implementation of the legislative changes will be 
approximately $40 million per fiscal year, and the State costs to be 
approximately $30 million per fiscal year.
    This interim final rule incorporates, and, in some cases, 
interprets in regulations statutory changes that are already in effect. 
In cases where it was necessary to provide interpretations, we have 
relied on the available legislative history of the statutory provisions 
to reach the best reading of the provision. Therefore, we have not 
prepared a regulatory flexibility analysis under the RFA.
    Section 1102(b) of the Act requires the Secretary to prepare a 
regulatory impact analysis if a final rule will have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
604 of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that has fewer than 50 beds and is 
located outside a Metropolitan Statistical Area.
    We have determined, and the Secretary certifies, that this interim 
final rule with comment period will not have a significant economic 
impact on the operations of a substantial number of small rural 
hospitals, and, therefore, have not prepared a rural hospital impact 
statement.
    The statute requires that all State Medicaid agencies must provide 
an opportunity for the designated groups of low-income pregnant women, 
infants, and children under age 19 to apply for Medicaid and to have 
their applications initially processed at locations other than welfare 
offices, including locations at Federally-qualified health centers and 
disproportionate share hospitals. Although this provision appears to be 
prescriptive, a majority of the States consider this to be a worthwhile 
option and have provided outstation locations in their respective 
States. Not only do we consider these provisions to be cost effective 
for potential Medicaid recipients through savings from travel, we 
expect State costs to be limited as a result of the availability of 
FFP. However, to the extent that these requirements may be burdensome, 
we request comments on any alternative approaches.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 435

    Aid to Families with Dependent Children, Grant programs--health, 
Medicaid, Reporting and recordkeeping requirements, Supplemental 
Security Income (SSI), Wages.

42 CFR Part 436

    Aid to Families with Dependent Children, Grant programs--health, 
Guam, Medicaid, Puerto Rico, Supplemental Security Income (SSI), Virgin 
Islands.

    42 CFR Chapter IV, Subchapter C is amended as follows:

PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE 
NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA

    A. Part 435 is amended as follows:
    1. The authority citation for part 435 continues to read as 
follows:

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

    2. Section 435.3 is amended by republishing the introductory text 
of paragraph (a) and adding a new citation in numerical order to read 
as follows:


Sec. 435.3  Basis.

    (a) This part implements the following sections of the Act and 
public laws that state eligibility requirements and standards:
* * * * *
1902(a)(55)  Mandatory use of outstation locations other than welfare 
offices to receive and initially process applications of certain low-
income pregnant women, infants, and children under age 19.
* * * * *


Sec. 435.902  [Redesignated as Sec. 435.901]


Sec. 435.903  [Redesignated as Sec. 435.902]


Sec. 435.904  [Redesignated as Sec. 435.903]

    3. Sections 435.902, 435.903, and 435.904 are redesignated as 
Secs. 435.901, 435.902, and 435.903, respectively.
    4. A new Sec. 435.904 is added to read as follows:


Sec. 435.904  Establishment of outstation locations to process 
applications for certain low-income eligibility groups.

    (a) State plan requirements. The Medicaid State plan must specify 
that the requirements of this section are met.
    (b) Opportunity to apply. The agency must provide an opportunity 
for the following groups of low-income pregnant women, infants, and 
children under age 19 to apply for Medicaid at outstation locations 
other than AFDC offices:
    (1) The groups of pregnant women or infants with incomes up to 133 
percent of the Federal poverty level as specified under section 
1902(a)(10)(A)(i)(IV) of the Act;
    (2) The group of children age 1 up to age 6 with incomes at 133 
percent of the Federal poverty level as specified under section 
1902(a)(10)(A)(i)(VI) of the Act;
    (3) The group of children age 6 up to age 19 born after September 
30, 1983, with incomes up to 100 percent of the Federal poverty level 
as specified under section 1902(a)(10)(A)(i)(VII) of the Act; and
    (4) The groups of pregnant women or infants, children age 1 up to 
age 6, and children age 6 up to age 19, who are not eligible as a 
mandatory group, with incomes up to 185 percent of the Federal poverty 
level as specified under section 1902(a)(10)(A)(ii)(IX) of the Act.
    (c) Outstation locations: general requirements.
    (1) The agency must establish either--
    (i) Outstation locations at each disproportionate share hospital, 
as defined in section 1923(a)(1)(A) of the Act, and each Federally-
qualified health center, as defined in section 1905(1)(2)(B) of the 
Act, participating in the Medicaid program and providing services to 
Medicaid-eligible pregnant women and children; or
    (ii) Other outstation locations, which include at least some, 
disproportionate share hospitals and federally-qualified health 
centers, as specified under an alternative State plan that is submitted 
to and approved by HCFA if the following conditions are met:
    (A) The State must demonstrate that the alternative plan for 
outstationing is equally effective as, or more effective than, a plan 
that would meet the requirements of paragraph (c)(1)(i) of this section 
in enabling the individuals described in paragraph (b) of this section 
to apply for and receive Medicaid; and
    (B) The State must provide assurances that the level of staffing 
and funding committed by the State under the alternative plan equals or 
exceeds the level of staffing and funding under a plan that would meet 
the requirements of establishing the outstation locations at the sites 
specified in paragraph (c)(1)(i) of this section.
    (2) The agency must establish outstation locations at Indian health 
clinics operated by a tribe or tribal organization as these clinics are 
specifically included in the definition of Federally-qualified health 
centers under section 1905(l)(2)(B) of the Act and are also included in 
the definition of rural health clinics under part 491, subpart A of 
this chapter.
    (3) The agency may establish additional outstation locations at any 
other site where potentially eligible pregnant women or children 
receive services--for example, at school-linked service centers and 
family support centers. These additional sites may also include sites 
other than the main outstation location of those Federally-qualified 
health centers or disproportionate share hospitals providing services 
to Medicaid-eligible pregnant women and to children and that operate 
more than one site.
    (4) The agency may, at its option, enter into reciprocal agreements 
with neighboring States to ensure that the groups described in 
paragraph (b) of this section who customarily receive services in a 
neighboring State have the opportunity to apply at outstation locations 
specified in paragraphs (c)(l) and (2) of this section.
    (d) Outstation functions. (1) The agency must provide for the 
receipt and initial processing of Medicaid applications from the 
designated eligibility groups at each outstation location.
    (2) ``Initial processing'' means taking applications, assisting 
applicants in completing the application, providing information and 
referrals, obtaining required documentation to complete processing of 
the application, assuring that the information contained on the 
application form is complete, and conducting any necessary interviews. 
It does not include evaluating the information contained on the 
application and the supporting documentation nor making a determination 
of eligibility or ineligibility.
    (3) The agency may, at its option, allow appropriate State 
eligibility workers assigned to outstation locations to evaluate the 
information contained on the application and the supporting 
documentation and make a determination of eligibility if the workers 
are authorized to determine eligibility for the agency which determines 
Medicaid eligibility under Sec. 431.10 of this subchapter.
    (e) Staffing. (1) Except for outstation locations that are 
infrequently used by the low-income eligibility groups, the State 
agency must have staff available at each outstation location during the 
regular office operating hours of the State Medicaid agency to accept 
applications and to assist applicants with the application process.
    (2) The agency may station staff at one outstation location or 
rotate staff among several locations as workload and staffing 
availability dictate.
    (3) The agency may use State employees, provider or contractor 
employees, or volunteers who have been properly trained to staff 
outstation locations under the following conditions:
    (i) State outstation intake staff may perform all eligibility 
processing functions, including the eligibility determination, if the 
staff is authorized to do so at the regular Medicaid intake office.
    (ii) Provider or contractor employees and volunteers may perform 
only initial processing functions as defined in paragraph (d)(2) of 
this section.
    (4) Provider and contractor employees and volunteers are subject to 
the confidentiality of information rules specified in part 431, subpart 
F, of this subchapter, to the prohibition against reassignment of 
provider claims specified in Sec. 447.10 of this subchapter, and to all 
other State or Federal laws concerning conflicts of interest.
    (5) At locations that are infrequently used by the designated low-
income eligibility groups, the State agency may use volunteers, 
provider or contractor employees, or its own eligibility staff, or 
telephone assistance.
    (i) The agency must display a notice in a prominent place at the 
outstation location advising potential applicants of when outstation 
intake workers will be available.
    (ii) The notice must include a telephone number that applicants may 
call for assistance.
    (iii) The agency must comply with Federal and State laws and 
regulations governing the provision of adequate notice to persons who 
are blind or deaf or who are unable to read or understand the English 
language.
    3. Section 435.907 is revised to read as follows:


Sec. 435.907  Written application.

    (a) The agency must require a written application from the 
applicant, an authorized representative, or, if the applicant is 
incompetent or incapacitated, someone acting responsibly for the 
applicant.
    (b) Subject to the conditions specified in paragraph (c) of this 
section, the application must be on a form prescribed by the agency and 
signed under a penalty of perjury.
    (c) The application form used at outstation locations for low-
income pregnant women, infants, and children specified in Sec. 435.904 
must not be the application form used to apply for AFDC. The 
application form (including any computerized application form) for 
these designated eligibility groups may be--
    (1) A Medicaid-only form prescribed by the agency specifically for 
the designated eligibility groups;
    (2) An existing Medicaid-only application; or
    (3) A multiple-program application that contains clearly 
identifiable Medicaid-only sections or parts.

PART 436--ELIGIBILITY IN GUAM, PUERTO RICO AND THE VIRGIN ISLANDS

    B. Part 436 is amended as follows:
    1. The authority citation for part 436 continues to read as 
follows:

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

    2. Section 436.2 is amended by revising the introductory text and 
adding a new entry in numerical order to read as follows:


Sec. 436.2  Basis.

    This part implements the following sections of the Act and public 
laws that state requirements and standards for eligibility:
* * * * *
    1902(a)(55) Mandatory use of outstation locations other than 
welfare offices to receive and initially process applications of 
certain low-income pregnant women, infants, and children under age 19.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.778--Medical 
Assistance Programs)

    Dated: July 15, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Dated: July 28, 1994.
Donna E. Shalala,
Secretary.
[FR Doc. 94-23279 Filed 9-22-94; 8:45 am]
BILLING CODE 4120-01-P