[Federal Register Volume 67, Number 217 (Friday, November 8, 2002)]
[Notices]
[Pages 68140-68142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-28469]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Maryland 
State Plan Amendment 02-05

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing to be held on 
December 19, 2002, Suite 216, The Public Ledger Building, 150 S. 
Independence Mall West, Philadelphia, Pennsylvania 19106, at 10 a.m., 
to reconsider our decision to disapprove Maryland State Plan Amendment 
02-05.

CLOSING DATE: Requests to participate in the hearing as a party must be 
received by the presiding officer by (15 days after publication).

FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding 
Officer, Office of Hearings, Centers for Medicare & Medicaid Services, 
Suite L, 2520 Lord Baltimore Drive, Baltimore, Maryland 21244-2670, 
Telephone: (410) 786-2055.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider our decision to disapprove Maryland State Plan 
Amendment (SPA) 02-05. This SPA was disapproved on August 26, 2002.
    In this amendment, Maryland proposes to cover targeted case 
management services for abused and neglected children under foster 
care. At issue is whether the Centers for Medicare & Medicaid Services 
properly

[[Page 68141]]

concluded as a basis for disapproving the amendment that: (1) The State 
had not demonstrated that the proposed services were within the 
statutory definition of case management services found in section 
1915(g)(2) of the Social Security Act (the Act); (2) the proposed 
services are available without charge to the user and thus payment 
under the amendment is not reasonable and necessary and would duplicate 
payment under other program authorities; and (3) the amendment would 
restrict beneficiary freedom of choice by limiting providers to 
employees of public welfare agencies.
    Medicaid coverage of targeted case management is authorized by 
section 1915(g) of the Act, which defines case management as services 
that assist beneficiaries in gaining access to needed services and does 
not include the direct provision of those services. Because the 
services proposed as Medicaid targeted case management are segments of 
child welfare services related to the foster care program, CMS is of 
the belief that they are integral components of the direct services and 
administrative functions of child welfare services.
    During conversations between CMS and the State of Maryland, the 
State cited section 8435 of the Technical and Miscellaneous Revenue Act 
of 1988, Pub. L. 100-647. In this section Congress clarified that the 
Secretary may not deny approval of either a SPA or a claim on the basis 
that the state is required to provide such services under state law, or 
is, or was otherwise paying for the services using non-Federal funds. 
However, section 8435 also expressly stated that this was not to be 
construed to require the Secretary to make payment for case management 
services that are provided without charge to the users of such 
services. Approval of SPA 02-05 would be contrary to this express 
statutory provision, since this SPA seeks payment from Medicaid program 
for services that are available without charge to the users.
    In addition, while states are free to set qualifications for 
providers, a state must comply with Medicaid law and regulations 
concerning freedom of choice at section 1902(a)(23) of the Act and the 
implementing regulation at 42 CFR 431.51. These provisions require that 
a state plan permit beneficiaries to obtain services from any qualified 
provider that undertakes to provide the services. Section 1915(g)(1) of 
the Act states ``The provision of case management services under this 
subsection shall not restrict the choice of the individual to receive 
assistance in violation of section 1902(a)(23).''
    Section 1116 of 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 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. 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 Maryland SPA (02-
05).
    The notice to Maryland announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Georges C. Benjamin, M.D.
Secretary, Department of Health and Mental Hygiene, 201 West Preston 
Street, Baltimore, MD 21201.
    Dear Dr. Benjamin: I am responding to your request for 
reconsideration of the decision to disapprove Maryland State Plan 
Amendment (SPA) 02-05. This SPA was disapproved on August 26, 2002.
    In this amendment, Maryland proposes to cover targeted case 
management services for abused and neglected children under foster 
care. At issue is whether the Centers for Medicare & Medicaid 
Services (CMS) properly concluded as a basis for disapproving the 
amendment that: (1) The State had not demonstrated that the proposed 
services were within the statutory definition of case management 
services found in section 1915(g)(2) of the Social Security Act (the 
Act); (2) the proposed services are available without charge to the 
user and thus payment under the amendment is not reasonable and 
necessary and would duplicate payment under other program 
authorities; and (3) the amendment would restrict beneficiary 
freedom of choice by limiting providers to employees of public 
welfare agencies.
    Medicaid coverage of targeted case management is authorized by 
section 1915(g) of the Act, which defines case management as 
services that assist beneficiaries in gaining access to needed 
services and does not include the direct provision of those 
services. Because the services proposed as Medicaid targeted case 
management are segments of child welfare services related to the 
foster care program, CMS is of the belief that they are integral 
components of the direct services and administrative functions of 
child welfare services.
    During conversations between CMS and the State of Maryland, the 
State cited section 8435 of the Technical and Miscellaneous Revenue 
Act of 1988, Pub. L. 100-647. In this section Congress clarified 
that the Secretary may not deny approval of either an SPA or a claim 
on the basis that the state is required to provide such services 
under state law, or is, or was otherwise paying for the services 
using non-Federal funds. However, section 8435 also expressly stated 
that this was not to be construed to require the Secretary to make 
payment for case management services that are provided without 
charge to the users of such services. Approval of SPA 02-05 would be 
contrary to this express statutory provision, since this SPA seeks 
payment from the Medicaid program for services that are available 
without charge to the users.
    In addition, while states are free to set qualifications for 
providers, a state must comply with Medicaid law and regulations 
concerning freedom of choice at section 1902(a)(23) of the Act and 
the implementing regulations at 42 CFR 431.51. These provisions 
require that a state plan permit beneficiaries to obtain services 
from any qualified provider that undertakes to provide the services. 
Section 1915(g)(1) of the Act states ``The provision of case 
management services under this subsection shall not restrict the 
choice of the individual to receive assistance in violation of 
section 1902(a)(23).'' 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 Maryland SPA 02-05.
    I am scheduling a hearing on your request for reconsideration to 
be held on December 19, 2002, Suite 216, The Public Ledger Building, 
150 S. Independence Mall West, Philadelphia, Pennsylvania 19106, at 
10 a.m. to reconsider our decision to disapprove Maryland SPA 02-05.
    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.

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

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


[[Page 68142]]


    Dated: November 4, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-28469 Filed 11-7-02; 8:45 am]
BILLING CODE 4165-15-P