[Federal Register Volume 67, Number 42 (Monday, March 4, 2002)]
[Notices]
[Pages 9744-9745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4973]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Oklahoma 
State Plan Amendment 99-09

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing on April 10, 
2002, at 10 a.m., in Conference Room 1113; 1301 Young Street; Dallas, 
Texas 75202 to reconsider our decision to disapprove Oklahoma State 
Plan Amendment (SPA) 99-09.

CLOSING DATE: Requests to participate in the hearing as a party must be 
received by the presiding officer by March 19, 2002.

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 Oklahoma's State Plan 
Amendment (SPA) 99-09. Oklahoma submitted SPA 99-09 on April 26, 1999.
    The SPA would provide for coverage and payment of certain services 
as targeted case management services for children who receive medical 
services pursuant to an Individualized Education Program, 
Individualized Family Service Plan, or an Individualized Health Service 
Plan. Under the SPA, providers of school-based medical services would 
be the only qualified providers of these services, which would be 
diagnostic in nature, and payment would be limited to the provider of 
an underlying medical service.
    Section 1116 of the Social Security Act (the Act) and 42 CFR part 
430 establish Department procedures that provide an administrative 
hearing for reconsideration of a disapproval of a State plan or plan 
amendment. The Centers for Medicare & Medicaid Services (CMS) is 
required to publish a copy of the notice to a state Medicaid agency 
that informs the agency of the time and place of the hearing and the 
issues to be considered. If we subsequently notify the agency of 
additional issues that will be considered at the hearing, we will also 
publish that notice.
    Any individual or group that wants to participate in the hearing as 
a party must petition the presiding officer within 15 days after 
publication of this notice, in accordance with the requirements 
contained at 42 CFR 430.76(b)(2). Any interested person or organization 
that wants to participate as amicus curiae must petition the presiding 
officer before the hearing begins in accordance with the requirements 
contained at 42 CFR 430.76(c). If the hearing is later rescheduled, the 
presiding officer will notify all participants.
    The issues are: (1) Whether the proposed covered services are in 
compliance with the statutory definition of case management services at 
section 1915(g) of the Act; (2) whether the payment rates are 
consistent with ``efficiency, economy, and quality of care'' in light 
of their high levels and apparent duplication of provider services 
already included in the basic provider payment; (3) whether the 
proposed restriction on payment for case management services to 
providers furnishing other covered medical services violates the 
freedom of choice requirements of section 1923(a)(23)(A) of the Act; 
and (4) whether the proposed payment for services required under an 
individualized health services plan (IHSP), for which educational 
programs are legally liable to pay, is consistent with requirements at 
section 1902(a)(25) of the Act to pursue payment from all liable third 
parties.
    As explained in the initial disapproval determination, CMS 
concluded that the State had not demonstrated that the proposed covered 
services were within the scope of section 1915(g) of the Act. The 
proposed services would consist of activities such as needs assessment, 
service planning, service coordination and monitoring, service plan 
review, and crisis assistance planning and were described by the State 
as generally diagnostic in nature. In contrast, case management 
services are described at section 1915(g) as directed at ``gaining 
access to needed medical, social, educational, and other services.'' In 
addition, CMS found that the services described in the amendment were 
inherent within the services performed by medical professionals in 
order to properly diagnose and treat their patients, and are integral 
to the services routinely paid through the basic fee-for-service rate 
paid to the providers. In light of the fact that the rates already 
being paid under the Oklahoma approved plan for school-based medical 
services were already higher than community rates and those paid 
generally, CMS therefore concluded that the proposed payments were not 
consistent with efficiency, economy and quality of care, as required by 
section 1902(a)(30)(A) because they effectively were duplicate payments 
for services covered by the basic payment rate. Furthermore, even if 
one were to assume that the proposed services were distinct from 
services included in the basic payment rate, CMS found that the 
proposed limitation of such payments to the provider furnishing the 
underlying services was inconsistent with beneficiary freedom-of-choice 
of provider, as required by section 1902(a)(23)(A) of the Act. And, 
finally, CMS concluded that the proposed specific authority to pay for 
services required under an IHSP was inconsistent with Medicaid 
requirements to pursue liable third party payers, under section 
1902(a)(25) of the Act and implementing regulations at 42 CFR 433.136. 
CMS noted that educational programs are legally liable to fund IHSP 
activities, and thus should be required to pay primary to Medicaid.
    Therefore, based on the reasoning set forth above, and after 
consultation with the Secretary as required under 42 CFR 430.15(c)(2), 
CMS disapproved Oklahoma SPA 99-09.
    The notice to Oklahoma announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Michael Fogarty, Chief Executive Officer, Oklahoma Health Care 
Authority, Lincoln Plaza, 4545 North Lincoln Boulevard, Suite 124, 
Oklahoma City, Oklahoma 73105-3413.

    Dear Mr. Fogarty:
    I am responding to your request for reconsideration of the decision 
to disapprove Oklahoma State Plan Amendment (SPA) 99-09. Oklahoma 
submitted SPA 99-09 on April 26, 1999.
    The issues are: (1) Whether the proposed covered services are in 
compliance with the statutory definition of case management services at 
section 1915(g) of the Social Security Act (the Act); (2) whether the 
payment rates are

[[Page 9745]]

consistent with ``efficiency, economy and quality of care'' in light of 
their high levels and apparent duplication of provider services already 
included in the basic provider payment; (3) whether the proposed 
restriction on payment for case management services to providers 
furnishing other covered medical services violates the freedom-of-
choice requirements of section 1923(a)(23)(A) of the Act; and (4) 
whether the proposed payment for services required under an 
individualized health services plan (IHSP), for which educational 
programs are legally liable to pay, is consistent with requirements at 
section 1902(a)(25) of the Act to pursue payment from all liable third 
parties.
    As explained in the initial disapproval determination, CMS 
concluded that the State had not demonstrated that the proposed covered 
services were within the scope of section 1915(g) of the Act. The 
proposed services would consist of activities such as needs assessment, 
service planning, service coordination and monitoring, service plan 
review, and crisis assistance planning and were described by the State 
as generally diagnostic in nature. In contrast, case management 
services are described at section 1915(g) as directed at ``gaining 
access to needed medical, social educational and other services.''
    In addition, CMS found that the services described in the amendment 
were inherent within the services performed by medical professionals in 
order to properly diagnose and treat their patients, and are integral 
to the services routinely paid through the basic fee-for-service rate 
paid to the providers. In light of the fact that the rates already 
being paid under the Oklahoma approved plan for school-based medical 
services were already higher than community rates and those paid 
generally, CMS therefore concluded that the proposed payments were not 
consistent with efficiency, economy and quality of care, as required by 
section 1902(a)(30)(A) because they effectively were duplicate payments 
for services covered by the basic payment rate. Furthermore, even if 
one were to assume that the proposed services were distinct from 
services included in the basic payment rate, CMS found that the 
proposed limitation of such payments to the provider furnishing the 
underlying services was inconsistent with beneficiary freedom-of-choice 
of provider, as required by section 1902(a)(23)(A) of the Act. And, 
finally, CMS concluded that the proposed specific authority to pay for 
services required under an IHSP was inconsistent with Medicaid 
requirements to pursue liable third party payers, under section 
1902(a)(25) of the Act and implementing regulations at 42 CFR 433.136. 
CMS noted that educational programs are legally liable to fund IHSP 
activities, and thus should be required to pay primary to Medicaid.
    Therefore, based on the reasoning set forth above, and after 
consultation with the Secretary as required under 42 CFR 430.15(c)(2), 
CMS disapproved Oklahoma SPA 99-09.
    I am scheduling a hearing on your request for reconsideration to be 
held April 10, 2002, at 10 a.m., in Conference Room 1113; 1301 Young 
Street; Dallas, Texas 75202. If this date is not acceptable, we would 
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,
    Thomas A. Scully
    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: February 21, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-4973 Filed 3-1-02; 8:45 am]
BILLING CODE 4120-03-P