[Federal Register Volume 69, Number 193 (Wednesday, October 6, 2004)]
[Notices]
[Pages 59930-59931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22419]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of New 
Hampshire State Plan Amendment (04-001A)

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

ACTION: Notice of hearing.

-----------------------------------------------------------------------

SUMMARY: This notice announces an administrative hearing on November 
19, 2004, at 10 a.m., JFK Federal Building, Room E275A, Boston, 
Massachusetts 02203-0003, to reconsider the decision to disapprove New 
Hampshire State Plan Amendment (SPA) 04-001A.

DATES: Requests to participate in the hearing as a party must be 
received by the presiding officer by October 21, 2004.

FOR FURTHER INFORMATION CONTACT: Kathleen Scully-Hayes, Presiding 
Officer, CMS, LB-23-20, Lord Baltimore Drive, Baltimore, Maryland 
21244, telephone: (410) 786-2055.

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider the decision to disapprove New Hampshire State 
Plan Amendment (SPA) 04-001A, which New Hampshire submitted on March 
31, 2004. SPA 04-001A sought to reduce the Estimated Acquisition Cost 
(EAC) for prescription drugs from Average Wholesale Price (AWP) minus 
12 percent to AWP minus 16 percent and the dispensing fee from $2.50 to 
$1.75 per prescription, effective for the period from January 12, 2004, 
to March 11, 2004. The CMS reviewed this proposal and for the reasons 
set forth below, was unable to approve SPA 04-001A as submitted.
    At issue is whether the requested effective date of January 12, 
2004, is consistent with statutory and regulatory requirements. In a 
separate action, CMS approved SPA 04-001B, which made the same changes 
in the EAC and dispensing fee calculations, effective March 12, 2004. 
Section 1902(a)(30) of the Social Security Act (the Act) requires a 
state's Medicaid state plan to provide such methods and procedures as 
may be necessary to ensure that payments are consistent with 
efficiency, economy, and quality of care. Under that authority, the 
Secretary has issued regulations prescribing state rate-setting 
procedures. Federal regulations at 42 CFR 447.205(d) require public 
notice to be issued prior to the effective date of a significant change 
in any methods and standards for setting payment rates for services. 
The state did not issue a public notice for the proposed changes in 
payment methodology until March 11, 2004. Therefore, the earliest that 
such changes could be effective is March 12, 2004.
    Based on the above, and after consultation with the Secretary as 
required under 42 CFR 430.15(c)(2), CMS disapproved New Hampshire SPA 
04-001A.
    Section 1116 of the Act and 42 CFR part 430 establish Departmental 
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 also will publish that 
notice.
    Any interested 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 person or organization that wants 
to participate as amicus

[[Page 59931]]

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 New Hampshire announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows: Mr. John A. 
Stephen, Commissioner, Department of Health and Human Services, 129 
Pleasant Street, Concord, NH 03301-3857
    Dear Mr. Stephen: I am responding to your request for 
reconsideration of the decision to disapprove New Hampshire State Plan 
Amendment (SPA) 04-001A, which the State submitted on March 31, 2004. 
The SPA 04-001A sought to reduce the Estimated Acquisition Cost (EAC) 
for prescription drugs from Average Wholesale Price (AWP) minus 12 
percent to AWP minus 16 percent and the dispensing fee from $2.50 to 
$1.75 per prescription, effective for the period from January 12, 2004, 
to March 11, 2004. The Centers for Medicare & Medicaid Services (CMS) 
reviewed this proposal, and for the reasons set forth below, was unable 
to approve SPA 04-001A as submitted.
    At issue is whether the requested effective date of January 12, 
2004, is consistent with statutory and regulatory requirements. In a 
separate action, CMS approved SPA 04-001B, which made the same changes 
in the EAC and dispensing fee calculations, effective March 12, 2004. 
Section 1902(a)(30) of the Social Security Act (the Act) requires a 
state's Medicaid state plan to provide such methods and procedures as 
may be necessary to ensure that payments are consistent with 
efficiency, economy, and quality of care. Under that authority, the 
Secretary has issued regulations prescribing state rate-setting 
procedures. Federal regulations at 42 CFR 447.205(d) require public 
notice to be issued prior to the effective date of a significant change 
in any methods and standards for setting payment rates for services. 
The State did not issue a public notice for the proposed changes in 
payment methodology until March 11, 2004. Therefore, the earliest that 
such changes could be effective is March 12, 2004. Based on the above, 
and after consultation with the Secretary as required under 42 CFR 
430.15(c)(2), CMS disapproved New Hampshire SPA 04-001A.
    I am scheduling a hearing for November 19, 2004, at 10 a.m., JFK 
Federal Building, Room E275A, Boston, Massachusetts 02203-0003, to 
reconsider the decision to disapprove SPA 04-001A. 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 that 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,
 Mark B. McClellan, M.D., PhD.

    Authority: Section 1116 of the Social Security Act (42 U.S.C. 
1316); 42 CFR 430.18.

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

    Dated: September 27, 2004.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 04-22419 Filed 10-5-04; 8:45 am]
BILLING CODE 4120-01-P