[Federal Register Volume 71, Number 15 (Tuesday, January 24, 2006)]
[Notices]
[Pages 3853-3854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-788]



[[Page 3853]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Ohio State 
Plan Amendments 05-07 and 05-020

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 28, 2006, in Suite 500, 233 N. Michigan Avenue, 
Minnesota Conference Room, Chicago, IL 60202, to reconsider CMS' 
decision to disapprove Ohio State plan amendments 05-07 and 05-020.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by February 8, 2006.

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 Ohio State plan 
amendments (SPAs) 05-07 and 05-020, which were submitted on August 1, 
2005, and September 1, 2005, respectively. Both SPAs were disapproved 
on October 28, 2005. Under SPAs 05-07 and 05-020, Ohio sought to 
implement the Medicaid School Program.
    The amendments were disapproved because they do not comport with 
the requirements of section 1902(a) of the Social Security Act (the 
Act) and implementing regulations. The specific reasons for disapproval 
are identified below.
    Under section 1902(a)(10) of the Act, a State plan must provide for 
making medical assistance available to eligible individuals. ``Medical 
assistance,'' as defined in section 1905(a) of the Act, does not 
include habilitation services. After CMS determined that habilitation 
services were not properly included within the scope of the statutory 
category of rehabilitation services, the Omnibus Budget Reconciliation 
Act of 1989 (OBRA-89) ``grandfathered'' certain States, including Ohio, 
to provide habilitation services under previously approved State plan 
provisions as part of the Medicaid rehabilitation benefit. However, 
Ohio formally terminated its habilitation services (known as the 
``Community Alternative Funding System,'' or CAFS program) in SPA 05-
008 and, thus, is no longer ``grandfathered'' based on its previously 
approved State plan provision. Because there is no provision of the 
State's Medicaid plan as approved on or before June 30, 1989, that 
provides coverage of habilitation services in the State's current 
approved plan, the provisions of section 6411(g)(1)(A) of OBRA-89, that 
prohibit the Secretary from withholding, suspending, disallowing, or 
denying Federal financial participation for habilitation services, no 
longer apply.
    In addition, the SPAs do not comply with the requirements of 
section 1902(a)(1) of the Act that services under the plan be available 
statewide. Under the SPAs, services would be covered only for select 
groups of students in participating schools but services would not be 
available to other eligible individuals. Because not all parts of the 
State may have participating schools, the SPAs violate statewideness 
requirements. The restricted availability of services also violates the 
requirements of section 1902(a)(10)(B) of the Act that services 
available to each individual within a Medicaid eligibility group must 
be comparable in amount, duration, and scope (and that services 
available to categorically needy groups cannot be less in amount, 
duration, and scope than those available to the medically needy). The 
SPAs are not consistent with comparability requirements because the 
services are available only to select groups of students.
    Additionally, these SPAs explicitly deny the provision of Medicaid 
fair hearing requests for individuals who are denied services. This 
provision is at variance with section 1902(a)(3) of the Act and Federal 
regulations at 42 CFR 431.200(a) which require that a State plan 
``provide an opportunity for a fair hearing to any person whose claim 
for assistance is denied or not acted upon promptly.''
    In addition, the State did not demonstrate that the proposed 
payment methodology would comply with the statutory requirements of 
sections 1902(a)(2), 1902(a)(30)(A), and 1903(a)(1) of the Act, which 
require that the State plan assure adequate funding for the non-Federal 
share of expenditures from State or local sources; that State or local 
sources have methods and procedures to assure that payments are 
consistent with efficiency, economy, and quality of care; and that 
Federal matching funds are only available for actual expenditures made 
by States for services under the approved plan. The State did not 
respond fully to CMS' requests for information concerning State payment 
and funding issues. Absent such information, CMS could not determine 
whether the proposed SPA would operate in compliance with all 
applicable requirements of section 1902(a) of the Act.
    Finally, for Ohio SPA 05-020 alone, the State did not show 
compliance with section 1902(a)(4) of the Act, which specifies 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. Pursuant to this provision, States must 
include in their State plans all information necessary for CMS to 
determine whether the plan can be approved to serve as a basis for 
Federal financial participation. Absent information on the methodology 
used to develop the fee schedules, this requirement is not met.
    For the reasons cited above, and after consultation with the 
Secretary, as required by 42 CFR 430.15(c)(2), Ohio SPAs 05-07 and 05-
020 were disapproved.
    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 Ohio announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:
    Mr. Jim Petro, Office of the Attorney General, Health & Human 
Services Section, 30 E. Broad Street, 26th Floor, Columbus, OH 43215-
3400.
    Dear Mr. Petro:

[[Page 3854]]

    I am responding to your request for reconsideration of the decision 
to disapprove Ohio State plan amendments (SPAs) 05-07 and 05-020, which 
were submitted on August 1, 2005, and September 1, 2005, respectively, 
and disapproved on October 28, 2005.
    Under SPAs 05-07 and 05-020, Ohio was seeking to implement the 
Medicaid School Program.
    The amendments were disapproved because they did not comport with 
the requirements of section 1902(a) of the Social Security Act (the 
Act) and implementing regulations. The specific reasons for disapproval 
are identified below.
    Under section 1902(a)(10) of the Act, a State plan must provide for 
making medical assistance available to eligible individuals. ``Medical 
assistance,'' as defined in section 1905(a) of the Act, does not 
include habilitation services. After the Centers for Medicare & 
Medicaid Services (CMS) determined that habilitation services were not 
properly included within the scope of the statutory category of 
rehabilitation services, the Omnibus Budget Reconciliation Act of 1989 
(OBRA-89) ``grandfathered'' certain States, including Ohio, to provide 
habilitation services under previously approved State plan provisions 
as part of the Medicaid rehabilitation benefit. However, Ohio formally 
terminated its habilitation services (known as the ``Community 
Alternative Funding System,'' or CAFS program) in SPA 05-008 and, thus, 
is no longer ``grandfathered'' based on its previously approved State 
plan provision. Because there is no provision of the State's Medicaid 
plan as approved on or before June 30, 1989, that provides coverage of 
habilitation services in the State's current approved plan, the 
provisions of section 6411(g)(1)(A) of OBRA-89, that prohibit the 
Secretary from withholding, suspending, disallowing, or denying Federal 
financial participation for habilitation services, no longer apply.
    In addition, the SPAs do not comply with the requirements of 
section 1902(a)(1) of the Act that services under the plan be available 
statewide. Under the SPAs, services would be covered only for select 
groups of students in participating schools but services would not be 
available to other eligible individuals. Because not all parts of the 
State may have participating schools, the SPAs violate statewideness 
requirements. The restricted availability of services also violates the 
requirements of section 1902(a)(10)(B) of the Act that services 
available to each individual within a Medicaid eligibility group must 
be comparable in amount, duration, and scope (and that services 
available to categorically needy groups cannot be less in amount, 
duration, and scope than those available to the medically needy). The 
SPAs are not consistent with comparability requirements because the 
services are available only to select groups of students.
    Additionally, these SPAs explicitly deny the provision of Medicaid 
fair hearing requests for individuals who are denied services. This 
provision is at variance with section 1902(a)(3) of the Act and Federal 
regulations at 42 CFR 431.200(a) which require that a State plan 
``provide an opportunity for a fair hearing to any person whose claim 
for assistance is denied or not acted upon promptly.''
    In addition, the State did not demonstrate that the proposed 
payment methodology would comply with the statutory requirements of 
sections 1902(a)(2), 1902(a)(30)(A), and 1903(a)(1) of the Act, which 
require that the State plan assure adequate funding for the non-Federal 
share of expenditures from State or local sources; that State or local 
sources have methods and procedures to assure that payments are 
consistent with efficiency, economy, and quality of care; and that 
Federal matching funds are only available for actual expenditures made 
by States for services under the approved plan. The State did not 
respond fully to CMS' requests for information concerning State payment 
and funding issues. Absent such information, CMS could not determine 
whether the proposed SPA would operate in compliance with all 
applicable requirements of section 1902(a) of the Act.
    Finally, for Ohio SPA 05-020 alone, the State did not show 
compliance with section 1902(a)(4) of the Act, which specifies 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. Pursuant to this provision, States must 
include in their State plans all information necessary for CMS to 
determine whether the plan can be approved to serve as a basis for 
Federal financial participation. Absent information on the methodology 
used to develop the fee schedules, this requirement is not met.
    For the reasons cited above, and after consultation with the 
Secretary, as required by 42 CFR 430.15(c)(2), Ohio SPAs 05-07 and 05-
020 were disapproved.
    I am scheduling a hearing on your request for reconsideration to be 
held on February 28, 2006, at Suite 500, 233 N. Michigan 
Avenue, Minnesota Conference Room, Chicago, IL 60202, to reconsider the 
decision to disapprove SPA 05-07 and 05-020. 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 at (410) 786-2055. 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.
    Sincerely,
    Mark B. McClellan, MD., PhD.
    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: January 13, 2006.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E6-788 Filed 1-23-06; 8:45 am]
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