[Federal Register Volume 67, Number 207 (Friday, October 25, 2002)]
[Rules and Regulations]
[Pages 65504-65505]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27256]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 431 and 438

[CMS-2104-F2]
RIN-0938-AK96


Medicaid Program; Medicaid Managed Care: New Provisions 
Correcting Amendment

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

ACTION: Final rule; correcting amendment.

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SUMMARY: In the June 14, 2002 issue of the Federal Register (67 FR 
40989), we published a final rule implementing the Medicaid managed 
care provisions of the Balanced Budget Act of 1997. The effective date 
of the final rule was August 13, 2002. This document corrects a limited 
number of technical and typographical errors identified in the June 14, 
2002 final rule.

EFFECTIVE DATE: This correcting amendment is effective November 25, 
2002.

FOR FURTHER INFORMATION CONTACT: Bruce Johnson, (410) 786-0615.

SUPPLEMENTARY INFORMATION:

Background

Need for Corrections

    In FR Doc. 02-14747 of June 14, 2002, (67 FR 40989), we published 
final regulations that implemented the statutory provisions from the 
Balanced Budget Act of 1997 (BBA) related to Medicaid managed care. As 
published, a provision of Sec.  431.220, and several provisions of the 
new part 438, contained technical errors. The errors included 
typographical errors, incorrect cross-references, incorrectly 
designated paragraphs, and contradictions. We are in this final rule 
correcting the identified errors.

Summary of Technical Corrections to the Regulations Text of the June 
14, 2002 Medicaid Managed Care Final Rule

    Section 431.220 identifies when the State agency must grant a fair 
hearing to a beneficiary, and was amended by the June 14, 2002 final 
rule to add new reasons or circumstances under which a State fair 
hearing must be granted. Section 438.56(f)(2) specifies that an 
enrollee may request a State fair hearing, for example, if the enrollee 
is dissatisfied with the State agency's determination that there is not 
good cause for disenrollment. The preamble to the final rule makes 
clear that it was CMS'' intent that these new rights be provided.
    However, we inadvertently neglected to include a cross-reference to 
this new right in Sec.  431.220, under the heading ``When a hearing is 
required''. This is corrected by adding a new item (7) to Sec.  
431.220, identifying the new circumstance when a State fair hearing 
must be granted as related to disenrollment.
    In Sec.  438.8, which identifies provisions that apply to PIHPs and 
PAHPs, paragraph (b) identifies provisions of part 438 that apply to 
prepaid ambulatory health plans (PAHPs). In this provision, we 
inadvertently omitted a reference to prohibitions against affiliations 
with individuals debarred by Federal agencies in Sec.  438.610. Again, 
it is clear from the preamble, and from the text of Sec.  438.610, that 
this provision was intended to apply to PAHPs. This error is corrected 
by adding a new item (8) to Sec.  438.8(b) to reference prohibited 
affiliations with individuals debarred by Federal agencies in Sec.  
438.610.
    In Sec.  438.10, which sets forth requirements relating to 
information, in subparagraph (e)(1)(ii) the term ``PIHP'' and in 
subparagraph (i)(3) the term ``potential enrollee,'' are in the 
singular form, but should be plural to conform with other nouns that 
are plural in the provision. These grammatical errors are corrected by 
making the terms plural.
    In several paragraphs, there were inaccurate cross-references to 
other provisions of the regulations text. In Sec.  438.10(f)(6)(iv), 
the reference to ``Sec.  438.10(h)'' should be ``Sec.  438.10(h)(1)''. 
In Sec.  438.52(d), the reference to paragraphs ``(b)(2) or (b)(3)'' 
should be ``(b) or (c)''. In Sec.  438.100(b)(iii), the reference to 
``Sec.  438.10(f)(6)(xiii)'' should be ``Sec.  438.10(f)(6)(xii)''. In 
Sec.  438.102(c), the reference to ``Sec.  438.10(e)(2)(ii)'' should be 
``Sec.  438.10(e)(2)(ii)(E)''. These are corrected in this final rule 
by inserting the correct regulatory citations.
    In both subparagraph (b)(2) and paragraph (c) in Sec.  438.102, 
which addresses provider-enrollee communications, we added the 
clarifying term ``paragraphs'' following ``Sec.  438.102'.
    In Sec.  438.114, governing emergency and post-stabilization 
services, the requirements in paragraphs (a) through (e) were intended 
to apply to all types of managed care programs. It is clear from the 
preamble to the final rule that this was CMS's intent. However, in 
paragraph (d)(ii), ``PIHP'' and ``PAHP'' inadvertently were omitted.
    This is corrected in this final rule by including a reference to 
``PIHP'' and ``PAHP''.
    Paragraph (b)(2)(i) of Sec.  438.116, which sets forth solvency 
standards, creates an exception to the solvency standard in paragraph 
(b) for entities that do not provide both inpatient hospital and 
physician services. By definition, PAHPs would not provide inpatient 
services. Therefore, the references to PAHPs in paragraph (b) are 
extraneous. This is corrected in this final rule by removing the two 
references to PAHPs in paragraphs (b)(1) and (2).
    In two places, paragraphs are incorrectly designated. In Sec.  
438.214, on provider selection, there are two paragraphs designated 
``(a)''. This is corrected in this final rule by redesignating the 
second paragraph as ``(b)''. In Sec.  438.810, on expenditures for 
enrollment broker services, the last paragraph (c) is actually a 
continuation of paragraph (b) specifying conditions that enrollment 
brokers must meet. This is corrected in this final rule by 
redesignating paragraph ``(c)'' as ``(b)(3)''.
    In Sec.  438.730, on sanctions by CMS, subparagraphs (e)(1) and 
(e)(2), the term ``HMO'' is used. The BBA replaced the term ``Health 
Maintenance Organization (HMO)'' with ``Managed Care Organization 
(MCO)''. The obsolete references to HMO in paragraph (e) of Sec.  
438.730 are corrected in this final rule by removing ``HMO'' and 
replacing it with the new acronym ``MCO''.
    In Sec.  438.810, governing expenditures for enrollment broker 
services, a reference to PAHPs was inadvertently omitted from the 
definition of ``Choice counseling'' in paragraph (a), even though the 
text in the remainder of the provisions in Sec.  438.810 includes such 
a reference. This is corrected in this final

[[Page 65505]]

rule by including the term ``PAHP'' in the definition of ``Choice 
counseling''.

Waiver of Proposed Rulemaking

    Ordinarily, a final rule is first published in the Federal Register 
in proposed form to provide a period for public comment before the 
provisions of the final rule take effect. We can waive this procedure, 
however, if we find good cause that a notice and comment procedure is 
impracticable, unnecessary, or contrary to the public interest, and 
incorporate a statement of finding in the final rule.
    We find that it is unnecessary to undertake notice and public 
comment procedures in this case because the technical corrections made 
in this final rule do not make any substantive policy changes. This 
document merely makes technical corrections and conforming changes 
designed to clarify the provisions of the June 14, 2002 final rule, 
which was subjected to notice and comment. Therefore, for good cause, 
we waive notice and public comment procedures under 5 U.S.C. 553(b)(B).

Correction of Errors

    In FR Doc. 02-14747 of June 14, 2002, (67 FR 4089), we are making 
the following corrections:

Corrections to the Regulations Text

List of Subjects

42 CFR Part 431

    Grant programs-health, Health facilities, Medicaid, Privacy, 
Reporting and recordkeeping requirements.

42 CFR Part 438

    Grant programs-health, Managed care entities, Medicaid, Quality 
assurance, Reporting and recordkeeping requirements.

    Accordingly, 42 CFR parts 431 and 438 are corrected by making the 
following correcting amendments:

PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION

    1. The authority citation for part 431 continues to read as 
follows:

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


Sec.  431.220  [Corrected]

    2. In Sec.  431.220, add new paragraph (a)(7) to read as follows:


Sec.  431.220  When a hearing is required.

    (a) * * *
    (7) Any enrollee who is entitled to a hearing under subpart B of 
part 438 of this chapter.
* * * * *

PART 438--MANAGED CARE

    1. The authority citation for part 438 continues to read as 
follows:

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


Sec.  438.8  [Corrected]

    2. In Sec.  438.8, add a new paragraph (b)(8) to read as follows:


Sec.  438.8  Provisions that apply to PIHPs and PAHPs.

* * * * *
    (b) * * *
    (8) Prohibitions against affiliations with individuals debarred by 
Federal agencies in Sec.  438.610.


Sec.  438.10  [Corrected]

    3. In Sec.  438.10(e)(1)(ii), ``PIHP'' is revised to read 
``PIHPs''.

    4. In Sec.  438.10(f)(6)(iv), the last reference to ``Sec.  
438.10(h)'' is revised to read ``Sec.  438.10(h)(1)''.

    5. In Sec.  438.10(i)(3), the last reference to ``potential 
enrollee'' is revised to read ``potential enrollees''.


Sec.  438.52  [Corrected]

    6. In Sec.  438.52(d), the reference to ``(b)(2) or (b)(3)'' is 
revised to read ``(b) or (c)''.


Sec.  438.100  [Corrected]

    7. In Sec.  438.100(b)(2)(iii), the reference to ``Sec.  
438.10(f)(6)(xiii)'' is revised to read ``Sec.  438.10(f)(6)(xii)''.


Sec.  438.102  [Corrected]

    8. In Sec.  438.102(b)(2), ``Sec.  438.10(e) and (f)'' is revised 
to read ``Sec.  438.10, paragraphs (e) and (f)''.

    9. In Sec.  438.102(c), ``Sec.  438.10(e)(2)(ii) and (f)(6)(xii)'' 
is revised to read ``Sec.  438.10, paragraphs (e)(2)(ii)(E) and 
(f)(6)(xii)''.


Sec.  438.114  [Corrected]

    10. In Sec.  438.114(d)(1)(ii), the phrase ``PIHP, PAHP'' is added 
between ``MCO'' and ``or applicable State entity''.


Sec.  438.116  [Corrected]

    11. In Sec.  438.116(b)(1), ``MCO, PIHP, and PAHP'' is revised to 
read ``MCO or PIHP''.

    12. In Sec.  438.116(b)(2), ``MCO, PIHP, or PAHP'' is revised to 
read ``MCO or PIHP''.


Sec.  438.703  [Corrected]

    13. In Sec.  438.703(e)(1) and (e)(2), the term ``HMO'' is revised 
to read ``MCO''.


Sec.  438.810  [Corrected]

    14. In Sec.  438.810(a), in the definition of ``Choice 
counseling'', ``, PAHP,'' is added between ``PIHP'' and ``or PCCM''.

    15. In Sec.  438.810, paragraph (c) is redesignated as paragraph 
(b)(3).

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)

    Dated: October 17, 2002.
Ann Agnew,
Executive Secretary to the Department.
[FR Doc. 02-27256 Filed 10-24-02; 8:45 am]
BILLING CODE 4120-01-P