[Federal Register Volume 70, Number 182 (Wednesday, September 21, 2005)]
[Notices]
[Pages 55401-55402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-18843]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare and Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Oklahoma 
State Plan Amendment 04-06

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

ACTION: Notice of hearing.

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SUMMARY: This notice announces an administrative hearing to be held on 
October 27, 2005, at 9 a.m. in Conference Room 820, 1301 Young Street, 
Dallas, Texas, to reconsider our decision to disapprove Oklahoma State 
Plan Amendment 04-06.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by October 6, 2005.

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

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider CMS' decision to disapprove Oklahoma State Plan 
Amendment (SPA) 04-06, which was submitted on September 23, 2004. Under 
SPA 04-06, Oklahoma sought to increase the per diem rate for 
residential behavioral management services provided to children 
residing in therapeutic foster care homes. By letter dated June 20, 
2005, CMS disapproved the SPA because it does not comport with the 
requirements set forth in title XIX of the Social Security Act (the 
Act) as discussed below:
    At issue in this reconsideration is whether the State's payment 
methodology complies with section 1902(a)(4) of the Act, which requires 
that the State plan must provide for such methods of administration as 
are found by the Secretary to be necessary for the proper and efficient 
administration of the plan. The regulations at 42 CFR 430.10 and 430.12 
require that the State plan and amendments contain all information 
necessary for the CMS to determine whether the plan can be approved to 
serve as a basis for Federal financial participation in the State 
program. The State's payment methodology is not explained in sufficient 
detail for CMS to determine whether the proposed increase is consistent 
with proper and efficient administration of the plan, as required by 
section 1902(a)(4).
    Also at issue is whether an increase in the State's per diem rate 
is consistent with section 1902(a)(30)(A) of the Act, which requires 
that States have methods and procedures to ensure that payments are 
consistent with efficiency, economy, and quality of care. The State's 
per diem rate represents a bundled payment methodology wherein the 
State pays a single rate for one or more of a group of different 
services furnished to an eligible individual during a fixed period of 
time. The payment is the same regardless of the number of services 
furnished, the specific costs, or otherwise available rates. The State 
has not provided sufficient information to determine whether the 
bundled rate for behavioral management services, and the proposed 
increase, accurately reflect true costs or reasonable fees for the 
services included in the bundle, and whether the proposed increase in 
Medicaid payment is due to permissible

[[Page 55402]]

increases in costs of Medicaid services specifically.
    In summary, the State lacks a clear and auditable methodology for 
setting the payment rate and justifying the proposed payment increase 
consistent with the requirement of sections 1902(a)(4) and 
1902(a)(30)(A).
    For the reasons cited above, and after consulting with the 
Secretary of Health and Human Services, as required by Federal 
regulations at 42 CFR 430.15(c)(2), CMS disapproved Oklahoma SPA 04-06.
    Section 1116 of the Act and Federal regulations at 42 CFR part 430, 
establish Department procedures that provide an administrative hearing 
for reconsideration of a disapproval of a State plan or plan amendment. 
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. Howard J. Pallotta,
General Counsel,
Oklahoma Health Care Authority,
Lincoln Plaza, 4545 N. Lincoln Boulevard, Suite 124, Oklahoma City, 
OK 73105.
    Dear Mr. Pallotta: I am responding to your request for 
reconsideration of the decision to disapprove Oklahoma State plan 
amendment (SPA) 04-06, which was submitted on September 23, 2004, 
and disapproved on June 20, 2005.
    Under SPA 04-06, Oklahoma sought to increase the per diem rate 
for residential behavioral management services provided to children 
residing in therapeutic foster care homes. The Centers for Medicare 
& Medicaid Services (CMS) disapproved the SPA because it does not 
comport with the requirements set forth in title XIX of the Act.
    At issue in this reconsideration is whether the State's payment 
methodology complies with section 1902(a)(4) of the Act, which 
requires that the State plan must provide for such methods of 
administration as are found by the Secretary to be necessary for the 
proper and efficient administration of the plan. The regulations at 
sections 42 CFR 430.10 and 430.12 require that the State plan and 
amendments contain all information necessary for CMS to determine 
whether the plan can be approved to serve as a basis for Federal 
financial participation in the State program. The State's payment 
methodology is not explained in sufficient detail for CMS to 
determine whether the proposed increase is consistent with proper 
and efficient administration of the plan, as required by section 
1902(a)(4).
    Also at issue is whether an increase in the State's per diem 
rate is consistent with section 1902(a)(30)(A) of the Act, which 
requires that States have methods and procedures to assure that 
payments are consistent with efficiency, economy, and quality of 
care. The State's per diem rate represents a bundled payment 
methodology wherein the State pays a single rate for one or more of 
a group of different services furnished to an eligible individual 
during a fixed period of time. The payment is the same regardless of 
the number of services furnished, or the specific costs, or 
otherwise available rates. The State has not provided sufficient 
information to determine whether the bundled rate for behavioral 
management services, and the proposed increase, accurately reflect 
true costs or reasonable fees for the services included in the 
bundle and whether the proposed increase in Medicaid payment is due 
to permissible increases in costs of Medicaid services specifically.
    In summary, the State lacks a clear and auditable methodology 
for setting the payment rate and justifying the proposed payment 
increase consistent with the requirement of sections 1902(a)(4) and 
1902(a)(30)(A).
    For the reasons cited above, and after consulting with the 
Secretary of Health and Human Services, as required by Federal 
regulations at 42 CFR section 430.15(c)(2), CMS disapproved Oklahoma 
SPA 04-06.
    I am scheduling a hearing to be held on October 27, 2005, at 9 
a.m. at 1301 Young Street, Conference Room 820, Dallas, Texas, to 
reconsider the decision to disapprove SPA 04-06. 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,

Mark B. McClellan, M.D., Ph.D.

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: September 15, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 05-18843 Filed 9-20-05; 8:45 am]
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