[Federal Register Volume 68, Number 168 (Friday, August 29, 2003)]
[Notices]
[Pages 52043-52044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22245]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Oklahoma 
Medicaid State Plan Amendment (SPA) 02-14

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing on October 7, 
2003, 10 a.m.; Room 714, 1301 Young Street; CMS Dallas Regional Office; 
Dallas, Texas 75202 to reconsider our decision to disapprove Oklahoma 
State Plan Amendment 02-14.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by September 15, 2003.

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

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider the decision dated May 28, 2003, to disapprove 
Oklahoma Medicaid State Plan Amendment (SPA) 02-14.
    Oklahoma submitted SPA 02-14 on October 22, 2002, and revised it on 
May 14, 2003. On May 28, 2003, CMS disapproved SPA 02-14, after 
consultation with the Secretary as required under 42 CFR 430.15(c)(2). 
The State requested reconsideration by letter dated July 25, 2003.
    At issue is whether the proposed supplemental payment methodology 
contained in the SPA complies with the requirement at section 
1902(a)(30)(A) of the Social Security Act (the Act) that payment 
methodologies must assure that ``payments are consistent with 
efficiency, economy and quality of care.'' The proposed payment 
methodology would provide supplemental payment for services rendered by 
doctors of medicine, osteopathy, and dentists who are State employees. 
The State asserted that increased payment was warranted because of the 
specialized services provided by these State employees. The State 
failed to demonstrate, however, that delivering Medicaid services 
through State employees generated significantly higher costs sufficient 
to justify the requested supplemental payment. Moreover, the 
supplemental payment methodology proposed by the State is not a 
customary method for paying physicians and other health professionals. 
The methodology would make it difficult to track payments for specific 
services and would complicate auditing processes. In sum, at issue is 
whether it is consistent with efficiency, economy, and quality of care 
to use a methodology that: (1) Is not justified by any increased costs 
to the State to ensure access to services for Medicaid beneficiaries; 
(2) is not a usual and customary payment methodology; and (3) would 
unduly complicate tracking and audit processes.
    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.
    The notice to Oklahoma announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Mr. Jim Hancock, Director
Health Policy Division
Oklahoma Health Authority
4545 North Lincoln Boulevard, Suite 124
Oklahoma City, OK 73105

    Dear Mr. Hancock: I am responding to your request for 
reconsideration of the decision to disapprove Oklahoma State Plan 
Amendment (SPA) 02-14.
    Oklahoma submitted SPA 02-14 on October 22, 2002, and revised it 
on May 14, 2003. On May 28, 2003, I disapproved SPA 02-14, after 
consultation with the Secretary as required under 42 CFR 
430.15(c)(2). You requested reconsideration by letter dated July 25, 
2003.
    At issue is whether the proposed supplemental payment 
methodology contained in the SPA complies with the requirement at 
section 1902(a)(30)(A) of the Social Security Act that payment 
methodologies must assure that ``payments are consistent with 
efficiency, economy and quality of care.'' The proposed payment 
methodology would provide supplemental payment for services rendered 
by doctors of medicine, osteopathy, and dentists who are State 
employees. The State asserted that increased payment was warranted 
because of the specialized services provided by these State 
employees. The State failed to demonstrate, however, that delivering 
Medicaid services through State employees generated significantly 
higher costs sufficient to justify the requested supplemental 
payment. Moreover, the supplemental payment methodology proposed by 
the State is not a customary method for paying physicians and other 
health professionals. The methodology would make it difficult to 
track payments for specific services and would complicate auditing 
processes. In sum, at issue is whether it is consistent with 
efficiency, economy, and quality of care to use a methodology that: 
(1) Is not justified by any increased costs to the State to ensure 
access to services for Medicaid beneficiaries; (2) is not a usual 
and customary payment methodology; and (3) would unduly complicate 
tracking and audit processes. For the above stated reasons, and 
after consulting with the Secretary as required by 42 CFR 
430.15(c)(2), the Centers for Medicare & Medicaid Services (CMS) 
disapproved Oklahoma SPA 02-14.
    I am scheduling a hearing on your request for reconsideration to 
be held on October 7, 2003, at 10 a.m., 1301 Young Street, Room 714, 
CMS Dallas Regional Office, 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

[[Page 52044]]

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: August 25, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 03-22245 Filed 8-28-03; 8:45 am]
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