[Federal Register Volume 66, Number 155 (Friday, August 10, 2001)]
[Notices]
[Pages 42232-42233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20236]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of New York 
State Plan Amendment (SPA) 96-40a

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing on October 3, 
2001; 10 a.m.; Room 38-110a; Thirty-Eighth Floor; Jacob Javits Federal 
Building; 26 Federal Plaza; New York, New York 10278, to reconsider our 
decision to disapprove New York SPA 96-40a.

Closing Date: Requests to participate in the hearing as a party must be 
received by the presiding officer by August 27, 2001.

FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding 
Officer, CMS C1-09-13, 7500 Security Boulevard, Baltimore, Maryland 
21244; Telephone: (410) 786-2055.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider our decision to disapprove New York SPA 96-40a. 
New York submitted this SPA on September 30, 1996. The issue is whether 
the effective date of a change in the method of Medicaid payment that 
increases Medicaid payments to hospitals may be earlier than the first 
day of the calendar quarter in which New York submitted a SPA for 
approval by the Secretary. This amendment proposes to increase payments 
under the Medicaid State plan by reclassifying certain amounts, 
originally paid outside the scope of the Medicaid program by State 
contractors for the cost of care for persons eligible for the State 
Home Relief program, as Medicaid disproportionate share hospital (DSH) 
payments. As the State's public notice made clear, the proposed change 
in Medicaid payment methodology was not simply to use an intermediary 
to make payments already authorized under the existing State plan, but 
would increase Medicaid payments by adding to the DSH payments to 
certain hospitals. Federal regulations at 42 CFR 447.256(c) and 
430.20(b), however, preclude the Centers for Medicare & Medicaid 
Services (CMS), formerly the Health Care Financing Administration, from 
approving a SPA that changes the method of payment prior to the first 
day of the calendar quarter in which the SPA was submitted. In 
addition, Federal regulations at 42 CFR 447.205(a) require a State to 
provide public notice of any significant proposed change in its methods 
and standards for setting payment rates for services. Federal 
regulations at 42 CFR 447.205(d) require that the notice be published 
before the proposed effective date of the change. Therefore, the 
earliest permissible effective date for this amendment based on the 
date of public notice (i.e., September 25, 1996) and on the calendar 
quarter in which the SPA was submitted (i.e., September 30, 1996), was 
September 26, 1996. After consulting with the Secretary as required by 
42 CFR 430.15(c), CMS informed New York of its decision to disapprove 
this amendment. SPA 96-40a was originally submitted as SPA 96-40, which 
affected DSH payments beginning on July 1, 1994. CMS suggested the 
State split the original amendment into two separate amendments to 
allow payments beginning on September 26, 1996, to be approved. The 
State agreed to this suggestion. The first amendment, 96-40a, affects 
Medicaid payments from July 1, 1994, through September 25, 1996, and 
was disapproved by CMS on May 14, 2001, after consultation with the 
Secretary as required under 42 CFR430.15(c)(2). The second amendment, 
96-40b, affecting Medicaid payments from September 26, 1996, forward, 
was approved.
    The notice to New York announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:
Dr. Antonia C. Novello,
Commissioner, New York State Department of Health, Corning Tower, 
Empire State Plaza, Albany, New York 12237.

    Dear Dr. Novello: I am responding to your request for 
reconsideration of the decision to disapprove New York State Plan 
Amendment (SPA) 96-40a. This SPA was submitted on September 30, 
1996.
    The issue is whether the effective date of a change in the 
method of Medicaid payment that increases Medicaid payments to 
hospitals may be earlier than the first day of the calendar quarter 
in which New York submitted a SPA for approval by the Secretary. 
This amendment proposes to increase payments under the Medicaid 
State plan by reclassifying certain amounts, originally paid outside 
the scope of the Medicaid program by State contractors for the cost 
of care for persons eligible for the State Home Relief program, as 
Medicaid disproportionate share hospital (DSH) payments. As the 
State's public notice made clear, the proposed change in Medicaid 
payment methodology was not simply to use an intermediary to make 
payments already authorized under the existing State plan, but would 
increase Medicaid payments by adding to the DSH payments to certain 
hospitals.

[[Page 42233]]

    The State requested an effective date of July 1, 1994. Federal 
regulations at 42 CFR 447.256(c) and 430.20(b), however, preclude 
the Centers for Medicare & Medicaid Services (CMS) (formerly the 
Health Care Financing Administration) from approving a SPA that 
changes the method of payment prior to the first day of the calendar 
quarter in which the SPA was submitted. In addition, Federal 
regulations at 42 CFR 447.205(a) require a State to provide public 
notice of any significant proposed change in its methods and 
standards for setting payment rates for services. Federal 
regulations at 42 CFR 447.205(d) require that the notice be 
published before the proposed effective date of the change. 
Therefore, the earliest permissible effective date for this 
amendment based on the date of public notice (i.e., September 25, 
1996) and on the calendar quarter in which the SPA was submitted 
(i.e, September 30, 1996), was September 26, 1996. After consulting 
with the Secretary as required by 42 CFR 430.15(c), CMS informed New 
York of its decision to disapprove this amendment.
    The SPA 96-40a was originally submitted as SPA 96-40, which 
affected DSH payments from July 1, 1994, forward. CMS suggested the 
State split the original amendment into two separate amendments to 
allow payments beginning on September 26, 1996, to be approved. The 
State agreed to this suggestion.
    The first amendment, 96-40a, affects Medicaid payments from July 
1, 1994, through September 25, 1996, and based on the above, was 
disapproved on May 14, 2001. The second amendment, 96-40b, affecting 
Medicaid payments from September 26, 1996, forward, was approved.
    I am scheduling a hearing on your request for reconsideration to 
be held on October 3, 2001, at 10:00 a.m. in Room 38-110a; Thirty-
Eighth Floor; Jacob Javits Building; 26 Federal Plaza; New York, New 
York 10278. If this date is not acceptable, we will be glad to set 
another date that is mutually agreeable to the parties. The hearing 
will be governed by the procedures prescribed at 42 CFR, Part 430.
    I am designating Ms. Kathleen Scully-Hayes as the presiding 
officer. If these arrangements present any problems, please contact 
the presiding officer. In order to facilitate any communication 
which may be necessary between the parties to the hearing, please 
notify the presiding officer to indicate acceptability of the 
hearing date that has been scheduled and provide names of the 
individuals who will represent the State at the hearing. The 
presiding officer may be reached at (410) 786-2055.
    Sincerely,

Ruben J. King-Shaw, Jr.,
Deputy Administrator and Chief Operating Officer, Centers for 
Medicare & Medicaid Services.

Section 1116 of the Social Security Act (42 U.S.C. section 1316); 
(42 CFR section 430.18)

(Catalog of Federal Domestic Assistance Program No. 13.714, Medicaid 
Assistance Program)

    Dated: August 7, 2001.
Ruben J. King-Shaw, Jr.,
Deputy Administrator and Chief Operating Officer, Centers for Medicare 
& Medicaid Services.
[FR Doc. 01-20236 Filed 8-9-01; 8:45 am]
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