[Federal Register Volume 74, Number 228 (Monday, November 30, 2009)]
[Rules and Regulations]
[Pages 62501-62503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28569]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 440, 447, and 457

[CMS-2232-F3; CMS-2244-F4]
RIN 0938-AP72 and 0938-AP73


Medicaid Program: State Flexibility for Medicaid Benefit Packages 
and Premiums and Cost Sharing

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

ACTION: Final rule.

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SUMMARY: This final rule temporarily delays the effective date of the 
November 25, 2008 final rule entitled, ``Medicaid Program; Premiums and 
Cost Sharing'' and the December 3, 2008 final rule entitled, ``Medicaid 
Program; State Flexibility for Medicaid Benefit Packages'' until July 
1, 2010.

DATES: Effective Date: This action is effective December 31, 2009. The 
effective date of the rule amending 42 CFR part 440 published in the 
December 3, 2008 Federal Register (73 FR 73694) is delayed until July 
1, 2010. The effective date of the rule amending 42 CFR parts 447 and 
457 published in the November 25, 2008 Federal Register (73 FR 71828) 
is delayed until July 1, 2010.

FOR FURTHER INFORMATION CONTACT:

Frances Crystal, (410) 786-1195, for State Flexibility for Medicaid 
Benefit Packages.
Christine Gerhardt, (410) 786-0693, for Premiums and Cost Sharing.

SUPPLEMENTARY INFORMATION:

I. Background

A. State Flexibility for Medicaid Benefit Packages

    On December 3, 2008, we published a final rule in the Federal 
Register (73 FR 73694) entitled ``Medicaid Program; State Flexibility 
for Medicaid Benefit Packages.'' The December 3, 2008 final rule 
implements provisions of section 6044 of the Deficit Reduction Act 
(DRA) of 2005, (Pub. L. 109-171), enacted on February 8, 2006, which 
amends the Social Security Act (the Act) by adding a new section 1937 
related to the coverage of medical assistance under approved State 
plans. Section 1937 provides States increased flexibility under an 
approved State plan to provide covered medical assistance through 
enrollment of certain Medicaid recipients in benchmark or benchmark-
equivalent benefit packages. The final rule set forth the requirements 
and limitations for this flexibility, after consideration of public 
comments on the February 22, 2008 proposed rule.
    Subsequent to the publication of the December 3, 2008 final rule, 
we published an interim final rule with comment period in the Federal 
Register on February 2, 2009 (74 FR 5808) to temporarily delay for 60 
days the effective date of the December 3, 2008 final rule entitled, 
``Medicaid Program; State Flexibility for Medicaid Benefit Packages.'' 
The interim final rule also reopened the comment period on the policies 
set out in the December 3, 2008 final rule. We received 9 public 
comments in response to the February 2, 2009 interim final rule.
    On February 4, 2009, the Children's Health Insurance Program 
Reauthorization Act (CHIPRA) of 2009 (Pub. L. 111-3) was enacted. 
Certain provisions of CHIPRA affect current regulations regarding State 
Flexibility for Medicaid Benefit Packages, including the December 3, 
2008 final rule. Specifically, section 611(a)(1)(C) and section 
611(a)(3) of CHIPRA amend section 1937 of the Act, to require that 
States provide the full range of the Early Periodic Screening, 
Diagnosis, and Treatment (EPSDT) coverage benefit to children under the 
age of 21, rather than those under 19 as specified in the DRA of 2005, 
who are enrolled in benchmark or benchmark-equivalent plans. EPSDT 
services may be provided through a benchmark or benchmark-equivalent 
plan or as an additional benefit supplementing coverage under the 
benchmark or benchmark-equivalent plan. Section 611(a)(1)(A)(i) of 
CHIPRA amends section 1937 of the Act by changing the language 
``Notwithstanding any other provision of this title * * *'' to read 
``Notwithstanding section 1902(a)(1) (relating to statewideness), 
section 1902(a)(10)(B) (relating to comparability), and any other 
provision of this title which would be directly contrary to the 
authority * * *'' One effect of this change is to clarify that the 
requirement, under 42 CFR 431.53 and section 1902(a)(4) of the Act, to 
assure transportation for Medicaid beneficiaries in order for them to 
have access to covered State plan services, is applicable to States 
electing to provide

[[Page 62502]]

Medicaid through benchmark or benchmark-equivalent plans.
    On April 3, 2009, we published a second final rule (74 FR 15221) in 
the Federal Register further delaying implementation of the December 3, 
2008 rule until December 31, 2009 and reopening the comment period to 
permit additional comments on the policies set forth in the December 3, 
2008 final rule and the statutory changes contained in CHIPRA. This 
second delay specifically requested comments on the provisions of 
CHIPRA enacted on February 4, 2009, which corrected language in the DRA 
as if these amendments were included in the DRA, and amended section 
1937 of the Act, ``State Flexibility for Medicaid Benefit Packages.'' 
We received 7 timely items of correspondence in response to the April 
3, 2009 interim final rule.

B. Premiums and Cost Sharing

    On November 25, 2008, we published a final rule entitled, 
``Medicaid Program; Premiums and Cost Sharing'' in the Federal Register 
(73 FR 71828) to implement and interpret sections 6041, 6042 and 6043 
of the DRA, as amended by section 405 of the Tax Relief and Health Care 
Act of 2006 (TRHCA). These provisions amended the Social Security Act 
to add section 1916A which provides State Medicaid agencies with 
increased flexibility to impose premium and cost sharing requirements 
on certain Medicaid recipients. These DRA provisions specifically 
addressed cost sharing for non-preferred drugs and non-emergency care 
furnished in a hospital emergency department. The DRA was amended by 
TRHCA to limit cost sharing for individuals with family incomes at or 
below 100 percent of the Federal poverty line. The November 25, 2008 
final rule integrated into CMS regulations the statutory flexibility to 
impose premiums and cost sharing that was added by the DRA. In 
addition, in the November 25, 2008 final rule, we responded to public 
comments on the February 22, 2008 proposed rule.
    Subsequent to the publication of the November 25, 2008 final rule, 
we published a final rule in the Federal Register on January 27, 2009 
(74 FR 4888) that temporarily delayed for 60 days the effective date of 
the November 25, 2008 final rule. The final rule also reopened the 
comment period on the policies set out in the November 25, 2008 final 
rule.
    On February 17, 2009, the American Recovery and Reinvestment Act of 
2009 (the Recovery Act) was enacted subsequent to the publication of 
the January 27, 2009 delay of effective date. Certain provisions of the 
Recovery Act amended the provisions of section 1916A of the Social 
Security Act that were added by the DRA. As a result, the regulations 
published on November 25, 2008 were not consistent with statutory 
authority governing Medicaid and CHIP premiums and cost sharing. 
Specifically, under the Recovery Act, effective July 1, 2009, Medicaid 
and CHIP programs are prohibited from imposing premiums or other cost 
sharing payments on Indians who are provided services or items covered 
under the Medicaid State plan by Indian Health providers or through 
referral under contract health services. Similarly, payments to Indian 
Health providers or to a health care provider through referral under 
contract health services for Medicaid services or items furnished to 
Indians cannot be reduced by the amount of any enrollment fee, premium, 
or cost sharing that otherwise would be due from the Indians.
    On March 27, 2009, we published a second final rule in the Federal 
Register (74 FR 13346) that further delayed the effective date of the 
November 25, 2008 final rule until December 31, 2009. The final rule 
reopened the comment period to give the public an additional 
opportunity to submit comments on the policy set forth in the final 
rule as well as the provisions of the Recovery Act. Comments were 
specifically solicited on the effect of certain provisions of the 
Recovery Act related to the exclusion of Indians from payments of 
premiums and cost sharing.

II. Provisions of the Proposed Rule and Response to Public Comments

    On October 30, 2009, we published a proposed rule in the Federal 
Register (73 FR 71828) to solicit public comments on further delaying 
the effective date of the November 25, 2008 and the December 3, 2008 
final rules (collectively, ``the 2008 final rules'') until July 1, 
2010. We proposed to further delay the effective date of the 2008 final 
rules from December 31, 2009 to July 1, 2010 to allow us sufficient 
time to revise a substantial portion of the final rules based on our 
review and consideration of the new provision of CHIPRA, the Recovery 
Act, and the public comments received during the reopened comment 
periods. To allow time to make these revisions, the Department 
determined that we need several more months to fully consider the 
changes needed to the rules. In the proposed rule, we noted that the 
comments received during the reopened comment periods were complex and 
presented numerous policy issues, which require extensive consultation, 
review, and analysis. Additionally, because both CHIPRA and the 
Recovery Act contain provisions that impact the American Indian and 
Alaska Native community, we stated that the development of the final 
rules requires collaboration with other HHS agencies and the Tribal 
governments.
    We believed that this time period would allow us sufficient time to 
further consider public comments, analyze the impact of the revisions 
on affected stakeholders, and develop appropriate revisions to the 
regulations.
    We received 1 timely item of correspondence in response to the 
October 30, 2009 proposed rule. The comment did not directly address 
our proposal to delay the effective date of the 2008 final rules until 
July 1, 2010. The comment was limited to the exemption of the benchmark 
and benchmark-equivalent packages from the assurance of transportation 
requirements. Because the comment is outside the scope of the proposed 
rule on the delay of the effective dates of the 2008 final rules, but 
instead addresses the issue of revisions that are needed to comply with 
statutory changes, we will address the comment when we issue revisions 
to the final rule on State flexibility for Medicaid benefit packages. 
Because this comment highlighted the need for such revisions, we view 
this comment as indirectly supporting our proposal to delay the 
effective date of the 2008 final rules in order to issue needed 
revisions.

III. Provisions of This Final Rule

    This rule further delays the effective date of the 2008 final rules 
until July 1, 2010. The provisions of the November 25, 2008 final rule 
and the December 3, 2008 final rule, which were to become effective on 
December 31, 2009, will now become effective July 1, 2010. We note 
that, although we are finalizing the delay in the effective date of the 
2008 final rules jointly because it is more efficient to do so, 
revisions to the 2008 final rules will be published as two separate 
revised final rules.

IV. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)


[[Page 62503]]


    Dated: November 20, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: November 23, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-28569 Filed 11-27-09; 8:45 am]
BILLING CODE 2244-F4-P