[Federal Register Volume 72, Number 188 (Friday, September 28, 2007)]
[Notices]
[Pages 55221-55222]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19141]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Hearing: Reconsideration of Disapproval of Pennsylvania 
State Plan Amendment (SPA) 06-007

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 
November 16, 2007, at Suite 216, The Public Ledger Building, 150 S. 
Independence Mall West, Conference Room 241, the Pennsylvania Room, 
Philadelphia, PA 19106, to reconsider CMS's decision to disapprove 
Pennsylvania SPA 06-007.
    Closing Date: Requests to participate in the hearing as a party 
must be received by the presiding officer by October 15, 2007.

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

SUPPLEMENTARY INFORMATION: This notice announces an administrative 
hearing to reconsider CMS's decision to disapprove Pennsylvania State 
plan amendment (SPA) 06-007 which was submitted on September 27, 2006. 
This SPA was disapproved on June 29, 2007.
    Under this SPA, the State requested the addition of targeted case 
management services to low-income, first-time expectant mothers who 
have, or are at risk of having, a high incidence of medical or social 
problems. The new targeted case management services were to be provided 
through the Nurse Family Partnership Program. CMS made a Request for 
Additional Information on December 22, 2006, to which the State 
responded on April 2, 2007. The information provided confirmed that the 
targeted case management services proposed in SPA 06-007 are currently 
provided to all individuals without charge.
    The amendment was disapproved because CMS found that the amendment 
violated the statute for reasons set forth in the disapproval letter. 
CMS consulted with the Secretary as required by Federal regulations at 
42 CFR 430.15(c)(2).
    Section 1902(a)(10) of the Social Security Act (the Act) requires 
that States make available medical assistance which is defined at 
section 1905(a) of the Act, and is limited to payment of medical costs 
for ``individuals whose income and resources are insufficient to meet 
all of such costs.'' The term ``medical assistance'' fundamentally 
excludes payment for medical services that are free to the general 
public, since where a service is provided without charge the individual 
is not in the circumstance of having insufficient income or resources 
to meet the cost of care. Hence, such services do not meet the 
definition of ``medical assistance.''
    In addition, section 1902(a)(30) of the Act requires States to have 
methods and procedures in place to assure that payments are consistent 
with efficiency, economy, and quality of care. CMS did not find that 
Medicaid payments for case management for first-time expectant mothers 
were consistent with this requirement when these same services are 
available to non-Medicaid enrollees without charge. Furthermore, the 
State failed to provide documentation requested by CMS demonstrating 
that the rate methodology used to determine payments to service 
providers was consistent with section 1902(a)(30). The State also 
failed to provide documentation of the various cost elements used to 
determine a fee-schedule amount or to submit provider surveys conducted 
by the State to determine whether its proposed indirect cost rate 
should be applied to direct costs to calculate the final fee paid to 
providers.
    Based on the above, and after consultation with the Secretary of 
the Department of Health and Human Services as required under Federal 
regulations at 42 CFR 430.15(c)(2), CMS disapproved Pennsylvania 
Medicaid SPA 06-007.
    The issues to be decided at the hearing are:
     Whether Pennsylvania has demonstrated that its SPA 06-007

[[Page 55222]]

complies with sections 1902(a)(10) and 1902(a)(30) of the Act by 
limiting payment of medical assistance to payment of medical costs for 
individuals who lack sufficient income and resources to meet the cost 
of care; and
     Whether the State has provided adequate documentation to 
demonstrate that the State's rate methodology is consistent with the 
requirements of section 1902(a)(30) of the Act; specifically whether 
the rates paid to service providers are consistent with efficiency, 
economy, and quality of care.
    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 Pennsylvania announcing an administrative hearing to 
reconsider the disapproval of its SPA reads as follows:

Ms. Estelle B. Richman,
Secretary of Public Welfare, Commonwealth of Pennsylvania, 
Department of Public Welfare, Office of Medical Assistance Programs, 
Bureau of Policy, Budget and Planning,
P.O. Box 8046,
Harrisburg, PA 17105.
    Dear Ms. Richman:
    I am responding to your request for reconsideration of the 
decision to disapprove Pennsylvania State plan amendment (SPA) 06-
007, which was submitted on September 27, 2006, and disapproved on 
June 29, 2007.
    Under this SPA, the State requested the addition of targeted 
case management services for first-time, low-income expectant 
mothers who have, or are at risk of having, a high incidence of 
medical or social problems. The Centers for Medicare & Medicaid 
Services (CMS) disapproved the SPA because CMS found that it 
violated the statute for reasons set forth in the disapproval 
letter.
    The CMS made a Request for Additional Information on December 
22, 2006, to which the State responded on April 2, 2007. The 
information provided confirmed that the targeted case management 
services proposed in SPA 06-007 are currently provided to first-time 
expectant mothers without charge through State grant funding and 
private funds.
    Section 1902(a)(10) of the Social Security Act (the Act) 
requires that States make available medical assistance, which is 
defined at section 1905(a) of the Act, and is limited to payment of 
medical costs for ``individuals whose income and resources are 
insufficient to meet all of such costs.'' The term ``medical 
assistance'' fundamentally excludes payment for medical services 
that are free to the general public, since where a service is 
provided without charge the individual is not in the circumstance of 
having insufficient income or resources to meet the cost of care. 
Hence, such services do not meet the definition of ``medical 
assistance.''
    In addition, section 1902(a)(30) of the Act requires States to 
have methods and procedures in place to assure that payments are 
consistent with efficiency, economy, and quality of care. CMS did 
not find that Medicaid payments for case management for first-time 
expectant mothers were consistent with this requirement when these 
same services are available to non-Medicaid enrollees without 
charge. Furthermore, the State failed to provide documentation 
requested by CMS demonstrating that the rate methodology used to 
determine payments to service providers was consistent with section 
1902(a)(30). The State failed to provide documentation of the 
various cost elements used to determine a fee-schedule amount or to 
submit provider surveys conducted by the State to determine whether 
its proposed indirect cost rate should be applied to direct costs to 
calculate the final fee paid to providers.
    Based on the above, and after consultation with the Secretary of 
the Department of Health and Human Services as required under 
Federal regulations at 42 CFR 430.15(c)(2), CMS disapproved 
Pennsylvania Medicaid SPA 06-007.
    The issues to be decided at the hearing are
     Whether Pennsylvania has demonstrated that its SPA 06-
007 complies with sections 1902(a)(10) and 1902(a)(30) of the Act by 
limiting payment of medical assistance to payment of medical costs 
for individuals who lack sufficient income and resources to meet the 
cost of care; and
     Whether the State has provided adequate documentation 
to demonstrate that the State's rate methodology is consistent with 
the requirements of section 1902(a)(30) of the Act; specifically 
whether the rates paid to service providers are consistent with 
efficiency, economy, and quality of care.
    I am scheduling a hearing on your request for reconsideration to 
be held on November 16, 2007, at Suite 216, The Public Ledger 
Building, 150 S. Independence Mall West, Conference Room 241, the 
Pennsylvania Room, Philadelphia, PA 19106, to reconsider the 
decision to disapprove SPA 06-007. 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 by Federal regulations 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,
Kerry Weems,
Acting Administrator.

    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.)

Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
 [FR Doc. E7-19141 Filed 9-27-07; 8:45 am]
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