[Federal Register Volume 71, Number 187 (Wednesday, September 27, 2006)]
[Notices]
[Pages 56536-56538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-15779]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of New York 
State Plan Amendment 05-50

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 
December 6, 2006, at 26 Federal Plaza, New York, NY 10278, Room 38-
110a, to reconsider CMS' decision to disapprove New York State plan 
amendment 05-50.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by October 12, 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 New York State plan 
amendment (SPA) 05-50 which was submitted on September 29, 2005. This 
SPA was disapproved on June 23, 2006.
    Under SPA 05-50, New York proposed to extend payment provisions for 
New York's Indigent Care Program for certain diagnostic and treatment 
centers. The amendment was disapproved because it did not comport with 
the requirements of section 1902(a)(4), 1902(a)(10), 1902(a)(30)(A), 
and 1905(a) of the Social Security Act (the Act).
    At issue on reconsideration is: (1) Whether the proposed payments 
under SPA 05-50 would be for services furnished to individuals within 
the statutory categories of permissible eligible individuals set forth 
in sections 1902(a)(10) and 1905(a) of the Act; (2) whether the 
proposed payments under SPA 05-50 would result in claims for Federal 
financial participation that would not be within the scope of medical 
assistance which would be inconsistent with sections 1902(a)(4), 
1902(a)(10), and 1905(a) of the Act; and (3) whether the State has 
demonstrated that the proposed payment rate, which would provide for 
payments unrelated to the covered Medicaid services furnished by the 
provider, is an efficient and economical method to pay for covered 
Medicaid services, consistent with the requirements of section

[[Page 56537]]

1902(a)(30)(A). The basis for these issues was set out in the 
disapproval determination and is summarized below.
    Section 1902(a)(4) of the Act requires that State Medicaid plans 
provide for methods of administration that are found by the Secretary 
to be necessary for the proper and efficient operation of the plan. 
Section 1902(a)(10) of the Act sets forth mandatory and optional groups 
of individuals for whom States may make medical assistance available 
under a State plan. Section 1902(a)(10) of the Act must be read in 
concert with the definition of medical assistance at section 1905(a), 
which includes additional specification of the categories of eligible 
individuals. SPA 05-50 would provide for payment for services furnished 
to individuals who are not within the listed groups or categories of 
individuals for whom medical assistance is authorized under the 
statute. Such payment is outside the scope of the definition of medical 
assistance. Including in the State plan a provision which would pay for 
provider costs that are not within the scope of medical assistance 
furnished to eligible individuals is not necessary for the proper and 
efficient operation of the plan. It will result in State claims for 
Federal financial participation in expenditures as medical assistance, 
which are not within the statutory definition of medical assistance.
    The requirements of section 1902(a)(10) of the Act, read in concert 
with section 1905(a) of the Act, as noted above, define the range of 
individuals who must or may be eligible under a State plan, and the 
scope of medical assistance that may be made available. These sections 
do not provide for payment of provider costs of treating ineligible 
individuals, which is the apparent purpose of the Indigent Care 
Program.
    Section 1902(a)(30)(A) of the Act requires that State plans provide 
payment methods for care and services available under the plan that are 
consistent with efficiency, economy, and quality of care. The proposed 
Medicaid payment method is determined by the individual diagnostic and 
treatment center's level of uncompensated care associated with 
uninsured patients and distributed without regard to the volume of 
Medicaid activity in the facility. The specific Medicaid reimbursement 
methodology applies a Medicaid rate to bad debt and charity care visits 
in the facility. This method results in an aggregate Medicaid payment 
which clearly is without regard to the provision of covered Medicaid 
services to eligible individuals, and cannot be considered an 
economical means of paying for such services.
    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 New York announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Mr. Gregor N. Macmillan, Director, Bureau of Medicaid Law, State of 
New York, Department of Health, Corning Tower, The Governor Nelson 
A. Rockefeller Empire State Plaza, Albany, NY 12237.

    Dear Mr. Macmillan: I am responding to your request for 
reconsideration of the decision to disapprove the New York State 
plan amendment (SPA) 05-50, which was submitted on September 29, 
2005, and disapproved on June 23, 2006.
    Under SPA 05-50, New York was proposing to extend payment 
provisions for New York's Indigent Care Program for certain 
diagnostic and treatment centers. The amendment was disapproved 
because it did not comport with the requirements of section 
1902(a)(4), 1902(a)(10), 1902(a)(30)(A), and 1905(a) of the Social 
Security Act (the Act).
    At issue on reconsideration is: (1) Whether the proposed 
payments under SPA 05-050 would be for services furnished to 
individuals within the statutory categories of permissible eligible 
individuals set forth in sections 1902(a)(10) and 1905(a) of the 
Act; (2) whether the proposed payments under SPA 05-50 would result 
in claims for Federal financial participation that would not be 
within the scope of medical assistance which would be inconsistent 
with sections 1902(a)(4), 1902(a)(10), and 1905(a) of the Act; and 
(3) whether the State has demonstrated that the proposed payment 
rate, which would provide for payments unrelated to the covered 
Medicaid services furnished by the provider, is an efficient and 
economical method to pay for covered Medicaid services, consistent 
with the requirements of section 1902(a)(30)(A). The basis for these 
issues was set out in the disapproval determination and is 
summarized below.
    Section 1902(a)(4) of the Act requires that State Medicaid plans 
provide for methods of administration that are found by the 
Secretary to be necessary for the proper and efficient operation of 
the plan. Section 1902(a)(10) of the Act sets forth mandatory and 
optional groups of individuals for whom States may make medical 
assistance available under a State plan. Section 1902(a)(10) of the 
Act must be read in concert with the definition of medical 
assistance at section 1905(a), which includes additional 
specification of the categories of eligible individuals. SPA 05-50 
would provide for payment for services furnished to individuals who 
are not within the listed groups or categories of individuals for 
whom medical assistance is authorized under the statute. Such 
payment is outside the scope of the definition of medical 
assistance. Including in the State plan a provision which would pay 
for provider costs that are not within the scope of medical 
assistance furnished to eligible individuals is not necessary for 
the proper and efficient operation of the plan. It will result in 
State claims for Federal financial participation in expenditures as 
medical assistance, which are not within the statutory definition of 
medical assistance.
    The requirements of section 1902(a)(10) of the Act, read in 
concert with section 1905(a) of the Act, as noted above, define the 
range of individuals who must or may be eligible under a State plan, 
and the scope of medical assistance that may be made available. 
These sections do not provide for payment of provider costs of 
treating ineligible individuals, which is the apparent purpose of 
the Indigent Care Program.
    Section 1902(a)(30)(A) of the Act requires that State plans 
provide payment methods for care and services available under the 
plan that are consistent with efficiency, economy, and quality of 
care. The proposed Medicaid payment method is determined by the 
individual diagnostic and treatment center's level of uncompensated 
care associated with uninsured patients and distributed without 
regard to the volume of Medicaid activity in the facility. The 
specific Medicaid reimbursement methodology applies a Medicaid rate 
to bad debt and charity care visits in the facility. This method 
results in an aggregate Medicaid payment which clearly is without 
regard to the provision of covered Medicaid services to eligible 
individuals, and cannot be considered an economical means of paying 
for such services. For the reasons cited above, and after 
consultation with the Secretary, as required by Federal regulations 
at 42 CFR 430.15(c)(2), New York 05-50 was disapproved on June 23, 
2006.
    I am scheduling a hearing on your request for reconsideration to 
be held on December 6, 2006, at 26 Federal Plaza, New York, NY 
10278, Room 38-110a, to reconsider the decision to disapprove SPA 
05-50. If this date is not acceptable, we would be glad to set 
another date that is mutually agreeable to

[[Page 56538]]

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, M.D., PhD.

(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 18, 2006.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. E6-15779 Filed 9-26-06; 8:45 am]
BILLING CODE 4120-01-P