[Federal Register Volume 67, Number 249 (Friday, December 27, 2002)]
[Notices]
[Pages 79121-79122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32654]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of New Jersey 
State Plan Amendment 02-10

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 
February 4, 2003, 10 a.m., Centers for Medicare & Medicaid Services' 
New York Regional Office, 26 Federal Plaza, Room 38-110A; New York, New 
York 10278-0063, to reconsider our decision to disapprove New Jersey 
State Plan Amendment 02-10.

CLOSING DATE: Requests to participate in the hearing as a party must be 
received by the presiding officer by January 13, 2003.

FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding 
Officer, CMS, 2520 Lord Baltimore Drive, Suite L, Baltimore, Maryland 
21244-2670, Telephone: (410) 786-2055.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider the decision to disapprove New Jersey State Plan 
Amendment (SPA) 02-10. This SPA was disapproved on September 19, 2002. 
In this amendment, New Jersey proposes to establish a new target group 
for case management services for youth and young adults under the age 
of 21 who are in the care of the Juvenile Justice Commission as a 
result of a commitment order. The SPA further specifies that the target 
group is limited to youth and young adults who reside in their own 
homes, the homes of relatives, community-based residences or 
residential group centers, or other community-based living arrangements 
as a result of their original placement or conditional release from a 
public institution.
    At issue is whether 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 New Jersey's Juvenile Justice 
Commission.
    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 
the State's juvenile justice program, CMS believes that they are 
integral components of the direct services and administrative functions 
of that juvenile justice program. In this instance, Medicaid payment 
for portions of the juvenile justice program would duplicate payment 
under other programs that are the responsibility of the State 
Government.
    During CMS conversation with the State, section 8435 of the 
Technical and Miscellaneous Revenue Act of 1988, Public Law Number 100-
647 was discussed. 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 states 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 this amendment, therefore, 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 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 
medical assistance in violation of section 1902(a)(23).'' The proposed 
SPA restricts beneficiary choice of case managers by imposing standards 
that are not reasonably related to the qualifications of providers, but 
instead limits available providers to employees of the Juvenile Justice 
Commission.
    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

[[Page 79122]]

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 is disapproving New Jersey SPA 02-10.
    The notice to New Jersey announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Ms. Kathryn A. Plant
Director, Division of Medical Assistance and Health Services, 
Department of Human Services, P.O. Box 712. Trenton, NJ 08625-0712.
    Dear Ms. Plant: I am responding to your request for 
reconsideration of the decision to disapprove New Jersey State Plan 
Amendment (SPA) 02-10.
    In the SPA, New Jersey proposes to establish a new target group 
for case management services for youth and young adults under the 
age of 21 who are in the care of the Juvenile Justice Commission as 
a result of a commitment order. The SPA further specifies that the 
target group is limited to youth and young adults who reside in 
their own homes, the homes of relatives, community-based residences 
or residential group centers, or other community-based living 
arrangements as a result of their original placement or conditional 
release from a public institution.
    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 New Jersey's Juvenile Justice 
Commission.
    Medicaid coverage of targeted case management is authorized by 
section 1915(g) of the Act, which defines case management services 
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 the State's juvenile justice program, CMS 
believes they are integral components of the direct services and 
administrative functions of that juvenile justice program. In this 
instance, Medicaid payment for portions of the juvenile justice 
program would duplicate payment under other programs that are the 
responsibility of the State Government.
    During CMS' conversation with the State, section 8435 of the 
Technical and Miscellaneous Revenue Act of 1988, Public Law Number 
100-647 was discussed. 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 states 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 this amendment, 
therefore, 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 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 medical assistance in violation 
of section 1902(a)(23).'' The proposed SPA restricts beneficiary 
choice of case managers by imposing standards that are not 
reasonably related to the qualifications of providers, but instead 
limits available providers to employees of the Juvenile Justice 
Commission.
    This notice announces an administrative hearing to be held on 
February 4, 2003, at 10 a.m., Centers for Medicare & Medicaid 
Services, New York Regional Office, 26 Federal Plaza, Room 38-110A; 
New York, New York 10278-0063.
    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: December 19, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-32654 Filed 12-26-02; 8:45 am]
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