[Federal Register Volume 73, Number 145 (Monday, July 28, 2008)]
[Notices]
[Pages 43761-43762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-17273]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services


Notice of Opportunity for a Hearing on Compliance of Texas State 
Plan Provisions Concerning Payments for Birthing Center Facility 
Services With Title XIX (Medicaid) of the Social Security Act

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

ACTION: Notice of Opportunity for a Hearing.

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SUMMARY: This notice announces the opportunity for an administrative 
hearing to be held on September 26, 2008 at the CMS Dallas Regional 
Office, 1301 Young Street, Room 1196, Dallas, Texas 75202, to consider 
whether Texas State plan provisions concerning payments for birthing 
center facility services comply with the requirements of the Social 
Security Act as discussed in the July 28, 2008 letter sent to the State 
and published herein.

CLOSING DATE:  Requests to participate in the hearing as a party must 
be received by the presiding officer by August 27, 2008.

FOR FURTHER INFORMATION CONTACT: Benjamin R. Cohen, Presiding Officer, 
CMS, 2520 Lord Baltimore Drive, Suite L, Baltimore, Maryland 21244, 
Telephone: (410) 786-3169.

[[Page 43762]]


SUPPLEMENTARY INFORMATION: This notice announces the opportunity for an 
administrative hearing concerning the finding of the Administrator of 
the Centers for Medicare & Medicaid Services (CMS) that the approved 
State plan under title XIX (Medicaid) of the Social Security Act (the 
Act) is not in compliance with the provisions of section 1902(a) of the 
Act. In particular, CMS has found that the State plan provides for 
separate payment for ``birthing center facility services.'' Birthing 
centers are not among the recognized provider types, nor are birthing 
center facility services a type of service within the scope of 
``medical assistance'' under the framework for State Medicaid programs 
established in Federal law. Further, Federal financial participation is 
not available in expenditures for payments for birthing center facility 
services provided on or after September 1, 2008, subject to the 
opportunity for a hearing described below. This notice is being 
provided pursuant to the requirements of section 1904 of the Act, as 
implemented in part by Federal regulations at 42 CFR 430.35 and 42 CFR 
Part 430, Subpart D.
    Birthing centers are not a recognized provider of services within 
the scope of ``medical assistance'' under section 1905(a) of the Act. 
In section 1905(a), Congress specified certain covered facility 
services, such as those provided by hospitals, clinics, or nursing 
facilities, but did not specify the services of birthing centers. 
Birthing centers are not any of those identified types of covered 
facilities (specifically, they do not meet the requirements to be 
considered ``clinics''). Thus, payment to birthing centers is not 
payment for ``medical assistance'' consistent with section 1905(a), and 
such payment therefore is not contemplated by the references to medical 
assistance at section 1902(a)(10) of the Act.
    Moreover, section 1902(a)(32) requires that State plans make 
payment directly to the provider of the service, unless there is an 
assignment or contractual arrangement under which the provider turns 
over fees to an employer or permits a facility to bill on his/her 
behalf. Neither of these circumstances apply under the Texas State 
plan, which accords birthing center facilities payment independent of 
the nurse midwife practitioners whose services are covered under 
section 1905(a)(17) of the Act. While the Act would permit higher 
payments to nurse midwives practicing at birthing centers in order to 
recognize the higher costs that may be incurred by such nurse midwives, 
there is no statutory authority to provide for direct payment to 
birthing centers for facility services.
    While CMS has approved State plan amendments to provide separate 
payment for birthing center facility services in the past, on further 
review of the above-referenced provisions, we do not believe that the 
statute allows for these payments. CMS has previously notified the 
State of this position through prior deferral action and disapproval of 
three Medicaid State plan amendments (SPAs 04-033(b), 06-004, and 07-
011). The first two SPAs were disapproved on June 29, 2006, and the 
third on December 23, 2007. CMS has deferred claims for the Federal 
share totaling $43,507 for three quarters starting with the period 
ending June 30, 2006.
    The notice to Texas announcing the opportunity for an 
administrative hearing on the issue of the compliance of the specified 
State plan provisions reads as follows:

Via Certified Mail--Return Receipt Requested

Mr. Chris Traylor, Associate Commissioner for Medicaid and 
Children's Health Insurance Program, Texas Health and Human Services 
Commission, P.O. Box 13247, Austin, TX 78711

    Dear Mr. Traylor: This letter provides notice of our finding 
that the approved State plan under title XIX (Medicaid) of the 
Social Security Act (the Act) is not in compliance with the 
provisions of section 1902(a) of the Act. In particular, the Centers 
for Medicare & Medicaid Services (CMS) has found that the State plan 
provides for separate payment for ``birthing center facility 
services.'' Birthing centers are not among the recognized provider 
types, nor are birthing center facility services a type of service 
within the scope of ``medical assistance'' under the framework for 
State Medicaid programs established in Federal law. Further, Federal 
financial participation is not available in expenditures for 
payments for birthing center facility services provided on or after 
September 1, 2008, subject to the opportunity for a hearing 
described below. This notice is being provided pursuant to the 
requirements of section 1904 of the Act as implemented by Federal 
regulations at 42 CFR 430.35 and 42 CFR Part 430, Subpart D.
    Birthing centers are not a recognized provider of services 
within the scope of ``medical assistance'' under section 1905(a) of 
the Act. In section 1905(a), Congress specified certain covered 
facility services, such as hospitals, clinics, or nursing 
facilities, but did not specify the services of birthing centers. 
Birthing centers are not any of those identified types of covered 
facilities (specifically, they do not meet the requirements to be 
considered ``clinics''). Thus, payment to birthing centers is not 
payment for medical assistance consistent with section 1905(a), and 
such payment, therefore, is not contemplated by the references to 
medical assistance at section 1902(a)(10) of the Act.
    Moreover, section 1902(a)(32) requires that State plans make 
payment directly to the provider of the service, unless there is an 
assignment or contractual arrangement under which the provider turns 
over fees to an employer or permits a facility to bill on his/her 
behalf. Neither of these circumstances apply under the Texas State 
plan, which accords birthing center facilities payment independent 
of the nurse midwife practitioner whose services are covered under 
section 1905(a)(17) of the Act. While the Act would permit higher 
payments to nurse midwives practicing at birthing centers in order 
to recognize the higher costs that may be incurred by such nurse 
midwives, there is no statutory authority to provide for direct 
payment to birthing centers for facility services.
    While CMS has approved State plan amendments to provide separate 
payment for birthing center facility services in the past, on 
further review of the above-referenced provisions, we do not believe 
that the statute allows for these payments. CMS has previously 
notified the State of this position through a deferral action and 
disapproval of three Medicaid State plan amendments (SPAs 04-033(b), 
06-004, and 07-011). The first two SPAs were disapproved on June 29, 
2006, and the third on December 23, 2007. CMS has deferred claims 
for the Federal share totaling $43,507 for three quarters starting 
with the period ending June 30, 2006.
    For all of these reasons, and after consulting with the 
Secretary as required by 42 CFR 430.15(c)(2), I am taking compliance 
action on the State's birthing center facility payment.
    If you are dissatisfied with this determination, you will have 
an opportunity for a hearing on [60 days after date of publication], 
in accordance with the procedure set forth in Federal regulations at 
42 CFR Part 430, Subpart D. Your request for such a hearing may be 
sent to the designated hearing officer, Mr. Benjamin R. Cohen, 
Centers for Medicare & Medicaid Services, 2520 Lord Baltimore Drive, 
Suite L, Baltimore, Maryland 21244. If you have any questions or 
wish to discuss this determination further, please contact Mr. Bill 
Brooks, Associate Regional Administrator, Centers for Medicare & 
Medicaid Services, Region VI, Division of Medicaid and Children's 
Health, Department of Health and Human Services, 1301 Young Street, 
Room 827, Dallas, TX 75202.

 Sincerely,

Kerry Weems,
Acting Administrator.

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

    Dated: July 23, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
 [FR Doc. E8-17273 Filed 7-25-08; 8:45 am]
BILLING CODE 4120-01-P